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Time Warner Cable

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BY RICARDO SMITH

Time Warner Cable Logo. [1]

Time Warner Cable Logo [1].

Company Overview

Time Warner Cable is an American cable telecommunications company. It is the second largest cable provider in terms of revenue only behind Comcast [2]. Time Warner Cable serves over 16 million customers in 29 different states [1]. The company was formed in 1992 through the merger of Time Inc. and Warner Communications’ respective cable businesses, following the merger of the two companies in 1989 [1]. Time Warner Cable was spun off as an independent operation in March 2009 [1]. Since its inception, Time Warner Cable has been a trailblazer in the cable industry. They have lead the way in technical innovation through the use of fiber optics to enhance the customer experience. Time Warner Cable provides cutting edge technology, a diverse selection of entertainment content, and superior service to homes across the United States [1]. On April 25th, 2016, a deal was approved by the U.S Department of Justice for the purchase of Time Warner Cable by Charter Communications [3].

A screenshot from a Time Warner Cable commercial advertising one-hour windows [11]

A screenshot from a Time Warner Cable commercial advertising one-hour windows [6].

Customer Service

Time Warner Cable has a reputation for poor customer service. According to the American Costumer Satisfaction Index, Time Warner Cable was the most unpopular company in America in 2014 with a score of 54 out of a possible 100 [4]. Their television service was the second worst ranked brand on the list, followed by Comcast’s Internet Service Provider [4]. Cable companies have recently come under scrutiny for their increasing subscription fees and lack of choice in the market [5]. Cable prices have more than doubled in the past ten years [5]. The rise of over the top subscription video on demand has caused a decline in cable subscriptions [5]. A leading industry analyst estimated that the top 8 cable companies lost 463,000 subscribers in the second quarter of 2015 compared to 141,000 in the second quarter of 2014 [5]. The decline has caused companies to raise their prices [5]. In response to their poor customer service ratings, Time Warner has taken a number of steps. The company launched an ad campaign acknowledging it’s poor customer service and promising to improve it [6]. The main focus of this initiative is a one-hour window for all customer appointments. In 2015, the company reported a 13% decrease in care calls per customer relationship, 98% on-time percentage for customer appointments, and 15% improvement in first-visit resolution [7].

Screen Shot 2016-04-28 at 12.35.18 AM

Time Warner Cable’s 2015 earnings report [7].

2015 Performance

In the fourth quarter of 2015, Time Warner Cable’s revenue grew by 4.9% [7]. The company earned $6.07 billion in 2015 [7]. This represents a 3.9% increase in yearly revenue, Time Warner’s highest in five years [7]. The company attributes the increase to accelerated growth in residential and business services [7]. The company’s operating income before depreciation and amortization (OIBDA) increased slightly for the fourth quarter and the whole year [7]. In their best year of residential subscriber performance ever, Time Warner added 618,000 new customer relationships, 1,000,000 high-speed data upgrades, and 1,036,000 voice subscribers in 2015 [7]. Time Warner made significant investments in 2015 to improve the customer experience and expand their network [7]. As a part of this effort, the company introduced an initiative to convert their infrastructure to an all digital system called TWC Maxx [7]. The new system results in increased Internet speeds, state-of-the-art television services, and improved overall reliability [7]. In 2015, TWC Maxx was fully implemented in six major cities and begun in 4 others [7]. The company has continued expanding the program in 2016 [8].

comcast_logo_detail

Comcast logo [11].

Proposed Comcast Merger

In November 2013, it was reported that Charter Communications was to put in an offer to purchase Time Warner Cable for around $135 per share [9]. As a result, Time Warner Cable stock rose by 10% [9]. Charter and Comcast stock also rose based on the rumor [9]. The offer was eventually rejected [10]. On February 13th, 2014 Comcast announced that it intended to acquire Time Warner Cable through a stock swap [11]. The announcement was met with great opposition from government officials, industry executives, and consumer advocacy groups alike [12]. People were largely opposed to the merger based on Comcast’s behavior in past deals [13]. Following its acquisition of NBCUniversal, Comcast became a partial owner of Hulu [13]. As a part of the deal, Comcast was supposed to remain a silent partner and not influence or interfere with the operation of the company [13]. As of July 2013, Hulu was for sale [13]. In that same month, a meeting to decide the company’s fate took place between the operating partners; Walt Disney, 21st Century Fox, and Comcast [13]. According to anonymous sources with knowledge of the conversation, Comcast told the other partners that it could enhance Hulu’s value, which caused them to decide not to sell the company [13]. This action directly violated the terms of Comcast’s NBCUniversal deal [13]. Other grievances included programmers experiencing continued difficulty in making their content available for streaming in Comcast markets and Comcast’s lack of promotion for a stand-alone broadband service that isn’t connected to a television package [13]. The proposed deal would have given Comcast a 57% market share of broadband services [13]. In April 2015, FCC Chairman Tom Wheeler came out in direct opposition of the merger [14]. In light of the strong public reaction, Comcast terminated the merger ahead of the official FCC decision later that month [14].

charter-communications-logo

Charter Communications logo [15].

Charter Merger

Following the failure of the Comcast merger, Charter Communications announced that it would be merging with Time Warner Cable on May 26th, 2015 in a $56.7 billion deal that combined cash and stock options [15]. Charter also announced that they would be purchasing Bright House Networks, previously controlled by Time Warner, in a separate deal for $10.1 billion [15]. This deal was met with far less opposition based on the lower combined market share in broadband service and Charter’s lack of recent negative PR [16]. In order to smooth the approval process, Charter promised not to impose data caps and not charge online content providers for direct connections to its network [16]. On April 25th, 2016, the U.S Department of Justice approved the sale with conditions [17]. On the same day, FCC chairman Tom Wheeler circulated his approval to other FCC commissioners [17]. The order is expected to get enough votes for approval [17]. In their official statement, the Department of Justice said they worked closely with the FCC to coordinate their reviews of the deal and devise comprehensive remedies for the issues that it presents [18]. As part of the approval, Charter is forbidden from including clauses in their Pay-TV contracts that bar content creators from exploiting their programming through online video on demand [3]. This condition was included largely because Time Warner is notorious for being the most aggressive provider with these clauses [17]. The conditions also forbid Charter from retaliating against programmers for licensing to online video on demand [3]. These conditions will last for seven years [3]. The sale will not become official until California public utility regulators submit their approval [17]. They are scheduled to vote in the summer of 2016 [17].

Overview

Time Warner Cable’s recent acquisition by Charter Communications will begin a new chapter in the company’s history, as well as the state of cable television altogether. Charter is expected to retire the Time Warner Cable brand [18]. Combining their resources will allow the two companies to cut costs and hopefully provide better prices for their customers. The new Charter’s future success will rely heavily on their public perception in the aftermath of this merger.

Sources

[1] Time Warner Cable. Company Overview for Time Warner Cable. Time Warner Cable. Retrieved April 25 2016.

[2] National Cable and Telecommunications Association. Industry Data. National Cable and Telecommunications Association. Retrieved April 25 2016.

[3] The United States Department of Justice (April 25 2016). Justice Department Allows Charter’s Acquisition of Time Warner Cable and Bright House Networks to Proceed with Conditions. The United States Department of Justice. Retrieved April 27 2016.

