2. Chapter 6 The World of Media

3. n A different kind of consumption “The Eyeball Business” n Time and Attention

4. n A different kind of consumption n Time and Attention n A different kind of consumption n Time and Attention n Media Receive Payment from… “The Eyeball Business”

5. n A different kind of consumption n Time and Attention n Media Receive Payment from… n A different kind of consumption n Time and Attention n Media Receive Payment from… l Advertisers “The Eyeball Business”

6. n A different kind of consumption n Time and Attention n Media Receive Payment from n A different kind of consumption n Time and Attention n Media Receive Payment from l Advertisers l Consumers l Advertisers l Consumers l Both “The Eyeball Business”

7. n Advertiser Paid Media [100% Ad Revenues] l Television n Advertiser Paid Media [100% Ad Revenues] l Television “The Eyeball Business” l Radio l Out-of-Home l Direct Marketing n Advertiser + Consumer Paid Media [Ad Revenues + Subscriptions] l Newspapers l Magazines l Cable TV l Radio l Out-of-Home l Direct Marketing n Advertiser + Consumer Paid Media [Ad Revenues + Subscriptions] l Newspapers l Magazines l Cable TV

8. n Consumer Paid Media [Tickets/Subscriptions] l Some Cable (HBO, etc.) n Consumer Paid Media [Tickets/Subscriptions] l Some Cable (HBO, etc.) l Movies l CDs & Concerts l Magazines l Public Radio/TV n “Sponsorships” l Event Marketing l Movies l CDs & Concerts l Magazines l Public Radio/TV n “Sponsorships” l Event Marketing “The Eyeball Business”

9. n Consumer Paid Media [Tickets/Subscriptions] l Some Cable (HBO, etc.) n Consumer Paid Media [Tickets/Subscriptions] l Some Cable (HBO, etc.) l +Product Placement in Movies/TV l Movies l CDs & Concerts l Magazines l Public Radio/TV n “Sponsorships” l Event Marketing l Movies l CDs & Concerts l Magazines l Public Radio/TV n “Sponsorships” l Event Marketing “The Eyeball Business”

10. “Eyeball Evolution” n Changing Habits / Changing Media l Old Media Models in trouble… l Newspapers, Network TV, some Magazines n Still lots of TV, but… l Many More Channels l Audiences Fragmenting l Mass Media is losing mass n The Second Screen l Internet/Social Media l A Powerful Combination l Which results in… n Changing Habits / Changing Media l Old Media Models in trouble… l Newspapers, Network TV, some Magazines n Still lots of TV, but… l Many More Channels l Audiences Fragmenting l Mass Media is losing mass n The Second Screen l Internet/Social Media l A Powerful Combination l Which results in…

11. “Eyeball Evolution” n The Audience Taking Control l Media becoming interactive l Media companies losing control l Local impact / Global impact n Easy entry but… l No easy profits l Change quick as a blink. n The Third Screen l Latest Media Connection l Evolution continues… n The Audience Taking Control l Media becoming interactive l Media companies losing control l Local impact / Global impact n Easy entry but… l No easy profits l Change quick as a blink. n The Third Screen l Latest Media Connection l Evolution continues…

12. The World of Media n Early Media History n Today’s Media World l Consumers & the Media l Media Conglomerates l Entertainment Brands n The Media Boom! n Current Media Choices (Part 2) n Early Media History n Today’s Media World l Consumers & the Media l Media Conglomerates l Entertainment Brands n The Media Boom! n Current Media Choices (Part 2) The World of Media

13. n The legend of the First mass-appeal advertising n Over 2000 years ago in N. African City of Cyrene n Silver coins carried a product message n The coins advertised a local plant n The legend of the First mass-appeal advertising n Over 2000 years ago in N. African City of Cyrene n Silver coins carried a product message n The coins advertised a local plant Early Media History:

14. n Babylonian Posters n Graffiti in Pompei n Egyptian Obelisks n Babylonian Posters n Graffiti in Pompei n Egyptian Obelisks Early Media History: n Signage n Hawkers & Criers n Signage n Hawkers & Criers

15. n The Printing Press n = The Reformation n = Thirty Years War n = The American Revolution n The Printing Press n = The Reformation n = Thirty Years War n = The American Revolution Evolution / Revolution

