Aspects of Concentration

1
Aspects of Concentration

• Hollywood Studios
• Internet Corporations

2
Hollywood Studios Carsey-Werner-Mandabach

• Produced shows like Cosby and Roseanne
  specializes in off-beat
• One of last studios independent of major network
  for scripted shows
• CBS, NBC, ABC have all tried to buy it
• Other independent studio is Sony Pictures
  Television
• In Fall 2003, 6 major networks together own 77
  of prime-time show unscripted shows make up most
  of the rest.

3
Independent Studios ctd

• Decline of independents traced back to 1995
  removal of restrictions on right of networks to
  own, syndicate shows they air
• Networks have every incentive to favor own shows
  but still buy from independents as well
• Three quarters of new shows fail, few producers
  have enough own money to risk
• Half-hour comedies typically cost more than 1m
  per episode hour-long dramas cost 2.2m.

4
Where does the money come from?

• Carsey-Werner-Mandabach still dependent on
  syndication revenues from Cosby and other shows
  to finance new projects overall, syndication
  revenue accounts for 75 of studios profits. 66
  of revenues
• Has sought to diversify invested in cable
  network Oxygen Media co-production deal with
  Paramount

5
Consequences

• Fewer quality shows
• Less originality
• Networks just interested in the highest margins,
  safe shows they can run through largest number of
  outlets
• Networks focused on same audience (18-49) that
  advertisers pay most to reach

6
Internet

• On-Line Travel
• InterActiveCorp acquired Hotwire, Sept 2003 its
  major competitor is Priceline, which may yet be
  acquired by InterActiveCorp
• Web-Search
• Yahoo! Inc. acquired Overture Services Inc. in
  July 2003 competitor LookSmart is in trouble,
  while Microsoft may develop own search capability

7
Internet (2)

• Real Estate Services
• Homestore Inc. may be acquired by Yahoo! Or
  InterActiveCorp
• On-Line Diets
• eDiets may be of interest to InterActive Corp.
• On-line Dating
• - Match.com and Udate.com have been acquired by
  InterActiveCorp