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IMS 6485: Content
1Dr. Lawrence West, MIS Dept., University of Central [email protected]
Topics
• The Role of Content in eCommerce
• The Economics of Information
• Themes
• Content Value & Revenue Models
• Publishing—Newspapers
• Publishing—Magazines
• Publishing—Books
• Entertainment—Music
• Entertainment—Everything Else
• Industry Structural Changes
IMS 6485: Content
2Dr. Lawrence West, MIS Dept., University of Central [email protected]
Auctions, Portals, & Communities on the Value Chain?
TRANS-PORTATIONCOMPANY
BROKER
INFORMATION FLOWS(SELLERS TO BUYERS)
FLOW OF GOODS
ADVERTISING .
INVOICE .
ORDER INFORMATION .
INFORMATION FLOWS(BUYERS TO SELLERS)
REQUEST INFORMATION .
PLACE ORDER .
MAKE PAYMENTS .
Animal
Vegetable
Mineral
INVENTORY
INVENTORY
INVENTORY
FACTORYWHOLE-SALER
INTERMEDIATE
GOODS
WHOLE-SALER
RETAILER
Where do these topics fall?
IMS 6485: Content
3Dr. Lawrence West, MIS Dept., University of Central [email protected]
Role of Content in eCommerce
• What is content in an eCommerce context?
– The text covers two broad categories of content
• Online publishing
• Online entertainment
– What are examples of each?
– What is the nature of the value of each?
• To consumers?
• To providers?
• What are examples of content not suitable for Internet distribution?
IMS 6485: Content
4Dr. Lawrence West, MIS Dept., University of Central [email protected]
The Economics of Information
Since the cost of collection of information is approximately independent of its use, although the cost of dissemination is not, there is a strong tendency toward monopoly in the
provision of information
George Stigler (1961)Nobel Prize Winner
IMS 6485: Content
5Dr. Lawrence West, MIS Dept., University of Central [email protected]
The Economics of Information (cont.)
• The story of content is a story of leverage
• Content has some cost to create and digitize
• Content becomes an asset to its possessor
• Content has public good properties
– Nonrivalrous consumption
– Difficult to exclude nonpayers
• How has the digitization of content affected its public good properties?
• What advantages and disadvantages to owners have we seem stemming from this characteristic?
IMS 6485: Content
6Dr. Lawrence West, MIS Dept., University of Central [email protected]
Themes
• Watch for these themes (West's Themes)
– The source of value of content in it's traditional delivery mechanisms
– Economies of scale in the production of content
– Economies of scale in the distribution of content
– The impact of digitization and the Internet on these issues
– New distribution channels and cross-channel cannibalization
– Pure play vs. mixed distribution models
IMS 6485: Content
7Dr. Lawrence West, MIS Dept., University of Central [email protected]
Themes (cont.)
• Watch for these themes from the text
– Competition for attention
– Competition for dollars
– Media convergence
• Technology
• Content
• Industry Structure
– Complimentary investments & technologies
IMS 6485: Content
8Dr. Lawrence West, MIS Dept., University of Central [email protected]
Content Value
• What are the sources of content value to consumers?
• For each source of value, what characteristics of the content
– Increase value?
– Decrease value?
• How does the value of content to consumers affect its value to owners?
IMS 6485: Content
9Dr. Lawrence West, MIS Dept., University of Central [email protected]
Five Content Revenue Models
• Marketing—selling a product with online content– Manufacturer sites
• Advertising—giving away content to sell other products– TV, Radio, Portals
• Pay per View/Download– iTunes, Napster, Newspaper archival articles
• Subscription– iTunes, Napster, WSJ, Consumer Reports
• Value Added—adding premium online content to enhance the value of some other product– Technical manuals for products
IMS 6485: Content
10Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Newspapers
• What were the revenue models for traditional print newspaper sales?
• Very few pure play newspapers making money
– Why?
• What is the typical revenue model for online versions of traditional newspapers?
– Why does this model make sense?
• What changes are influencing the online newspaper field?
• Why is the WSJ making money on subscriptions to the online version?
