Bài giảng E-commerce business, technology, society - Chapter 10: Online Content and Media

E-commerce Kenneth C. LaudonCarol Guercio Traverbusiness. technology. society.seventh editionCopyright © 2011 Pearson Education, Inc.Copyright © 2011 Pearson Education, Inc.Copyright © 2010 Pearson Education, Inc.Slide 10-*Chapter 10Online Content and MediaCopyright © 2011 Pearson Education, Inc.Copyright © 2011 Pearson Education, Inc.Information Wants to Be ExpensiveClass DiscussionWhy did the Wall Street Journal succeed with a subscription model?Would you pay to read a daily newspaper online? Why or why not? Would you pay for access to online archives of newspapers and/or magazines? Do you think newspapers can make the transition from “print on paper” to “news on-screen?”What do you think about the New York Times’ plan for a subscription-based model?Slide 10-*Copyright © 2011 Pearson Education, Inc.Trends in Online Content, 2010-2011Increased media consumptionInternet media revenues fastest growingGrowth of Internet audience outpaces other mediaUser-generated content growing, inverting traditional production/business modelsEntertainment moves to mobile devicesInternet advertising revenues expanding rapidlySlide 10-*Copyright © 2011 Pearson Education, Inc.Trends in Online Content (cont’d)Content owners adapt mixture of advertising, subscription, ala carte payment for business modelPaid content and free content coexistConvergenceNewspapers in transition to online modelsWeb becomes entertainment powerhouseConsumers increasingly support time-shifting, space-shifting in media consumptionSlide 10-*Copyright © 2011 Pearson Education, Inc.Content Audience and MarketAverage American adult spends 3,900 hrs/yr consuming various media2010 media revenues: $973 billionTV, radio, Internet: Account for over 80% of the hours spent consuming media20 - 30% substituting online entertainment for traditionalSlide 10-*Copyright © 2011 Pearson Education, Inc.Media UtilizationSlide 10-*Figure 10.1, Page 651SOURCE: Based on data from U.S. Census Bureau, 2010Copyright © 2011 Pearson Education, Inc.Internet and Traditional MediaCannibalization vs. complementarityTime spent on Internet reduces time available for other mediaBooks, newspapers, magazines, phone, radioConversely, Internet users consume more media of all types than non-Internet usersInternet users also often “multitask” with media consumptionMultimedia – reduces cannibalization impact for some visual, aural mediaSlide 10-*Copyright © 2011 Pearson Education, Inc.Media Revenues by ChannelSlide 10-*SOURCE: Based on data from U.S. Census Bureau, 2010Figure 10.2, Page 652Copyright © 2011 Pearson Education, Inc.Relative Size of the Content Market, Based on Per-Person SpendingSlide 10-*Figure 10.3 Page 653SOURCE: Based on data from U.S. Census Bureau, 2010Copyright © 2011 Pearson Education, Inc.Digital Content Delivery ModelsThree commercial content business modelsPaidFree with advertiser supportFreemiumFree content can drive users to paid contentUser-generated contentOver 89 million users have created, 124 million have viewedTypically free, advertising supportedYouTube the leading advertiser-supported video siteSlide 10-*Copyright © 2011 Pearson Education, Inc.Free or Fee?Early years: Internet audience expected free content but willing to accept advertisingEarly content was low-qualityWith advent of high-quality content, fee models successfuliTunes29 million buy from legal music sitesNewspapers charging for premium contentYouTube cooperating with Hollywood production studiosSlide 10-*Copyright © 2011 Pearson Education, Inc.Media Industry StructurePre-1990, smaller independent corporations in separate industries Today, three separate segments: Publishing, newspapers, entertainmentEach segment dominated by a few key playersLarger media ecosystem includes millions of individuals, entrepreneurs (blogs, YouTube, independent music bands)Slide 10-*Copyright © 2011 Pearson Education, Inc.Media ConvergenceTechnological convergence: Hybrid devices combining functionality of existing media platforms, e.g. PDAsContent convergence: Three aspects: Design, production, distributionNew tools for digital editing and processingIndustry convergence:Merger of media enterprises into firms that create and cross-market content on different platformsSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence and the Transformation of Content: BooksSlide 10-*Figure 10.5, Page 659Copyright © 2011 Pearson Education, Inc.Online Content Revenue