We all know about News Corp buying myspace or, ITV buying Friendster
Old media companies are also snapping up internet firms as fast as they can. Most of these are profitable, in contrast to the dotcoms of a few years ago—but only just. On March 6th NBC Universal, a media firm owned by General Electric, spent $600m on iVillage, a website for women which had a profit of $9.5m in 2005. Last year Rupert Murdoch's News Corporation spent more than a billion dollars buying barely profitable internet companies.
Further
Jessica Reif Cohen, a media analyst at Merrill Lynch, reckons that profits from online advertising and paid content could represent up to 8-9% of total earnings for Disney, Viacom and News Corporation in 3-5 years and considerably more for Time Warner, courtesy of AOL. The most obvious opportunity is to put the content they already own on new platforms. Media companies can charge people directly, or sell ads around it. In October last year Disney took the big step of allowing two of its hit dramas—“Lost” and “Desperate Housewives”—to be downloaded from Apple's iTunes download service on to iPods for $1.99 an episode. Programmes from NBC and from Viacom's cable channels soon followed, and CBS has put two of its hits, “CSI” and “Survivor”, on Google Video Store, the search firm's new video service. Time Warner, Disney and Viacom have all started broadband channels.
More recent developments Amazon, an online retailer, is in talks with three Hollywood studios about a service that would allow people to download new movies at the same time as they come out on DVD.
And finally
Each of the firms has a different strategy for the internet. Viacom and News Corporation want to build or acquire brand new online businesses as well as to expand their existing brands onto the internet. Disney and Time Warner, on the other hand, are mostly putting their own programming online. Jeff Bewkes, chief operating officer of Time Warner, reckons that one-off download deals such as Disney's and NBC's with Apple's iTunes will prove to be merely a beginning.
But a strategy they must have. Here are a few posts found in the CDB vaults that might be of interest in the context of the Economists article
Darwinism rudely arrives in our media ecology || Financial Times on MySpace impact to Broadcast Media || Business Week International killed by the internet || Mobile: the new mass media || Disney experimenting in the converging media-telecoms-internet space || Big Media vs. the people || Economist has excellent primer on new media, written for old media || The last presses we will ever own || The digital holes in the digital cheese || Pushmepullyou - in a connected world || Conversations on Convergence || When push comes to pull. The new economy & culture of networking technology || Waiting for the bubble to burst || Blushing Auntie's success not so clear cut || Digital salvation || Digital TV broadcasts to mobile arrive to Europe on 3 in Italy || The end of TV as we know it: A future industry perspective || 20 year future of mobile telecoms || 2006: the year the i-Pod died || postmodern engagement marketing vs. modern interruptive marketing || The one number you need to grow || 2006 when TV capitalizes on mobile phones || Generation "C"ers growing up on digital technology
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