[4] American Customer Satisfaction Index. American Customer Satisfaction Index. American Customer Satisfaction Index. Retrieved April 25 2016.

[5] Darrow, Barb and Jones, Stacy (August 18 2015). Cable consumers keep cutting the cord. Can anyone blame them?. Fortune. Retrieved April 25 2016.

[6] Morran, Chris (October 5 2015). Time Warner Cable Admits Its Customer Service Stinks. Pinky Swears To Do Better. Consumerist. Retrieved April 25 2016.

[7] Time Warner Cable Inc. (January 28 2016). Fourth-Quarter and Full-Year 2015 Earnings Summary. Time Warner Cable. Retrieved April 25 2016.

[8] Time Warner Cable Inc. (February 8 2016). Time Warner Cable Takes Next Step to Transform TV and Internet Experience in Central and Northern New York. Time Warner Cable. Retrieved April 25 2016.

[9] Yousuf, Hibah (November 22 2013). Cable stocks surge on takeover chatter. CNN Money. Retrieved April 25 2016.

[10] CNBC (January 13 2014). Time Warner Cable rejects Charter’s $61B bid as inadequate. CNBC. Retrieved April 25 2016.

[11] Comcast (February 13 2014). Time Warner Cable To Merge With Comcast Corporation To Create A World-Class Technology and Media Company. Comcast. Retrieved April 25 2016.

[12] Steel, Emily (April 22 2015). Comcast Critics Cast Doubt on Its Intentions. The New York Times. Retrieved April 25 2016.

[13] Steel, Emily (April 21 2015). Comcast’s Track Record in Past Deals May Be Hitch for Merger With Time Warner Cable. The New York Times. Retrieved April 25 2016.

[14] Trefis Team (April 28 2015). Comcast-TWC Merger Called Off; Where Do These Companies Stand Now. Forbes. Retrieved April 26 2016.

[15] Charter Communications Inc. (May 26 2015). Charter Communications to Merge with Time Warner Cable and Acquire Bright House Networks. Charter Communications Inc. Retrieved April 25 2016.

[16] Economides, Nicholas (March 22 2016). Why a Charter-Time Warner Cable Merger Won’t Actually Kill Cable Companies. Fortune. Retrieved April 25 2016.

[17] King, Hope and Stetler, Brian (April 25 2016). Giant cable merger cleared by regulators. CNN Money. Retrieved April 25 2016.

[18] Morran, Chris (April 25 2016). 5 Things You Should Know About the Approved Merger of Time Warner Cable and Charter. Consumerist. Retrieved April 27 2016.

Netflix

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6359042145958794521015636446_unnamed

Netflix Logo, Courtesy of Netflix (1)

Corporate Headquarters

100 Winchester Circle

Los Gatos, California 95032

(408) 540-3700

www.netflix.com

Officers and Directors

Reed Hastings, Founder and CEO

Reed Hastings, Founder and CEO (2)

kelly Bennett, Chief Marketing Officer

Kelly Bennett, Chief Marketing Officer (2)

Jonathan Friedland, Chief Communications Officer

Jonathan Friedland, Chief Communications Officer (2)

David Wells, Chief Financial Officer

David Wells, Chief Financial Officer (2)

Neil Hunt, Chief Product Officer

Neil Hunt, Chief Product Officer (2)

Tawni Cranz, Chief Talent Officer (2)

Company History

In 1997, Reed Hastings and Marc Randolph founded Netflix after previously working together as high ranking software engineers at a company called Pure Software. At the beginning, Netflix was an online movie rental service. Over time Netflix adopted a subscription based model that offered endless movie options for a monthly fee.

400303 05: Packages of DVDs await shipment at the Netflix.com headquarters January 29, 2002 in San Jose, CA. The online DVD rental site has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)

Netflix DVD Rental, Courtesy of Huffington Post (5)

 

Netflix-Streaming-Devices

Devices Compatible With Netflix Streaming, Courtesy of Techforanyone.com (6)

The new idea proved to be effective, and in 2002, Netflix officially became a publicly traded company under the ticker “NFLX” with 600,000 active members in the United States. In 2005, that number grew to a reported 4.2 million users, which Netflix was able to sustain by introducing their ground breaking streaming service that allowed viewers to watch shows instantly. By the end of 2010, Netflix had become a major player in the technology world by partnering up with top electronics companies such as Microsoft, Apple, and Blue-ray. The reason for this was to enter other market places and reach all possible consumers. That became possible in 2011; Netflix began to stream internationally and entered countries in Europe and Latin America.(3) In 2013, Netflix produced it’s first original series called House of Cards, which became wildly successful and is still on the air today. Since then, Netflix has been nominated for 79 Emmys and has won 13, and is now viewable in over 50 countries and reports over 70 million subscribers.(4)

Finances 

Screen Shot 2016-04-24 at 3.33.28 PM

Netflix Memberships, Courtesy of CNBC (7)

Netflix reported earnings were double what most analyst expected. Impressively, Netflix posted a first-quarter EPS of 6 cents, which is up a full cent per share from the year-earlier period. Revenue came in at $1.96 billion, against 1.57 billion in 2015. Now in over 130 countries, Netflix has over 81 million subscribers.(7) This quarter, net additions amounted to a record 6.74 million shattering the old mark of 5.59 million in 2014 and operating income has been cut almost in half to $47 million vs. 97 million a year ago.  One of the main reasons for the great quarter is because of the rapid membership growth. Netflix reported 6.74 million new members, which 4.51 million are international. US revenue grew 18% and profited $413 million, or had a 35.5% margin compared to a 31.7% margin a year ago. International revenue also improved,  increasing 57% and contributing a loss of $104 million, which was better than expected due to the rapid expansion. In most of the international markets, Netflix is only offered in English and payment methods are extremely limited. Going forward, Netflix will add more local languages and payment options to ensure their international plan becomes as profitable as their United States core.(8)

Netflix Stock Price, Courtesy of Yahoo

Netflix Stock Price, Courtesy of Yahoo (9)

In 2015, Netflix stock price reached over $702.60 per share, which resulted in splitting the stock and giving shareholders an extra 6 shares lowering the price to $100.37 a share. Today, Netflix closed at $95.90 per share, comparably better than 79.77 a year ago.(9)

 

 

Global Distribution

International expansion is “vital” for Netflix to grow due to a subscription plateau in the United States. The company plans to be in 200 countries by the end of 2016 and in January announced it was live in more than 190 countries already.

Netflix Global Coverage, Courtesy of Netflix

Netflix Global Coverage, Courtesy of Netflix (11)

While English is the main language, Netflix added Arabic, Korean, and Chinese to the 17 languages already programed into the system. Netflix is now available on almost every device that can connect to the internet, and provides the best possible stream based on bandwidth. Although the company has still not made money going abroad, the actual service has been receiving high praise from its international consumers. The hopes that the company will eventually become fully “global’ seems to dwindle relying on China and North Korea, but Netflix does not seem to be giving up.(10)

Content

In the next quarter, Netflix will release seven new seasons of original content that will  include shows like Unbreakable Kimmy Schmidt, Bloodline, Grace and Frankie, and Orange is the New Black. Also,the company will release the original films The Do-Over, Special Correspondents, and The fundamentals of Caring, which are set to have stars like Adam Sandler, Ricky Gervais, and Paul Rudd behind the projects. Most importantly, the second quarter marks the beginning of the first talk show on Netflix called Chelsea, starting Chelsea Handler.

