Zynga

Posted on April 25, 2016 by Rebecca Duke

by REBECCA DUKE

[1] Zynga logo

OVERVIEW

In 2007, Mark Pincus founded Zynga, the first social gaming company. Named after his dog Zinga, the company was created in order to make gaming more accessible and turn it into a more interactive, friendly experience [2]. Zynga has created some of the most successful social games to date, including Words with Friends, FarmVille, and Zynga Poker. Over one billion users have played Zynga games and connected via the company’s franchises.

[3] A sampling of Zynga games

Additionally, in 2009, Pincus formed Zynga.org, a 501(c)(3) non-profit organization that allows the success of social gaming to give back to those in need by connecting revenues from gamers to other non-profits around the world. One of Zynga.org’s biggest projects was the creation of co.lab, a gaming development technology program that gives underprivileged San Francisco kids the opportunity to learn about game design hands-on.

INDUSTRY

The creation of Zynga spawned the entire social gaming industry, an industry of which Zynga continues to be a leader. According to IBISWorld, the industry has grown rapidly ever since its conception in 2007 [4]. Growth peaked during the 2008 recession, when many companies were downsizing and left unemployed Americans with more leisure time. In recovery from the recession, customers are slowly investing more and more in social games in order to unlock achievements and progress more quickly in the game (for example, while playing FarmVille, a user could pay a few dollars to expedite the growth of their crops and thus move on to bigger and better tasks).

[5] FarmVille 2: Country Escape

Before social gaming, those interested in playing interactive games were required to own some form of external console, such as an Xbox or PlayStation. With Zynga, users can play games and connect with other gamers all across the globe as long as they have an internet connection and an account on a social networking site. The number of broadband connections in households has grown steadily each year, widening the potential market of social gamers. The social network aspect of gaming has introduced new customers that were not previously active gamers, namely females over 40.

KEY EXECUTIVES

[6] Mark Pincus – Founder and Executive Chairman of the Board

[7] Frank Gibeau – Chief Executive Officer and Board of Directors Member

Earlier in March, Mark Pincus stepped down as CEO of Zynga and was replaced by Frank Gibeau [8]. Pincus still sits as the Executive Chairman of the Board and oversees the company. Frank Gibeau is a 20-year veteran of Electronic Arts, one of Zynga’s leading competitors, so he is expected to bring positive change and expertise to the company and allow it to progress financially.

FINANCIALS

Zynga is a publicly traded company, listed on the NASDAQ under the ticker ZNGA. The stock price currently sits at 2.48, a relatively high number since averaging 2.15 over the past three months [9]. Zynga stock took a tumble in early and mid-February after the publication of a disappointing fourth quarter and annual report. After bringing in $185 million in revenue, the company’s operating income and net income amounted to losses of $55 million and $51 million, respectively. These numbers were a stark contrast to the third quarter, when Zynga brought in $10 million more in revenue and net income was $3 million. Zynga has two main revenue streams: advertising, namely video and banner ads, and the sale of “virtual goods” from in-game purchases [10].

[11] NASDAQ – ZNGA

One big change for Zynga that will bring in more cash flow is its future sale of real estate. Currently, Zynga operates out of a 670,000 square-foot office in Silicon Valley, a space that is now too large for its 2,300 employees [12]. Downsizing and liquidating their current office space could lead to a $300 million profit, given the astronomical increase in San Francisco properties since 2012.

[13] Zynga Headquarters

CURRENT PROJECTS

In January, Zynga announced a partnership with The Rubicon Project in developing SponsoredPLAY, a new form of native advertising that allows political candidates to take advantage of what mobile ads have to offer [14]. SponsoredPLAY beta ads have seen six times the engagement rate of normal mobile advertisements, a metric that is incredibly important in today’s age of distracted consumers. With these ads, players connect with brands through mini games that incorporate a piece of the brand’s image. Specifically, The Rubicon Project introduces political candidates as the brands, and encourages the candidates to use the technology to engage voters in a fun and educational way. The SponsoredPLAY ads are also linked to Twitter to create a social buzz around the political issues that the user finds compelling. Ads are expected to be finalized and placed in the games later this year, just in time for the presidential election.

[15] SponsoredPLAY Mockup

One of the two new Zynga games that launched on March 31, 2016 was Willy Wonka & the Chocolate Factory Slots. This was the first game of many to be licensed from Warner Bros. Interactive Entertainment, thanks to a multi-year agreement signed in mid-2015 [16]. The partnership allows for a realistic representation of the characters, sounds, and visuals from the original film. Willy Wonka Slots provides the player with nine different slot machines to begin, in addition to a special “High Roller World” with more levels that unlock after the player has earned over 24 million credits. The basic format of the game is similar to other Zynga games, where the user can play completely for free but has many opportunities to progress further with small increments of in-app credit purchases. The game can be downloaded for free on iTunes, Google Play, and Amazon or played on Facebook.

