TRF 235 Trade Magazine https://lpelin.expressions.syr.edu/trf235 Articles written by students, for students Sat, 27 Feb 2016 02:24:24 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.11 NPR In Radio Production https://lpelin.expressions.syr.edu/trf235/2016/02/24/npr-in-radio-production/ Wed, 24 Feb 2016 22:22:41 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1177 Continue reading ]]>  

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National Public Radio, Inc., commonly known as NPR, is the leading membership and representation organization for public radio, and services hundreds of member radio stations worldwide. NPR is a non-profit, funded membership organization that produces and distributes media content, both nationally and internationally, as a syndicator for its member stations (Vault.com, 2016). It was created through the Corporation for Public Broadcasting (CPB), a non-profit corporation that is funded by the United States government to promote public broadcasting. NPR was founded in 1970, and is now headquartered in Washington, D.C.

The company programmed its first radio broadcast that aired in April of 1971, that consisted of live coverage of the Senate Vietnam hearings that were occurring at that time (Reference for Business, 2016). Shortly after that, NPR debuted what would become their most popular program to date: All Things Considered, a daily news radio program.

NPR has a news staff of over 340 combined reporters, newscasters, editors, producers, hosts, and more (NPR.org, 2016). The company has a management team consisting of CEO/President Jarl Mohn, four key executives, and a Board of Directors. The Board of Directors is made up of Jarl Mohn, Chair of the NPR Foundation Howard Wollner, 10 NPR Member Station Managers, and five selected members of the general public (Bloomberg Business, 2016).

jarl mohn

CEO Jarl Mohn

NPR owns the copyrights to all content that it produces, as well as other original media, such as the NPR.org website and the NPR News iPhone app. Along with using the NPR brand to distribute programs produced by its independent producer member stations, NPR is highly known for producing its own radio and media content, including news, music, talk shows, and more. Programs that NPR produces itself are news and public affairs programs, such as Morning Edition and All Things Considered, and cultural programming, such as Snap Judgement and All Songs Considered. The NPR.org website provides updated news, podcasts, blogs, streaming audio, exclusive multimedia features including video and photojournalism, and free access to over 10 years of archived coverage done by NPR. It also programs a channel through Sirius XM Satellite Radio, and produces several international programs in over 150 countries around the world. The NPR Twitter account is one way for its followers to see news and social updates, including stories ranging from Syrian refugees to scientific research about soot in snow (NPR Twitter, 2016). You can also find an NPR Soundcloud account that offers music playlists, poetry audio, and more (NPR Soundcloud, 2016). What seems to be NPR’s most valued asset, though, is its control over the Public Radio Satellite System. This system is the main satellite and internet content distribution service that distributes NPR programs and other public radio programming for competing programming producers all over the world (NPR.org, 2016).

Given the nature of NPR’s commercial-free programming, member stations are required to be non-commercial or non-commercial educational radio stations. You could say that these member stations are among the “suppliers” for NPR’s business. According to the official NPR website, the organization reaches 25.9 million weekly listeners through over 1,000 public radio stations on air. The NPR online counterpart, NPR.org, brings in an audience of 25.6 million monthly users (National Public Media, 2016). Among its biggest business competitors are the other large public radio providers, including American Public Media, and Public Radio International (NPR.org, 2016). American Public Media is the second largest provider for public radio programming in the United States and is also a non-profit organization. NPR of course also competes with hundreds of locally and independently produced programs that are not being distributed by the NPR brand.

Given that NPR is a non-profit organization, it must receive its revenues from various streams in order to stay afloat. The bulk of its revenues come from fees that it charges its member stations for programming, and for an annual member due. The pricings of those programming and distribution fees differ because NPR charges more per station as the volume of listening increases. There are also flat fees that it collects from users of the NPR-owned Public Radio Satellite System. The CPB grants federal funds to public radio stations, that in turn pay NPR for its programming and distribution, and that is a significant aspect to NPR’s revenue. Since NPR also provides digital services for its audience, the member stations must also pay a typically flat rate for that support. It also receives grants from foundations, sponsorships, and contributions from independent supporters.

Although NPR is known for being commercial free, there are still advertising revenues that it can generate. In non-commercial radio, hosts often use a form of advertising called underwriting. With underwriting, a host can advertise for sponsors by making brief statements that may include corporate slogans, descriptions of products and services, or contact information such as websites. NPR uses its online services to generate advertising revenue through banner ads featured on the homepage. Interestingly enough, too, NPR offers the sale of consumer products through its NPR Shop that adorn the NPR brand so that supporters can self promote the company (NPR.org, 2016).

NPR has been around for about 45 years, or what feels like forever to some of us. While it has done an excellent job in providing its partners with a stable and successful platform for public radio programming and distribution, it also has plans to delve in the innovative aspect of the broadcasting industry. In the last few years it has launched NPR Labs, an innovative research and consulting service that is focused on the research and development of radio technology in the industry. In fact, the NPR Labs engineers have developed digital multicasting for HD Radio, which became the replacement technology for analog radio. Soon to come are innovations for the development of accessible media services for the hearing- and vision-impaired. According to NPR, it is the only major broadcast organization that invests in radio technology assessment, and that contributes to its name as the leading organization for public radio (NPR.org, 2016).

npr labsReferences

N. (2016). NPR Stations and Public Media. Retrieved February 8, 2016, from http://www.npr.org/about-npr/178640915/npr-stations-and-public-media

N. (2016). Overview and History. Retrieved February 8, 2016, from http://www.npr.org/about-npr/192827079/overview-and-history

N. (2016). Public Radio Audience Demographics – NPR Profiles. Retrieved February 8, 2016, from http://nationalpublicmedia.com/npr/audience/

N. (2016). Public Radio Finances. Retrieved February 8, 2016, from http://www.npr.org/about-npr/178660742/public-radio-finances

N. (n.d.). Syria’s Regime And Rebel Group Agree To Truce That Will Begin Saturday https://t.co/e2SYpv8MdP. Retrieved February 23, 2016, from https://twitter.com/NPR/status/702100782024241153

National Public Radio – Company Profile, Information, Business Description, History, Background Information on National Public Radio. (n.d.). Retrieved February 8, 2016, from http://www.referenceforbusiness.com/history2/97/National-Public-Radio.html

NATIONAL PUBLIC RADIO, INC. (n.d.). Retrieved February 8, 2016, from http://www.vault.com/company-profiles/media-entertainment/national-public-radio,-inc/company-overview.aspx

National Public Radio, Inc.: CEO and Executives. (n.d.). Retrieved February 8, 2016, from http://www.bloomberg.com/research/stocks/private/people.asp?privcapId=4271262

NPR. (n.d.). Retrieved February 23, 2016, from https://soundcloud.com/npr/sets

T. (n.d.). National Public Radio (NPR) | American organization. Retrieved February 8, 2016, from http://www.britannica.com/topic/National-Public-Radio

 

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PRISM Worldwide https://lpelin.expressions.syr.edu/trf235/2016/02/24/prism-worldwide/ Wed, 24 Feb 2016 20:10:16 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1167 Continue reading ]]> PRISM Worldwide: Distribution and Exhibition in Advertising

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You may not have heard of PRISM, but you definitely know its work. PRISM is a pioneer in the sports marketing and activation business, specifically delivering in areas such as sponsorship, content creation, public relations, and activation (Prism, n.d.). PRISM defines its work as “Intelligent Activation” (Prism, 2016). It focuses on the brands they work with to think of innovative new products and projects. PRISM aims to deliver mass media coverage for blue-chip brands (A guide, 2014).

 

 

The History & Structure of PRISM

PRISM is a privately held company within WPP. PRISM was acquired by WPP in 1999 and was then aligned with sister advertising company JWT (Payne, 2007). To this day, PRISM is the biggest sponsorship agency and most rewarded activation agency in WPP (Sylt, 2012).

Steve Madincea founded the company in 1993. Madincea, who was previously the commercial director of the Benetton Formula One team, is the Group Managing Director alongside Cliff Peters, the Worldwide Managing Partner, and Giles Thomas, the COO (Prism, n.d.). PRISM has between 51 and 200 employees. Its headquarters are located in Knightsbridge in London, UK in the same office building as its sister advertising company JWT (LinkedIn, 2016). PRISM also has strategic office locations across five continents in cities such as Bangkok, Cologne, London, Melbourne, Santa Monica, Shanghai, and Amsterdam (Prism, n.d.).

PRISM has also received prestigious industry awards such as the Cannes Lions International Festival of Creativity and has had “finalists for the Sport Industry Group’s Best International Sport Marketing Campaign for the past four years” (LinkedIn, 2016).

 

Distribution, Exhibition & Activation

Though PRISM is active in many parts of the advertising supply chain, it is mainly focused on the distribution and exhibition of advertising and projects. The company helps connect sponsors and brands to events or consumers.