Chelsea Poster, Courtesy7 of Chelsea Handler's Twitter

Chelsea Poster, Courtesy of Chelsea Handler’s Twitter (12)

This talk show is important because it will abandon the tradition “all episodes at once” model and enter into the realm of nightly streaming. Chelsea will start three nights a week and will be recorded in front of a live audience to compete with other Late Night shows. Lastly, since Netflix is now virtually global, the company has stepped up production of non-English series following the success of last years’s Narcos, which was filmed in both Spanish and English. Netflix plans to release their first french series Marseille on May 5th 2016, and Hibana their first Japanese film in June. These series will give Netflix an edge in non-english countries and will result in a global audience.(8)

Competition

Netflix has become the lead pioneer in streaming companies, but with so much success comes competition. The biggest threat to Netflix seems to be the emergence of Amazon. According to Nielsen, in the fourth quarter of 2014, Netflix had a 36% market share on American households to Amazon’s 13% and Hulu Plus‘s 6.5%.(15)

Amazon Vs Netflix, Courtesy of Techradar.com

Amazon Vs Netflix, Courtesy of Techradar.com (17)

These numbers could change due to Amazon’s membership offering of $8.99 a month, one dollar less than Netflix sets to make it’s price in may. Amazon only sold Prime memberships for $99 previously, but on April 17th that changed to challenge Netflix. This is important because it could mean a huge loss in market share for Netflix moving forward. The price adjustment comes at a perfect time for Amazon because Netflix plans on raising their subscription fee from $7.99 to $9.99 a month. It should be interesting to see how Netflix reacts.16

Overview

Ultimately, Netflix shows that they are a media powerhouse that looks to make a major impact not only in the United States, but around the world. It will be interesting to see if their experiment in timed streaming will work, and if they can keep Amazon from gaining ground in the marketplace.

Sources

  1. theodysseyonline.com accessed April 23, 2016
  2. Netflix.com Officers and Directors accessed April 23, 2016
  3. Media.Netflix.com  accessed April 23, 2016
  4. Bustle.com  accessed April 24, 2016
  5. huffingtonpost.com  accessed April 23, 2016
  6. techforanyone.com accessed April 24, 2016
  7. CNBC.com accessed April 24, 2016
  8. Shareholders PDF accessed April 24, 2016
  9. yahoo.com  accessed April 24, 2016
  10. Media.Netflix.com Netflix around the world accessed April 24, 2016
  11. Help.Netflix.com  accessed April 24, 2016
  12. Twitter.com accessed April 24, 2016
  13. N/A
  14. Youtube.com accessed April 24, 2016
  15. Investorpedia.com accessed April 24, 2016
  16. Geekwire.com accessed April 24, 2016
  17. techradar.com accessed April 24, 2016

Paramount Pictures- Julia Dorin

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paramount

Paramount Pictures

5555 Melrose Avenue, Los Angeles, CA. 90038

www.paramount.com

HOW IT ALL STARTED

Paramount Pictures, founded in 1912 by Adolph Zukor, is the fifth oldest film studio on Earth. Along with Zukor, Paramount’s founding fathers include Jesse L. Lasky ad Cecil B. DeMille, whose innovation and determination have created an empire. Since its conception in 1912, Paramount has become one of the foremost production and distribution companies in the entertainment industry [1]. Owned by media conglomerate Viacom, Paramount maintains a solid reputation and has branched into various divisions including Paramount Animation, MTV Films, Comedy Central Films, Nickelodeon Movies and many others. Paramount has had multiple successful releases in 2016 so far and anxiously awaits the release of various new projects.

THE TEAM

Led by Chairman and Chief Executive Brad Grey, Paramount Pictures develops and produces iconic pictures such as “The Big Short”, ”The Wolf of Wall Street”, “Star Trek”, and many more. Grey took over the company in 2005, leading it to great success by finishing first in the global market in 2011, and maintaining high morale and a good reputation throughout his tenure. However as of late, Grey has faced financial trouble as the leader of Paramount, showing a substantial decrease in operating profit from last fiscal year’s $205 million to this fiscal year’s $111 million [2]. Another revered executive, Rob Moore, serves as the Vice Chairman for Paramount Pictures. Moore works to oversee the company’s Worldwide Marketing and distribution of films and television programs. Other executives include Frederick Huntsberry, Marc Evans, and Amy Powell, all who contribute to Paramount’s long-lasting success [3].

Brad Grey

Brad Grey- CEO of Paramount Pictures [12]

FINANCES 

So far this year, Paramount Pictures has acquired a total film gross of $311,567,245 from a variety of films. “Daddy’s Home” grossed a total of $150,357,137 since its release in December of 2015. “The Big Short”, also released in December of 2015 grossed $70,259,870 as well as receiving the Academy Award for Best Writing, Adapted Screenplay. The film was also nominated for another four Oscars and four Golden Globe awards as well. Paramount also released “Anomalisa”, which was nominated for Best Animated Feature Film in the 2016 Academy Awards. Other releases such as “Zoolander 2” and “Whiskey Tango Foxtrot” have contributed to Paramount’s total film gross thus far [4]. Paramount is known for some of the most grandiose pictures ever produced, such as James Cameron’s 1996 Blockbuster “Titanic”, which was awarded the Oscar for Best Picture during the year of its release. Other top notch production includes “Interstellar”, starring Matthew McConaughey, which won an Academy Award for Best Achievement in Visual Effects during the 2015 Oscars.

 

THE FUTURE

Looking ahead, Viacom is searching for a minority investor in Paramount in order to expand its content through the help of another company. Philippe Dauman, Viacom’s Chief Executive, believes a new investor would aid in Paramount’s recently dropping stock price and decreased ratings, which is depicted by the 2015 market share of 5.9%. Ideally, Paramount is looking for a Chinese investor to expand the company’s horizons and broaden its foreign influence. With the strict censorship implemented by China’s government, a Chinese partner would be extremely helpful for Paramount’s future success due to China’s massive population being about twenty percent of the total world population. Other interested parties include high profile companies such as Amazon, Apple, and Lionsgate Entertainment who have expressed the desire to get involved with Viacom’s Paramount Pictures. However, there is some controversy surrounding a new investor due to Paramount’s decrease in net worth. Viacom paid $9.8 billions dollars to acquire Paramount in 1994, yet current predictions value the company at only $5.5 billion today [5]. 21st Century Fox has demonstrated great interest in buying a portion of Paramount, which could be a smart business move and allow the company to begin paying off some of their debt [6].

GLOBAL EXPANSION 

Paramount recently gained rights to continue sharing their content to European countries after a long investigation with the European Union. The EU charged many companies including Google with anti-trust violations, claiming that streaming services such as Sky, which were carrying Paramount programs, were unfairly inaccessible to those outside of certain territories in the European Union. After much debate, Viacom and Paramount Pictures have reached a peaceful and satisfactory conclusion with the EU, allowing the production company to continue to license their programs through premium pay-TV output license agreements. This agreement also abolishes the prospect of fines as well as establishing a basis to solve other disagreements between various entertainment companies and the European Union [7]. Symbiosis between the EU and Paramount Pictures aids the company in reaching global success and distributing their programs and films across the world.

