Value Creation and Branding in Television's Digital Age

Value Creation and Branding in Television's Digital Age

Value Creation and Branding in Television's Digital Age

Value Creation and Branding in Television's Digital Age

Synopsis

Until recently, profit in the television industry went to the owners of the conduit, the distributors of content. As the industry enters the digital age, the distribution bottleneck will disappear and be replaced by the content creators themselves. Television today is not just 500 channels: it is countless millions of hours of programming stored on video servers around the world. For media companies wanting to create value in this new era, including the major networks, digital branding is key. This book provides detailed historical data, financial, models and informed discussion of profitability trends in the industry. It offers a framework for understanding and predicting profitability and describes the nature of branding as it applies to the television industry. It shows how a handful of dominant brands will emerge as sought-after organizers of content. Investors, industry consultants and executives, policy makers, students and academics will all find this book fascinating and informative.

Excerpt

The story of how television programming evolved from its Golden Age origins of Milton Berle in the living room to its post-MTV pastiche is a familiar one. No one who has lived through the last few decades of the twentieth century would fail a basic test on television that contained questions like "name a network news anchorman or a famous television pet." In fact, more people probably know the names of Jerry Seinfeld's friends than the name of their senator or representative.

However, ask whether a television producer or a local station makes more money and you will probably draw a blank. This book tells the story of the business of television. It traces the history of profitability in the television business from the Tiffany network through the hegemony of John Malone, the "Darth Vader of the cable kabal," and into the digital future of cable modems, direct broadcast satellites, and digital terrestrial television. The book is about who makes money, why they make it, and whether they will continue to make it.

The best way to understand the industry and its economics is to think about it in terms of a supply chain (Exhibit 1). In its simplest terms, the industry consists of content and conduit. Content consists of the upstream suppliers: the producers and packagers of programming. Think of packagers as networks that buy and produce programming and put it into schedules. The conduit consists of the downstream distributors: the local television stations, the cable operators, and television manufacturers. The dominant firms in the business are household names. Firms like Paramount, Disney, and Viacom are predominantly suppliers of content--they produce programming like "a Paramount film," the Disney Channel, and MTV--while Belo, Cablevision, and Zenith are conduit . . .

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