PRISM has worked with many different sponsors and companies to deliver top of the line projects. One project the company worked on was with Allianz for the London 2012 Olympic Games. Allianz wanted to become an outstanding competitor but didn’t know where to start. PRISM created an internal campaign “Team Allianz.” The campaign launched in 2011 and showcased 11 past, present, and future Olympic and Paralympic athletes. PRISM released 40 short films presenting the athlete’s stories and their journey’s. It challenged the employees to engage with the athletes and even rewarded them with tickets to support Team Allianz (Prism, 2016).

Along with distribution, comes PRISM’s definitive mission, “Intelligent Activation” (Prism, 2016). Brand activation is defined as “the seamless integration of all available communication means in a creative platform in order to activate consumers. Activation means simulating: 1. Interest, 2. Trial, 3. Loyalty” (Fankhauser, 2013). PRISM uses brand activation in a calculated and intelligent way. The company takes campaigns to the next level by distributing them while integrating and incorporating audience and employee interaction. This is one factor that makes PRISM so unique.

 

Assets of PRISM

PRISM has many strong connections with other companies, brands, and events. It works with well-known brands like Nike, Coca-Cola, Johnson & Johnson, AT&T, and Samsung. The company also has done campaigns for big events such as the Super Bowl, the Olympics, the World Cup, and Wimbledon. Listerine World CupThough it does not own or control any companies, PRISM has close ties with Formula One, Red Bull, and UEFA Champions League. PRISM is the only agency involved in the UEFA Champions league since its inception (LinkedIn, 2016). Aside from Madincea’s previous connection with Formula One, PRISM’s association with Formula One was furthered when the company was acquired by WPP. WPP CEO, Sir Martin Sorrell, is a non-executive director of Formula One motor racing (Hall, 2015). PRISM also works closely with Red Bull in partnership with Formula One sponsoring and other car companies. The company furthered its car ties and connection with Red Bull by getting involved with consumer cars such as Infinity, Ford, and Renault (Sylt, 2014). PRISM also handles the PR for Formula One.

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Business & Revenue Model

PRISM has a multi-divisional service technique. These services include Digital, Creative, Film Production, Design, and PR & Communications. Each service has subsidiary services incorporated within. With digital, PRISM works on campaign ideation, digital strategy, web design and development, and UX design. On the creative side, PRISM comes up with creative ideation and campaign strategy, intellectual property, and product planning. In the production side, it develops concepts, produces content, edits, and sources content. In design, PRISM creates brands, editorials, and advertising. With PR and communications, PRISM makes strategies, manages content, releases content, and distributes content.

Multi Divisional Services

PRISM also has a “5 D Engagement Process”, which shows the steps of engaging individuals or brands. The first D is Define, which involves research. The second D is Design, which involves creating a strategy for the companies. The third D is Develop, which is the production side of the process. Third is Deliver, which is PRISM’s way of delivering assets and publishing on identified websites from the agreed upon seeding, sharing, and placement. The final D is Deep-Dive. This is where PRISM reviews its performance and effectiveness (Prism, 2016).

5 D

PRISM’s revenue model is a fee-based model. This means PRISM creates campaigns based on a fee. Sponsors or companies pay PRISM a set amount of money that covers the entire job. This model is a good choice for PRISM because of their diverse campaigns, which allows them to create many types of media and activations and then determine a price based on what the job entails. In combination with its service technique and engagement process, PRISM succeeds in its field.

 

The Future of PRISM

PRISM has a bright future ahead. According to WPP, “PRISM is a trusted partner delivering big results at competitive events through high-profile, integrated campaigns for clients of all sizes” (Prism, n.d.). This company is going places.

 

References

Allianz. (2016). Retrieved from http://www.allianzusa.com/

AT&T. (2016). Retrieved from https://www.att.com/

Barker, S. (1999, March 26). Stop press: WPP acquires automotive specialist Prism. Retrieved February 6, 2016, from http://www.prweek.com/article/99270/stop-press-wpp-acquires-automotive-specialist-prism

Coca-Cola. (2016). Retrieved from http://us.coca-cola.com/home/

Fankhauser, D. (2013, May 15). What does a ‘custom activation’ actually look like? Retrieved February 20, 2016, from http://mashable.com/2013/05/15/custom-activation/

Ford. (2016). Retrieved from http://www.ford.com/

Formula 1. (2016). Retrieved from http://formula1.com/

A guide to Prism’s global content network. (2014). Retrieved February 8, 2016, from http://www.prismteam.com/prism-files/display-image/gcn.jpg

Hall, E. (2015, January 6). WPP leads $250 million investment round in sports marketing start-up. Retrieved February 5, 2016, from http://adage.com/article/global-news/wpp-leads-250m-investment-sports-marketing-start/296470/

The Infiniti / Renault F1 partnership. (2016). Retrieved from http://www.infiniti.com/us/

J. Walter Thompson. (2016). Retrieved from https://www.jwt.com/

Johnson & Johnson. (2016). Retrieved from http://www.jnj.com/

LinkedIn. (2016). Retrieved February 2, 2016, from https://www.linkedin.com/company/prism—public-relations-&-international-sports-marketing

Madincea, S. (2016). Steve Madincea. Retrieved from https://www.linkedin.com/in/stevemadincea

Madincea, S. (2016, February 18). Prism interview [Telephone interview].

Nike. (2016). Retrieved from https://www.nike.com/

Payne, J. (2007, April 20). Prism to unite with JWT in London offices. Retrieved February 6, 2016, from http://www.brandrepublic.com/article/651998/prism-unite-jwt-london-offices

Prism 2014 highlights. (2015, January 7). Retrieved from https://www.youtube.com/watch?v=fCjtKkuQSac

Prism about us. (2014, December 11). Retrieved February 7, 2016, from https://www.youtube.com/watch?v=HnrufAQUR-Y

Prism. (n.d.). Retrieved February 1, 2016, from http://www.wpp.com/wpp/companies/prism/

Prism team. (2016). Retrieved February 1, 2016, from http://www.prismteam.com

Red Bull. (2016). Retrieved from http://www.redbull.com/us/en

Samsung. (2016). Retrieved from http://www.samsung.com/

Sylt, C. (2012, August 5). Fourfold rise in turnover at WPP sponsorship arm Prism. Retrieved February 2, 2016, from http://www.thisismoney.co.uk/money/markets/article-2184085/Fourfold-rise-turnover-WPP-sponsorship-arm-Prism.html

Sylt, C. (2014, June 2). WPP’s Prism gets early World Cup bounce. Retrieved February 7, 2016, from http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/10868893/WPPs-Prism-gets-early-World-Cup-bounce.html

Team Allianz. (2015, June 15). Retrieved from https://www.youtube.com/watch?v=AgQcOrY1pBs

UEFA. (2016). Retrieved from http://www.uefa.com/

WPP. (2016). Retrieved from http://www.wpp.com/wpp/

WPP’s F1 sponsorship results hardly on pole position. (2011, July 10). Retrieved February 5, 2016, from http://www.pitpass.com/44174/WPPs-F1-sponsorship-results-hardly-on-pole-position

 

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Marketing and Promotion in Music: The FADER https://lpelin.expressions.syr.edu/trf235/2016/02/24/marketing-and-promotion-in-music-the-fader/ Wed, 24 Feb 2016 17:23:36 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1090 Continue reading ]]> logo

The FADER is the definitive voice of emerging music and the lifestyle that surrounds it.

BACKGROUND

The FADER is a New York City-based media brand. It started out as a magazine, and over the years developed into more than just a printed publication. The full magazine is launched bi-monthly. For 6 issues a year, a subscription in the Unite States costs $29.99. Buying hardcopies of the magazine individually costs $10 a piece. “People see The FADER logo, and it means something to them,” (thefader.com, 2016). Because everything seems to be digital these days, to adapt, The FADER website frequently creates content and posts about current music, style, and culture.

The FADER magazine was launched in 1999. Founders, Jon Cohen and Rob Stone started out as childhood friends. Years down the road they became both business partners and the co-founders of two unique companies: Cornerstone and The FADER. The two companies share an office space in New York City and collectively have about 50 employees.

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BUSINESS MODEL & ASSETS 

In 2005, The New York Times dubbed The FADER as “the new music-and-fashion bible,” (RatLiff, 2005). The FADER discovers artists before they get big and hit the mainstream. Drake is a classic example. The company discovered Drake back in 2009. Drake started as one of Lil Wayne’s affiliates. Lil Wayne’s affiliates are called Young Money. Pre-Drake, Young Money didn’t have the best reputation. When Drake joined Young Money, the hip hop music community were skeptical at first and assumed that he was ghostwriting his music. When Drake’s hit song “Best I Ever Had” was released, it quickly hit #1 on many music charts. Now, in 2016, Drake is huge! The FADER called it, “Drake was the next big thing,” (The FADER, 2009). Other artists The FADER discovered and covered include but are not limited to The White Stripes, Kanye West, and Bon Iver.