COMING UP

As one of the most iconic companies in the industry, Paramount has produced classic films such as “The Godfather”, and with numerous new releases on the horizon, they continue to hope for more success at the box office. Anticipated releases include “Star Trek Beyond”, “Ben-Hur”, and “Teenage Mutant Ninja Turtles: Out of the Shadows”, all of which Paramount has great hope for [8]. Huge blockbusters are essential not only to increase the company’s market share price and total gross but to maintain their outstanding reputation as well. Films such as “Star Trek Beyond” bode well for Paramount, due to the franchise’s already established consumer base, making the film a much anticipated release in the coming year.

Although Paramount Pictures has seen better days fiscally, the company still holds its head high and continues to produce and distribute projects that change the way audiences view cinema. With the implementation of a new investor combined with the already established leadership of Brad Grey and his team, Paramount will certainly make a comeback in the industry. With the increase of foreign cooperation, Paramount executives have high hopes that their company to extend beyond country borders, making their films renowned around the world.

SOURCES

[1] Paramount.com. (2016). The Paramount Story. Retrieved 25 April 2016.

[2] Atkinson, C. (2016). Paramount’s Brad Grey Needs Big Success to Save his Job. New York Post. Retrieved 25 April 2016.

[3] Paramount.com (2016). Paramount Executives. Retrieved 25 April 2016.

[4] Boxofficemojo.com. (2016). Paramount Yearly Comparisons. Retrieved 25 April 2016.

[5] Bond, P. (2016). Paramount’s Suitors? Here’s Seven Top Prospects. The Hollywood Reporter. Retrieved 25 April 2016.

[6] Atkinson, C. (2016). 21st Century Fox Eyes Minority Slice of Paramount Pictures. New York Post. Retrieved 25 April 2016.

[7] Jafaar, A. (2016). Paramount Offers Concessions in EU Anti-trust Investigation. Deadline Hollywood. Retrieved 25 April 2016.

[8] Boxofficemojo.com. (2016). Paramount Upcoming Releases. Retrieved 25 April 2016.

[9] Paramount.com. (2015). Daddy’s Home Image. Retrieved 25 April 2016.

[10] Wikipedia. (2015). Anomalisa Poster. Retrieved 25 April 2016.

[11] Trekcore. (2015). Star Trek and Beyond Poster. Retrieved 25 April 2016.

[12] Paramount.com. (2015). Brad Grey Executive Biography. Retrieved 25 April 2016.

 

 

 

 

Spotify by Daniel Rakow

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6358624155746048241907330677_spotify-logo-horizontal-black (5)

Executives 

                       Daniel Elk                                                            Martin Lorenzton

Unknown

                      Martin Lorentzon - Spotify. Photo: thomasengstrom.com

History

Spotify was developed in 2006 in Stockholm, Sweden.  It was founded by the former CTO of Stardoll, Daniel Elk and the co-founder of TradeDoubler, Martin Lorentzon.  They officially launched the music streaming service in October of 2008 for paid subscribers and in 2009 they made their service available for free subscriptions.  The free subscriptions opened up the service to a bigger audience while slightly hindering their income.  In 2011 Spotify crossed over into the United States market and also introduced the Spotify App for devices. (1)

More About Spotify

Since 2011, Spotify has solidified its spot as one of the top music streaming services along with Apple Music and Tidal.  Today, Spotify features curated playlists that are made by their employees for paid subscribers.  They have radio stations that allow the user to discover new music based on artists that are similar to the ones the user listens to.  Along with that, they have a huge library of music consisting of 30 million songs.  Their premium service allows users to access all of their songs and provides weekly curated playlists called Discover Weekly.  Currently, they have over 75 million users with 30 million of those users being paid subscribers. (2)

Potential Change of Location 

Flag_of_Sweden.svg

(Swedish Flag)

As of recent, Spotify has been hinting at a change of location for its headquarters.  Since they started the company, they have been based in Stockholm, Sweden.  However, recent circumstances have lead them to reconsider their choice to remain in their hometown. As Elk wrote in an open letter that he posted online, “We love Sweden and believe that this is basically the best environment for us. But at the same time we cannot magically remove the political obstacles.  Thousands of Spotify jobs could go to the U.S instead of Sweden.”  Spotify is frustrated with the Swedish governments inability to let businesses in their country grow.  To start, Spotify believes the housing situation needs to be revisited.  It’s extremely difficult to rent apartments in Stockholm because such a large amount are controlled by housing associations.  It could take over 10 years to get a rental apartment which makes it extremely difficult for Spotify to bring in foreign talent. Another area Spotify argues needs change is their education system.  They argue that the country doesn’t focus at their schools enough on technology.  This leads to a lack of programmers for them to hire. The lack of knowledge causes them to have to train more workers, which could be avoided.  Lastly, Spotify hopes to change Sweden’s stock options.  The country’s rules don’t allow Spotify to grant their employees stock options which would attract brighter employees. (6) (7)

Competition

In the last month Spotify has had to deal with more competition than ever.  Not only have they been going head to head with Apple’s streaming service Apple Music, they have also seen a few new players enter the streaming world. To start, Apple has signed exclusive contracts with big artists.  These artists’ new albums debut on Apple Music and take a few weeks before they are available on Spotify.  Artists like Drake have Spotify users growing impatient when he drops new content.  He has 24 million monthly listeners and is the 7th most played artist on Spotify.  This could hurt them eventually if it doesn’t change.  Jay-Z music streaming service Tidal is another competitor with Spotify.  In early February Rihanna took to Tidal to release her new album Anti.  While it is now available on Spotify, for months it had users converting to Jay-z’s service to access it.  Similarly, Kanye West exclusively released his new album The Life of Pablo on Tidal.   However, The Life Of Pablo was recently made available on Spotify as well.  Soundcloud, in the last month, has also entered the subscription space.  They created Soundcloud Go which will also directly compete with Spotify.  Even with all these competing services, Spotify has a loyal user base of over 75 million people that will be hard to take away from them. (8)

Spotify x Billboard 

billboard-music

(Billboard)

On April 21 Billboard announced it’s partnership with Spotify for 2016.  This is a huge win for Spotify over Apple Music.  Billboard will bring all of its users to Spotify instead of Apple Music.  Billboard’s charts are turning to Spotify to make it easier for its users to access today’s hits by streaming songs directly from their weekly charts.  Now, when viewing the Hot 100 or Billboard 200 the user is able to listen to the songs they are analyzing.  There are 30 second previews directly next to the song on the chart that also give the option to stream the full version on Spotify.  Billboard will also be publishing 3 new spotify driven charts on billboard.com.  One will be a 30 song Velocity Chart which will include the 30 most trending songs on Spotify.  The next will have a Viral 50 chart which will consist of the 50 most shared songs across social media platforms like Twitter, Instagram, and Facebook. Lastly there will be a Velocity Chart with 30 songs with 5 songs for each decade (1960-2000).  To take a look at the Billboard Hot 100 with Spotify streaming click here. (9)

