Chapter 10 - Online Content and Media

Chapter 10
Learning Objectives
• Identify the major trends in the consumption of media and
online content
• Discuss the concept of media convergence and the
challenges it faces
• Describe the five basic content revenue models
• Understand the key factors affecting the online publishing
and entertainment industries
Online Content
• No other sector of the American economy has been so
challenged by the Internet and the Web than the content
• The online content industries are organized into two major
• Print (newspapers, magazines, and books)
• Entertainment (television, movies, radio, video games, and music)
• Together, the online content industries are expected to
generate revenues of about $24 billion in 2013
• As a communications medium, the Web is, by definition, a
source of online content as well as a powerful new
distribution platform
Three Revenue Models for Digital
Content Delivery
• There are three revenue models for delivering content on
the Internet:
• Subscriptions (“all you can eat”)
• A la carte (“pay form what you use”)
• Free (with advertising) and freemium
• A newer alternative model is completely free user-
generated content
• Contrary to early projections that free content would drive
“paid” out of business, it turns out that both models are
viable now and in the near future
Free or Fee: Attitudes About Paying for
Content and the Tolerance for Advertising
• In the early years of online content, most Internet users
expected to pay nothing for online content
Users were also willing to accept advertising as a way to
pay for free content
By 2013, attitudes were changing
In a demonstration of just how much quality online content
is worth paying for, by 2013, Apple had sold 25 billion
songs, 500 million TV shows, and more than 150 million
As it turns out, free content is not worth much and should
be free, but premium content is worth a great deal and
should be priced accordingly
Digital Rights Management and
Walled Gardens
• Content producers generate revenue and profits from
their creations, and they may protect these revenue
streams through copyright
Digital rights management (DRM) refers to a combination
of technical and legal means of protecting digital content
from unlimited reproduction and distribution without
Content producers and distributors are still trying to find
the right balance between usability and protection
One solution is a “walled garden” that ties content to the
hardware and operating system
For example, Kindle books cannot be converted to other
formats like epubs or Adobe PDF files
Media Industry Structure
• The media content industry prior to 1990 was composed
of many smaller independent corporations specializing in
content creation and distribution in separate industries of
film, television, book and magazine publishing, and
newspaper publishing
• During the 1990s and into this century, after an extensive
period of consolidation, huge entertainment and
publishing media conglomerates emerged
• Some of this is due to a phenomena called media
Media Convergence
• Technological convergence
• Development of hybrid devices that can combine the functionality of
two or more existing media platforms into a single device
• Content convergence
• Convergence in the design, production, and distribution of content
• Industry convergence
• Merger of media enterprises into synergistic combinations that
create and cross-market content on different platforms
Online Content Revenue Models
• Marketing
• Free content drives offline revenues
• Advertising
• Free content is paid for by online advertising
• Pay-per-view/pay-for-download
• Subscription
• Monthly charges for service
• Mixed
• Combination of the above models
The Online Content Industries
• The Online Publishing Industry
• Newspapers (Magazines)
• Books
• The Online Entertainment Industry
• Television
• Movies
• Music
• Games

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