Sports Media Comm 312

1. Sports MediaComm 312 September 11, 2007 Russ Maloney

4. Revenue

5. Sports Media Truth Sports programming delivery is now highly sophisticated and aimed more at specialized audiences than the captive mass audiences of the past.

6. Nielsen Ratings Source: Nielsen

7. Nielsen Cable Ratings Source: Nielsen

8. State of the Sports Media Revenue and Economics

9. Changing World Source: RTNDF

10. Changing World Source: RTNDF

11. Media Ownership Content and Distribution

12. Media Convergence Which is more important? Content or Distribution

13. Content vs. Distribution The old argument has been . . . Neither . . . they are equally important. “Without content, distribution had no value. Without distribution, content was worthless.”

14. Distribution • Distribution has become much more available in recent years and quite affordable in many cases. • The exception is radio and television • The result has been a glut of consumer choices (channels).

15. Content • The vast array of distribution systems now available have the capacity to deliver a wide variety of content. • However, the content needed to fill these channels of distribution, in many cases does not exist, or cannot be produced cost effectively.

16. Convergence Factors • Technological Advances • Internet • Digital Delivery Systems • Government Deregulation • Media Concentration • Economic Necessity • Differentiation in a saturated marketplace

17. ESPN

18. Convergence Economics • “Content is costly to produce, but cheap to reproduce.” • “Economists say that production of an information good involves high fixed costs, but low marginal costs.” Source: Information Rules by C. Shapiro and H. Varian

19. Convergence Economics Content driven organizations are in a much better position in this era of convergence.

20. Approaches • If you have distribution . . . find content. • If you have content . . . Look for additional distribution channels. • If possible . . . Obtain both content and distribution and dominate the competition.

21. Definition Media Convergence is the widespread distribution, through a number of different media channels, of content, news, information, and/or programming originally produced for one outlet.

22. The Public Interest Is media convergence in the public’s best interest?

23. Media Ownership Integration

24. Integration • Horizontal Integration • Owning several outlets of the same type • Control distribution of content • Vertical Integration • Owning multiple types of media outlets • Control both the production of content and the means to distribute that content

25. Vertical Integration Example:Walt Disney Company 2005 • Owns: • ABC-TV network • ABC radio networks • 10 television stations • 71 radio stations • 4 music companies • 10 book companies • 15 magazines • 6 movie studios/movie distributors • 18 cable TV networks • Walt Disney Internet Group

26. Vertical Integration How might ESPN and ABC benefit each other ?

27. Vertical Integration • Own the production of media content and the means of distributing that content • ESPN can • Produce a program/event on multiple channels • Release it on home video • Show it on ABC-TV • Release it Internationally

28. Synergy • Synergy is when the merger of two companies produces one large company that is stronger by itself than the two separate companies working together • Single company owns production and distribution of content • It then repackages the same product in different forms of media

29. Synergy • Disney can also • Distribute a music soundtrack, release it first to Disney-owned radio stations • Offer the TV shows on ABC exclusive interviews with the stars of the movie • Release the book • Provide contests and promotions on Web Sites

30. Media Consolidation

31. Problems with the Model