Money

Spotify recently has raised over 1 billion dollars in debt financing.  This is a substantial amount especially for a company that is financially stable.  It is no doubt that Spotify now has money to spend but the question is: what will Spotify decide to do with all this extra money? forbes.com went into detail with ways that Spotify is planning on improving. Firstly, they are expected to get into the video space. Apple and Tidal already both have video content on their service.  Spotify, being their number one competitor, will definitely start exploring music videos, behind the scenes, artist episodes, tour videos, and live footage. One major area they will have to work on is their payment rates.  Their current rate per stream is .004.  This rate tends to anger artists because they believe they are not being compensated for their art.  This has lead artists like Taylor Swift and Adele to not allow their catalog of music to be included on their streaming service.  With the extra money Spotify is planning to start working in these areas. (10)

Sources

(1) Streatfield, Brooke. Rise of a Tech Giant: The History of Spotify. The Telegraph.  Retrieved: April 25, 2016

(2) Person, Adam Pasick. The Magic That Makes Spotify’s Discover Weekly Playlists so Damn Good. Quartz. Retrieved: April 25, 2016

(3) Bertoni, Steven.  Spotify’s Daniel Elk: The Most Important Man In Music.  Forbes.  Retrieved: April 24, 2016

(4) Sloan, Paul.  The Future of Music.  CNET.  Retrieved: April 24, 2016

(5) Spotify.  Vulcan Post.  Retrieved: April 25, 2015

(6) McIntrye, Hugh.  Spotify May Soon Leave Sweden.  Forbes.  Retrieved: April 23, 2016

(7) Swedish Flag.  Eduniversal.  Retrieved: April 23, 2016

(8) Apple Music’s Biggest Swipe at Spotify Yet.  Music Business Worldwide. Retrieved: April 24, 2016

(9) Billboard Staff.  Billboard Announces Spotify as Exclusive Playback Partner of The Charts. Billboard.  Retrieved: April 24, 2015

(10) McIntrye, Hugh.  What Can Spotify Do With The $1 Billion It Just Raised?  Forbes.  Retrieved: April 24, 2015

Singleton, Micah.  Spotify Hits 30 million Subscribers.  The Verge.  Retrieved: April 25, 2016

 

Sirius XM Radio – Joshua Weisleder

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1221 Avenue of the Americas
New York, NY 10020

James E Meyer Chief Executive Officer

James E. Meyer | Chief Executive Officer, SiriusXM

SiriusXM_Preisdent_and_Chief_Content_Officer_Scott_Greenstein

Scott Greenstein | President and Chief Content Officer, SiriusXM

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Dara Altman | Executive Vice President and Chief Administrative Officer, SiriusXM

About

SiriusXM delivers quality ad-free satellite radio programing to its subscribers ever since its early inception in Washington, DC in the early 90’s. The broadcasting company transmits satellite radio services like Sirius Satellite Radio, XM Satellite Radio and Sirius XM Radio anytime and and anywhere for its subscribers in North America. Users can access the service in their car, computer, and smartphone and tablet devices. Sirius also has constructed deals with every major automaker while also providing weather and traffic updates for automobiles, trucks, boats, RVs and aircrafts. In regards to content, Sirius offers musical stations from various genres and time periods, sporting entertainment from all major professional leagues and top notch talk show programming across its hundreds of channels. SiriusXM also allows users to individualize their content by using MYSXM which lets users listen to hours of on-demand programing so they will never miss a beat. In regards to revenue, SiriusXM is the biggest in the market and recently reached 30 million subscribers during its first quarter of 2016(1). The American based company also has a Canadian subsidiary called SiriusXM Canada, which has a user base of 2 million users.

New Programming

This past year, SiriusXM has added more quality programs to its already impressive collection of stations. Some of their new content includes SiriusXM NHL Network Radio, SiriusXM Comedy Greats, FOX News Headlines 24/7, Velvet (a vocalist curated station for the likes of John Legend and Adele), SiriusXM Fly (Hip/Hop and RnB from the 90’s and early 2000’s) and KIDZBOP Radio(2).

SiriusXMNHLNetworkRadio-8185-12-Logo-160x86-P-11042014SiriusXMComedyGreats-9408-12-Logo-160x86-P-28042015FOXNewsHeadline-9410-12-Logo-160x86-P-12062015,0Velvet-9361-12-Logo-160x86-P-102513SiriusXMFly-9339-12-Logo-P-160x86-020813KidzBop-9366-12-Logo-160x86-P-091313

SiriusXM also schedules in limited time channels throughout the year to test out potential ratings or to celebrate particular events or musical artists. In anticipation for the acclaimed music festival, Sirius launched Coachella Radio on April 11 to feature music by artist that are scheduled to perform(3). Last January, recently after his death, Sirius added a commemorative David Bowie station on channel 30 to celebrate his legendary career(4). As well, with the recent passing of Prince, they created a station in his honor on channel 50(5).

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This past march, SiriusXM provided all users access to every second of every game of the 2016 NCAA March Madness on their satellite radios and internet connected devices. They provided extensive coverage for both mens and women’s basketball with insight analysis from Mike Krzyzewski, Bobby Cremins, Tom Brennan, Steve Lappas and Mateen Cleaves(6). In addition, at the beginning of April, SiriusXM expanded its broadcasting coverage for Golfs biggest event, The Masters. There programing included commentary and hours of live play-by-play coverage from Augusta National(7). As well, Sirius will broadcast all the NBA and NHL playoff action this postseason while also providing MLB and NFL regular season and playoff games throughout the rest of 2016 and beyond.

CollegeSports_FI_260x146_031111,4SXMNBARadio-Court-FI-260x146,4 SiriusXMNHLRadio-FI-260x146-100112,0

Finances

Currently, Sirius XM Holdings Inc. has a share price of $3.96 on NASDAQ(8)

Screen Shot 2016-04-24 at 5.24.57 PM

In 2015, the company recorded its highest revenue at $4.6 billion while having their Net Income reach $510 million(9). Their Net Subscriber base grew by 2.3 million in the previous year, which helped them propel to 30.1 total users in 2016. In addition, their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization(10)) surged 13% to an all time high for the company by reaching $1.66 Billion at the end of 2015 which eclipsed its 2014 mark of $1.47 Billion. For 2016, the company projects a 1.4 million net subscriber increase, $4.9 Billion rise in revenue, an EDBITDA of roughly $1.78 Billion and a Free Cash flow of around $1.4 billion. In addition, highly regarded financial analysis and TV personality for Mad Money, Jim Cramer, publicly stated earlier in April that: “When you see a lot of cars being sold — and we have a remarkable number of cars being sold — you want to own Sirius(11).” With SiriusXM having market control of satellite radios with the main automobile manufactures, its safe to say that SiriusXM will continue to be profitable.

Howard Stern

The king of SiriusXM’s programing is unquestionably Howard Stern. He has two stations on the service, Howard 100 and Howard 101, attracts millions of listeners and has generated huge earning for the company. As the highest paid radio broadcaster in the country, there was speculation if Stern would leave SiriusXM to purse a new distribution medium like Apple Music or Netflix(12). However, he decided to renew his contract with SiriusXM last November to give him a 5 year $90 Million per year deal, which is an annual increase from his previous $80 million yearly salary. By locking him up, SiriusXM can ensure that there biggest star is happy and still an integral part of their growing business(13).