16. Early US Media History n Handbills, Almanacs, Pamphlets... l Benjamin Franklin s Poor Richard’s Almanac s Pennsylvania Gazette l “Common Sense” s Thomas Paine s Argued for Revolution n Newspapers l Viewed as essential l “Freedom of the Press” n Handbills, Almanacs, Pamphlets... l Benjamin Franklin s Poor Richard’s Almanac s Pennsylvania Gazette l “Common Sense” s Thomas Paine s Argued for Revolution n Newspapers l Viewed as essential l “Freedom of the Press”

17. n 1650 - first newspaper ad - Germany n 1704 - first US ads - Boston n Early newspaper ads like today’s classified ads n 1650 - first newspaper ad - Germany n 1704 - first US ads - Boston n Early newspaper ads like today’s classified ads Origins of Print - Newspapers n Ad clutter - even then. n Newspaper advertising grew along with business and growing urban centers n Ad clutter - even then. n Newspaper advertising grew along with business and growing urban centers NY Journal 1788

18. n 1650 - Illustrated London News n Printing Technology improves l 1871 - halftone process l 1892 - 4-color rotary press n J. Walter Thompson & Cyrus Curtis make magazines ad media n 1650 - Illustrated London News n Printing Technology improves l 1871 - halftone process l 1892 - 4-color rotary press n J. Walter Thompson & Cyrus Curtis make magazines ad media Origins of Print - Magazines Publishing becomes a Very Big Business Publishing becomes a Very Big Business n Economic Growth l Literate middle class l Consumer products n Economic Growth l Literate middle class l Consumer products

19. n Marshall McLuhan Consumers & The Media Media Evolution l “we evolve as our media evolves.” l From ear-driven to eye-driven to… l “we evolve as our media evolves.” l From ear-driven to eye-driven to… n Advertising Changes as Media Changes

20. Early Broadcast - Radio

21. n 1906 - First radio program broadcast n Early commercials unobtrusive n Beginnings of sponsorship n Audiences grow n Advertiser interest grows n Then, it’s the 30s... n Early commercials unobtrusive n Beginnings of sponsorship n Audiences grow n Advertiser interest grows n Then, it’s the 30s...

22. Early Broadcast - Radio The Golden Age of Radio The Golden Age of Radio n First Free Mass Media - 100% paid by advertisers n Hit Programs n Mass Audiences n Major Brands are Born l Example: Wheaties n Hit Programs n Mass Audiences n Major Brands are Born l Example: Wheaties

23. n Philo Farnsworth Early Broadcast - Television n 1939 - introduced by RCA at World’s Fair n 1946 - 10 TV stations n 1949 - coaxial cable reaches Chicago - this allows network broadcasts n 1939 - introduced by RCA at World’s Fair n 1946 - 10 TV stations n 1949 - coaxial cable reaches Chicago - this allows network broadcasts The teen-ager who invented television The teen-ager who invented television n Developed cathode ray n 1927 applies for patent n 1930 patent granted The teen-ager who invented television The teen-ager who invented television n Developed cathode ray n 1927 applies for patent n 1930 patent granted

24. Early Broadcast - Television n First TV ads l Royal Crown Cola l BBDO takes lead n 1951 1.5 million TV sets n 1952 15 million TV sets n TV Networks develop n First TV ads l Royal Crown Cola l BBDO takes lead n 1951 1.5 million TV sets n 1952 15 million TV sets n TV Networks develop n 1953 - First Color TV Broadcast - RCA

25. Early Broadcast - Television n A Powerful Selling Tool!

26. Today’s Media World n Next, we’ll cover… n Consumers & The Media n Media Conglomerates n Entertainment Brands n Next, we’ll cover… n Consumers & The Media n Media Conglomerates n Entertainment Brands Today’s Media World

27. Consumers & The Media n A Media-Saturated Culture l Nothing like it before l Incredible richness of options n How Many Messages a Day? l Nothing like it before l Incredible richness of options n How Many Messages a Day?

28. Consumers & The Media n A Media-Saturated Culture l Nothing like it before l Incredible richness of options n How Many Messages a Day? n A Media-Saturated Culture l Nothing like it before l Incredible richness of options n How Many Messages a Day? n The Great American Time Crunch l More time for media l Less time for… n Remember - they’re your eyeballs! l More time for media l Less time for… n Remember - they’re your eyeballs!