[17] Willy Wonka & the Chocolate Factory Slots

The second game that debuted at the end of March is Crazy Cake Swap, a variation on the wildly popular Match-3 genre [18]. Crazy Cake Swap is a mix of Candy Crush and Diner Dash, taking place in a bakery and offering different sets of goals for each level. The essentials are similar to other Match-3 games; of course, there’s the concept of matching three or more identical cakes to gain points. A player also only gets five lives and must wait or pay for more when they run out, and a similar wait-or-play model when the end of each “world” is reached. However, it provides a fun element of personalization by allowing users to upload their own photos or avatars, and has more of a storyline than other similar games. Crazy Cake Swap is distributed through the same outlets as Willy Wonka Slots and is free to play with the exception of optional in-app purchases.

[19] Crazy Cake Swap

FUTURE PROJECTS

Zynga has been promising investors two high-development games for awhile, CSR2 and Dawn of Titans, that are finally set to debut later in 2016 [20]. These games could bring in major revenue for Zynga if they become anywhere near as popular as Words with Friends or FarmVille. A recent trend with Zynga has been the overall decline in players, but huge increase in bookings for some of their popular games [21]. Essentially, this means that while there are fewer players, these players are spending a lot of time gaming. If Zynga can successfully recruit more of these avid gamers and grow their user base back up, they will continue to be a force to be reckoned with in the social gaming world.

[22] Dawn of Titans

SOURCES

[1] “Zynga Logo.” Pop Culture Blog. Dallas Morning News, 3 June 2013. Web. 25 Apr. 2016.

[2] “Zynga Leadership.” Zynga. Zynga, n.d. Web. 22 Apr. 2016.

[3] “About Game Cards.” Zynga. Zynga, n.d. Web. 25 Apr. 2016.

[4] “Social Network Game Development.” IBISWorld. IBISWorld, n.d. Web. 22 Apr. 2016.

[5] “Farmville 2: Country Escape.” Google Play. Google, n.d. Web. 25 Apr. 2016.

[6] “Mark Pincus.” Catchafire. Catchafire, 25 Sept. 2013. Web. 25 Apr. 2016.

[7] “Frank Gibeau.” Live Geek or Die. Disqus, 29 Mar. 2013. Web. 25 Apr. 2016.

[8] Takahashi, Dean. “Mark Pincus and Frank Gibeau Talk about the Future of Zynga and Social Mobile Gaming.” Venture Beat. VentureBeat, 2 Mar. 2016. Web. 20 Mar. 2016.

[9] “Zynga, Inc. (ZNGA).” Yahoo Finance. Yahoo!, n.d. Web. 24 Apr. 2016.

[10] Gobry, Pascual-Emmanuel. “How Zynga Makes Money.” Business Insider. Business Insider, 28 Sept. 2011. Web. 24 Apr. 2016.

[11] “Zynga’s Opening Day.” Gigaom. Knowingly, 16 Dec. 2011. Web. 25 Apr. 2016.

[12] Bruno, Alessandro. “ZNGA Stock: This Is Why the Bears Are Wrong on Zynga Inc.” Profit Confidential. Lombardi Publishing, 26 Feb. 2016. Web. 20 Mar. 2016.

[13] “Zynga Headquarters.” Games.com. AOL, 12 Nov. 2012. Web. 25 Apr. 2016.

[14] Pakula, Kelly. “Zynga & Rubicon Project Announce New SponsoredPLAY Custom Mobile Advertising Product for Political Campaign Advertisers.” Global Newswire. Nasdaq, 7 Jan. 2016. Web. 24 Apr. 2016.

[15] “Zynga Mockup.” Adweek. Adweek, 7 Jan. 2016. Web. 25 Apr. 2016.

[16] Shaul, Brandy. “Zynga Launches Willy Wonka & the Chocolate Factory Slots on Facebook, Mobile.” Social Times. Adweek, 31 Mar. 2016. Web. 24 Apr. 2016.

[17] “Willy Wonka Slots.” Zynga Blog. Zynga, 31 Mar. 2016. Web. 25 Apr. 2016.

