Generator of Business

The cable television industry may be in for a makeover, whether it likes it or not.  One possible role model could be Apple Inc., notes a February 2010 article from The Wall Street Journal. Here’s why:

Currently, TV networks provide shows and channels to cable operators for a fee. Cable operators then bundle the content together as part of a cable TV package, and recoup their expenses from consumer subscriptions and in some cases advertising.

The problem is, consumers aren’t happy paying for packages that include shows on networks they don’t really watch or even want in the first place. In fact, media research firm Nielsen estimates that in 2008, households only viewed 18 channels on average, out of the 130 that come with their cable TV subscription.

Likewise, the Internet is a growing threat to the cable television industry’s current distribution model. Not only can viewers now watch shows for free or at a low cost online and on web-enabled devices, but the ubiquity of the Internet could also increase the risk for pirated shows, especially as consumers look for cheaper alternatives.

One possible solution, notes The Wall Street Journal, is for cable operators to ditch their role as content middleman and to simply focus on selling access to their pipes, allowing TV networks to then sell content directly to consumers. This, notes the paper, is similar to how Apple Inc.’s new e-book store for the iPad (dubbed “iBooks”) operates — by acting as a storefront (or a dumb pipe) for publishers to sell their books, in exchange for a fee.

To read the full Wall Street Journal article, click here.

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Top-ranked IESE Business School's Institute for Media and Entertainment (IME) is the leader in media and entertainment executive education. Our intensive programs for executives and thought leaders include Advanced Digital Media Strategies, and the world's first global Advanced Management Program in Media and Entertainment (Media AMP). These programs attract executives from top media companies around the world, including Time Warner, Google, Disney, Fox Entertainment Group, NBC Universal, MTV Networks, and many others. IESE-IME helps media professionals gain industry-specific business knowledge and real-world insight to help them think like CEOs and advance their media and entertainment careers. For more information, visit www.ime.edu

Businesses are increasingly using social media to connect with consumers and enhance brand awareness. However, according to a 2009 global study sponsored by technology giant Cisco, few businesses have formal processes and policies in place to govern social media use, and this lack could lead to improper disclosure and misrepresentation.

The Cisco study, the first of a two-part series, is based on in-depth interviews with 105 participants from 97 organizations in 20 countries. It was carried out by IESE Business School in Spain (an operating partner of the Institute for Media and Entertainment), the E. Philip Saunders College of Business at the Rochester Institute of Technology in the U.S., and the Henley Business School in the United Kingdom.

According to the study, social networking tools like Facebook and Twitter are becoming a key part of business initiatives in areas like marketing and communications, human relations and customer service. However, only one in seven of the surveyed companies had a formal process to implement social media tools, and only one in 10 involved their IT departments in their social media strategies. What’s more, respondents admitted that they find it difficult to create and adopt policies that strike the right balance between the personal nature of social networking, and proper corporate oversight.

As companies integrate social media in their operations, the study suggests that the following issues be addressed: When, how and what initiatives are to be launched (and not launched); how the enabling technologies should be managed; and how employee use of these technologies should be managed.

For study highlights and additional information, you can read the full Cisco news release here.

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Top-ranked IESE Business School's Institute for Media and Entertainment (IME) is the leader in media and entertainment executive education. Our intensive programs for executives and thought leaders include Advanced Digital Media Strategies, and the world's first global Advanced Management Program in Media and Entertainment (Media AMP). These programs attract executives from top media companies around the world, including Time Warner, Google, Disney, Fox Entertainment Group, NBC Universal, MTV Networks, and many others. IESE-IME helps media professionals gain industry-specific business knowledge and real-world insight to help them think like CEOs and advance their media and entertainment careers. For more information, visit www.ime.edu

In January 2010, Apple Inc. finally launched its long-awaited touchscreen tablet — the iPad. It can surf the Web, play music and videos, send mail, display photos, read e-books and publications, and run thousands of applications from the App Store. Indeed, Apple CEO Steve Jobs says it will put “the whole Internet in the palm of your hands.”

Already, the iPad has gotten attention from consumers and industry players alike. While some analysts expect it to “ignite” sales of tablet computers, some have also pointed out its deficiencies, such as the device’s failure to run Adobe’s Flash player, its inability to support multitasking capabilities, its lack of a built-in camera, and so on.

To simply focus on the pros and cons of Apple’s latest offering, however, may be to miss the crucial point, says Sandra Sieber, Associate Professor and Head of the Department of Information Systems at top-ranked IESE Business School, an operating partner of the Institute for Media and Entertainment (IME). Sieber also teaches the Advanced Digital Media Strategies executive education program at IME.

And what exactly is the point? A likely price war on Internet data plans, leading to increased Web use and consumption of content, says Sieber. This is because unlike the iPhone, the iPad has no exclusivity contract with AT&T.  Consumers are free to choose which telecom operator to work with, opening the field wide for competition. So while the iPad could likely boost bandwidth use much like the iPhone did, telecom operators may not find it as lucrative, as they would likely have to cut profit margins and offer economical data plans to win their share of the market.

The likelihood that iPad owners will consume more content, however, is good news for content distributors and developers. “It will still imply that content distributors will have to find good ways to monetize content, but with this new proposition, Apple directly attacks the access hurdle,” says Sieber. “As (Apple Inc.) said on the iPad presentation event, they have 75 million iPhone users. What they did not say is that they are all paying hefty data plans. How many users may they have if the mobile Internet becomes cheap?”

To read Sieber’s detailed analysis on the subject, published on the IESE Technology Blog, click here.

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Top-ranked IESE Business School's Institute for Media and Entertainment (IME) is the leader in media and entertainment executive education. Our intensive programs for executives and thought leaders include Advanced Digital Media Strategies, and the world's first global Advanced Management Program in Media and Entertainment (Media AMP). These programs attract executives from top media companies around the world, including Time Warner, Google, Disney, Fox Entertainment Group, NBC Universal, MTV Networks, and many others. IESE-IME helps media professionals gain industry-specific business knowledge and real-world insight to help them think like CEOs and advance their media and entertainment careers. For more information, visit www.ime.edu