Managing Media Businesses: A Game Plan to Navigate Disruption and Uncertainty PDF
Preview Managing Media Businesses: A Game Plan to Navigate Disruption and Uncertainty
edited by MIKE ROSENBERG & PHILIP H. SEAGER MMAANNAAGGIINNGG MMEEDDIIAA BBUUSSIINNEESSSSEESS aa ggaammee ppllaann ttoo nnaavviiggaattee ddiissrruuppttiioonn aanndd uunncceerrttaaiinnttyy Managing Media Businesses Mike Rosenberg • Philip H. Seager Editors Managing Media Businesses A Game Plan to Navigate Disruption and Uncertainty Editors Mike Rosenberg Philip H. Seager IESE Business School IESE Business School Barcelona, Spain Barcelona, Spain ISBN 978-3-319-52020-9 ISBN 978-3-319-52021-6 (eBook) DOI 10.1007/978-3-319-52021-6 Library of Congress Control Number: 2017932894 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover design by Samantha Johnson Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Who: To media and entertainment executives everywhere, but especially the Media AMP Class of 2014. What: Thanks for generously contributing to this book. Where: New York, Los Angeles, Barcelona. When: Yesterday, today and tomorrow. Why: To prove that reports of our death are greatly exaggerated. How: That depends on you! Preface Chances are, we only need to say, “The dress: white and gold or blue and black?” and you will instantly know what we’re talking about. For a few days in February 2015, the Great Dress Debate was the reigning topic of conversa- tion on the planet, dividing public opinion and leading some to experience “a brief existential crisis over the meaning of color and life and a bout of embarrassing squealing before some powerful newsroom bosses,” as Terrence McCoy confessed in The Washington Post [1]. The fact that millions of people could look at the exact same image and see entirely different realities con- founded and alarmed people in equal measure. As part of a recent Advanced Management Program (AMP) in Media & Entertainment held at IESE Business School, we conducted a similar experiment. We presented a picture to a group of participants and asked them to describe what they saw. One saw a Hindu god. Another an African mask. Another insisted it was a Mexican mask. Everyone saw something completely different. We gave them an “answer” for what the picture actually was, but that wasn’t really the point—just as when scientists finally weighed in on the Great Dress Debate, explaining how our eyes and brains process light and color differently, and proclaiming that the dress was indeed blue and black, the issue remained far from settled. More than two-thirds of an online poll insisted it was white and gold. It seemed people preferred the magic of their original perceptions. What if the person who originally posted the picture of the dress online had simply said, “Look at this blue and black dress”? Having been told the color of the dress—having been given the “answer”—most of us would prob- ably never have given the matter a second thought. Similarly, our participants would probably not have seen the god or the masks or whatever other image vii viii Preface sprang to mind, because we would have conditioned their ability to see what it was that we wanted them to see. “Conditioned” is the key word here. We are all conditioned to see the world through our own particular lens, which is influenced by our backgrounds, characters, cultures and experiences (and as we now know, by how our eyes and brains play tricks on us under certain light conditions). Is it any wonder, then, that in our particular picture puzzle, a participant of Indian heritage saw the Hindu god, the African participants saw the African mask and the Mexican participants saw it as Mexican, though they were in disagreement as to whether it was Aztec or Mayan? We all have certain mental models, or frames, as well as preferred modes of behavior, that have a strong bearing on how we interpret reality and how we act based on those interpretations. Why does this matter? Think about this in terms of your business, where the picture you are asked to look at on a daily basis is rather more serious than a trivial dress. Maybe it’s looking at your publishing business and asking, “What future do I see in newspapers, magazines or books?” Maybe it’s look- ing at your digital venture and asking, “How do I monetize this?” Or maybe it’s looking at both print and digital, and asking, “How do I make these two platforms work together?” Your answers to the questions that vex your media or entertainment busi- ness will depend on your frame—a frame that needs to be broken if you are to survive in times of such rapid change. Frank Bennack, the veteran chief executive of the Hearst media empire, knows this to be true. As he told us during a “fireside chat” in our New York center, 90 percent of his business today bears no resemblance to what it was when he started as CEO in 1979. You need to be like a pilot, he said, who is mentally running through the flight long before stepping into the cockpit. Proficient pilots visual- ize the path they want the airplane to take. They don’t wait until they’re at the desired altitude and then suddenly bank right. They’re constantly looking ahead, thinking about where they need to go, compensating for whatever might break the pattern—and in this way, they arrive at their destination. To not do so is to end up like the music industry, which thought that being like a pilot simply meant that you winged it. When digital arrived, the industry stuck to its traditional frame—the sale of CDs and total control of the value chain—and it did all it could to oppose anything that challenged its way of seeing the world. A decade later, listen to what Warner Music Group executive Michael Nash had to say to those who are overly attached to their frames: “Get over it. Move on. Understand where the world is going. Understand the core strength of your company, and figure out how to harness that core strength in a new context” [2]. Prefac e ix This book is precisely about that: Understanding where the world is going, understanding the core strength of your company and figuring out how to harness that core strength in a new context. This book is based on IESE’s AMP in Media & Entertainment, which IESE Business School has been running in New York and Los Angeles since 2011. The program combines contributions from leading professors and practitio- ners, as well as real-life case studies, to establish a base upon which you can start to build the set of managerial tools that you will need to manage fast- changing media and entertainment businesses. Mirroring that program, this book tells a story and takes the reader on a journey of self-knowledge and self-discovery. There are numerous plot twists and constant guessing games, as befits an industry going through unprec- edented disruption. But by the end we hope that you will have learned some important new lessons and gained deeper insights into how to apply general management principles to the particular challenges you face. The Editors References 1. T. McCoy (February 27, 2015), “The Inside Story of the ‘White Dress, Blue Dress’ Drama that Divided a Planet,” The Washington Post, https://www.washingtonpost. com/news/morning-mix/wp/2015/02/27/the-inside-story-of-the-white-dress- blue-dress-drama-that-divided-a-nation/ 2. L. Cabral (2011), “Interview with Michael Nash, Warner Music Group,” IESE Insight magazine, Second Quarter, Issue 9. Contents 1 The Big Picture: Four Trends That Change Everything 1 Mike Rosenberg and Philip H. Seager 2 Strategy: The Soul of Your Business 15 Mike Rosenberg, Adrian Caldart, with Philip H. Seager 3 “Show Me the Money!” Getting Inside the Bottom Line 37 Philip H. Seager as told by Hillel M. Maximon 4 Marketing in a New Media World 55 Julian Villanueva with Philip H. Seager 5 Decisive Leadership: Leaders That Create Extraordinary Outcomes 81 Mike Rosenberg, Iris Firstenberg, with Philip H. Seager 6 Decision Analysis: The “Science” of Predicting Your Next Hit 101 Miguel A. Ariño, Rafael de Santiago, with Philip H. Seager 7 Operations Management: Not Just What You Do, But How You Do It 113 Philip Moscoso with Philip H. Seager xi xii Contents 8 Th e Digital Economy: It’s Not the Technology, It’s the Business Model, Stupid! 135 Sandra Sieber with Philip H. Seager 9 M anaging Creative People: Time to Tear Up the Handbook? 159 Philip H. Seager 10 C orporate and Entrepreneurial Finance: Moving Your Business from Back of the Envelope to Front of the Class 183 Ahmad Rahnema Alavi, Jan Simon, with Philip H. Seager 11 Scenario Planning: Your Playbook for the Future 205 Mike Rosenberg with Philip H. Seager Index 215
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