10. 2 Hours, 54 Minutes
4 Hours, 20 Minutes
Hours Spent Watching TV, Daily
...LEADS TO A CHANGE IN CONSUMER BEHAVIOR
Estimated using data from TV Basics
12. NOV ‘72 DEC ‘77 SEPT ‘79 JAN ‘80 JUN ‘80
AUG ‘80MAR ‘83 MAY ‘82 AUG ‘81 DEC ‘80
JUN ‘85APR ‘83 FEB ‘84 FEB ‘84 JAN ‘85
JUL ‘86NOV ‘93 APR ‘91 OCT ‘88 FEB ‘87
13. Started by a former sports
anchor frustrated with the
amount of time he was given
to report the sports news; with
a $9,000 credit card advance
and $30,000 from friends and
family.
ESPN
14. Started by the founder of The
Cable Educational Network,
Inc with $5 million in start-up
capital led by investment firm
Allen & Company
THE DISCOVERY CHANNEL
15. Started by a lobbyist for the
cable industry looking to
create the first network aimed
at African Americans with a
loan of $15,000 and a
$500,000 investment.
BET NETWORK
16. SUCCESS IS NOT A RANDOM ACT.
It arises out of a predictable and powerful set
of circumstances and opportunities.
“
“
- MALCOLM GLADWELL, Outliers
17. A CHANGE IN TECHNOLOGY
A CHANGE IN CONSUMER
BEHAVIOR
A MASSIVE OPPORTUNITY
LEADS TO
LEADS TO
24. SMARTPHONE PENETRATION VS 1980’S CABLE
PENETRATION
1960 1970 1980 2000 2010 2020
Cable Subscriptions (1960-80)
V
Smartphone Penetration (2000-Present)
25. HOURS SPENT ON PHONES & WATCHING TV
3 Hours, 20 Min
4 Hours, 20 Min
2 Hours, 50 Minutes
Hours Spent Daily Watching TV(1965-85)
Hours Spent Daily on Smartphones (1995-Present)
Estimated using data from TV Basics
26. ...CHANGES IN CONSUMER BEHAVIOR
76
77
78
79
80
81
82
83
84
85
US Pay TV Penetration Rates
Source: US Census, Company reports, Citi Research
27. A CHANGE IN TECHNOLOGY
A CHANGE IN CONSUMER
BEHAVIOR
A MASSIVE OPPORTUNITY
LEADS TO
LEADS TO
30. “
“
- MAXWELL WESSEL, Harvard Business Review
At the end of the day, corporations exist to
make money…They hear about the advantages
of ‘disruptive innovation’…and decide that their
organization should do ‘some of that’. But their organizations
are designed to do something else
very well. Namely, what they’re already doing
31. LAYOFFS AFFECT MTV, OTHER NETWORKS, AS VIACOM
RESTRUCTURING CONTINUES
VARIETY March 10, 2015
Viacom expected to cut around $250 million in costs as a result of the
restructuring.
ESPN CUTS 300 JOBS AS SUBSCRIBER FEE GROWTH
SLOWS
LA TIMES October 21, 2015
ESPN has been under pressure to control costs as it no longer can
depend on steady growth from its most reliable revenue stream: fees
from cable and satellite subscribers
HBO TO CUT 7% OF ITS WORKFORCE BEGINNING THIS
WEEK
DEADLINE HOLLYWOOD October 28, 2014
Time Warner’s directive to its divisions to cut head count, part of the
media giant’s effort to improve profitability, hits the premium network
operation this week
34. “The joke is that Chorus is a unicorn
with a kitten on its back. People think
it is a magical system that fixes
everything.”
TECH CENTRIC
MELISSA BELL Co-Founder, Vox.com
35. 16M Views
“The secret to Buzzfeed’s
success is a culture that
embraces constant change
yet remains devoted to
data-driven metrics.”