The FADER produces original content. The company has in-house photographers, videographers, writers, social media marketing team, and stylists. With its own team on board, they don’t reproduce and regurgitate information around the internet.

In addition to the magazine, The FADER produces events. These events are exclusive and produced in partnership with other brands. In a symbiotic relationship, The FADER and its clients promote one another and manipulate the way people view its brands through innovative marketing. In 2002, The FORT was created. This is another asset of the brand. The FADER FORT is a live music entity that started out as an anti-VMAs party. The VMAs are also known as the annual MTV Video Music Awards. The FADER FORT appears annually at the Austin, Texas’s South by Southwest festival and New York City’s College Music Journal festival.

WHY DOES SOCIAL MEDIA MATTER?

Posting on the social media accounts direct traffic to articles and content. It helps raise awareness around the brands and artists involved. This kind of capital is invaluable.

The FADER has collaborated with a countless number of brands. One example of a company that The FADER continuously works with is Vitamin Water. Vitamin Water is owned by Coca-Cola. Ultimately The FADER has a strong partnership with the Coca-Cola brand. The idea behind this series is “boring made brilliant.” 2015 was vitaminwater #uncapped’s 5th anniversary. The twitter handle used for the #uncapped campaign was “#vitaminwateruncapped.” 2015’s series of concerts was marketed as “5 years| 5 nights| 5 shows|, ” (The FADER, 2015). This cycle of #uncapped was a wrap. This series of events produced a lot of online coverage and buzz. In the summer of 2013, The FADER produced small unexpected secret shows throughout New York City, still in partnership with Vitamin Water. Rapper Earl Sweatshirt performed for an intimate crowd of about 30 people in an auto repair shop. Everyone was drinking vitaminwater that night. In the coming weeks, Solange performed a showcase for a small crowd in a Laundromat and the following week Travis Scott performed in a bank. He too had a small intimate audience. The FADER prides itself on its unconventional marketing strategies.

I wanted to add footage of the #uncapped events mentioned above but those videos have been made private for unknown reasons.  

Brand partnerships and sponsorships are what help make all of these campaigns possible. They fund the events. The amount of money spent and earned isn’t disclosed anywhere on the internet. Whether FADER is collaborating with Toyota Avalon, Sprite, Sonos, or Converse, these companies all agree on a budget. Once the budget is negotiated and signed off on, The FADER then takes care of how the shows are produced, promoted and covered afterwards. Recap reports are sent back to its clients. The brands that The FADER partners with aren’t as creatively involved in these campaigns. The client’s main concern is that its logo is present and that the product is heavily featured and portrayed as “cool.” As a result, the ultimate goal for these events is to help clients increase sales through fun and eccentric approaches.

Other ways that The FADER promotes its clients and its brand is through online contests and giveaways. September 17th 2015, The FADER partnered with New Era for a giveaway in celebration of its 100th issue. To participate “you would post your favorite cover in addition to why it’s your favorite for a chance to win some exclusive caps. Make sure you hashtag #FADER100,” (Pham, 2015). At the time it was a mystery as to who would make it on the covers of the 100th issue. Once launched, it was no surprise that Drake and Rihanna appeared on the covers.

The FADER website, http://www.thefader.com/, generates a significant amount of traffic each month. The FADER keeps its statistics very transparent online while similar publications such as Complex and Noisey do not. Complex and Noisey are similar music outlets- competition. When using services like Quantcast and Compete for statistics, hardly any information on unique views or page visits come up for these sites. Shouldn’t these companies be proud of their growth? Complex magazine produces 1.7 million monthly US Uniques where as The FADER produces 1.4 million monthly US Uniques, (Quantcast, 2016). Uniques is a common term used to describe the standard measure of visitors based on cookies. Cookies are small files that websites save on the computer to track how often a specific user visits the website. Websites such as Quancast have a method of converting cookies to Uniques. In marketing, it is important to understand what demographic, psychographic and geographic areas you appeal to, and don’t appeal to.

Here are The FADER’s current social media counts as of 2/24/16:

Facebook: 283,074 likes

Instagram: 227,000 followers

Twitter: 363,000 followers

Youtube: 191,000 subscribers

WHAT’S NEXT?

The FADER FORT presented by Converse will be at SXSW this coming March. The lineup for the event is TBA (to be announced). South by Southwest is an annual week-long film, interactive media, and music festival spread across the streets of Austin, Texas. Expect great things from The FADER in 2016! The team over at there comes up with unique marketing strategies that set the brand apart from others. I’m curious to see The FADER’s future collaborations and what artists it breaks next.


REFERENCES 

Aswad, J. (2015, March 16). Corner Office: Cornerstone Co-CEOs and The Fader Co-Founders Jon Cohen & Rob Stone on Riding With the Notorious B.I.G., SXSW | Billboard. Retrieved February 8, 2016, from http://www.billboard.com/articles/business/6502266/corner-office-cornerstone-the-fader-jon-cohen-rob-stone

Cornerstone Agency. (n.d.). Retrieved February 8, 2016, from http://www.cornerstoneagency.com/

Cover Story: Drake’s Rise to Fame and Fortune. (2009, September 1). Retrieved February 10, 2016, from http://www.thefader.com/2009/09/01/cover-story-drakes-rise-to-fame-and-fortune

Frank, A., McDermott, P. D., Pastel, J., & Zeichner, N. (2015, September 29). I Trust You: The Oral History Of The FADER. Retrieved February 8, 2016, from http://www.thefader.com/2015/09/29/fader-oral-history-100

Pham, R. (2015, September 17). The FADER 100th Issue Giveaway. Retrieved December 8, 2016, from http://uncvr.net/the-fader-100th-issue-giveaway/

RSVP For The FADER And vitaminwater®’s 5th Anniversary Of #uncapped. (2015, September 24). Retrieved February 10, 2016, from http://www.thefader.com/2015/09/24/rsvp-uncapped-2015

Ratliff, B. (2005, October 30). Overcoming the Stereotype of Sexy and Sophisticated. Retrieved February 8, 2016, from http://www.nytimes.com/2005/10/30/arts/music/overcoming-the-stereotype-of-sexy-and-sophisticated.html?_r=0

Mitchell, J. (2015, October 29). Get Paid To Be Yourself: The Business Of Being Rob Stone. Retrieved February 24, 2016, from http://www.forbes.com/sites/julianmitchell/2015/10/29/get-paid-to-be-yourself-the-business-of-being-rob-stone/2/#6a14b5c07444

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Marketing & Promotion- Spotify https://lpelin.expressions.syr.edu/trf235/2016/02/24/marketing-promotion-spotify/ Wed, 24 Feb 2016 17:14:14 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1157 Continue reading ]]> guida-spotify-softonic-copy-664x374

 

Company Background

In 2005, Martin Lorentzon and Daniel Ek founded Spotify in Stockholm, Sweden. The two found a creative way to “Spot and Identify” In the Spring of 2007, Spotify’s first public beta was released, and that fall, Spotify was launched for public access in Europe. Three years later, Spotify was released to the United States (TechCrunch 2013).As the company began to expand, Ek and Lorzentzon decided to introduce advertisements to Spotify. That decision turned to be quite lucrative as the company had a twenty-one million dollar valuation in its Series A Round up (TechCrunch, 2012). Spotify is one of the, if not the leader of on-demand music streaming. The app offers ad-supported free membership or premium membership for a monthly fee. The new company headquarters are located in London, England and currently employ 1,370 people (Statistics Brain, 2015).

overview

Assets

Spotify has not yet vertically integrated and has very much stayed focused on its main goal of streaming music to it’s customers. Many of the features the application has can be classified as its assets.

Through the use of Discover Weekly, Spotify has created system that recommends music to you based on your previous streaming history. Listeners look to Discover Weekly when they want to hear new music and often find their favorite songs without putting effort in researching. Spotify has essentially cut out the time spent researching and replaced it with a computer generated system that benefits all involved. Discover Weekly is only available by purchasing the premium level which seems to be a primary reason listeners subscribe. Other reasons for upgrading include eliminating advertisements and sneak previews of new songs (Global Perspectives: Marketing Management, 2012). Spotify lets users connect through various social media platforms and share their playlists and favorite tracks.

 

Spotify-premium-.99-710x341

Business and Revenue Model

Spotify aquires its content from the music owner and monetizes through its subscription based service. The application has 25-30 million subscribers and approximately 75 million on the ad-supported free tier. This number has nearly doubled since last year and shows no sign of slowing down. A marketing firm counted 317 billion on-demand streams which is a 92.8% increase from last year (Statista, 2016).  In 2014, Spotify reported that they made $1.3 billion dollars in revenues, a 45% increase from 2013. (NY Times, 2015)

Spotify has many competitors as the music streaming market has proven to be a multi-billion-dollar industry. Apple Music ($9.99/mo), Tidal ($19.99/mo), Pandora ($4.99/mo) and Soundcloud (free w/ limited ads) are some of Spotify’s biggest competitors.

