The previous chapters of the book „Managing Media Companies: harnessing creative Value“ by Annet Aris and Jaques Bughin will show, that the digitization of media “(…) will fundamentally influence the way ´traditional´ media are managed”. The chapter summed up in this work will describe digital media and its influences. The future role of digital media: After a short introduction acout the history of digital media or „New Media“ and the reasons for the genesis of the internet-bubble and its explosion, this assignment will show the development of “New Media” after the explosion. Then a short overview about the beginning of broadband-technology and promising business models is subject of this work. After that I will provide two case-studies to show the practical relevance of the chapter. 2.1 A brief history of the digital media bubble The new media experienced its first hype in the 1990s. The dial-up internet, a key innovation, made it possible to change the internet to a mass medium. Many existing media companies but also a lot of start-ups discerned the possibilities of this key innovation. Low entry barriers, high expectations and faith into the advertising market made it possible that within only a few years a big new industry came into being. This was mostly financed by venture capital. And actually the internet was received so well as a new medium, that there were 600 milion users by the year 2002. A situation of excess supply developed in the new media market. In trust of a further rise investors invested more and more in stocks and shares of this companies. Within one and a half year, beginning in the middle of 1999, this brought a multiplication of rates to a few companies, and therefore an uncontrolled overvaluation of the rates appeared. This effect was intensified by a lot of companies and their mostly blind urge of expansion. The liquidity received by IPOs was invested into further purchases of companies but without any regard to their balances - they quite often were in the red. [...]
Table of Contents
1 Introduction
2 The future role of digital media
2.1 A brief history of the digital media bubble
2.2 Current digital media models
2.3 IP-TV/digital-TV
2.4 Combined ISPs/portals
2.5 Content players struggling to make content pay
2.6 Search engines highly attractive
2.7 The future is broadband
2.7.1 Broadband Uptake
2.8 New Business Models
2.9 Rebalancing the broadband value chain
3 Case Study: Arcor Online – Video in demand
3.1 Arcors´s history
3.2 Arcors´s business segments
3.3 Arcor´s business model
3.4 Arcor-Online
3.5 Arcor Video on Demand
3.6 Recommendation for action - Arcor Video in Demand
4 Case Study: genios – paid content
4.1 genios´s history
4.2 genios´s business segments
4.3 genios´s business model
4.4 Recommendation for action
5 General Learnings
5.1 Do´s
5.2 Don’t´s
Objectives and Topics
This assignment analyzes the impact of digitalization on traditional media management and the subsequent evolution of digital media business models. By examining the aftermath of the internet bubble and the rise of broadband technology, the study identifies successful strategies and key economic factors for digital service providers.
- The historical context and economic collapse of the "digital media bubble."
- Emerging business models in the broadband era.
- Case study analysis of Arcor Online’s Video on Demand service.
- Case study analysis of Genios’s paid content information services.
- General learnings and best practices for sustainable online business models.
Excerpt from the book
2.1 A brief history of the digital media bubble
The new media experienced its first hype in the 1990s. The dial-up internet, a key innovation, made it possible to change the internet to a mass medium. Many existing media companies but also a lot of start-ups discerned the possibilities of this key innovation. Low entry barriers, high expectations and faith into the advertising market made it possible that within only a few years a big new industry came into being. This was mostly financed by venture capital.
And actually the internet was received so well as a new medium, that there were 600 milion users by the year 2002.
A situation of excess supply developed in the new media market. In trust of a further rise investors invested more and more in stocks and shares of this companies. Within one and a half year, beginning in the middle of 1999, this brought a multiplication of rates to a few companies, and therefore an uncontrolled overvaluation of the rates appeared. This effect was intensified by a lot of companies and their mostly blind urge of expansion. The liquidity received by IPOs was invested into further purchases of companies but without any regard to their balances – they quite often were in the red. Furthermore the rising values were not covered by actual equivalents, because the capital of IT companies is mostly not material goods but lies much more in the intellectual work of their employees. Often the book value of companies consisted in not more than a few buildings and a mediocre IT infrastructure. The companies bought on top mostly made loss. Healthy companies were either prohibitively expensive or were buyers at the market themself. That is why the prices of takeover candidates were so high.
Summary of Chapters
1 Introduction: Provides an overview of the book's premise regarding the influence of digitization on traditional media management.
2 The future role of digital media: Discusses the history of the digital media bubble, the role of broadband technology, and categorizes new business models in the online market.
3 Case Study: Arcor Online – Video in demand: Examines Arcor's entry into the Video on Demand market, their business structure, and provides recommendations for future growth.
4 Case Study: genios – paid content: Analyzes the history and business model of Genios as a supplier of professional information services.
5 General Learnings: Derives key "Do's" and "Don'ts" based on the analysis of past internet market failures and successes.
Keywords
Digital Media, Broadband, Internet Bubble, Business Models, Arcor, Video on Demand, Genios, Paid Content, Media Management, Innovation, ISP, Market Consolidation, Value Chain, Online Services, Strategy.
Frequently Asked Questions
What is the core focus of this assignment?
The assignment explores how digital media transforms traditional business environments and identifies the requirements for building sustainable, profitable digital business models post-internet bubble.
What are the central themes discussed?
Central themes include the impact of broadband adoption, the transition of content providers to digital platforms, and the strategies for successful online commercialization.
What is the primary research goal?
The goal is to determine how media companies can harness creative value through digital technology while avoiding the strategic pitfalls that led to the collapse of the dot-com era.
Which methodology does the author apply?
The author uses a combination of descriptive theoretical analysis and qualitative case study methodology to compare two different digital business approaches.
What does the main body cover?
It details the evolution from dial-up to broadband, categorizes business models (e.g., subscription vs. advertising-based), and performs deep dives into Arcor and Genios.
How is this work characterized by its keywords?
It is defined by terms like broadband infrastructure, content monetization, and corporate strategy within the digital media landscape.
Why did Arcor face difficulties in the Video on Demand market?
Arcor struggled due to a lack of up-to-date movie content, as major studios were hesitant to partner, and because of the historical disconnect between PC-based internet services and living room consumption habits.
How did Genios manage to remain successful?
Genios succeeded by implementing a clear business model early, focusing on specialized business information rather than mass-market hype, and adapting to mobile technology requirements.
- Quote paper
- Anne Nölling (Author), 2006, The future role of digital media, Munich, GRIN Verlag, https://www.grin.com/document/59102
