Guest Lecture Review: SAG - AFTRA (2/3)

Mr. Moore's guest lecture on diversity, racial equality and equal rights standards in the entertainment industry brought a new dimension to entertainment that I was not aware of. I was most surprised by Mr. Moore's explanation of how to obtain a guild card. Traditionally, actors achieve guild memberships by progressing from extras or non-speaking, minor roles to a speaking part in a guild approved film. In their first speaking part, the actor has all the benefits of the guild but is neither part of the guild nor does the actor have to pay guild residuals that role. However, when the actor achieves a second speaking role in a guild-supported film, it must register for the guild and is contractually binding for the rest of their career. The most surprising part of this process is that many actors try to bypass these regulations and obtain a guild card through an illegal distributor. These distributors ask for a certain amount of money and in exchange the actor receives a guild card, or so they think they do. These scams surprised me because I do not know how a fraudulent business can still be legally running, have the decency to take advantage of individuals who do not know better and yet people still get sucked into these scams thinking they will actually be a guild member.

 One topic I wished Mr. Moore touched on was the types of revenue streams the guild receives from its members, specifically from residuals on their members' work. After learning so much about residuals in my classes and how members try to avoid paying guild fees, I wanted to know from a guild's perspective how they feel about individuals who try to do this. Members try to avoid guild fees from PDF agreements, loan out corporations or escrows and to see how guilds try to take down or take control of these sneaky agreements is an interesting relationship the guilds have with its members that I would have liked to been explained. 

   The most valuable piece of information I took from Mr. Moore's guest lecture was how he works with producers, directors, networks and studios to ensure that portrayal of real life is maintained through diversity amongst roles. Whether it is the main characters or the extras used in a film, I found it incredibly interesting that guilds also enforce racial standards for on entertainment projects to prevent misconstrued "realities."

Trade Review: Week Eleven (1/1)

Report: Spotify to raise over $100M for 3B valuation

After three consecutive years of net loss, Spotify, again, seeks outside investors to push Spotify over the edge into net profits for 2012. With the 100 million dollars potentially raised from Goldman Sachs and other private investors, Spotify will attempt to achieve a 3 billion dollar valuation. With this money Spotify hopes it can support its current cost structure while also expanding their library of music, marketing strategies for Spotify, develop new partnerships, create new innovations for their users and move Spotify into other countries in the coming years. With Spotify’s massive growth spurt from 2011 to 2012 after entering the American market, Spotify wants to create the same type of consumer movement in international markets with the 100 million dollars they plan to raise. After reporting over 200 million dollars in revenue in 2011, Spotify shows promising results for 2012 with projected revenue of 500 million. However, Spotify’s revenue is heavily dependent on amount of content it provides and “despite its impressive growth, Spotify has some issues, including its dependence on record labels providing content” (Loeb). The only way Spotify can sustain or increase foot traffic, which directly leads to subscriptions, is through amount of songs it can provide for its listeners. With only 18 million songs in the Spotify’s library, other companies like Apple dwarf Spotify’s total library by more than 10 million. With no other way of deriving revenue except through subscriptions and advertisements, Spotify needs to find a third stream of revenue to create more cash flow. Or, Spotify could increase their advertisement cost on their interface to bump of revenue. Already competing in price wars with other streaming services, Spotify cannot afford to increase their subscription prices. With music streaming increasing in competition amongst companies, Spotify needs the 100 million dollar funds to stay on top of the music streaming market share. Services like Pandora, Nokia, Rhapsody and Rdio are forcing Spotify to financially arm themselves to battle and protect their market share of the music streaming industry. Yet, the biggest competition has yet to come, where Apple is set to launch a music streaming program in the coming year that could potentially crush all competition. Due to their gigantic library of music, brand recognition and innovative trends, Apple will surely be a force to be reckoned with in the coming years and hopefully Spotify will continue to raise more money to go head to head with Apple. 

Trade Review: Week Ten (1/1)

Spotify Signs TV Deal With Samsung

Spotify has partnered with Samsung in an effort to encourage and incentivize new subscribers. Samsung's newest television products will now have Spotify streaming built into the television as an added perk. However, the consumer can only access the Spotify streaming by being a subscriber. Simply being a free user will not allow you to listen to the content, “the deal will give Samsung a new way to promote its televisions; Spotify, meanwhile, hopes the arrangement offers a new incentive for consumers to pay for its subscription service rather than use its advertising-backed, free-of-charge offering” (Grundberg). By partnering with a brand, especially of such high technological caliber as Samsung, will hopefully boost subscription revenue and increase Spotify’s global image. A popular brand in the international market as well, Samsung users that are not already familiar with Spotify will be able to discover the service in a new way (if Spotify is registered in that country).

This is not Spotify’s only recent partnership, where Spotify just linked up with video streaming giant Netflix in an effort to increase subscriptions for both companies alike. Spotify will allow those individuals who are already subscribers to have free access to Netflix until the years end. In doing so, Spotify hopes that the partnership will raise awareness to the power of streaming content and also incentivize consumers who were on the fence about paying for either service. More importantly, it is Netflix trying to raise awareness in international markets that Spotify is already prominent in like like Norway, Sweden and Finland Hopefully, with this partnership Netflix and Spotify will bring in new, paying users.

Guest Lecture Review (1/3): Intermedia

Mr. Kern’s guest lecture on Inter Media and his explanation of private equity within the media investment sector presented an incredibly intellectual, engaging discussion. Throughout the discussion Mr. Kern provided an insightful look into the private equity business and how he invest, flips and sells off media companies over an average of ten year period. What I was most surprised about during his lecture was that he prefers to invest in stable, longstanding companies that have simply hit a rough patch. Although it makes sense to make safe investments, I was taken back by how Mr. Kern does not invest in more current business models or emerging trends. I believe that the business of media is constantly changing, which is what makes the media industry such a powerful field to work in. I would think that investors would want to put their money towards emerging trends that would hopefully catch fire and create a large return on investment. One topic I wished Mr. Kern would have touched on was a mores specific breakdown of an investment strategy and how he determines what companies to invest in, where he allocates the invested funds and what key factor he looks for in every company. Obviously as part of a private equity firm, Mr. Kern does not want to give away his tactics but it would have been immensely helpful to simply give examples of what different aspects many private equity firms like Inter Media generally look for in a potential company. The most valuable piece of information Mr. Kern provided during his lecture was that Google is losing revenue, as more and more publishing companies are going digital. This means that Google is losing out on potential content to provide or distribute in their search engine due to exclusivity for the publishers. As a result, Google decreases traffic to its website, advertisers see a fall out in traffic to Google and thus advertisement revenue decreases.