E-commerce Lecture 5 PDF

15/11/2024 E-commerce 2023–2024: business. technology. society. Eighteenth Edition Chapter 10 Online Media © 2023 Pearson Education Ltd...

15/11/2024 E-commerce 2023–2024: business. technology. society. Eighteenth Edition Chapter 10 Online Media © 2023 Pearson Education Ltd. All Rights Reserved 1 Learning Objectives 10.1 Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, and the concept of media convergence. 10.2 Understand the key factors affecting the online publishing industry. 10.3 Understand the key factors affecting the online entertainment industry. 10.4 Understand how creators are attempting to monetize user-generated content. © 2023 Pearson Education Ltd. All Rights Reserved 2 Trends in Online Content Streaming wars: slowing growth; shift to advertising-supported model. Mobile platform accelerates the transition to digital content Tech companies become significant players in content production business Book publishing stable as e-book sales growth slows Podcasting becoming increasingly popular Mobile platform and apps morph into content distribution platform Time spent with digital media vastly exceeds time spent with TV © 2023 Pearson Education Ltd. All Rights Reserved 3 1  15/11/2024 Content Audience (1 of 2) Average adult spends more than 4,800 hours/year consuming various media Time spent with digital media accounts for more than 60% of total media time spent. Desktop and mobile use: 8 and a quarter hours per day © 2023 Pearson Education Ltd. All Rights Reserved 4 Content Audience (2 of 2) Cannibalization versus complementary – Does time on Internet reduce time spent with other media? – Massive shift of audience to Web, tablets, smartphones Television viewing, music consumption remains strong, reading has increased Impact of Internet: – Increase in total demand for media, including traditional products like books – Physical products replaced by digital © 2023 Pearson Education Ltd. All Rights Reserved 5 Insight on Society: Is Gen Z Really All That Different? Class discussion: – What are some of the defining socioeconomic and behavioral patterns of Gen Z? – In what ways does evidence contradict stereotypes about Gen- Z’s behavior patterns? – Do you self-identify as a member of Gen Z? Why or why not? © 2023 Pearson Education Ltd. All Rights Reserved 6 2  15/11/2024 © 2023 Pearson Education Ltd. All Rights Reserved 7 © 2023 Pearson Education Ltd. All Rights Reserved 8 https://www.linkedin.com/pul se/understanding-gen-zs- spending-power-apac- malaysia-cultural-ang- hympc/ © 2023 Pearson Education Ltd. All Rights Reserved 9 3  15/11/2024 How This Information is Useful for Businesses and Brands 1. Tailored Marketing Strategies Personalisation and Engagement: Digital Natives: Given Gen Z’s digital-first nature, businesses should prioritise online marketing channels, including social media, influencers, and targeted digital ads. For instance, platforms like WeChat, Line, and TikTok can be effectively used to engage with Gen Z consumers in APAC. Localized Content: Brands can create culturally relevant content that resonates with regional values and preferences. This might involve highlighting products that reflect cultural heritage or blending traditional elements with modern trends in Malaysia. © 2023 Pearson Education Ltd. All Rights Reserved 10 How This Information is Useful for Businesses and Brands 2. Product Development and Innovation Meeting Specific Needs: Health and Sustainability: Products that emphasize health benefits and sustainability are increasingly popular among Gen Z. Businesses can innovate by incorporating eco-friendly materials and transparent sourcing practices. Tech-Savvy Products: Given Gen Z’s digital proficiency, there is a high demand for tech-enhanced products, from smart home devices to wearable technology. Companies can focus on integrating advanced features that appeal to this tech-savvy generation. © 2023 Pearson Education Ltd. All Rights Reserved 11 How This Information is Useful for Businesses and Brands 3. Enhanced Customer Experience Omnichannel Presence: Seamless Shopping Experience: Businesses must ensure a seamless integration between online and offline channels. Gen Z prefers a shopping experience that allows them to easily switch between browsing online and purchasing in-store. Customer Feedback and Interaction: Encouraging reviews and feedback on digital platforms can enhance trust and engagement. Social media interactions and influencer partnerships can amplify positive experiences and build brand loyalty. © 2023 Pearson Education Ltd. All Rights Reserved 12 4  15/11/2024 How This Information is Useful for Businesses and Brands 3. Enhanced Customer Experience Omnichannel Presence: Seamless Shopping Experience: Businesses must ensure a seamless integration between online and offline channels. Gen Z prefers a shopping experience that allows them to easily switch between browsing online and purchasing in-store. Customer Feedback and Interaction: Encouraging reviews and feedback on digital platforms can enhance trust and engagement. Social media interactions and influencer partnerships can amplify positive experiences and build brand loyalty. © 2023 Pearson Education Ltd. All Rights Reserved 13 Content Market: Entertainment and Media Industry Revenues Total entertainment and media industry revenues estimated to be about $360 billion in 2021 Entertainment industry comprises almost 80% of total – Television and movie account for majority of entertainment industry revenue – Video game industry: rising in importance – Music and radio: less than 10% each – Podcasting: less than 1% but growing Print media: about 20% of total – Book publishing, magazines, newspapers © 2023 Pearson Education Ltd. All Rights Reserved 14 Online Content: Consumption, Revenue Models, and Revenue Online content delivery revenue models – Subscription – A la carte – Advertising supported (free/freemium) Free content can drive users to paid content Users increasingly paying for high-quality, unique content © 2023 Pearson Education Ltd. All Rights Reserved 15 5  15/11/2024 Media Industry Structure Three separate segments – Print – Movies – Music Each dominated by few key players with little crossover © 2023 Pearson Education Ltd. All Rights Reserved 16 Media Convergence Technological convergence – Hybrid devices Content convergence – Three aspects: Design, production, distribution – New tools for digital editing and processing Industry convergence – Merger of media enterprises into firms that create and cross-market content on different platforms © 2023 Pearson Education Ltd. All Rights Reserved 17 Figure 10.5 Convergence and the Transformation of Content: Books © 2023 Pearson Education Ltd. All Rights Reserved 18 6  15/11/2024 Online Publishing Industry Three segments – Online newspapers – E-books – Online magazines © 2023 Pearson Education Ltd. All Rights Reserved 19 Online Newspapers Most troubled segment of publishing industry – Revenues shrunk from $60 billion in 2002 to an estimated $20 billion in 2021 Four factors in decline – Growth of Web, mobile devices as alternative medium – Alternative digital sources for news – Failure to develop suitable new business models – Rise of social media and role of directing traffic to newspaper content © 2023 Pearson Education Ltd. All Rights Reserved 20 Online Newspaper Industry: Strengths and Challenges Strength: Newspaper audience size and growth Challenge: Digital ad revenue Strength: Content is king Challenge: Finding a revenue model Challenge: Growth of digital-only digital competitors Challenge: Surviving digital disruption © 2023 Pearson Education Ltd. All Rights Reserved 21 7  15/11/2024 Magazines Rebound on the Digital Platform Physical magazine circulation falls after 2001 – Exception is special interest magazines Digital magazines – Ad revenue growing – Total audience size increasing – Popular websites drive traffic to online magazines © 2023 Pearson Education Ltd. All Rights Reserved 22 E-books and Online Book Publishing After several years of explosive growth, e-book sales have flattened in recent years New channel for self-publishing authors Major publishers still dominant source of book content While some large bookstore chains have disappeared, the number of small independent bookstores had been growing prior to the Covid-19 pandemic © 2023 Pearson Education Ltd. All Rights Reserved 23 E-book Business Models E-book industry composition – Intermediary retailers (booksellers), traditional publishers, technology developers, device makers (e-readers Wholesale model – Retailers pay wholesale price and establish retail price Agency model – Distributor as agent must charge publisher’s retail price © 2023 Pearson Education Ltd. All Rights Reserved 24 8  15/11/2024 Online Entertainment Industry Major players: Television and movies, music, games Internet has transformed industry: – Mobile devices – Social networks featuring video streaming – Download and streaming services – Growth in broadband access – Closed streaming platforms reduce need for DRM Emergence of very large-scale, integrated technology media companies – Amazon, Google, Apple, and Netflix. © 2023 Pearson Education Ltd. All Rights Reserved 25 Home Entertainment: Television and Movies (1 of 2) Transition to Internet delivery platforms – Streaming and downloading services – Mobile platform Binge watching v s linear TV e rs u Social network influences Uncertain future for cable TV © 2023 Pearson Education Ltd. All Rights Reserved 26 Home Entertainment: Television and Movies (2 of 2) Challenges – Digital formats produce less revenue than physical – Pressure to change release windows – Growing strength of online movie distributors like Netflix – Pirated content © 2023 Pearson Education Ltd. All Rights Reserved 27 9  15/11/2024 Audio Entertainment: Music and Podcasts (1 of 2) Most disrupted of content industries – Move from physical to digital product Took 20 years until revenue in 2021 finally topped previous high in 1999 Digital revenues: 87% of all revenues in 2021 Two types of digital music services – Streaming subscription services (Internet radio) – Digital download (download to own) © 2023 Pearson Education Ltd. All Rights Reserved 28 Audio Entertainment: Music and Podcasts (2 of 2) Podcasts – Digital audio presentation that can be downloaded from Internet, stored on desktop or laptop computer or mobile device, and listened to at listener’s convenience – Becoming a professional talk content-distribution industry – Supported primarily by advertising © 2023 Pearson Education Ltd. All Rights Reserved 29 Games Online gaming has had explosive growth – Pokémon Go; mobile platform Types of digital gamers – Casual – Social – Mobile-fastest growing market – Massively multiplayer online (MMO) – Console E-sports © 2023 Pearson Education Ltd. All Rights Reserved 30 10  15/11/2024 Creators and User-Generated Content (1 of 2) Types of user-generated content – Print, video, digital audio, games, art, photography Revenue models – Advertising – Sales of digital content (subscription or on a per-piece basis) – “Tips” from fans – Events © 2023 Pearson Education Ltd. All Rights Reserved 31 Creators and User-Generated Content (2 of 2) Platforms – YouTube  Best known – Social networks  Creator funds – Only small percentage of creators have received more than $5000 from a creator fund © 2023 Pearson Education Ltd. All Rights Reserved 32 Businesses can focus on innovation, integrating the latest Forward Opportunities and Industry technologies like AI and IoT, to appeal to Gen Z’s tech-savvy nature. The emphasis on health and sustainability among Gen Z consumers Benefits drives demand for health-oriented products, using natural ingredients, and emphasizing eco-friendly practices. Investing in advanced e-commerce technologies, including AI-driven personalization and seamless mobile experiences, can attract and retain Gen Z customers. Fashion remains a significant area of expenditure for Gen Z, especially brands that align with their values of sustainability and individuality. Financial institutions can develop user-friendly digital banking solutions and financial literacy programs tailored to the needs of young consumers. © 2023 Pearson Education Ltd. All Rights Reserved 33 11  15/11/2024 Copyright This work is protected by United Kingdom copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. © 2023 Pearson Education Ltd. All Rights Reserved 34 12