For the past several years, media companies have faced profound challenges to their traditional business models. After a period of consolidation and vertical integration, large media conglomerates found themselves in possession of the engines of both content creation and distribution. However they also faced new threats from “long tail” competitors and from new technologies that made the protection of intellectual property and the monetization of content more difficult. Advertising revenues, the traditional economic foundation of the media, began flowing into ever more diverse channels with the growth of internet-based alternatives to traditional advertising. As competition and the supply of lower-cost communication alternatives expanded, traditional media companies came under pricing pressures that further tested their foundational business models.
This course charts this recent history and assesses the current economic outlook for media companies through the specific lens of the metrics that are used by both buyers and sellers to set media market values. It begins by reviewing the classic business models for print, television, and internet media and describing the traditional role of research and metrics in setting the commercial values for these ad-supported media. It continues by considering the technology-driven transformations of those businesses – the digitalization of all media, the proliferation of distribution options, the rise of search and of social media, the disintermediating effects of ad networks and of behavioral targeting technologies. Each of these has induced changes in consumer behavior and required significant adjustments in the ways that media are measured and valued – changes that are at the core of this course’s focus. Finally, the course discusses the ways in which content-based media companies are responding to the challenges by endeavoring to diversify their revenue streams, monetize their content assets in new ways, and generate new media metrics appropriate to the new economic requirements. The course also reviews the ways in which research is used by media companies to select content for development and to hedge risk – particularly in the development of television pilots for each new season.
The course consists of lectures and discussions. Initially, the lectures will be done by the two professors co-teaching the course; however once the “basic” course material has been covered, we will also have a series of guest lectures from experts and entrepreneurs who are developing new systems for media measurement and valuation. The guest lecture schedule is not yet finalized but may include representatives from such firms and organizations as Adobe, Omniture, Facebook, Nielsen, CIMM, MRI, Marketing Search Partners, Neurofocus, and others. Students will be asked to prepare for each guest speaker by doing advance research on their organization and how it fits into the evolving media ecosystem. Apart from lectures by the professors and the guest lecturers, some class time will also be devoted to discussion and debate related to the two “problem scenarios” that will be assigned. For these exercises, we will lay out a current strategic business problem faced by media companies: students will then write a short analysis of the problem and their thoughts on how the problem would best be addressed.
Requirements and Grading:
Students must attend class and participate in discussions. Grades will be assigned based on the following:
- 50% Final Exam (in class, no notes)
- 40% Short analysis of two “problem scenarios”
- 10% Class participation
- David Poltrack is the Chief Research Officer at CBS and the President of CBS Vision
- Scott McDonald is the Senior Vice President for Research & Insights at Condé Nast
Scott McDonald was a Columbia Business School faculty member from 1999 to 2016.
David Poltrack was a Columbia Business School faculty member from 2002 to 2016.