Before the creation of Spotify and many other streaming apps, there was a world-wide boom in illegally downloaded music. In 2009, 95% of all music downloads in the UK were illegal (The Guardian, 2009). Although Spotify has almost eradicated illegal downloading, they were still accused of cutting out the writers and publishers for royalties. In 2014, Taylor Swift removed her music from Spotify claiming that the royalties were not sufficient and that the company was undervaluing the art. Swift’s departure inspired the likes of many other artists across the industry. Contrarily, independent artists feel that the real mistreatment is the treatment of small artists. “This royalty bias toward popular artists comes at the expense of small independent artists” (The Kernel, 2015).

Illegal-download-graph

 

Looking to the Future

As an effort to continue the growth of their empire, Spotify recently introduced a new video streaming department. “We’re bringing you a deeper, richer, more immersive Spotify experience,” stated Daniel Ek. Spotify already partners with networks like Comedy Central, ABC, BBC, and ESPN (Variety, 2015). The company should attempt to vertically integrate in the near future and attempt to compete with other video-streaming sites like YouTube and Vimeo.  In 2015, Spotify reported that their net losses were close to $197 million dollars, a thirty percent increase from 2013. Spotify said that they attribute these loses to investments its in personnel increases, product development and international expansion (NY Times, 2015). Not long after these investments, Spotify was valued at a remarkable $8.53 billion dollars after raising $526 million dollars only a few days after apple announced Apple Music to the public. This valuation makes Spotify the highest valued venture capital-backed company in Europe (The Telegraph, 2015). The sky is the limit for this streaming empire.

 

daniel_ek_and_martin_lorentzon-5-2

Martin Lorentzon (Left) and Daniel Ek (Right)

 

Works Cited:

 

 

 

  • Crook, J. (2015, July 29). A Brief History Of Spotify. Retrieved February 12, 2016, from http://techcrunch.com/gallery/a-brief-history-of-spotify/

 

  • Davidson, L. (2015, June 10). Spotify valued at $8.53bn valuation after fresh funding round. Retrieved February 11, 2016, from http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11664186/Spotify-hits-8.53bn-valuation-after-fresh-funding-round.html

 

  • Faughnder, R. (2015, June 28). Apple Music versus the streaming competition. Retrieved February 12, 2016, from http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-streaming-spotify-apple-music-tidal-20150629-story.html

 

 

 

 

  • Richter, F. (2016, January 12). Infographic: The Rise of Music Streaming Continues. Retrieved February 12, 2016, from https://www.statista.com/chart/4220/music-sales-in-the-united-states/

 

 

 

  • Sullivan, C. (2015, May 29). Why Spotify is the Next Must-Have Marketing Tool. Retrieved February 14, 2016, from http://www.targetmarketingmag.com/article/marketing-with-music-how-spotify-becoming-the-next-must-have-marketing-tool/

 

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Focus Features Production https://lpelin.expressions.syr.edu/trf235/2016/02/24/focus-features-production/ Wed, 24 Feb 2016 16:57:13 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1133 Continue reading ]]> Focus Features

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In a world where box office hits fill the large majority of theaters across the country, it is interesting to take a deeper look into a specialty film production company. With nine nominations for best picture at the Academy Awards, Focus Features has produced titles such as Brokeback Mountain, Dallas Buyers Club, The Theory of Everything, and more. With an interesting path to its creation, Focus Features is an ever-changing company that is compelling to examine.

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Company Management

Focus Features, the Los Angeles based company formed in 2002, actually has roots that begin in 1991 with Ted Hope and James Schamus’ creation of the independent film company Good Machine (referenceforbusiness.com, 2006). This small New York based film company began to slowly grow, eventually forming a joint venture with another independent producer, October Films, to create Good Machine International, bringing them to a world wide stage (referenceforbusiness.com, 2006). After this had occurred, a fellow independent company was formed in 1999, USA films, which was made up of October, Gramercy, and other Polygram Units. Following this creation, in 2001 USA films was purchased by Universal in a 7 billion dollar deal that encompassed all of the USA networks (referenceforbusiness.com, 2006). Finally, this allowed for Universal to purchase Good Machine in 2002, merging the company with USA films to create what is now known as Focus Features.

James Schamus was given the job of CEO for Focus Features, a job which was his for 11 years. Schamus held this position, heading a company that had built up to 104 employs, spread across Los Angeles, New York, and London, until 2013 when he was suddenly replaced by then CEO of Film District, Peter Schlessel (Stewart, 2013). This changing of the guard also lead to a relocation of the Focus headquarters, from New York to Los Angeles (Stewart, 2013). Universal’s motives behind the many changes to Focus was that they said it promised to release more films a year, with a wider appeal than before (Stewart, 2013).

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Company Assets

Today the company is almost 200 employees strong, operating as Focus Features in North America and to the rest of the world as Focus Features International (Linkedin.com, 2016). Universal has eased the process for Focus to acquire different companies and assets. It has allowed Focus to open more divisions within the company. For example, in 2004 it created Rogue, which developed specifically action, thriller, and suspense films; Rogue was later sold to Relativity Media for roughly 150 million dollars in 2009 (Cieply, 2009). Universal has also enabled Focus to create movies such as Paranormal Activity 2, The Purge Anarchy and more due to Universal’s 10 year, first-look deal with Blumhouse Productions, a company known for making high profits off of very low budget films (Cunningham, 2014). One last notable division under Focus Features’ reach, is that of Gramercy. The company, which was formed in 1992, was recently revived by Focus in early 2015 to work on horror, action and sci-fi pictures (Petski, 2015). Focus Features is a company that hasn’t sat still since its creation, always allowing for new innovations and constant changes which has helped keep the company thriving to this day.

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Business Model

Comparable to all companies, Focus Features’ main goal is the make money, and as its company has evolved over the years, so has its business model. Focus has always been a producer and distributor of film, but over the years it has continued to gradually shift towards more production. Reaching the audience becomes tougher every year, not only because it is difficult to create new, original, entertaining content, but also because the number of competitors increases every year. Focus Features has to compete with the top film companies in the world, such as Lionsgate Entertainment, Relativity Media, and the major film producers like Disney and 21st Century Fox (Goodrow, 2016). Even with such fierce competition, Focus has stayed above water by producing critically acclaimed work year after year. Focus is able to do this by acquiring some of the most intriguing intellectual property on the market. This can be seen in a recent 9-million-dollar acquisition of a Berlin film Loving, an interracial marriage drama that is described as a love story for the ages (Fleming Jr, 2016).

Revenue Model

Initially, Focus was concerned with box office earnings and DVD sales. It sought to improve DVD sales by working with retailers such as Virgin, by having them display its films on rotating rack, leading to sales of over 2 million copies of Focus’ Assault of Precinct 13 within the first week (referenceforbusiness.com, 2006). As time has progressed, and the DVD has become less and less relevant, Focus has continued to adjust to the times, as displayed in its move to Los Angeles. Supplying itself with established and rising filmmakers and talent, it has been able to produce more films and reach wider audience (focusfeatures.com, 2016). A majority of the money Focus is able to produce comes from a foreign audience. Through the combination of foreign-pre sales, a co-financing deal with Commerzbank (A German based Bank) and different equity deals, Focus is able to easily survive lower domestic box office profits (Eller, 2010). Also, with new deals with companies such as Blumhouse Productions, Focus is able to earn millions at the box office with movies with very low production budgets. This formula has kept Focus a consistently profitable company over the span of its existence (Eller, 2010).

Future

Adaptation is necessary to keep a company afloat in the ever changing Film industry. This accounts for the rather complex history of Focus Features and leads one to predict an equally scrambled future. Evidence of this is that current CEO, Peter Schlessel, will be replaced by Peter Kujawski on April 1st of this year (Siegel, 2016). Kujawski, the current managing director of Universal Pictures International Production will be taking over due to a slower year than expected in the third year of Schlessel’s reign (Siegel, 2016). Only time will tell if Focus Features has made the correct management changes.