Broadcasting Partners

Despite having several fantastic musical stations, SiriusXM has established great partnerships with several sports, news and talk programming corporations. Some of their partners are BBC, Bloomberg Radio, CNBC, CNN, the Dave Ramsey Show, ESPN, NPR, Playboy, Radio Disney, and the Weather Network(14). By having a strong group of media corporations available for users within the Sirius ecosystem, it gives users tons of options to recieve quality news and talk.

Automobile Partnerships

With a major source of listenership generated from car owners, SiriusXM has partnered with almost every major car manufacture in the market. They have existing deals with Acura, Audi, BMW, Cadillac, Chevrolet, Dodge, Ford, Harley Davidson, Honda, Jeep, Kia, Lexus, Toyota, and many more manufacturers(15). By having SiriusXM accessible with both American and non-American automobiles and in both luxuries and more affordable cars, the company is allowing all drivers the opportunity to subscribe to their service and its setting themselves up to be the go to place for in car audio entertainment in North America.

Closing Statements

SiriusXM provides a service unmatched in the industry. Despite heavy competition in the streaming market, SiriusXM is the only provider of ad-free satellite radio with a multitude of stations to entertain any kind of listener. From your favorite pop songs on Hits 1 to breaking news on CNN, you have 100’s of channels to choose from. After following another successful fiscal year, locking up their biggest entertainment asset in Howard Stern and continuously locking down automobile partnerships, theres nothing slowing down the satellite radio giant.

Sources

  1. Billboard – April 23rd, 2016
  2. SiriusXM: Channel Update – April 23rd, 2016
  3. SiriusXM: Investor Update – April 22nd, 2016
  4. SiriusXM Blog: David Bowie – April 24th, 2016
  5. SiriusXM Blog: Prince – April 24th, 2016
  6. SiriusXM: Investor Update Golf – April 22nd, 2016
  7. Marketwatch – April 23rd, 2016
  8. SiriusXM Investor Update – April 22nd, 2016
  9. SiriusXM 2015 Financial Report – April 15, 2016
  10. Investopedia – April 24th, 2016
  11. The Street – April 22nd, 2016
  12. TechTimes – April 22nd, 2016
  13. Today – April 23rd, 2016
  14. SiriusXM Partners – April 24th, 2016
  15. SiriusXM Automobile Partners – April 24th, 2016

 

 

Radio One

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RADIO ONE, INC.

– Radio One Logo [1]

COMPANY

Radio One, Inc. is a multi-media company that primarily targets urban consumers. While the company primarily focuses on radio broadcasting, it also has ownership in TV One, Reach Media, and Interactive One, which are digital resource outlets that provide users with

Interactive One logo

-Interactive One logo [3]

information and news. With fifty-five broadcast stations in sixteen United States markets primarily geared towards African-American listeners, Radio One is the largest radio broadcasting operation [2].

Radio One has also branched out in television media. It recently acquired a controlling interest in TV One, which produces cable programming that like the radio network is designed to target a primarily African American audience [4].

KEY EXECUTIVES

ALFRED LIGGINS Photo

Alfred C. Liggins – CEO, Radio One [5]

Linda Vilardo

Linda Vilardo – Executive Vice President, Radio One [6]

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Peter D. Thompson – Chief Financial Officer, Radio One [7]

BACKGROUND

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– Catherine Hughes – Founder, Radio One [8]

Radio One is targeted at minority audiences and was itself founded by an African American woman, who continues to own a majority stake in the company. Catherine Hughes began her career in gospel radio in Washington DC, before eventually buying her first station with the help of bank loans, her own savings, and a loan from the African American venture capital firm Syncom, which funded African American media start-ups. Hughes’ overcame constant struggles with debt, eventually hosting her morning drive show herself as the bank refused to allow her to pay a salary for someone to host the slot. Gradually, Hughes’ venture achieved profitability and expanded, though she still had to contend with banks that insisted she programmed her stations to include white music for white audiences. Hughes was convinced that black programming was the way to profitability, and the entire history of her company vindicated her insight and self-belief. Hughes retired in 1993 and was replaced by her son Alfred C. Liggins III, who oversaw the massive expansion of the station in the 1990s, following the relaxation of ownership rules. Ironically, Hughes had feared that relaxing ownership rules would concentrate ownership in the hands of a few large corporations: Radio One has become the largest African American owner of stations in the United States [9].

In 2012, Radio One was expected to generate revenues of $433 million dollars. When asked how she had the vision to start such a venture, Hughes pointed to her need to take care of her son. She did not want him to become another statistic as part of the loss of African American youth in our society [10].

In 2013, Radio One acquired a majority stake in Reach Media. This allowed the company to expand its black talk radio programming, designed to offer an alternative voice to white conservatives such as Rush Limbaugh. The network features the Reverend Al Sharpton and other popular African American hosts and commentators [11].

However, before gaining success, Radio One faced financial difficulties in the mid 2000s and was forced to abandon its black audience formatting in some of its stations. In 2007, Radio One changed its format in Houston, Columbus and Cincinnati to cater to mainstream white audience because of the difficulties of generating sufficient revenue. At the same time, black radio stations in New York City were forced to merge because of falling revenues [12].

ADVERTISEMENTS

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-Vision Critical Logo [13]

Part of Radio One’s success has arisen from its ability to get customers to advertise on its shows by convincing them that they can connect with African American audiences and give them the tools they need to do so. Vision Critical, a marketing organization, has been instrumental in helping Radio One develop the systems it needs to connect with its advertisers and inspire new companies to advertise on its stations [14].

RESTRUCTURING

Deon Levingston, General Manager

Deon Levingston, General Manager [15]

Recently, Radio One has restructured certain facets of itself in order to target the modern African-American. On March 1, 2016, Radio One reported that Deon Levingston would return to the company as the General Manager of Indianapolis and Regional Vice President of Detroit and St. Louis. Since leaving Radio One, he played a role in the success of mainstream hit African American shows such as The Steve Harvey Morning Show, The Wendy Williams Experience, and Circle of Sister [14]. This experience has given Levingston the tools to create strategies to more accurately target modern urban consumers.

 

 

FINANCIALS

Since its first radio station was acquired in 1980, Radio One has hired 1,740 employees and has accumulated a sales revenue of $303.2 million [16]. Radio One held a revenue increase each year since the start of the company until 2014 when its revenue decreased by 2% from 2013’s fiscal of $448.7 million to 2014’s fiscal of $441.4 million [17]. As of April 24th, 2016, Radio One’s stock is steady at a high of 1.8300 and a low of 1.8300 with a declining 7.11 per cent change. Radio One holds an Avg Vol (3m) at 42,237 and a market cap of 92.36 million [18]. While Radio One’s stations have received higher ratings in the first quarter of 2016 than the fourth quarter of 2015, Alfred Liggins, the CEO of Radio One, reported in February 2016 that the company’s revenue has decreased. Radio One’s revenue decreased by 4.3% in the first quarter of 2016 since the fourth quarter of 2015 because of  a decrease in listeners in the Houston, Atlanta, Baltimore, and Indianapolis markets. Liggins explains that Radio One’s strategy to increase ratings have worked; however, the company is still searching for ways to increase revenue. Liggins feels that one of the issues  the company faces is that there are not enough young account executives employed [19]. While many Radio One listeners are of the 18-24 demographic, some Radio One executives are not young enough to execute appropriate strategy plans targeted towards a younger demographic. In addition to the company’s decline in overall revenue, Radio One saw an advertising revenue decrease of 5.2% between the fourth quarter of 2015 and the fourth quarter of 2014 [20].