DATA CENTRIC
FAST COMPANY February 16, 2016
36. “NowThis has put its emphasis on creating
content specifically for social media platforms –
and shortening its news videos to live and thrive
on those platforms”
SOCIAL DNA
POLITICO February 6, 2015
37. “[Bustle] is designed to be mobile-
first. Nearly 85% of Bustle’s
readership comes from mobile
devices. For millennials, this is the
new normal”
MOBILE FIRST
BRYAN GOLDBERG Founder, Bustle
38. “The skills required to do what a great
real time digital journalist does are
different…using the full capabilities of
the digital medium, including covering
unfolding stories in real-time, using
text, pictures, video, and commentary.”
REAL TIME NEWSROOM
HENRY BLODGET Founder, Business Insider
41. NETWORK TELEVISION
PRODUCTION
COST PER MINUTE
$50,000 -
$100,000
NEW MEDIA PRODUCTION
COST PER MINUTE
$500 - $1000
Data from MARK SUSTER, Upfront Ventures
CONTENT COSTS IN LINE WITH ABILITY TO MONETIZE
42. ~Half of Millennials Don’t Own
A TV
~Half of Millennials check their
phones a few times per hour
44% 51%
RESONATES WITH MILLENNIALS
43. MODERN TOOLS & TACTICS
MODERN COST STRUCTURES
MODERN MEDIA COMPANIES
PLUS
LEADS TO
62. “ABC to Acquire ESPN as Texaco Sells It’s 72%”
LOS ANGELES TIMES August, 27, 1985
“CBS Corp. Will Acquire TNN and CMT for Stock Valued at 1.55B”
ADVERTISING AGE February 11, 1997
“NBC to Buy Bravo Channel in $1.25B Deal”
THE NEW YORK TIMES November 4, 2002
“Weather Channel is Sold to NBC and Equity Firms”
THE NEW YORK TIMES July 7, 2008
...MANY GOT ACQUIRED BY THE MEDIA BUSINESSES WHO
CAME BEFORE THEM
63. “Turner to Merge into Time Warner; A $7.5B Deal”
THE NEW YORK TIMES September 23, 1995
Viacom Set to Acquire CBS in Biggest Media Merger Ever
THE NEW YORK TIMES September 8, 1999
“Comcast to Buy NBC Universal”
MASHABLE December 1, 2009
...AND SOME SOLD TO THE PIPE OWNERS
66. “Turner Buys Bleacher Report, Next-Gen Sports Site”
FORBES August 6, 2012
“NBCUniversal Buys Big Chunks of Vox Media and Buzzfeed”
RECODE August 12, 2015
“Disney Doubles Ownership Stake in Vice to 10%”
VARIETY August 12, 2015
“Univision to purchase satirical website, The Onion”
VARIETY August 12, 2015
...MANY ARE GETTING ACQUIRED BY THE TRADITIONAL
PLAYERS...
67. ...AND I PREDICT THAT
SOME WILL START TO GET
OWNED BY THE NEW PIPE
OWNERS
The Roman Empire published Acta Diurna ("Daily Acts"), or government announcement bulletins, around 59 BC, as ordered by Julius Caesar. They were carved in metal or stone and posted in public places.
In the 1925, the TV was invented by John Logie Baird
In the 1950s, the TV penetrated the homes of Americans and became the first screen people are addicted to
1950 – 9 percent of americans had a tv set – by 1960, that figure jumped to 90% (library of congress)
1940s – 1950s There was a bit of slow development of TV due to World War 2 – but by 1949, Americans who lived within range of the TV stations in the country could watch network TV. The programming was largely controlled by the “big 3” companies - National Broadcasting Company (NBC), American Broadcasting Company (ABC), and Columbia Broadcasting System (CBS). The 3 networks originally controlled only a few local television stations, but they swiftly affiliated with other stations to cover almost the entire U.S. by the late 50s.
1950 – 9 percent of americans had a tv set – by 1960, that figure jumped to 90% (library of congress)
At this time, media was controlled by the few. These 3 stations were the gateway for content into people’s homes.
THEN THERE WAS A CHANGE IN TECHNOLOGY – this guy named John Walson launched the first commercial cable system in Mahanoy City, PA – because they were in a geographically isolated town, reception was poor and they didn’t have access to the channels in the nearest city. Customers purchasing TVs asked to be connected to Walson’s antenna and he recognized the business opp. He charged $2 a month for the service and by 1948 had 727 customers. He and other entrepreneurs began setting up similar “community antenna systems” in rural communities. By 1955 there were 400 such systems with a total of 150k subscribers. Cable TV was born.