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References

Cieply, M. (2009, January 04). Universal Sells Rogue for $150 Million. Retrieved from http://www.nytimes.com/2009/01/05/business/media/05rogue.html

Cunningham, T. (2014, July 20). Blumhouse Signs 10-Year Production Deal With Universal Pictures. Retrieved from http://www.thewrap.com/blumhouse-prods-signs-10-year-production-deal-with-universal-pictures/

Eller, C. (2010, May 25). Positive cash flow through hits and misses makes Focus Features an attractive asset. Retrieved from http://articles.latimes.com/2010/may/25/business/la-fi-ct-focus-20100525

Fleming Jr, M. (2016, February 13). Focus Features Makes Big Berlin Deal; $9 Million For Interracial Marriage Drama ‘Loving’. Retrieved from http://deadline.com/2016/02/loving-joel-edgerton-ruth-negga-michael-shannon-focus-features-interracial-civil-rights-richard-and-mildred-loving-berlin-1201702174/

Focus Features | About Us. (2016). Retrieved from http://www.focusfeatures.com/about

Focus Features – Company Profile, Information, Business Description, History, Background Information on Focus Features. (2006). Retrieved from http://www.referenceforbusiness.com/history2/32/Focus-Features.html

Focus Features Motion Pictures and Film. (2016). Retrieved from https://www.linkedin.com/company/focus-features

Focus Features revives Gramercy label for genre films. (2015, May 20). Retrieved from http://www.filmjournal.com/news/focus-features-revives-gramercy-label-genre-films

Goodrow, B. (2016). Key Competitors. Retrieved from http://lionsgateentertainmentprofile.weebly.com/key-competitors.html

Petski, D. (2015, May 20). Focus Revives Gramercy Pictures Label For Genre Films. Retrieved from http://deadline.com/2015/05/focus-features-revives-gramercy-pictures-label-genre-films-1201430500/

Siegel, T. (2016, February 4). Focus Features Shake-Up: Peter Schlessel Out. Retrieved from http://www.hollywoodreporter.com/news/focus-features-shake-up-peter-862037

Stewart, A. (2013, October 10). Focus Features Shake-Up Blurs Forecast for Specialty Biz. Retrieved from http://variety.com/2013/biz/news/focus-features-shake-up-blurs-forecast-for-specialty-biz-1200709829/

Stewart, A. (2013, October 02). Revamped Focus Features Led by Peter Schlessel Relocating to L.A. Retrieved from http://variety.com/2013/film/news/breaking-focus-features-ceo-james-schamus-out-peter-schlessel-to-take-over-1200688551/

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Media Rights Capital: Perfecting Online Video Production https://lpelin.expressions.syr.edu/trf235/2016/02/24/media-rights-capital-perfecting-online-video-production/ Wed, 24 Feb 2016 16:52:52 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1122 Continue reading ]]> key_art_mrc_studios1

As new media platforms continue to emerge, traditional media companies are constantly being challenged by adversity. To stay in business, companies must be innovative in order to adapt to the technological changes brought about by new consumer behavior. Some businesses struggle to stay afloat, while others thrive off of the new trends like a surfer riding a wave. Several media systems have been disrupted by the invention of the internet, and many broadcast networks were forced to create new viewing experiences such as DVR and On Demand. Traditional studios and production companies were also affected by online media, having to find new distribution channels for their content. One of these independent film and television studios is called Media Rights Capital. By working with larger studios and networks to distribute its content, Media Rights Capital produces films and TV series. The difference between it and most production companies is that it produces content for online streaming services like Netflix, as well as traditional TV networks. Media Rights Capital has a working business model for now, but the diversification of online video gives independent networks, like Netflix, the opportunity to create their own content for a smaller cost. If this trend continues, companies like Media Rights Capital will need to innovate once more if it is to stay in business.

 

The Company

Media Rights Capital, also known as MRC Studios, was founded in 2004 by Asif Satchu and Modi Wiczyk as a film studio (mrcstudios.com, 2016). MRC went on to produce and finance original TV series in 2007. It created content for premium networks and studios such as HBO and Universal, respectively. And according to the company’s LinkedIn profile, it is backed by investments from the likes of Goldman Sachs, WPP Group PLC, and AT&T. It also lists itself in the broad category of 11-50 employees (linkedin.com, 2016). Headquartered in Beverly Hills, CA, MRC is at the cultural center for media production. Although MRC was originally controlled by its investors, it is not wholly owned by any of them. In 2014, another minority stake was transferred into the hands of Guggenheim Partners for around $240 million, valuing MRC “at more than $1 billion” (Shaw & Waxman, 2014). Possibly contributing to this valuation is the fact that Media Rights Capital owns the rights to all of its content, including “House of Cards,” “Ted,” and “Furious 7.”

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Ted 2

Business Model

Companies are aware of the ever-changing environment around them, but that doesn’t mean they are always ready to adapt. This wasn’t the case for Media Rights Capital. Before Netflix became a popular distribution channel, and thus prior to “House of Cards,” MRC had a head start in producing content compatible with digital platforms (Patel, 2014). It produced an animated series with actor Seth MacFarlane, titled “Seth MacFarlane’s Cavalcade of Cartoon Comedy.” The experience was no doubt a differentiator from MRC and similar companies, but Patel believes the knowledge from that experience is what pushed it over the top. Simply put, online video caters more to long-form content rather than short-form animations. “House of Cards” as a show is Netflix’s business model in itself, but MRC has bigger and broader aspirations.

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House of Cards

MRC wasn’t always successful, however. One of its biggest blunders occurred in 2008, when The CW network was receiving terrible Sunday ratings. The network figured that by outsourcing content control to Media Rights Capital, it would help CW improve (Collins, 2008). This was a learning experience in realizing that among competitors, the audience gravitates toward established product (Hibberd, 2008). With the creation of Netflix and other online video services, viewers can watch their favorite shows anytime they want to. In effect, MRC no longer has to compete with live shows airing at the same time as its shows do, and that is part of its business model. As mentioned before, among several premium TV networks, MRC started by producing and financing films with studios like Universal Pictures. The two companies agreed that Universal would distribute 20 movies for Media Rights Capital. In the past, those two have co-produced films such as “Bruno” and “The Invention of Lying” (White, 2010). By producing the films by itself, MRC is in command of creative control. Its only burden is finding studios or networks to distribute the content for them, and for the right price.

 

Revenue Model

On the traditional TV networks, MRC sold ad time for shows it was broadcasting. Along with that, “MRC has secured distribution outlets that give it a steady revenue stream” (Grover, 2008). The revenue model for Netflix is very different from traditional TV, as it is based on a monthly subscription fee, rather than selling advertisement slots. MRC and other producers still receive a fair cut, but the model is very different.resizedimage450240-bottom-up-vs-top-down-forecasting_2 What makes Media Rights Capital so diversified, though, is the amount of different distribution channels it has. For films which go to theaters, MRC makes its money from box office sales. Its movie “Ted” cost $50 million to make, yet it generated $549.4 million from ticket sales worldwide. The investors are unique in their own right, and experts believe that MRC has a healthy line of credit, possibly preventing it from starting a product that can’t be financed (Grover, 2008).

 

Moving Forward

As the internet has changed the film and television industries both to great extents, companies have become more creative and innovative. Media Rights Capital is one of those companies who found a way to constantly succeed in an ever-changing industry. As we look ahead into the future of online video, TV networks are more likely to drop their production companies and move to in-house producing to cut costs. Some companies like Amazon and Hulu are doing just that, which threatens companies like MRC (Bishop, 2015). Netflix may be in the process of this also, but MRC owns the rights to “House of Cards,” so it couldn’t take that show away. MRC also secured the rights to make films based off of Stephen King’s “The Dark Tower” series (Fleming, 2012). MRC got in the game at the right time, and excelled in what was uncharted territory.

 

References

Bishop, B. (2015, September 25). Netflix isn’t going to rely on Hollywood to make its TV shows. Retrieved February 10, 2016, from http://www.theverge.com/2015/9/25/9398465/netflix-original-series-new-production-company

Collins, S. (2008, November 21). CW will abandon Sunday lineup. Retrieved February 10, 2016, from http://articles.latimes.com/2008/nov/21/business/fi-cw21

Erlichman, J., & Palazzo, A. (2014, February 5). Guggenheim Said to Invest in ‘House of Cards’ Maker MRC. Retrieved February 10, 2016, from http://www.bloomberg.com/news/articles/2014-02-04/guggenheim-said-to-invest-in-house-of-cards-maker-mrc

Fleming, M., Jr. (2012, August 20). ‘Ted’ Backer MRC In Talks To Finance Stephen King’s ‘The Dark Tower’ Retrieved February 10, 2016, from http://deadline.com/2012/08/did-warner-bros-just-bypass-gold-on-the-ground-by-dropping-the-dark-tower-321889/

Grover, R. (2008, October 1). Media Rights Capital Gets Credit. Retrieved February 10, 2016, from http://www.bloomberg.com/news/articles/2008-10-01/media-rights-capital-gets-creditbusinessweek-business-news-stock-market-and-financial-advice

Hibberd, J. (2008, November 21). CW deletes MRC Sunday block. Retrieved February 10, 2016, from http://www.hollywoodreporter.com/news/cw-deletes-mrc-sunday-block-123374

MRC Studios: Overview | LinkedIn. (n.d.). Retrieved February 10, 2016, from https://www.linkedin.com/company/media-rights-capital

Media Rights Capital. (n.d.). Retrieved February 10, 2016, from http://www.mrcstudios.com/about/index

Patel, S. (2014, February 14). How Media Rights Capital Built Its ‘House of Cards’ – VideoInk. Retrieved February 10, 2016, from http://www.thevideoink.com/features/media-rights-capital-built-house-cards/#.VrslIpMrKRt