Models and Business ProcessesMarketingFree content drives offline revenuesAdvertisingFee content paid for by advertisingPay-per-view/pay-for-downloadCharge for premium contentSubscriptionMonthly charges for servicesMixedSlide 10-*Copyright © 2011 Pearson Education, Inc.Making a Profit with Online Content25% users will pay for some contentFour factors required to charge for online contentFocused marketSpecialized contentSole source monopolyHigh perceived net valuePortion of perceived customer value that can be attributed to fact that content is available on the InternetSlide 10-*Copyright © 2011 Pearson Education, Inc.Revenue and Content CharacteristicsSlide 10-*Figure 10.6, Page 664Copyright © 2011 Pearson Education, Inc.Key Challenges Facing Content Producers and OwnersTechnologyBandwidth issues for high definition video, CD-quality musicCost Internet distribution more costly than anticipated, for migrating, repackaging, and redesigning contentDistribution channels and cannibalizationDigital rights management (DRM)Use of technology to circumvent DRMInterests of content creators versus technology companies that profit from illegal downloadsSlide 10-*Copyright © 2011 Pearson Education, Inc.Insight on BusinessWho Owns Your Files?Class DiscussionWhy does digital content need any more protection than analog content stored on records and tapes?What is DRM software? Have you ever encountered digital content that is protected with DRM? Why did Apple abandon its DRM software? Is DRM working for Amazon’s Kindle? Does it matter to the consumer whether content purchased is “owned” or “licensed”?How does DRM potentially interfere with “fair use” of copyrighted material?Slide 10-*Copyright © 2011 Pearson Education, Inc.Online NewspapersMost troubled segment of publishing industryHowever, online readership growing at 15%Online newspapers one of most successful forms of online content to dateFew have reached break-evenAggregators have used Web to take away part of newspapers’ content/business – classifieds (Craigslist), weather, news, etc.Slide 10-*Copyright © 2011 Pearson Education, Inc.Monthly Unique Visitors at Top 10 Online NewspapersSlide 10-*SOURCES: Based on data from comScore, 2010; eMarketer, 2010Figure 10.7, Page 672Copyright © 2011 Pearson Education, Inc.Newspaper Business ModelsInitially fee-based, then free, and now beginning a return to fee-basedNewspaper headlines are primary content on Google News, Yahoo NewsNewspapers have sought industry-wide alliances, e.g. CareerBuilder Other strategiesRevenue sharing with Internet titansNew reader devicesSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence in Newspaper IndustryTechnology:Slow move to Internet; beginning to incorporate video, RSS etc.Content:Four content changesPremium archived contentFine-grained searchingVideos reportingRSS feedsTimeliness allows competition with TV/radioIndustry structure: Has not seen much convergence due to limited returnsSlide 10-*Copyright © 2011 Pearson Education, Inc.Challenges: Disruptive TechnologiesClassic case of disruptive technology?Industry still in fluxNewspapers have significant assets: ContentReadershipLocal advertisingAudienceWealthier, older, better educatedOnline audience will continue to grow in numbers and sophisticationSlide 10-*Copyright © 2011 Pearson Education, Inc.E-booksEvolutionProject Gutenberg (1970s)Voyager’s books on CD (1990s)Adobe’s PDF formatTypes of commercial e-booksWeb-accessed e-bookWeb-downloadable e-bookDedicated e-book readerKindle, Sony, NookGeneral purpose PDA readerPrint-on-demand booksSlide 10-*Copyright © 2011 Pearson Education, Inc.Book Audience Size and GrowthAmericans read about 10 books per year per person; spend $106/year on trade booksE-book sales2% of book sales in 2010Will grow to 10% by 2014Fastest growing delivery platform for text contentSlide 10-*Copyright © 2011 Pearson Education, Inc.Growth of E-Book Revenues 2009-2014Slide 10-*SOURCES: Based on data from Assoc. of American Publishers, 2010; authors’ estimates.Figure 10.9, Page 680 Copyright © 2011 Pearson Education, Inc.E-book Industry Revenue ModelsPay-for-download Publishers selling electronic versions of print books to online intermediaries such as Barnesandnoble.com and AmazonLicensing of entire e-libraries of contentSimilar to subscription model, monthly or annual feeCustomers typically major institutions, librariesAdvertising-supported modelDistributor (e.g. Google) arranges for rights to display book, shares ad revenues with publishersSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence in Publishing IndustryTechnological convergence slowed by:Poor resolution of computer screensLack of portable reader devices to compete with bookDRM concernsLack of standardsPotential solutionsSub-pixel display technologiesElectronic ink technologyDRM softwareEmerging standards: OEB, ONIXSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence in Publishing Industry(cont’d)Content E-books in media integration stageXML and large-scale online text/graphic storage systems have transformed book production and made it more efficientIndustry structureIndustry still dominated by a few titansSome challenges from:Google, Microsoft in indexing copyrighted booksBarnes & Noble move into publishingSelf-publishingSlide 10-*Copyright © 2011 Pearson Education, Inc.Insight on SocietyThe Future of BooksClass DiscussionWhat technologies are changing the concept of what a book is?Do you consider Wikipedia a “book,” and if so, what type of book?What qualities makes Unigo a threat to traditionally published college references?Are some types of traditional books more threatened by Internet technologies than others?Slide 10-*Copyright © 2011 Pearson Education, Inc.Online Entertainment IndustryMajor players:Television, radio, Hollywood films, music, video gamesUndergoing a transformation brought about by Internet, aided by:iPod/iPhone video and music platformDigital cellular networksSocial networking platformsViable business models in music subscription servicesWidespread growth of broadbandBusiness models that eliminate need for DRMSlide 10-*Copyright © 2011 Pearson Education, Inc.The Five Major Players in the Entertainment IndustrySlide 10-*Figure 10.10, Page 687SOURCE: Based on data from U.S. Census Bureau, 2010; NPD Group, 2010, authors’ estimates.Copyright © 2011 Pearson Education, Inc.Online Entertainment Audience SizeOnline “traditional” entertainment (films, music, games): Music downloads, followed by online games and TV, radioUser-generated content:Substitutes for and complements traditional commercial entertainmentTwo dimensions: User focus User controlSites that offer high levels of both will growSlide 10-*Copyright © 2011 Pearson Education, Inc.Projected Growth in Traditional Online Entertainment (In Millions)Slide 10-*SOURCES: Based on data from eMarketer, 2010, Stevenson, 2010; authors’ estimates.Figure 10.11, Page 689Copyright © 2011 Pearson Education, Inc.User Role in EntertainmentSlide 10-*Figure 10.12, Page 690Copyright © 2011 Pearson Education, Inc.ContentInternet has greatly changed packaging, distribution, marketing, sales of traditional entertainmentGreatest impact: MusicFrom CD of 12-15 songs to single-song downloadsGroups can bypass traditional marketing and salesRevenue ModelsMarketing, advertising, pay-per-view, subscription, value-added, mixedSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence inEntertainment IndustryTechnology convergence:PCs and handheld devices (iPods) become music listening devicesPC has become game stationGame stations connect to InternetMovies and televisionMove toward Internet distributioniTunes Store, Netflix, HuluSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence inEntertainment Industry (cont’d)Content convergenceSignificant progress toward digital tools for content creation and productionDigital cameras, workstationsMusic recording and production highly digitized; some distribution direct to Internet, bypassing CD production stageSlide 10-*Copyright © 2011 Pearson Education, Inc.Convergence inEntertainment Industry(cont’d)Industry structureFractionated: Many players and forces shape industryReorganization of value chain needed for aggressive move to WebPossible alternative modelsContent owner direct modelInternet aggregator modelInternet innovator modelSlide 10-*Copyright © 2011 Pearson Education, Inc.Entertainment Industry Value ChainsSlide 10-*Figure 10.13, Page 694Copyright © 2011 Pearson Education, Inc.Insight on TechnologyHollywood Meets the Internet: Round 3Class DiscussionWhat strategies has Hollywood pursued to combat movie piracy? Are there legitimate ways that videos can be distributed on the Web?How can the differentiation of DVD products help in combating piracy?Do you think Hollywood is doing a better job of protecting its content than the music industry?Slide 10-*Copyright © 2011 Pearson Education, Inc.All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice HallCopyright © 2011 Pearson Education, Inc.