Spring 2008 Marzieh Chapardar Nahid Karimaghalou Broadcast.com

The Yahoo! Offer Yahoo offered $5.7 billion to acquire broadcast.com in April 1999 Shares of Broadcast.com surged 37% in one day Broadcast.com was leader in audio and video broadcasting Ranked 6 th in news/info/entertainment Ranked 14 th largest website overall

Introduction Founded by Mark Cuban and Todd Wagner in 1995 Initially broadcasting audio over the Internet First mover in multimedia broadcasting Differentiation strategy Timing Characteristics of service Network size

Broadcast.com’s Network (1999) Exclusive contracts with: 300 radio stations 40 televisions 400 sport teams 600 business customers among which were blue-chip firms e.g. AT&T and General Motors

Positioning Added value: broadcasting audio and video via Internet Target customers include: Major universities and colleges Major sport teams Television stations Radio stations Blue-chip businesses Three different sources of revenue Exclusive contracts to decrease bargaining power of new entrants

History of Broadcast.com The initial idea raised when Wagner and Cuban missed attending Hoosiers basketball games Initial investment of 5000$ including: A Packard Bell 486 PC Network equipments High-speed connection Contract with KLIF radio station A simple marketing strategy: inviting anyone interested in Dallas area sports to visit the website

Broadcast.com As A Firm Cuban & Wagner launched AudioNet.com Changed the company name to Broadcast.com to reflect the diversity of programming and services Success = Attraction of more content providers Blocking new comers Multiyear exclusive agreements Large portfolio of content providers due to being a first mover Digital Performance Right in Sound Recordings Act

Business Model Broadcast.com focused on generating profits from the start Three sources of revenue: 1. Content provider pays (or airtime) 2. The Business Service Group services 3. Advertising space sold on the website Building brand-awareness through exclusive agreements with: Major colleges Major universities NFL (Major professional football league in the US with 28 teams)

Internet Broadcasting Feeling financial pressure in late 95, they sold shares in $30000 increments As an long-term solution, they approached the services of investment bank Alex Enabled Broadcast.com to expand the private network 550 multimedia-streaming servers Contracted with major net backbone providers (GTEI, MCI, Sprint, UUNET) Direct lines of 45 and 155 Mbps Unicasting and Multicasting services Strategic relationships with Yahoo and RealNetworks

Competition Competition mount on several fronts: Streaming media websites Videoconferencing Traditional media

Streaming media websites competitors Most of these competitors specialized in one medium; e.g.: Netradio CBC Sportline Real Broadcast Network (strategic alliance of MCI & RealNetworks)

Videoconferencing competitors This arena competitors include: Videoconferencing companies Teleconferencing companies Other companies that provided Internet broadcasting services to businesses They increased rapidly as new sites such as: Vcall.com BestCalls.com Decreasing technology cost and improving transmission quality arisen the expectation of greater competition for fewer available revenues (most companies do it in-house).

Traditional media competitors Competition with radio, television, and print for a slice of the advertisers’ budget Some of them established a viable presence on the web (like CNN and New York Times) Competition to sell its inventory of radio and television ad spots obtained from content providers

Going Public Its IPO: July 17, 1998 Stated goal: becoming the top broadcasting portal on the Internet Another high-water mark: stoke appreciated over 249% in one day Improving brand name through the IPO process (not an exit strategy) Expanding volume of its content agreements and business services

After Yahoo! Acquisition Broadcast.com’s content and services integrated during the third quarter of 1999 Independent Yahoo Broadcast Services unit created Yahoo! customers took advantage of Webcasting services Advertisers and merchants incorporated video and audio in their marketing

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