Shaw, L., & Waxman, S. (n.d.). Guggenheim Invests $240 Million in ‘House of Cards’ Producer Media Rights Capital (Exclusive). Retrieved February 10, 2016, from http://www.thewrap.com/guggenheim-capital-invests-200-million-house-cards-producer-media-rights-capital/

White, M. (2010, May 27). Universal Agrees to Distribute Movies for Media Rights Capital. Retrieved February 10, 2016, from http://www.bloomberg.com/news/articles/2010-05-27/universal-pictures-agrees-to-distribute-movies-for-media-rights-capital

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Broadcast TV Post Production: Broadway Video Entertainment https://lpelin.expressions.syr.edu/trf235/2016/02/24/broadcast-tv-post-production-broadway-video-entertainment/ Wed, 24 Feb 2016 16:30:44 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1124 Continue reading ]]> Broadwayvideoweblogo

History and Corporate Structure

In 1979 Lorne Michaels founded Broadway Video Entertainment, Inc. in New York City. Broadway Video is an entertainment and media company that produces and distributes prime time and late night comedic content.  Lorne Michaels started in the entertainment business as the creator of Saturday Night Lorne-michaelsLive, having been hired by NBC to replace the reruns that would air on Saturday nights. Except for a five-year gap from 1980-1985, Michaels has been Saturday Night Live’s executive producer for the entire time that the show has been on the air (Lorne Michaels). Lorne Michaels is the founder and executive producer while Jack Sullivan is the Chief Executive Officer at Broadway Video (Bloomberg.com).

Company Assets

Broadway Video created a ventures department to be in charge and maintain its assets. This department is in charge of creating partnerships, acquisitions, investment, and the joint ventures that Broadway Video engages in (Broadwayvideo.com). Broadway Video has investments and partnerships with many technology companies that have a focus on entertainment. One of the investment opportunities that Broadway Video Ventures meerkatengaged in is with a start-up called Meerkat. Meerkat is a smartphone app that allows the user to live stream what they are doing (Flynn, 2015). This allows everyday people to live stream their lives and it also can allow different celebrities to use the app to give their fans insights into their life.  One of Broadway Videos assets is a company called Above Average. Above Average is one of the online distribution sights for original comedic content (Aboveaverage.com). Above Average gives the different content that Broadway Video creates another place to be seen and for money to be made of the product. Since Broadway Video owns Above Average it has a direct link to its own distribution. This means that it is able to not only be in the production side of the supply chain but also enter into the distribution side.

Business Model

Broadway Video Entertainment is broken down into 4 products: television, film, enterprises and post-production (Broadwayvideo.com). The television department of Broadway Video focuses on developing programming for various outlets. The television
department has produced shows such as Saturday Night Live, 30Rock, and Portlandia. The film department of Broadway Video is located in Los Angeles. Broadway Video helped to create films like Mean Girls.  The post-production department of Broadway video is the original department of the company. The enterprises department of Broadway Video deals with all the licensing and distribution of the library.  The Post-production office takes the recorded material and completes different editing and effects to create the finished product. Broadway Video post-production works with music, television, film, digital and commercials. Broadway Video Entertainment’s competitors are all post-production companies that are attempting to edit and distribute content for television, film and music.

Revenue Model

Broadway Videos revenue comes from networks and companies purchasing production and post-production services. When a network or company brings its content to Broadway Video for post-production services it will pay a fee for that service. The amount that the client pays is dependent on what it wants done, how big the project is and the time frame that is allowed for Broadway Video to work on the project.  Another revenue stream for snlBroadway Video is through the content that it owns, such as Saturday Night Live. Since Broadway Video owns it in order for NBC to be able to air Saturday Night Live it has to purchase the rights from Broadway Video. Lorne Michaels came up with a new way for him to make revenue from Saturday Night Live by selling sponsored ad placements during the show that he will be able to use to make a profit while still completing the same basic product (Atkinson, 2014).

Other interesting facts about Broadway Video

Broadway Video is working with a newly founded partnership with Aspera to move their data back and forth from their New York office to their Los Angeles office quicker and more efficiently. This partnership will allow Broadway video to complete its projects faster while also utilizing teams from both the New York and Los Angeles offices to produce the best results for the client (Globenewswire.com, 2015). Along with its recent partnership with Aspera, Broadway Video has also recently launched a Latino-focused digital studio. In a partnership with NCBUniversal Telemundo, it will now be creating and distributing the content targeting the Latino community (Verhoeven, 2015). This partnership will help Broadway Video expands the reach of its product to a different community. By getting the product out to this community they can then hope that this community will come back and utilize some of their other products.

Bibliography

Above Average Productions. (n.d.). Retrieved February 10, 2016, from https://aboveaverage.com/hello/about-us/

Atkinson, C. (2014, September 28). Lorne Michaels finds new way to profit off of ‘SNL’ Retrieved February 10, 2016, from http://nypost.com/2014/09/28/lorne-michaels-finds-new-way-to-profit-off-of-snl/

Broadway Video Entertainment, Inc.: Private Company Information. (n.d.). Retrieved February 09, 2016, from http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=39795199

Broadway Video Selects Aspera to Accelerate Production and Distribution of Original Content. (2015, April 8). Retrieved February 10, 2016, from https://globenewswire.com/news-release/2015/04/08/722613/10128009/en/Broadway-Video-Selects-Aspera-to-Accelerate-Production-and-Distribution-of-Original-Content.html

Flynn, K. (2015, March 30). Lorne Michaels’ Meerkat Bet: Why The Saturday Night Live Creator Thinks It Will Survive Twitter’s Periscope. Retrieved February 10, 2016, from http://www.ibtimes.com/lorne-michaels-meerkat-bet-why-saturday-night-live-creator-thinks-it-will-survive-1863964

Lorne Michaels. (n.d.). Retrieved February 10, 2016, from http://www.biography.com/people/lorne-michaels-16242370

Verhoeven, B. (2015, September 28). Broadway Video Launches Latino-Focused Digital Studio ‘Mas Mejor’. Retrieved February 10, 2016, from http://www.thewrap.com/broadway-video-launches-latino-focused-digital-studio-mas-mejor/

Broadwayvideo.com. (n.d.). Retrieved February 10, 2016, from http://www.broadwayvideo.com/

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Industrial Light & Magic – Post-Production in Film https://lpelin.expressions.syr.edu/trf235/2016/02/24/industrial-light-magic-post-production-in-film/ Wed, 24 Feb 2016 15:52:57 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1100 Continue reading ]]> Industrial Light and Magic

How One VFX Company Does More Than “Stay Afloat”

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http://disney.wikia.com/wiki/Industrial_Light_%26_Magic

Background

While dozens of visual effects companies have gone out of business since the turn of the millennium, post-production company Industrial Light & Magic has doubled its employee base from 750 to over 1500 since 1997 (Cohen, 2014; Horn, 2014). Referred to as ILM in the industry, Industrial Light & Magic is the dominant visual effects provider, having worked on seven of the top ten box-office hits of all time (ILM.com). The company was founded by George Lucas in 1978 when no existing company could pull off the post-production that he needed for Star Wars (French & Kahn, 2015). Following the achievement of Star Wars in 1977, ILM found further successes with E.T. in 1982, Back to the Future in 1985, Jurassic Park in 1993 and Pirates of the Caribbean in 2003. In more recent news, ILM became a part of a major mass media corporation in 2012 when Disney bought Lucasfilm, of which ILM is a subsidiary (Seymour, 2012). This eventually led to the latest 2015 installment of Star Wars, post-produced by ILM, which became the highest-grossing movie of all time in just twenty days (D’Alessandro, 2016). Needless to say, Industrial Light & Magic is the premiere option in the visual effects industry.

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Business Model & Assets

With so many visual effects and post-production companies facing failure for the past twenty years, one may wonder how ILM has been so successful. It all comes down to the company’s assets; ILM leverages its artists, talent, software and track record to its own advantage. In many ways, ILM’s assets are a major part of its business model. The very fact that Disney owns the company is an asset; ILM gets projects from Disney and its subsidiary production studios, including the upcoming films Captain America: Civil War and Doctor Strange from Marvel Studios (“San Francisco,” 2016). Other mass media corporations also give ILM work, including upcoming films Teenage Mutant Ninja Turtles 2 from Viacom’s Paramount Pictures and The Great Wall from NBCUniversal’s Universal Pictures (“San Francisco,” 2016). Unlike most visual effects for film companies, ILM has also found major success in the profitable business of visual effects for commercials (Fisher, 1997). This healthy, sustainable business helps to offset the risks of the more unsteady film visual effects projects. Yet regardless of how unpredictable the industry may be, ILM is unique in that it has the experience that other visual effects companies do not; it can take creative control of products, make accurate predictions of post-production costs when submitting bids and even expend overhead costs to develop ideas before winning a bid (Fisher, 1997). Thus, although ILM places higher bids than most other visual effects companies, it has the leveraging power to convince studios to choose them (Fisher, 1997). ILM keeps much of its business a mystery to the industry, but other key aspects include the fact that it develops its own editing software to produce unique, innovative shots, as well as offering its talent long-term contracts with “unlimited upward mobility, where advancement can occur quickly” (Fisher, 1997). These are all aspects of ILM’s business that other post-production companies simply do not have the power or capital to do.