DEBT 

Despite its success, Radio One carries around $1 billion dollars of debt that it chose to refinance in May of 2015. CEO Liggins is confident that Radio One can continue its profitability in the light of increasing minority audiences and the increasing spending power of underrepresented groups. As he stated, “In the continuingly browning America, multicultural advertising continues to rate strong and move forward and I think that we’re right at the epicenter of it. We’ve got some more exciting announcements and initiatives in the coming months as it relates to really firming up and filling out this platform.” [21]

FUTURE

Company executives have had the chance to examine the reasons behind the company’s revenue declined and are prepared to set up a strategy to increase revenue for the next quarter. Radio One’s plan for the next quarter is to develop its cross-platform sales and marketing strategy through One Solution which offers advertisers more opportunities to reach Radio One’s urban consumers [22].

SOURCES

[1] Radio One Logo. Retrieved April 25, 2016. http://www.earlboston.com/testimonials/

[2] Radio One: The Urban Media Specialist. Retrieved April 25, 2016. http://home.radio-one.com/about-us/

[3] Interactive One Logo. Retrieved April 25, 2016. http://www.frequencynews.com/wordpress/urban-music-formats/interactive-one-presents-its-all-black-music/

[4] Radio One: The Urban Media Specialist. Retrieved April 25, 2016. http://home.radio-one.com/about-us

[5] Alfred C. Liggins Headshot. Retrieved April 25, 2016. http://soba.iamempowered.com/content/alfred-c-liggins

[6] Linda Vilardo Headshot. Retrieved April 25, 2016. http://www.directwomen.org/alumnae/alumnae-biographies/linda-j-vilardo

[7] Peter D. Thompson Headshot. Retrieved April 25, 2016. http://thesoundla.com/2014/12/mark-thompson-host-new-mark-morning-show-beginning-february-2015/

[8] Catherine Hughes Headshot. Retrieved April 25, 2016. http://www.mbda.gov/blogger/mbda-agency/women-history-month-profile-catherine-l-hughes

[9] Radio One, Inc. – Company Profile, Information, Business Description, History, Background Information on Radio One, Inc. Retrieved April 25, 2016. http://www.referenceforbusiness.com/history2/40/Radio-One-Inc.html

[10] Cathy Hughes, Radio One: From Teen Mom To Media Mogul. Retrieved April 25, 2016. http://www.huffingtonpost.com/2012/08/17/catherine-hughes-radio-one_n_1798129.html

[11] Radio One, Reach Media Launching Urban Talk-Radio Network. Retrieved April 25, 2016. https://www.targetmarketnews.com/storyid10310501.htm

[12] A Radio Merger in New York Reflects a Shifting Industry. Retrieved April 25, 2016. http://www.nytimes.com/2012/04/30/business/media/a-radio-merger-in-new-york-reflects-a-shifting-industry.html

[13] Vision Critical Logo. Retrieved April 25, 2016. http://www.lisagoller.com

[14] Radio One Announced Changed in Local Leadership. Retrieved April 25, 2016. http://www.prnewswire.com/news-releases/radio-one-announced-changes-in-local-radio-leadership-300228791.html

[15] Deon Levingston Headshot. Retrieved April 26, 2016. http://www.insideradio.com/features/insider_interviews/q-a-deon-levingston-gm-emmis-communications-nyc-cluster/article_4ed43390-7369-11e5-8d0c-ff558f527f8a.html

[16] Radio One, Inc. – Company Profile, Information, Business Description, History, Background Information on Radio One, Inc. Retrieved April 25, 2016. http://www.referenceforbusiness.com/history2/40/Radio-One-Inc.html

[17] Radio One, Inc. Rankings & Reviews. Retrieved April 26, 2016. http://www.vault.com/company-profiles/radio/radio-one,-inc/company-overview.aspx

[18] Yahoo! Finance: Radio One. Retrieved April 26, 2016. http://finance.yahoo.com/q?s=ROIAK

[19] FMQB Thinking Ahead. Retrieved April 26, 2016. http://www.fmqb.com/Article.asp?id=2993698

[20] FMQB Thinking Ahead. Retrieved April 26, 2016. http://www.fmqb.com/Article.asp?id=2993698

[21] Radio One Gears Up For TV One Deal. Retrieved April 25, 2016. http://www.insideradio.com/free/radio-one-gears-up-for-tv-one-deal/article_4de2e636-cecb-11e4-9469-0701768ec384.html

[22] Radio One Gears Up For TV One Deal. Retrieved April 25, 2016. http://www.insideradio.com/free/radio-one-gears-up-for-tv-one-deal/article_4de2e636-cecb-11e4-9469-0701768ec384.html

Emmis Communications – Jake Kalmenson

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Emmis Communications

by Jake Kalmenson

emmis_logo

1 Emmis Communications’ Logo

Emmis Communications

40 Monument Circle, Suite 700

Indianapolis, IN 46204

 http://www.emmis.com

About 

Emmis Communications is a media conglomerate based in Indianapolis that specializes in broadcast radio and publishing. The company holds 24 radio stations in six different markets, as well as six magazine publications in five different markets. The company was established in 1979 when Jeff Smulyan purchased WSVL, a radio station in Shelbyville, Indiana. After a few years of struggling to get the operation going, WENS was finally launched, penetrating the market as an adult contemporary format—the station was nearly an automatic hit.  One significant member of the newly launched radio station was David Letterman who was just entering broadcast as a career. His fast appeal as a personality contributed mightily to the overall success of the radio station.  With the success of the companies first acquisition, Smulyan used his profits and reinvested them into the company, eventually turning Emmis Communications into a multi-media company that today ranks among the top 10 in the radio industry in the United States. 2

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3 Jeff Smulyan – Founder and Board Member – Emmis Communications

Jeff Smulyan serves as the founder and Chairman of the Board of Emmis Communications. In 1989, Smulyan and a group of investors purchased the Seattle Mariners. Only three years later they decided to sell it. Evidently, Jeff isn’t solely a radio guy, he has immersed Emmis into the magazine publication industry as well as the digital marketplace. He graduated from the University of Southern California with a B.A. in history and Telecommunications, as well as earned a Juris Doctor degree from the USC Law School. 4

Rick Cummings - President of Programming

5 Rick Cummings – President of Programming

Rick Cummings joined the media company as its first program director for WENS-FM. He later went on to become the national program director for Emmis Communications in 1984. Later on in 2002, he became the President of Programming.6

RADIO: Emmis has a variety of stations in a multitude of markets, however a few in particular help bring in the majority of its revenues. These include its two flagship stations: Power 106 and Hot 97

