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Behind the Scenes in Media

Behind the Scenes in Media: New Business Models and the Transformation of Content, Consumption, and Consumer Choice typography

Behind the Scenes in Media

New Business Models and the Transformation of Content, Consumption, and Consumer Choice
In July, comedian Dax Shepard inked an $80 million deal with Amazon for exclusive rights to his popular Armchair Expert podcast.

A Podcast.

Granted, there are a few extra bits of content Shepard will create as part of the agreement, but unless you assiduously follow the media, you might not have considered such a sum in tandem with a podcast. But the Amazon deal shows the dynamism—if not dizzying throes—the sector is experiencing. And for better or worse, the pace shows no signs of slowing in the foreseeable future. If anything, according to media experts at the Gabelli School of Business, it could increase. Amidst the sea change, however, are ample opportunities for those with new ideas and approaches.

Very Slowly, Then All at Once

The mechanism for revenues in the media has always been straightforward, explained Armando Núñez, GABELLI ’82, but the means have been shifting, slowly, then all at once. Núñez, chair of Fordham University’s Board of Trustees, is the former chairman of the ViacomCBS global distribution group. He held several high-profile executive positions there and was responsible for shaping CBS’s global licensing and syndication business, turning CBS Studios International into a worldwide distribution leader. He has launched some of the most successful content in the world, and his focus on global access fueled the network’s marquee franchises, including the multibillion-dollar CSI, NCIS, and Star Trek.

“The consumer doesn’t realize that at the end of the day, content is a commodity. You produce that content for ‘x’ dollars and get ‘y’ dollars, and in the case of successful content, ‘y’ is greater than ‘x,’ which sometimes happens but is not guaranteed,” he explained. Núñez added that the “triple play” era—when cable companies bundled television, internet, and telephone services—was a time of relative stability. “It was based on the idea that we would produce a certain number of series a year, and was a dependable model.”

Evan Shapiro, adjunct professor for communications and media management at the Gabelli School, and a thought leader in the media and entertainment industry who created the Peabody award-winning Portlandia and other household-name shows, said this bundling strategy was good for the consumer too, in comparison to the media maelstrom they and industry executives face today.

“Everything was in the same ecosystem, and the consumer was satisfied. There was one bill, one interface, and it was easy to find what you wanted,” Shapiro explained, adding that the consumers also benefited in terms of quality. “When you look at the last golden era of television when Mad Men and Breaking Bad and all other great shows were coming out, that’s what they were funding. I got to make Portlandia. There’s no way that show would get green-lit today. We’ve replaced that with absolute chaos.”

Armando Núñez smiling while sitting at desk in suit with hands together
Photo courtesy of ViacomCBS
Armando Núñez, GABELLI ’82, chair of Fordham University’s Board of Trustees, is the former chairman of ViacomCBS Global Distribution Group. An accomplished media executive, Núñez shaped CBS’s global licensing and syndication business and transformed CBS Studios International into a worldwide distribution leader.

A Delicate Calculus

The cross-pollination of content among platforms and even companies has destabilized business models and created a delicate calculus for media executives who must decide how to apportion their products, and in what quantities. “The U.S. media companies initially helped build the Netflixes and Amazons of the world by licensing their library content to those platforms. And we were literally making billions of dollars licensing to Netflix, Amazon, and others,” said Nuñez. Soon though, the conversation turned to questions of whether companies would be better served platforming their own content. Companies faced a multi-variable problem and had to decide what and how much to license or keep at home, and when. “There were more and more platforms, and it became trickier. There weren’t any clear-cut answers. I had an internal dialogue that helped me make the best decisions possible in consultation with my senior leadership team. We were looking for the right fuel mix for how to make the models more predictable and create greater opportunities for growth.”

The surfeit of options caused headaches for consumers, as well. Shapiro cited the paradox of choice. “When consumers are faced with too much choice, they make fewer choices. And that’s exactly what’s happening right now. Or they sign up to watch that one show they want to watch, they binge it, and then they cancel. That churn is a major issue,” he said. “There are many ways to fight that. One is bundling. Not just bundling video with video, but bundling video with other things. That’s why Prime works so well. I really do think we have this existential crisis of our own making in front of us.”

