evolving media: will content, distribution or new...

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2003 Precision Agricultural Services Dealership Survey Results Staff Paper No. 3-10 Sponsored by Crop Life Magazine and Center for Food and Agricultural Business Purdue University June 2003 Dr. Linda D. Whipker* Dr. Jay T. Akridge *Linda D. Whipker is a marketing consultant in Raleigh, NC. Jay T. Akridge is Director of the Executive MBA Program in Food and Agricultural Business and the Center for Food and Agricultural Business at Purdue University and a Professor in the Purdue Department of Agricultural Economics. Purdue University is committed to the policy that all persons shall have equal access to its programs and employment without regard to race, color, creed, religion, national origin, sex, age, marital st atus, disability, public assistance status, veteran status, or sexual orientation.

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Evolving Media: Will Content, Distribution or New Platforms Dominate?

Mike Milken Chairman

Milken Institute

Chase Carey Deputy Chairman, President and COO

News Corp.

Charlie Ergen Chairman and Co-founder

Dish Network

Robert Pittman CEO, Clear Channel

Communications

International Phone Call: ~$12/Minute

1957 America

2012 $.01

1975 $10

Cost of a 1-Minute Phone Call from the U.S. to India

Telecommunications cost to business approaches zero.

Computer Storage: $2 million per megabyte

1957 America

IBM System 370/168 in 1976

• 8 megabytes for $8 million

• Cost per megabyte: $1 million

Apple iPad 3

• 64 gigabytes for $699

• Cost per megabyte: $0.01

Blockbuster $4.5 billion

Netflix $0.16 billion

28 Netflix = 1 Blockbuster

Blockbuster vs. Netflix - 2002 Market Value

Blockbuster vs. Netflix Market Value

Netflix $16 billion

7/13/2011

Blockbuster $0

Source: PBS; EW; CNN Money

• Netflix lost $2 billion in value within 8 hours following announcement to split services (Sept. 2011)

• Netflix lost 800,000 subscribers in Q3 ’11, most of them DVD subscribers

Blockbuster vs. Netflix Market Value

Blockbuster vs. Netflix Market Value

Netflix $16 billion

7/13/2011

Blockbuster $0

5/1/2012

Netflix $4.5billion

Growth of Mobile TV Advertising

Multichannel 27.9%

Online 1.8%

Mobile 0.4%

Terrestrial 69.9%

2010 Multichannel

27.9%

Online 1.8%

Mobile 3.6%

Terrestrial 64.8%

2015

Source: Adapted from PricewaterhouseCoopers (2011); Global Entertainment and Media Outlook

• Tape recorder and transistor radio (1950s)

• 5-inch micro TV (1962)

• Trinitron Color TV (1965)

• U-matic video tape system (1969)

• Beta-Max (1975)

• Sony Walkman (1979)

• Compact discs and player (1982)

• Handycam 8mm video camera (1985) (Sony sales and profits triple during the 1980s)

• Sony Play Station (1994)

Akio Morita

Co-founder

S Source: “Historical Review of Sony's Innovations and Future Steps” (Masanori Hachiya/Sloan School of Management)

Sony: Five Decades of Innovation

Apple vs. Sony 1997 Market Value

Sony $34.3 billion

Apple $1.65 billion

21 Apple = 1 Sony

Sony $16 billion

34 Sony = 1 Apple

Date: 5/1/12

Apple $554 billion

Apple vs. Sony 2012 Market Value

“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's about the people you have [and] how you're led.”

-Steve Jobs

Primetime Viewing Shares Broadcast vs. Cable

80%

60%

40%

20%

87/88 89/90 91/92 93/94 95/96 97/98 99/00 01/02 03/04

National/Local Broadcast TV

Ad-Supported Cable

Source: NHI Quarterly NTAR/CAB Anaylsis of Nielson Galaxy

05/06 07/08 09/10

40.2%

58.1

Steve Ross