MIS Test #4 Chapter 10
E-book market
Amazon, Apple, Barnes & Noble New channel for self-publishing authors Hugh Howey's Wool (2013)
Challenges of E-book platform
Control over pricing: Amazon controls largest market share for e-books Amazon vs. Hachette Further evolution of digital distribution platform: Kindle unlimited subscription service Digital marketplace exchanges for peer sharing of digital files Converging technologies: Interactive books, iBook Author, iBook Textbooks
Content Audience and Market
Desktop and mobile use has increased to 5.75 hrs/day
Online Magazines
Digital replica magazines One-third of U.S. Internet users read online magazines 35% of tablet users Apple's iPad subscription service Popular Web sites (Pinterest, Facebook) drive traffic to online magazines Social reader apps Magazine aggregators
Agency Model
Distributor as agent must charge publisher's retail price Amazon
New Digital Ecostystems
E-book hardware, software, combined with online megastores Authors able to bypass traditional agent, publisher channels DRM more effective for e-books than music industry
TV industry to new Internet delivery platforms
Expansion of broadband networks, new mobile platforms and cloud servers Social TV OTT: Over-the-top (Internet) delivery
Factors required to charge for online content
Focused market Specialized content Sole source monopoly High perceived net value
Factors for Decline in Online Newspapers
Growth of Web, mobile devices as alternative medium Alternative digital sources for news Failure to develop suitable new business models Rise of social media and role of directing traffic to newspaper content
Internet and traditional Media
Increase in total demand for media, physical products replaced by digital
e-book industry composition
Intermediary retailers (booksellers), traditional publishers, technology developers, device makers (e-readers), vanity presses
Movies
More Americans bought online movies than DVDs in 2014 Many alliances and competing interests between distributors and creators Two types of online movie sales Internet video on demand (iVOD) Electronic sell-through
online gaming business models in flux
Most online/mobile games offered for free, difficult to monetize
Trends in Online Content, 2013-2014
Netflix streaming TV shows to your television Internet video begins to challenge cable TV The mobile platform accelerates the transition to digital content Console games stagnate as online, social, casual games soar
Daily Unique Visitors at Online Newspapers make it an advantage
New York Times 53. 8 million, tribune Papers, NY Daily News, USA Today, wallstreet journal, washington post Online newspaper readership is expanding as consumers shift to mobile devices and participate in social networks mobile newspaper readership strong amongst young persons due to greater use of smartphones and tablet computers
Online Content Consumption
Online TV and movies largest and fastest growing online entertainment form video (77% of internet users) newspapers 74% radio 63% tv shows 56% movies 41%
Online newspapers advantages
Online readership growing at over 10%/year Large audience sizes Wealthy and consumer-intense demographic Strong brand identification Quality of content Audience increasingly coming from social media sites Less engaged, link visitors Avoiding front page
Finding a revenue model for online newspapers
Paywalls, with free content for casual users Bundled price for print/digital subscriptions Metered subscription model New York Times Freemium
Internet transforming industry
Platform development: Smartphones, tablets, online streaming and cloud storage Social networks (such as YouTube) as distributors
Online Newspaper Models
Print newspaper with online presence print newspaper integrated web edition digital news platform with print edition
Competition from pure digital news sites
Pure digital sites have lower costs, but lower credibility/trust
wholesale model
Retailers pay wholesale price and establish retail price Traditional publishers - 5 large companies who produce 80% new book titles
Digital Rights Management (DRM)
Technical and legal means to protect digital content from unlimited reproduction and distribution, Telecommunications and device industries benefit from increased traffic 24% of global Internet traffic is stolen material
Online entertainment industry
Television Radio broadcasting Hollywood films Music Games (not-very-new arrival)
Channels of Media revenues
Television (30%), Newspapers (17%), Books (12%), Magazines (11%), radio, video games, box office, home video, internet media, recorded music
Explosive growth of online gaming
Types of online gamers Casual Social Mobile—fastest growing market Console
Disrupted music industry
Unbundling of single songs Distributor market dominated by Apple's iTunes Digital revenues account for 64% of all revenues Digital download—90% of digital music revenue Streaming subscription services—fastest growing
Digital Content Revenue Models
free content can drive users to paid content, users increasingly pay for high quality, unique content
online gaming audience
from most popular to least: mobile, casual, social, console
Successful Fee Models
high quality content: Itunes, millions of users buy from legal music sites, YouTube cooperating with Hollywood and NY film production studios
Major Online movie distrubutors
netflix (44%) Apple (32.3) others, microsoft, vudu (walmart), sony
Online Publishing Industry
online newspapers e-books online magazines
net value
portion of perceived customer value that can be attributed to the fact that content is available on the Internet
Media Industry
segmented in print, movies, and music Each dominated by few key players with little crossover Larger media ecosystem Four Internet titans compete for ownership of online content ecosystem: Apple, Google, Amazon, and Facebook
media convergence
technological: development of hybrid devices that can combine functionality of two or more existing media platforms into a single device content: convergence in design, production, and distribution of content industry: merger of media enterprises into synergistic combinations that create and cross-market content on different platforms
Projected growth in Online Entertainment
tv and movies will engage and generate more revenue than all forms of digital media, including music