This Year’s Model

While managing media companies has always been complicated, these days, it is at times not your business model but your content that distinguishes you, explained Bozena Mierzejewska, Ph.D., associate professor and chair of the Gabelli School’s Communications and Media Management area, which offers the M.S. in Media Management. “Think about early Netflix. That was a revolutionary business model. Watch as much as you like, all for the same price. Now you can choose variations of subscription options with or without advertising, quality of video, or the number of screens or downloads. It’s the way you design your business model and adjust to your audiences that determines your longevity.”

“Companies like Netflix have actually said they’re not competing with TV—although I don’t completely believe them,” said Janet Gallent, Ph.D., associate clinical professor of communications and media management at the Gabelli School. “They say they’re also competing with Fortnite. Everything is about getting a share of eyeballs, a share of time, a share of heart. Netflix now has gaming. Amazon has gaming and music. The big tech companies know that you need it all if you want to be the platform where everyone goes to meet all those needs. The consumer wants a positive, seamless experience. Frictionless. That’s what we’re seeing.”

Angela Rayos del Sol smiling in black suit with hands crossed
Photo by Kyle James
Media Management student Angela Rayos del Sol is getting an inside look at digital media in her internship at NBCUniversal. “Working in ad sales and agency planning has allowed me to gain practical insights into creating media plans and providing strategic recommendations across NBCU’s Entertainment and News properties, including Peacock,” she said.

Media Microclimates Abound

Smaller content creators aren’t exactly snapping at the heels of the giants and midsized media outfits, but they are building sustainable models for their own work and ideas, minnows that swim happily alongside the whales. As a media creator, Shapiro shares his work through LinkedIn and Substack, and has a dedicated following of subscribers that fund his enterprise. Some podcasters may hit the media Powerball, but he said most are diligently building their own communities.

“I’ve built a really good business model around those fifty-to-a-hundred thousand people. I don’t need to make more than I’m making because I’m incredibly satisfied with what I’m doing, and my relationship to my audience is really sound,” he said. Shapiro feels this is a viable avenue open to content creators with their own message. “For example, if you get 5,000 people to pay you $4 a month, that’s a quarter of a million dollars a year.”

One way of looking at the evolving scene is that new media creators are thriving in microclimates, covering defined topics like media critique and innovation—as Shapiro does—art criticism, a particular slice of the political spectrum, or photographing dogs on the street. These creators are proliferating, and while they may not compete directly with larger outlets, they do take up some of a limited resource, the attention of viewers. “Competitive pressure is growing for big organizations because each of us has a limited amount of time, so the fight for attention is much harder,” explained Mierzejewska. “Media organizations have to spend more in advertising, promotion, their own content, and also create even better content in order to compete for eyeballs with those huge amounts of independent content creators on YouTube or TikTok.”

Ready for Launch

Preparing students for entry into a turbulent field is never easy, but Gallent advises staying with the basics. “One of the most important traits of a great business leader is to ask the right questions. When you have the theoretical frameworks, you can [do that],” she said. “And when you teach students how to apply theory, they can understand what drives consumers.”

Students want to go into media because they love media and see themselves as big media consumers, Mierzejewska added. She sees her role as a teacher as providing students with the concrete skills they will need to chart a course for their businesses even in the face of inevitable headwinds. “We focus on learning to analyze, design, and innovate in business models, because the models are the core of your strategy and adaptation. The other thing that is important is exposing yourself to the dynamism of change.”

“I’m not a case study teacher,” Shapiro said. “I teach the business of media in real time, so we spend a lot of time looking out the window, and watching the planet’s shift as it happens, and talking about what that means to us. We focus on what’s happening in the ecosystem right now, and then translate all of this into something that you can use that is actionable so you can get a job.”

Nuñez is bullish on Gabelli School graduates, in part because of the opportunities and internships on offer—which allow students to do substantive work in one of the biggest media centers in the world—and because of the experience the faculty bring to the table. “These make the Gabelli School unique, and the students therefore have a unique opportunity to understand this complex and continuously changing landscape.”

—Chris Quirk is a freelance writer.