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Revenue Model

However, a business model itself does not make money, so it is important to understand how Industrial Light & Magic turns their business into a revenue model. A major problem in the visual effects industry is overspending by post-production companies; due to directors changing ideas but only paying the company a one-time fee, the companies will have to work overtime and over-budget to complete the project (Watt, 2014). To avoid this, ILM does two things that were previously mentioned: first, it gives accurate, costlier bids based on experience and leveraging power (Fisher, 1997). Second, ILM will include with its bid plenty of pre-development and research as to make sure that it is on the same page as the director and producers (Fisher, 1997). This way, the bid that comes in, often in the tens of millions of dollars, is right on par with what ILM will actually need to spend to post-produce the film with enough room for a profit. Furthermore, ILM has mastered its budgeting; just as tasks are divided into teams, so are budgets. Thus, in many ways, “the department heads run their units as little businesses as well” according to Ben Morris, ILM’s Creative Director (Fisher, 1997). Every step of the way, someone is accountable to make sure that his or her department does not go over-budget. However, just like all post-production companies, ILM is a royalty-free business. Regardless of what revenue the film may yield, ILM only receives the bid price.

What’s Next?

The future of Industrial Light & Magic seems bright; with four Star Wars and Star Wars-spinoff movies slated for release through 2019, steady business will continue (Hayes, 2015). Additionally, ILM is under strong leadership. Lynwen Brennan, the current President and General Manager, has overseen the company’s expansion into Vancouver and London while also growing the Singapore studio (“Leadership,” 2016). The Head of ILM Studios is Sam Mercer, whom is responsible for the executives in charge of each of the four ILM studio locations (“Leadership,” 2016). Out of the fifteen executives listed on ILM’s leadership page, seven of them are women, a mark of gender diversity that the company prides itself on. Finally, with new ventures such as ILMxLAB, a self-defined “laboratory for immersive entertainment,” ILM has entered the field of virtual reality (“Lucasfilm,” 2015). There is no telling whether that will be a worthwhile investment as of yet, but with the capital and power that Industrial Light & Magic has, why not?

Lynwen Brennan, http://static.dolimg.com/lucas/headshots/lynwen_brennan-6417dcf7adb9.jpg

Lynwen Brennan, President & General Manager
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Works Cited

Cohen, D. S. (2014, February 12). ‘Star Wars,’ ‘Avengers’ Spawn Industrial Light & Magic’s London Expansion. Retrieved February 07, 2016, from http://variety.com/2014/biz/news/industrial-light-magic-london-star-wars-avengers-1201099729/

D’Alessandro, A. (2016, January 06). ‘Force Awakens’ Passes ‘Avatar’ As Top-Grossing Film At Domestic B.O. In Only 20 Days. Retrieved February 07, 2016, from http://deadline.com/2016/01/star-wars-the-force-awakens-highest-grossing-film-domestic-box-office-record-beats-avatar-1201676602/

Fisher, L. M. (1997, April 1). How to Manage Creative People: The Case of Industrial Light and Magic. Strategy Business. Retrieved February 5, 2016, from http://www.strategy-business.com/article/15151?gko=144d6

Hayes, B. (2015, January 29). Disney Confirms Release Plan for ‘Star Wars’ Episode 8 and 9. Retrieved February 10, 2016, from http://screencrush.com/star-wars-episode-8-9-release-confirm/

Horn, L. (2014, February 26). Life of Pi’s VFX Team Explains What’s Wrong With Their Industry. Retrieved February 05, 2016, from http://gizmodo.com/life-of-pis-vfx-team-explains-whats-wrong-with-the-in-1531864103

Industrial Light & Magic at Lucasfilm. (n.d.). Retrieved February 04, 2016, from http://lucasfilm.com/industrial-light-and-magic

Leadership. (n.d.). Retrieved February 8, 2016, from http://www.ilm.com/leadership/

Lucasfilm & ILM Launch ILMxLAB. (2015, June 12). Retrieved February 9, 2016, from http://www.ilmxlab.com/assets/pdf/ilmxlab-press.pdf

San Francisco. (n.d.). Retrieved February 04, 2016, from http://www.ilm.com/offices/san-francisco/

Seymour, M. (2012, October 30). Disney buys Lucasfilm and thus ILM. Retrieved February 06, 2016, from https://www.fxguide.com/featured/disney-buys-lucasfilm-and-thus-ilm/

Watt, B. (2014, February 27). Winning an Oscar in bankruptcy: Rhythm and Hues and the visual effects biz one year later. Retrieved February 9, 2016, from http://www.scpr.org/blogs/economy/2014/02/27/15946/winning-an-oscar-in-bankruptcy-rhythm-and-hues-and/

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Post Production at BBC Radio https://lpelin.expressions.syr.edu/trf235/2016/02/24/post-production-at-bbc-radio/ Wed, 24 Feb 2016 15:51:21 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1095 Continue reading ]]>

Ever since it was founded in 1922, BBC Radio has been one of the foremost leaders in broadcasting. John Reith, the founding managing director of the company, knew how important programming standards and a respectable moral tone were in the radio business, and to this day BBC Radio as well as stations around the world strive to follow his directive to inform, educate, and entertain (BBC, 2016).

Business Model

Today, BBC Radio is the largest international radio service, broadcasting in twenty-seven languages in countries across the world. Headquartered in London, England, Helen Boaden is the Director of Audio and Music, though the title has changed several times over the years (BBC, 2016). BBC Radio has over 1,300 employees working in its numerous different sub-divisions, stations, and radio shows (BBC, 2016). These assets are what make BBC Radio what it is today.

Assets

One of the biggest aspects of BBC Radio is its domestic and international broadcasts from its affiliate stations, which include BBC Radio 1 (youth-oriented Top 40 music), BBC Radio 2 (talk shows, adult contemporary music, and comedy), and BBC Local Radio, which brings local news to various parts of England, Scotland, and Ireland. BBC Radio also features international syndication, with programs such as “In Concert”, which features live recordings of classic rock shows, and “Classical”, showcasing classical and orchestral music. Among its most famous on-air personalities include Annie Mac, one of the most well respected radio DJs when it come to new electronic music (Annie Mac Presents, 2016), and Marth Kearney, presenter of “The World At One”, a lunchtime news and current affairs talk show. BBC Radio is also known worldwide for its hugely popular “BBC World Service”, which is one of the most highly regarded news services on the planet. This service, which is available through terrestrial, satellite, and internet radio, covers breaking news from around the world, and is known for its unbiased and ethical reporting. BBC World Service is free to the public, and makes all of its revenue from ad placements. By remaining totally free, BBC Radio is able to uphold its oldest ethos of being informative, educational, and entertaining.

Annie Mac of “Annie Mac Presents”

Revenue Stream

Along with owning many of the domestic radio stations in the UK, BBC Radio also has partnerships with Sirius Satellite Radio and British Airways (The Guardian, 2015). With these partnerships, the company is able to offer subscription based services, in which users pay a monthly fee to access content. This is paid to them by Sirius XM from a small percentage of their own monthly subscription fees. BBC Radio also offers in-flight programming on British Airways flights – another ingenious way in which the company generates revenue. With these subscription services, BBC Radio has been able to expand to numerous new markets in varying countries including India, the United States, and Canada. In fact, the company has been so successful in India that Tony Hall, BBC’s Director General said that they will see a $1.86 billion commercial return over the next five years, which is more than 15% higher than the returns of the previous five years (The Guardian, 2015). To put this in perspective, in 2010, the total commercial revenue generated by BBC Radio was about $1.1 billion, and total spending was around $700 million. National Advertising campaigns are responsible for the majority of BBC Radio’s income, increasing 4.4% in 2009. Local advertising has been stabilized at about $150 million since 2009, however sponsorship revenue has been steadily decreasing since this time as well. To break down these figures even further, we can look at exactly what stations and services provided by BBC Radio cost the most to generate. Leading the programs in cost is BBC Local Radio, which consumes about 3.1% of all revenue generated to produce. Next is BBC Radio 1, costing about 2.5% of total revenue generated by the company. From there, it goes BBC Radio 5 Live at 1.6%, BBC Radio 2 coming in at 1.3%, and BBC Radio 1 and BBC Radio 3 tied at 1.1%.Though these seem like small numbers, in reality they equal out to hundreds of millions of dollars (Stake Holders, 2010).