This was the beginning of today’s cable giants.
It soon became apparent that the “television deprived” were not the only viewers who would want access to additional channels and additional programming.
850k in 1960s
16MM in 1970s
53MM in1980
1986, 82%of americans watched tv daily. Average household had the tv on for 7 hours a day
SUDDENLY CABLE WAS HERE. AND EVERYONE WAS SPENDING THEIR TIME WATCHING TV.
Graph from tvb.org
In the 70’s, networks specifically designed to be distributed by the cable system began to appear
1980s - big household names are created - Cable networks had increased from 28 in 1980 to 79 in 1989
Outliers, Malcolm Gladwell – this was a circumstance that led to an opportunity.
Went in search of investors, approached Taft Broadcasting, and the head of Taft told him Bill Rasmussen not only would the idea not work but cable was going to be gone in a few years.
Kind of looks like a startup right?
THIS BECAME FUCKING ESPN! The world’s most profitable media business – estimated value is $50 billion
Today is the 2nd highest grossing TV network.
Acquired by Viacom for $2.3 BILLION
Then the 90s happened. And so did a lot of great stuff but there was very little disruption in media.
Gave interent users faster connection speeds without disrupting their telephone usage. Broadband technology split the signal in one line between telephone and internet so users can use them simultaneously and at much greater speeds.
THEN THERE WAS A CHANGE IN TECHNOLOGY – this guy named John Walson launched the first commercial cable system in Mahanoy City, PA – because they were in a geographically isolated town, reception was poor and they didn’t have access to the channels in the nearest city. Customers purchasing TVs asked to be connected to Walson’s antenna and he recognized the business opp. He charged $2 a month for the service and by 1948 had 727 customers. He and other entrepreneurs began setting up similar “community antenna systems” in rural communities. By 1955 there were 400 such systems with a total of 150k subscribers. Cable TV was born.
This is how you discover content now.
There is an overabundance of content; people consume content in a totally new way;
NY Post
When there’s a change in consumer behavior – another consumer behavior suffers Attention is moving away from cable
Really hard for BIG, expensively-minded companies to be innovative
Traditional co’s business models are under fire. Need to shrink infrastructure in order to grow stock price. Have to answer to Wall Street. Unlikely they’ll innovate.
These guys have the attention of consumers.
To survive in this ecosystem, you need a particular set of skills. There is the highest velocity of content being thrown at consumers than ever before. More time being spent on more devices. But there aren’t more hours in the day/more attention. There is a crisis of not enough attention for all the content being created. Only the best stuff is going to get discovered.
These brands are going and taking traditional dollars – well positioned to be able to built beyond digital
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
They knew how to create content for the new pipes
New media cos also getting bought by owners of old pipes
(Viacom is CBS)
The traditional “gateways” started to buy these new content creators – they were the most powerful in that medium. They knew how to engage audiences and they were attractive to advertisers.
New media cos also getting bought by owners of old pipes
History is repeating itself and the power has shifted to the content creators that know how to build for the new pipes. This is not to say that all new media companies will become huge and all the traditional companies will fail. Some will fail but some will also figure it out. Some will acquire new media companies.
History is repeating itself and the power has shifted to the content creators that know how to build for the new pipes. This is not to say that all new media companies will become huge and all the traditional companies will fail. Some will fail but some will also figure it out. Some will acquire new media companies.
History is repeating itself and the power has shifted to the content creators that know how to build for the new pipes. This is not to say that all new media companies will become huge and all the traditional companies will fail. Some will fail but some will also figure it out. Some will acquire new media companies.
History is repeating itself and the power has shifted to the content creators that know how to build for the new pipes. This is not to say that all new media companies will become huge and all the traditional companies will fail. Some will fail but some will also figure it out. Some will acquire new media companies.
History is repeating itself and the power has shifted to the content creators that know how to build for the new pipes. This is not to say that all new media companies will become huge and all the traditional companies will fail. Some will fail but some will also figure it out. Some will acquire new media companies.