29. Media Conglomerates n From Local to Global l The First Conglomerates - local - starting with the newspaper l Example: WGN s “World’s Greatest Newspaper” s #1 AM station, major independent TV station (WGN, now a superstation) l The First Conglomerates - local - starting with the newspaper l Example: WGN s “World’s Greatest Newspaper” s #1 AM station, major independent TV station (WGN, now a superstation) s Additional media properties s Ongoing partnerships/mergers u Partner w. Warner for WB Network u Merge w. LA Times s Additional media properties s Ongoing partnerships/mergers u Partner w. Warner for WB Network u Merge w. LA Times

30. Broken Business Models l Newspaper = Dramatic declines in s Readership s Advertising Revenue l Television = not so super s Increase in clutter/competition s Decline in viewership / ad revenue l Even with the #1 AM station… s Ad revenues still declining l Plus corporate problems s Tax/Buyout problems l Newspaper = Dramatic declines in s Readership s Advertising Revenue l Television = not so super s Increase in clutter/competition s Decline in viewership / ad revenue l Even with the #1 AM station… s Ad revenues still declining l Plus corporate problems s Tax/Buyout problems n Example: The Tribune Company

31. Media Conglomerates n From Special to General l Growth based on special expertise: s Time = magazines s Disney = movies/theme parks s CBS = broadcasting l Opportunistic Expansion: s “Bigger Financial Fish” eat smaller ones s Mergers also create “Bigger Fish” s Example: ViaCom (Paramount, MTV, Nickelodeon) s Merges w. CBS (TV + radio + billboards) l Growth based on special expertise: s Time = magazines s Disney = movies/theme parks s CBS = broadcasting l Opportunistic Expansion: s “Bigger Financial Fish” eat smaller ones s Mergers also create “Bigger Fish” s Example: ViaCom (Paramount, MTV, Nickelodeon) s Merges w. CBS (TV + radio + billboards)

32. Media Conglomerates l Four Very Large - Primarily Media s Time-Warner s Disney: ABC, A&E, Disney, ESPN, Miramax... s CBS - broadcasting + Viacom (cable) s News Corporation (FOX) l Other “Interesting” Giants s SONY (Entertainment + Electronics) s NBC Universal (TV + Movies) l Let’s look at The Big Four... l Four Very Large - Primarily Media s Time-Warner s Disney: ABC, A&E, Disney, ESPN, Miramax... s CBS - broadcasting + Viacom (cable) s News Corporation (FOX) l Other “Interesting” Giants s SONY (Entertainment + Electronics) s NBC Universal (TV + Movies) l Let’s look at The Big Four... n World of The Media Giants

33. Media Conglomerates n World of The Media Giants l Top 6 Media Companies Source: AdAge, 12/31/2012 #1 Comcast Corp.$44,981 #2 DirecTV$22,310 #3 Walt Disney Co.$21,546 #4 Time Warner$19,894 #5 Time Warner Cable$18,104 #6 News Corp.$17,314 l Top 6 Media Companies Source: AdAge, 12/31/2012 #1 Comcast Corp.$44,981 #2 DirecTV$22,310 #3 Walt Disney Co.$21,546 #4 Time Warner$19,894 #5 Time Warner Cable$18,104 #6 News Corp.$17,314

34. Media Conglomerates n News Corporation (FOX) l Rupert Murdoch News Corp 17 billion (FOX) News Corp 17 billion (FOX) l The FOX Network - Fox News, Sports, Family Channel, 20th Century Fox, Star TV, BSkyB, The Times N Y Post,.LA Dodgers l The FOX Network - Fox News, Sports, Family Channel, 20th Century Fox, Star TV, BSkyB, The Times N Y Post,.LA Dodgers s Understood power of media s Australian Newspapers s More newspapers, more media l The FOX Network s Understood power of media s Australian Newspapers s More newspapers, more media l The FOX Network

35. Media Conglomerates n News Corporation (FOX) l Rupert Murdoch News Corp 17 billion (FOX) News Corp 17 billion (FOX) l A Global Empire s Satellites everywhere l A Global Empire s Satellites everywhere l The FOX Network - Fox News, Sports, Family Channel, 20th Century Fox, Star TV, BSkyB, The Times N Y Post,.LA Dodgers l The FOX Network - Fox News, Sports, Family Channel, 20th Century Fox, Star TV, BSkyB, The Times N Y Post,.LA Dodgers s Understood power of media s Australian Newspapers s More newspapers, more media l The FOX Network s Understood power of media s Australian Newspapers s More newspapers, more media l The FOX Network s Sports as strategic tool u NFL for Fox Network u FOX Sports (cable) u NFL for Fox Network u FOX Sports (cable)