The Future

So what’s next for BBC Radio? It seems that they are moving towards a more personalized experience for listeners: curated playlists, live and on demand audio streaming, and of course, digital download of their programs (Thornton, 2016). Essentially, the hope is to basically have a “personal” radio station for everyone that tunes in, curated to their particular like, interests, and past viewing habits. They also hope to eliminate programming that viewers may not be interested in at all, instead making listeners essentially pick and choose their favorite topics to listen to, whether this be sports, music, news, travel, comedy, or just plain old talk shows (BBC, 2016). Whatever the future hold, we know that BBC Radio will be on the forefront of innovation, and will always try to meet the needs of their consumers.

 


 

Refrences

3.11 UK commercial radio revenue and BBC radio spending. (2010). Retrieved February 09, 2016, from http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr11/radio-audio/3.11

Careers. (2016). Retrieved February 09, 2016, from http://www.bbc.co.uk/careers/what-we-do/radio

BBC World Service -. (n.d.). Retrieved February 09, 2016, from http://bbcworldservice.radio.net/

Archive on 4. (2012, November 02). Retrieved February 9, 2016, from http://www.bbc.co.uk/programmes/b01nsyxq

Annie Mac Presents. (2016). Retrieved February 09, 2016, from http://anniemacpresents.com/amp2015/

Thornton, M. (2015, December 23). My Radio Post Production Mastering Plug-in Chain – Part 1. Retrieved February 09, 2016, from http://www.pro-tools-expert.com/home-page/2015/12/16/my-broadcast-post-production-mastering-plug-in-chain

(2015, September 17). BBC to launch US online subscription service next year. Retrieved February 09, 2016, from http://www.theguardian.com/media/2015/sep/17/bbc-us-online-subscription-service

Friend, M. (201, September 10). The next radio revolution – your very own BBC Radio station. Retrieved February 09, 2016, from http://www.bbc.co.uk/blogs/aboutthebbc/entries/414a928e-a9a9-494e-bacb-8f2f12ac12bb

Welcome to Broadcasting House. (2016). Retrieved February 09, 2016, from http://www.bbc.co.uk/broadcastinghouse/

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DIRECTV: Distribution https://lpelin.expressions.syr.edu/trf235/2016/02/24/directv-distribution/ Wed, 24 Feb 2016 10:57:35 +0000 https://lpelin.expressions.syr.edu/trf235/?p=1078 Continue reading ]]> directv logo

In the world today, we are given communication and technology at the rate of our demand. We communicate using direct and indirect forms of media that can be delivered to millions of consumers at once such as with cable and satellite television. Although it is one of the most widely accessed technologies of our time, we must understand that television is a media industry of its own. When providing a nation with television programming, it is important to acknowledge the most prominently effective business infrastructures that have impacted the world today. In terms of distribution, we are going to focus on DirecTV, now owned by AT&T as of June 2015 (CNN.com, 2014).

DirecTV was acquired by AT&T in 2015

DirecTV was acquired by AT&T in 2015

Background

DirecTV is a satellite company that distributes and exhibits television content. DirecTV has a headquarters location in El Segundo, California, but also include corporate offices in New York, New York, and in Denver, Colorado, while also having satellite uplink facilities in Castle Rock, Colorado, and Marina del Rey, California, with a Latin American broadcast center in Long Beach, California. In addition to the locations that are owned by DirecTV, it also has more than 801 home service locations across the country, which provides home installations of DirecTV receivers. It has approximately 27,200 employees in the United States. DirecTV was founded in 1990 as an asset of Hughes Electronics. During the inaugural years, DirecTV was created to compete with Sky, a European high-power digital television service provided by News Corporation. The name “DirecTV” derives from the term direct broadcast satellite television (DirecTV.com, 2016). The company is currently under the direction of John T. Stankey, whom is also the President of AT&T Entertainment and Internet Service, after AT&T’s acquisition of DirecTV on May 18, 2014 (Law360.com, 2015). Previous acquisitions made by DirecTV before its acquirement by AT&T include the purchase of ReplayTV from D&M Holdings in December of 2007, and the purchase of wireless home security firm LifeShield in June of 2013 (BizJournals.com, 2013).

John T. Stankey, President of AT&T Inc.

John T. Stankey, President of AT&T Inc.

Assets

DirecTV’s assets include channels and programming featured exclusively on their service, which include channels like the Audience Network, Root Sports Northwest, Root Sports Southwest, and the 3D television channel n3D. DirecTV also provides exclusive programming, mainly for sports events and packages that include the NFL Sunday Ticket, and bonus coverage of the Men’s Major Golf Tournaments and Grand Slam Tennis Tournaments (TheVerge.com, 2014). DirecTV carries sponsorship deals with airlines such as Delta Airlines, JetBlue, American Airlines, and United Airlines. Original programming is featured on the Audience Network, holding intellectual property to shows such as Rogue, The Dan Patrick Show, the now-defunct Supreme Court of Comedy, Guitar Center Sessions, and The Artie Lange Show. Other programming segments included acquired series from other networks such as Friday Night Lights from Universal Media Studios, and Passions from NBC Studios. International programming from the Audience Network includes the comedy series Trailer Park Boys and Less Than Kind, both from Canada.

Alternative Rock group The Smashing Pumpkins performing live in 2012 for Guitar Center Sessions, exclusively featured on DirecTV

Alternative Rock group The Smashing Pumpkins performing live in 2012 for Guitar Center Sessions, exclusively featured on DirecTV

Business Model

DirecTV’s business model includes a service that distributes and exhibits cable and satellite channels as a service provider. The service is delivered to consumers of cable and satellite television, which has accumulated to 26 Million subscribers as of 2015. Although there is a high amount of customers buying DirecTV’s service, the company could not escape competition, as any other healthy business. DirecTV has seen direct competition from other satellite broadcast services such as Dish Network and Time Warner Cable. Still, DirecTV remains as one of the strongest providers of satellite television, helping to distribute programming from all six conglomerates of Viacom, Comcast, The Walt Disney Company, Twenty-First Century Fox, Inc., Time Warner, and CBS Corporation, featuring an expansive catalog of channels and programming featured on all media companies (DigitalTrends.com, 2012).

Revenue Model

The company pays annually for licenses from one of the media conglomerates, like Viacom, to carry channels onto the service provider. Viacom would license their 26 channels to DirecTV for around $1 Billion for the annual term, allowing for DirecTV to broadcast their channels to their customers. Paying customers would pay a monthly fee as a form of subscription at a standard price of $19.99 per month for a standard 145-channel package that includes channels from other media companies. In total, $519,740,000 is made per year from the subscription fees, if we assume that every customer under the subscription is paying only for the standard package. Other forms of revenue streams for DirecTV come from advertising and stock shares (Reuters.com, 2015).

DirecTV's Revenue from 2006 to 2014

DirecTV’s Revenue from 2006 to 2014

In conclusion, this entire article highlights what DirecTV represents as a satellite television service provider. It is important to understand how, why, and where the properties of broadcast companies distribute their content, in order to grasp the basic concept of the business side of this service. DirecTV and its properties demonstrate the essentials of the business by providing a successful and dominating example as the United States’ top provider of television programming.


 

References

CNET Staff. (2002, January 2). Hughes buys satellite firm for $1.3 billion. Retrieved February 5, 2016, from http://www.cnet.com/news/hughes-buys-satellite-firm-for-1-3-billion/

Couts, A. (2012, July 11). DirecTV vs. Viacom: Why subscribers should support DirecTV. Retrieved February 5, 2016, from http://www.digitaltrends.com/home-theater/directv-vs-viacom-why-subscribers-should-support-directv/

DirecTV Editing Staff. (2016). About Us : Company Profile. Retrieved February 5, 2016, from http://www.directv.com/DTVAPP/content/about_us/company_profile

Key, P. (2013, June 5). DirecTV buys LifeShield, which Michael Hagan joined in 2009 – Philadelphia Business Journal. Retrieved February 5, 2016, from http://www.bizjournals.com/philadelphia/news/2013/06/05/directv-buys-firm-backed-by-michael.html

Nayak, M. (2015, July 24). With DirecTV, mobile video services and ad revenue to come, AT&T executive says. Retrieved February 10, 2016, from http://www.reuters.com/article/us-at-t-videoservice-idUSKCN0PY29X20150724

Popper, B. (2014, May 19). Here’s why AT&T is trying to buy DirecTV. Retrieved February 5, 2016, from http://www.theverge.com/2014/5/19/5730534/why-is-att-trying-to-buy-directv

Sege, A. (2015, November 4). FCC Says $48B AT&T-DirecTV Merger Good For Competition – Law360. Retrieved February 5, 2016, from http://www.law360.com/articles/723149/fcc-says-48b-at-t-directv-merger-good-for-competition

Stelter, B. (2014, May 19). AT&T announces deal to acquire DirecTV. Retrieved February 5, 2016, from http://money.cnn.com/2014/05/18/news/companies/att-directv/index.html?hpt=hp_t2

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