Power 106

Power 106

7 Power 106

Power 106, Emmis’ Los Angeles-based hip-hop station, is a huge brand and has been the number one urban-hit station in LA for years. The station serves as a portal to debut hits as well as break new artists as millions of people tune in each day. For years KPWR (Power 106) had “Big Boy” host the morning show. However, last year the huge radio company Clear Channel (IHeart Radio) entered the market as a clear competitor with the launch of 92.3. The largest radio conglomerate used its leverage to strip Power 106 of its long-time morning show host by offering him a bigger contract. Since Big Boy left KPWR, the station has seen a serious dip in its ratings: the company moved from #5 in the market to #16 by the end of the year. 8

Kanye West at Power 106

9 Kanye West at Power 106

Hot 97

10 Hot 97 Logo

WQHT or “Hot 97” became the first all hip-hop station in 1992 when the format changed from dance to hip-hop and R&B. This change was in response to the station experiencing an all-time-low in ratings. Ever since, the station has been a powerhouse, trendsetting and defining hip-hop culture in the number one radio market, New York City. Hot 97’s principal demographic is 18-34 year olds. The station has facilitated the breaking of big time artists including: Jay Z, Nas, Chris Brown, Ne-Yo and 50 Cent.11

Concerts

Every year Emmis Communication takes advantage of its powerful position in the music industry by hosting multiple music festivals. In Los Angeles, Power 106 puts on the concert ‘PowerHouse,’ which features many of the top hip-hop artists in the world. Additionally, the company’s New York hip-hop radio station ‘Hot 97’ hosts the music festival “Summer Jam” which takes place at MetLife stadium in New York City. In recent news, Emmis Communications has expanded its ‘Summer Jam’ to Tokyo.

Summer Jam Takes Tokyo

12 Summer Jam Takes Tokyo

Financial

In the financial report released November 30th, 2015, Emmis Communications released its net revenues per sector of the company. Evidently, radio revenues were the highest at $132,789,000 nine months into the year. As compared to last year, the company is down almost $5 million in revenue. Revenues from publishing remained steady: only dropping in the $10,000 range. What stands out most is that the company generated a significantly higher amount in the field of ‘Emerging Technologies,’ which refers to online radio and digital advertising. In 2014, the company saw $318,000 in revenue, whereas in 2015 the company saw almost $1 million in revenue: $985,000.13

Financial Results for Q3

14 Financial Results for Q3

Emmis Communications or (EMMS) currently sells for 58 cents per share. Over the last month (since March 28th) the company’s stock price has fluctuated within a range of 10 cents. It has hit a high of .65 cents per share, meanwhile hitting a low of 55 cents per share.

EMMS Stock - Month

15 EMMS Stock – Month

As shown below, the price has significantly wavered since 2012: it hit a high of over $3 per share, meanwhile also hitting a low of its current state, .58 cents per share. The company’s owner has attributed its fallen stock price to the recent struggles the company has faced in Los Angeles as well as the general consensus that radio is a declining industry.

EMMS Stock - Year

16 EMMS Stock – Year

Recent News

Due to the difficulties the company has seen with its flagship station KPWR, it has taken action to cut costs by laying off employees, cutting executive salaries and lowering its budget. After experiencing a weak fiscal quarter, the company laid off 32 employees, cutting about 3% of its workforce. In addition to the layoffs, the company is also shaving the salaries of all its senior executives. In an article published by The Indy Star, the company is looking to cut “$7.5 million from its budget, as well as $5.3 million from its radio properties.” Additionally, Smulyan decided not to renew the contract of Mike Corbin–someone who had worked for the company for nearly 10 years, as well as Deon Levingston, the company’s New York general manager. 17

What’s to Come

While the situation in Los Angeles as well as the decline of its stock price might suggest a variable future for the company, many believe that the low valuation is a result of an overreaction to a declining radio industry. While studies show that more and more people are using streaming services to consume music, there continues to remain strong evidence showing that radio is still the most dominant medium for music consumption. According to the Nielsen Total Audience Report, AM/FM radio still reaches over 90% of all Americans and 223 million people each week.18

Sources:

  1. “Emmis Communications.” Emmis Communications Home Comments. N.p., n.d. Web. 25 Apr. 2016.
  2. “History of Emmis Communications.” History of Emmis Communications. N.p., n.d. Web.
  3. “Jeff Smulyan – Chairman, CEO, and Founder.” Emmis Communications. N.p., n.d. Web. 25 Apr. 2016.
  4. Ibid.
  5. “Rick Cummings – Emmis Communications.” Emmis Communications. N.p., n.d. Web. 25 Apr. 2016.
  6. Ibid.
  7. “Power 106 | Where Hip Hop Lives.” Power 106 | Where Hip Hop Lives. Emmis Communications, n.d. Web. 25 Apr. 2016.
  8. “Emmis Radio: Power 106 KPWR – Los Angeles.” Emmis Communications. N.p., n.d. Web. 25 Apr. 2016.
  9. “Kanye West – Awesome – [LEAKED MUSIC].” Power 106. N.p., n.d. Web. 25 Apr. 2016.
  10. “HOT 97 | Where Hip Hop Lives.” HOT 97 | Where Hip Hop Lives. N.p., n.d. Web. 25 Apr. 2016.
  11. “RADIO: New York – HOT 97 WQHT – Emmis Communications.” Emmis Communications. N.p., n.d. Web. 25 Apr. 2016.
  12. “Hot 97’s Summer Jam Takes Its Talents To Tokyo.” Vibe. N.p., 30 Mar. 2016. Web. 25 Apr. 2016.
  13. Newton, R. Emmis. “801.” The Mathematical Gazette 12.178 (1925): 475. Summary of Financial Results. Web.
  14. Ibid.
  15. “Emmis Communications Corporation.” : NASDAQ:EMMS Quotes & News. Google Finance, n.d. Web. 25 Apr. 2016.
  16. Ibid.
  17. Briggs, James. “Emmis Communications Confirms Layoffs.” Indystar. Indystar, n.d. Web.
  18. “STATE OF THE MEDIA: AUDIO TODAY 2014.” Nielsen. N.p., n.d. Web.
  19. Contents, Table Of. EMMIS COMMUNICATIONS CORPORATION (n.d.): n. pag. Emmis Communications 10-K. Emmis Communications. Web.
  20. “Emmis Announces International Expansion of HOT 97 Summer Jam.” PR Newswire. PR Newswire, n.d. Web.
  21. “Emmis Communications Income-statement 2016-Q3.” Emmis Communications Quarterly Income Statement 2016 Q3, 2016 Q2. Amigo Bulls, n.d. Web. 25 Apr. 2016.
  22. “HOT 97 | Where Hip Hop Lives.” HOT 97 | Where Hip Hop Lives. Emmis Communications, n.d. Web. 25 Apr. 2016.
  23. Owen, Laura. “Left on the Dial: With Young People Trading AM/FM for Streaming, Will Radio Find a Home in Your next Car?” Neiman Lab. Neiman Lab, n.d. Web.
  24. “RADIO: New York – HOT 97 WQHT – Emmis Communications.” Emmis Communications. N.p., n.d. Web. 25 Apr. 2016.
  25. “RADIO REACHES 223M LISTENERS EACH WEEK.” Inside Radio. Inside Radio, n.d. Web.
  26. “Top Audio Companies.” : Media Ownership Database. State of the News Media, n.d. Web. 25 Apr. 2016.