IMS 6485: Content
11Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Newspapers (cont.)
• What are the advantages/disadvantages of online vs. offline newspapers?
• How are these features reflected in the revenue models of online newspapers?
• What technological advances affect online newspaper publishing?
• How does leverage apply in newspaper publishing?
• Are there economies of scale in newspaper content creation?
• How does consumer taste affect the value of online newspapers?
IMS 6485: Content
12Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Magazines
• "The traditional print magazine industry is in trouble. Young readers are migrating to the Internet for news about fashion, politics, opinions, and a host of specialized topics that used to be the purview of magazines."
• What are the advantages/disadvantages of online vs. print magazine publishing?
IMS 6485: Content
13Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Magazines (cont.)
• Online versions of print publications are using different revenue models
– Enhance the brand name of the print publication
– Subscription to online or online premium content
– Advertising
• Revenue model choices flexible with circumstances
• Online magazines have many characteristics common to online retail
– Established brands doing better online than pure play
IMS 6485: Content
14Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Books
• How does a reader's experience with a book differ from that with a newspaper or magazine?
• How has this affected the popularity of electronic books?
• What technological challenge may affect part of this issue?
• What market niches may prove popular for eBooks?
– Justify your answer
IMS 6485: Content
15Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Books (cont.)
• Two widely used revenue models for eBooks
– Pay per view/download
– Bundling libraries into subscription-based access
• Why might these models make sense?
• What distinctions do you expect to see in publisher participation in these two models?
• Notice the emergence of competing standards for eBook publishing
– Where have we seen this before?
IMS 6485: Content
16Dr. Lawrence West, MIS Dept., University of Central [email protected]
Publishing—Books (cont.)
• Digital Rights Management (DRM) for eBooks
– Problem shared by digital film and music content
– Without protection, one download can be nearly costlessly replicated any number of times.
• Internet-enabled small scale publishing
– Self publishing/Vanity press
– Niche publications
– Enhancing the authoring, editing, and publishing process
IMS 6485: Content
17Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment Industries
• Five Major Components
– Films
– Television
– Radio broadcasting
– Music
– Video games
• More than any of the content industries, the entertainment segment is undergoing a transformation brought about by the Internet.
• What is the value proposition for entertainment content?
IMS 6485: Content
18Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment—Music
• The Music market may be a leading indicator of the path the rest of the industry may take
– What has determined this path?
– What constraints apply to other media at present?
• Trace the delivery format, value proposition, and revenue model for music throughout history
• What technological changes have affected each of the above throughout history?
IMS 6485: Content
19Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment—Music (cont.)
• What are the economics of the record album?
– Role of the 78 and 45 RMP records
– Role of the entire record album
– Advent of high quality tape recording
– Advent of the cassette tape recorder
– Advent of the CD
– Advent of ripping technology
– Current marketing channels for music
IMS 6485: Content
20Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment—Music (cont.)
• What are the economics of digital rights management?
• What instances of disintermediation have we seen in the music industry?
– Niche markets?
– Self publishing?
• What complimentary technologies and evolutions in consumer taste have also helped to shape the music distribution industry?
IMS 6485: Content
21Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment—Film & Television
• How is the film industry different from the music industry?
– Ownership interests?
– Technologies?
• Have you noted the popularity of whole-season DVD collections of popular TV shows (and some that maybe weren't so popular)?
• What precludes offering these shows on an episode-by-episode basis like music tracks?
IMS 6485: Content
22Dr. Lawrence West, MIS Dept., University of Central [email protected]
Entertainment—Games
• Video games are taking an interesting twist to avoid some of the DRM pitfalls besetting video and music content
• What are they?
IMS 6485: Content
23Dr. Lawrence West, MIS Dept., University of Central [email protected]
Industry Structural Changes
• Your book states that the Internet is transforming from a communications medium to an entertainment medium.
• Entertainment has always served as a medium for commanding users' attention—in the hopes they will either pay or also attend to your commercial message
• What is the role of content and/or entertainment in an eCommerce application in which you are involved?
– Marketing yourself through content
– Producing content
– Distributing content