36. Media Evolution n Media are becoming Brands l Growing across media platforms n Driven by conglomerates, almost all media are developing into... n Media are becoming Brands l Growing across media platforms n Driven by conglomerates, almost all media are developing into... Entertainment Brands

37. n Now let’s cover… n Media - The New Brands n Entertainment Brands n Entertainment Brand Economics n Now let’s cover… n Media - The New Brands n Entertainment Brands n Entertainment Brand Economics Entertainment Brands

38. Media - The New Brands n Media no longer channel specific l Technology no longer a limitation n The Brand Concept Emerges n Media no longer channel specific l Technology no longer a limitation n The Brand Concept Emerges n Example: ESPN l A sports brand n Example: ESPN l A sports brand 3 “flavors” of cable 3 “flavors” of cable l A sports bar l A magazine l A radio network

39. n Entertainment Brand Economics l A different kind of consumption l Media “sells eyeballs” n Entertainment Brand Economics l A different kind of consumption l Media “sells eyeballs” Entertainment Brands l Payment from… s Advertisers s Consumers s Both l Synergy (NBA on ESPN, TNT, ABC) l Payment from… s Advertisers s Consumers s Both l Synergy (NBA on ESPN, TNT, ABC) s Time and Attention

40. n Example: Spiderman l Marvel Comics Superhero - re-staged l Appeared in s Comics s Cartoons s Movies s Accessories n Example: Spiderman l Marvel Comics Superhero - re-staged l Appeared in s Comics s Cartoons s Movies s Accessories Entertainment Brands

41. n Example: Spiderman l Publicizing the movie n Example: Spiderman l Publicizing the movie Entertainment Brands s ambient ads located on buildings s ambient ads located in bathrooms

42. The Media Boom! n In 2011… l Measured Media Spending for the U.S.$131.03 Bill. l Annual Newspaper Advertising$17.6 Bill. l Broadcast Radio Stations15,256 l Basic Cable Subscribers56.4 Mill. l Digital Cable Subscribers46.8 Mill. l U.S. Adult Smart Phone Users175.8 Mill. l U.S. Internet Users244.5 Mill. n More Media More Often l Even in a media-saturated society like ours, there’s always room for one more. n In 2011… l Measured Media Spending for the U.S.$131.03 Bill. l Annual Newspaper Advertising$17.6 Bill. l Broadcast Radio Stations15,256 l Basic Cable Subscribers56.4 Mill. l Digital Cable Subscribers46.8 Mill. l U.S. Adult Smart Phone Users175.8 Mill. l U.S. Internet Users244.5 Mill. n More Media More Often l Even in a media-saturated society like ours, there’s always room for one more. The Media Boom!

43. n Four Factors Changing Media l Media Technology s Digital Explosion s New Delivery Systems - Internet, video stores, etc. n Four Factors Changing Media l Media Technology s Digital Explosion s New Delivery Systems - Internet, video stores, etc. The Media Boom! CD ‘Zine from Apple

44. n Four Factors Changing Media l Media Technology s Digital Explosion s Delivery Systems - Internet, Netflix, DVDs n Four Factors Changing Media l Media Technology s Digital Explosion s Delivery Systems - Internet, Netflix, DVDs The Media Boom! l Media Competition s From monopoly to hyper-competition s Mature Market - huge need for “hits” l Media Audiences s Fragmenting, but more valuable l Media Expenditures s Going across platforms (i.e. ESPN) s From monopoly to hyper-competition s Mature Market - huge need for “hits” l Media Audiences s Fragmenting, but more valuable l Media Expenditures s Going across platforms (i.e. ESPN)

45. n The Entertainment Economy l Part of “PowerShift” l Creating Big New Brands n The Entertainment Economy l Part of “PowerShift” l Creating Big New Brands The Media Boom! n Media as Brands l Marketing becoming more important n + Entertainment Brands l Marketing/Advertising is critical n Great Expansion & Volatility l Opportunity is everywhere n Media as Brands l Marketing becoming more important n + Entertainment Brands l Marketing/Advertising is critical n Great Expansion & Volatility l Opportunity is everywhere

46. You & The World of Media n So, how does this affect you? l In your life? l In your possible career opportunities? n After class… l What media will you turn on? l And what medium turns you on? n Remember, they’re your eyeballs! n So, how does this affect you? l In your life? l In your possible career opportunities? n After class… l What media will you turn on? l And what medium turns you on? n Remember, they’re your eyeballs!

47. Everywhere you look... Everywhere you look... It’s a New Brand World!