Monday, May 3, 2010

Update on my Advanced Business Strategy project

Here is an update on my research for my group project in Advanced Business Strategy (MGMT-943).  We were asked to focus on the following question:
Given Comcast's acquisition of NBC, what should NBC Universal Television's strategy be and why?
After doing some initial research, I focused my part of the project on if NBC should own more or less TV channels (like SyFy).

Fortunately, there have been a lot of stories on the TV industry recently, including a special report in this week's Economist (I never read this magazine before Kellogg, but I love it now), a blog post on affiliate fees that made its way through Twitter,  and a BusinessWeek article from March on the industry's strategy for controlling online distribution.

At this point, I've settled on the following ideas, but I'm chatting with a Kellogg alum, who I reached out to via LinkedIn, in the industry this week, and he may shed some new light on the subject.
Given audience fragmentation, NBC should acquire more TV channels to capture a larger share of fragmented audiences.  In particular, it seems that audiences are increasingly shifting toward basic cable offerings, so that is where NBC should focus any future acquisition efforts.

A few reasons why NBC should own channels instead of using contracts to distribute programming:
  • Better flexibility in distribution and programming decisions across TV channels; can use this to position programming to improve a show's chance of success (lead-in audience, etc)
  • Can consolidate redundant functions, such as advertising and ad sales, to reduce costs
  • Are incentivized to strengthen the channels' brands, which increases the probability that a program on those channels will become a hit
  • Gain leverage against other distributors and content creators
  • Unique cross-channel advertising and programming opportunities
Here is some of my data so far.

2 comments:

  1. Congrats on Clear Admit victory!
    I enjoy your blog :)

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  2. Congrats to you too Orlando! You totally deserve it in every category! and go Kellogg! :D

    ReplyDelete