Media Today, 4th Edition Chapter Recaps and Study Guide Chapter 6: Understanding the Strategies of Media Giants



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Media Today, 4th Edition

Chapter Recaps and Study Guide
Chapter 6: Understanding the Strategies of Media Giants
After studying this chapter, you will be able to:

  • Evaluate the core businesses of two contemporary media conglomerates—The Walt Disney Company and News Corporation—as well as the core business of Google, a large web-based corporation that is on the way to becoming a cross-media conglomerate.

  • Examine and evaluate other large media firms to better understand their scope and power.

  • Recognize and understand the three main operating strategies of News Corporation.

  • Recognize and understand the three main operating strategies of The Walt Disney Company.

  • Recognize and understand the three main operating strategies of Google.

  • Harness your media literacy skills in order to develop your own critical view of cross-media activities and their impact on society and on individuals.




  • A conglomerate is a company that owns a number of other companies in different industries.

  • A mass media conglomerate is a company that holds several mass media firms in different media industries under its corporate umbrella.

  • Strategies are overall, broad plans to accomplish a set of goals.

  • Chapter 6 examines the strategies of three media conglomerates: The Walt Disney Company, News Corporation, and Google, because:

    • All three exert enormous influence on the media world.

    • Each conglomerate has different ways (strategies) of facing up the challenges of the new media environment..

    • Many of the activities of each firm are familiar to you. The goal here is to help you see these activities in new ways so you can apply the concept of strategy to other media conglomerates.




  • THE WALT DISNEY COMPANY

    • Operates four main divisions: Disney Consumer Products, Media Networks, the Disney Parks, and Studio Entertainment.




    • Disney’s three main strategies:

      • Exploit as much synergy as possible among subsidiaries.

      • Emphasize the global movement of content.

      • Adopt new distribution technologies.




    • Exploit as much synergy as possible among subsidiaries.

      • One objective is to find ways for the company’s subsidiaries to profit from the distribution of new and old material in a wide array of media industries.

      • Another objective is to get the subsidiaries to work with one another to find new ways to profit from the creation, distribution, and exhibition of materials.

      • Disney has used the content of its animated films for its many other subsidiary operations and has attempted to develop a synergy-and-licensing approach to maximize potential profit.

      • Disney enjoys the ownership of several well known media franchises, properties that have potential well beyond their original appearances as films, TV series, or book series; many of these franchises are examples of desirable family entertainment.

      • The chapter discusses examples of how franchises operate in Disney’s strategy.




    • Emphasize the global movement of content.

      • Disney’s subsidiary, Walt Disney International, was created to boost revenues outside the U.S.

      • The Disney parks in Paris and Hong Kong help maintain consumer engagement with other Disney products.

      • Disney is attempting to create foreign products that resonate in their particular cultures.




    • Adopt new distribution technologies.

      • Disney has moved into distribution via digital technologies.

      • Disney foresees corporate websites (Disney.com, ABC.com, etc.) as the central area for its digital activities.




  • NEWS CORPORATION

    • Like Disney, News Corp. emphasizes the need for synergy among subsidiaries, global reach, and the use of new technologies.




    • News Corp. thinks of itself more grandly in global terms than does Disney.




    • News Corp.’s three main strategies:

      • Expand rapidly into the internet and other new digital realms.

      • Continue to exercise control over diverse, global distribution channels.

      • Obtain and exploit the rights to a range of world-friendly programming.




    • Expand rapidly into the internet and other new digital realms.

      • News Corp.’s purchase of MySpace.com positioned the conglomerate in a key internet position.

      • News Corp. plans to move its operations into cell phones and other digital devices.

      • News Corp. is working with other companies to make material available for downloading into iPods and other devices.




    • Nurture diverse global channels of distribution.

      • News Corp. has always sought clout over distribution, and the new digital technologies offer a way to enhance that kind of power.

      • Older, non-digital distribution activities are the revenue engines that keep News Corp. growing.

      • Murdoch sees a three-stage strategy in which profitable, high growth businesses move the company ahead and please investors while mature parts of the company fund the growth areas of the future.

      • While Disney emphasizes content in its strategy, News Corp. emphasizes distribution.




    • Emphasize entertainment, news and sports.

      • Although News Corp. puts emphasis on distribution, it does not ignore content; it uses very popular entertainment content, news, and sports in its global distribution channels; News Corp. does not emphasize one genre over another.

      • Sports and news content play significant roles in maintaining News Corp.’s clout in distribution.



  • GOOGLE

    • A Web search engine is an information retrieval system designed to help find information of the World Wide Web; Goggle is the dominant search engine.




    • Google is among the companies at the top of the media food chain.

      • Google is the dominant search engine in the world (but not in every country).

      • Google’s revenue in 2009 was about $22 billion.




    • Google’s three main strategies:

      • Keep improving the global effectiveness of the search engine.

      • Expand Google’s advertising to as many media as possible.

      • Create non-search products that will keep users coming back despite competition.




    • Keep improving the global effectiveness of the search engine.

      • Website results are ranked after the search; the best sites are the ones nominated by other sites.

      • Three problems with the ranking system:

        • Older sites get privileged because they have more link nominations.

        • System implies popularity equals credibility and accuracy.

        • People can rig the rankings.

      • Google is trying to create particular search engines for people in specific professions; these are called vertical search engines.

      • Google sees itself as a global search engine, operating in 116 languages.




    • Expand Google’s advertising activities to as many media as possible.

      • About 98 percent of Google’s revenues come from advertising; Google’s primary business is serving ads to people in two types of web locations: the search engine (the AdWords program) and on websites not owned by Google but which allow Google to place text ads on their site pages in turn for sharing revenue (the AdSense program) in ways that are guided by databases about users.

      • Google constantly perfects its understanding of the conditions under which people enter particular search words or go to particular sites; the company constantly tracks and analyzes the activities of users in order to refine the search strategy and to refine the advertising serving model.

      • Google uses the database information to serve ads to mobile phones and to Google’s YouTube website.

      • Google hopes to serve ads to newspapers and radio stations in the same manner.

      • Google’s data collection worries people concerned about privacy issues, and worries advertising agencies about the possibility of Google becoming the controlling force in all advertising in all media.




    • Create products that will keep users coming back despite competition.

      • Publicly, Google tries to maintain its advertising strategy as secondary to its mission of organizing the world’s information.

      • Google tries to fend off potential competitors by investing in talented personnel and cutting edge technologies and by developing services that potential competitors can’t afford.

      • Google has developed some excellent services that keep people coming back, and these include Gmail email, Google Docs and Spreadsheets and Google Books.




    • Google employs unorthodox technological and policy related tactics.

      • Google supported the use of the unused frequencies between television channels (“white spaces”) for wireless broadband.

      • Google bought the Android mobile operating system and seeks to keep it “open source”. Google also released the Nexus One smartphone that uses this operating system.




  • Media literacy and corporate strategies.

    • Conglomerates are trying to find profits in the movement of products and ideas across media boundaries.

    • Database-guided personalization may lead to very narrowly defined targets and could potentially tailor content to individuals.



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