Media and Entertainment

Peering into the Liquid Crystal Display: How will we rent movies in the future?

Crystal BallA corporate strategy article by Thunderbird students A. Andrikopoulos, L. Del Bianco, S. Golliher, I. Perez and K. Singh

As the movie rental industry evolves, what’s next for movie rental kiosks?

How many Americans have never seen a movie with a crystal ball or some tea leaves? Movies are replete with clairvoyant seers peering into the future. Harry Potter’s Professor Trelawney predicts the eventual demise of Voldemort or Harry. Precogs in the Minority Report have visions of crimes before they happen. Sandra Bullock’s character in Premonition is forewarned of her husband’s imminent death with lifelike visions. The companies that rent these same movies could certainly use such tools and talents to fully understand the future of the movie rental industry which has drastically changed in the last few years with the advent of recent technological advances for online streaming.

Will the Death of Groupon Be its Lookalikes?

GrouponA corporate strategy article by Thunderbird students.

In 1887, Mr. Asa Candler was faced with a distribution dilemma. [1] The Atlanta druggist had spent $2,500 on a formula for a sweet-tasting drink and was looking for a way to promote the sale of this little-known beverage named Coca-Cola. [2] His solution: handwritten tickets offering customers a free sample. To Mr. Candler’s surprise, the offer was a huge success. So was born the coupon. By 1913, an estimated 11% or roughly 8.5 million Americans had received a free coke. [1] One could argue that Mr. Candler’s invention of the coupon is the reason Coca-Cola started on its path to becoming one of the most iconic global brands - ever.

Fast forward to 2008, when an internet start up based in Chicago, IL created one of the largest shake ups in the marketing world since Mr. Candler’s first hand written ticket; that company - Groupon. The novelty of Groupon was this: through the power of the internet, select “daily deal” coupons could be offered and if a big enough “group” agreed to purchase the deal, then the deal would become valid. [3] The program was used by participating companies as a way to reduce the risk of losses, increase customer traffic, and drive promotions. Now four years since its launch, the Groupon business model has come under attack and faces many strategic obstacles, including competition from lookalike websites.

Redbox: Strategy in the Sunset of Physical Media

RedboxA corporate strategy article by Thunderbird students Cole Augustine, Cynthia Austin, Bradley Carson, and Jennifer Long

Redbox has seen a meteoric rise to the top of the movie rental business, despite their focus on a dying form of media. As the company’s built in expiration date draws closer, Redbox must ask itself, “What Now?” This article will provide an overview of how Redbox got to the top, a preview into the future of the video rental industry, and suggestions for how Redbox can stay relevant in a changing industry.

In the midst of huge losses amongst video rental companies such as Blockbuster and Hollywood Video, Redbox emerged as an innovator by targeting a low price strategy and partnering with other companies known for value to increase volume. Originally a subsidiary of McDonald’s, Redbox entered the market with $1 DVD rental kiosks in many high traffic McDonald’s locations. The Redbox $1 DVD rental price point aligned well to the low income McDonald’s target market, and paying per DVD rental (transaction-based pricing) reinforced the low priced model, translating consumer spending directly to consumption (rather than a subscription-based pricing model where the consumer pays regardless of consumption).

The Growth Must Go On: Media Giant Grupo Televisa's Wireless Push Threatens its Global Strategy

by R. Dharni, A. Ibanez, T. Phan, J. Mendenhall, and P. Zamorano

Grupo Televisa SAB’s recent acquisition of a 50% stake in near-bankrupt Mexican wireless company Iusacell has been touted by company management as core in its strategy to become an “integrated media-telecom Company.”  While the deal has been widely panneddue to the high, $1.6 billion valuation for a company in an industry most analysts see as having few synergies with any of the company’s existing businesses, the bigger risk may lie in how the deal impacts Televisa’s successful foray into global markets.

As the dominant entertainment media company in Mexico, commanding 70% of the television broadcasting market1, Televisa has progressively built a robust global footprint through content licensing agreements, minority ownership stakes in foreign media entities, and content creation and distribution partnerships.  The company has parlayed this global strategy into a market capitalization of over $11 billion2 where it stands alone as the world’s largest Spanish-speaking media company. However, if recent statements in the press are any indication, it appears Televisa does not see its domestic and global success in media as the right trajectory for the company’s future.  Instead, the company is betting heavily on its telecom strategy to drive future growth.

YaWho?: A giant trying to find its place on Web 2.0

Yahoo global strategyBy Daniela Bernini, Tobias Bertram, Thomas Dornis, Nofil Fawad, Asif Shaw, Ron Teagarden and Dan VanDusen

Yahoo has been here for fifteen years. We are the Internet. Unfortunately, we sit in a paradigm that values the new shiny penny,” Carol Bartz CEO of Yahoo!

Yahoo, once the leader in internet services, is struggling to implement a growth strategy to keep up with competitors such as Google and Facebook. Yahoo used to be the portal for Internet users, but over the last 10 years Yahoo’s market dominance has been severely dampened by new entrants. Yahoo announced a reduction in force of about 600 employees this month, or 4 percent of its workforce, the third such action since 2008.

The Economist: A traditional company in a new space

The Economist global strategyA few years ago, BusinessWeek was valued at more than $1 billion and in October 2010 it was sold for a mere $5 million. When buying Newsweek in August 2010, the buyer Sydney Harman confessed, “Break-even is a serious accomplishment, especially in this world, the world of journalism. I’m not here to make money, I’m here to make joy.” Print media is considered a dying business now but even in this environment The Economist, one of the oldest magazines in political, economic and academic news, is growing steadily. While most of the industry players have lost readership, The Economist has increased circulation 95% over the past ten years. Its circulation has risen another 3.3% from 2008 to 2009 while the largest news magazines lost more than 25% of their circulation, with Business Week losing 2% circulation and Forbes remaining steady with a 0.1% gain.

DreamWorks Animation: Move It or Lose It!

Embraer global strategyBy Saurabh Aphale, John Briscoe, Ankit Dwivedi, Megan Groves and Tosha Sorenson

Just south of San Francisco sits DreamWorks Animation (DWA), a business environment more akin to a Tuscan village than a traditional animation studio. At the time of founding, current CEO Jeffrey Katzenberg and cofounders Geffen and Spielberg may not have thought the animation film industry would bear this level of competition. Rivals’ strategic alliances, technology, diversification, and company culture have contributed to the profound impact of box office returns.  To compete in this intense environment, DWA has developed a core set of capabilities which include pioneering technology, creativity incubation, and an exceptional company culture which foster growth and innovation.  Leaping 41 spots to number six on Fortune 100’s Best Employers to Work For survey has further catapulted DWA into the spotlight.

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