[18] Allen, Jennifer. “Crazy Cake Swap Review: Sweet, Familiar, and ‘Friendly’.” Gamezebo. Gamezebo, 5 Apr. 2016. Web. 25 Apr. 2016

[19] “Crazy Cake Swap.” Google Play. Google, n.d. Web. 25 Apr. 2016.

[20] Morris, Chris. “What Will It Take To Turn Zynga Around?” Fortune. Fortune, 11 Feb. 2016. Web. 25 Apr. 2016.

[21] Nusca, Andrew. Here’s Why Changing CEOs Won’t Fix Zynga. Fortune. Fortune, 2 Mar. 2016. Web. 20 Mar. 2016.

[22] “Dawn of Titans.” NaturalMotion. NaturalMotion, 5 Mar. 2015. Web. 25 Apr. 2016.

Focus Features

Posted on December 1, 2014 by jepflieg

by John Pflieger

[21] Focus Features Logo

Focus Features is a film production and distribution company that serves at the art house film department of the NBCUniversal brand. Started in 2002, Focus Features is currently run by CEO Peter Schlessel, who took the helm in late 2013 after Focus and the FilmDistrict merged in 2013 [1]. Focus Features has had great success over the last 12 years with critically acclaimed releases like Brokeback Mountain, Dallas Buyers Club, and Lost in Translation just to name a few. The former being the most successful Focus Feature production to date, grossing $83 million and receiving 3 Academy Awards and receive nominations for 5 more along with a slue of other awards [2][3].

Financials

Catering usually to more specific audiences then some of the major production house, Focus Features is currently ranked 12^th for top grossing production companies in the 2014 year, with a total gross of $104 million, which puts them in control of 1.1% of the current market share [4]. Though falling short to its 5^th ranked older brother Universal Pictures, the smaller production company has managed to sustain an average gross of $8.7 million per release over the course of its 11 releases in 2014 [4][5]. With award season approaching, Focus has the potential to see continued growth in revenue through the beginning of 2015. With Oscar buzz surrounding actor Eddie Redmayne of Focus Features most recent release The Theory of Everything, a nomination for best actor has the potential to increase revenue by about $600,000, where a win in the category could yield nearly $6 million in increased revenue[6][7]. Though Focus is only responsible for a small portion of NBCUniversal’s $1.4 billion filmed entertainment revenue, the small production house continues to boast impressive figures[8].

Recent Releases

“The Theory of Everything “

[22] The Theory of Everything Poster

The biographical film chronicles the life of astrophysicist Stephen Hawking as he fell in love with his wife Jane, explored the science of universal time, and struggled with the debilitating neurological disease of ALS [9]. Eddie Redmayne, who plays Steven Hawking, has already been labeled by Variety as one of the main contenders for the Best Actor Academy Award[6]. The film, which opened November 7^th in a limited release to 5 theaters grossed $208,763 and continued to succeed as it hit a wide release November 26^th in 802 theaters and grossed slightly over $5 million in its wide release opening[10]. As of December 1^st the film has grossed $9.6 million and has the potential to see continued success as the holidays and award season approaches[10].

“Kill The Messenger”

[23] Kill The Messenger Poster

A political thriller starring Academy Award nominated actor Jeremy Renner, tells the story of journalist Gary Webb, who stumbles across a dark story that involves drugs and government cover-ups[11]. The film opened October 10^th in 374 theaters and grossed $941,809 in its opening weekend. At its widest relapse the film was only in 427 theaters and to date has only grossed $2.4 million, having been stifled by the Buena Vista release of “Alexander and the Terrible, Horrible, No Good, Very Bad Day” which was release the same day and saw far greater success[12][13].

“The Boxtrolls”

[24] The Boxtrolls Poster

This family film tells the tail of an adventure of a group of unique creatures as they raise an orphan and fight for their lives in an effort to thwart their local town villain[14]. This film has been the most successful release for Focus Features this year having grossed nearly $50 million. The feature opened September 26^th 3,464 theaters and gross $17.2 million, which accounted for 34.9% of the films total gross domestically[15]. The film went on to gross $56.2 million worldwide, making a total of $105.7 million, which is a huge success not only for Focus Films, but also for the small Oregon based stop-motion animation house Laika Studios, which carried out the animation for “The Boxtrolls.”[15][16] The small animation studio also produced “ParaNorman” and “Coraline” for Focus Features, which are both in Focus Feature’s top 5 for most successful domestic grossing films[5]. Only days after the opening of “The Boxtrolls”, Focus Features signed an agreement with Laika to work with them on 3 more feature length films[17]. This agreement proves to be especially wise when looking at the fact that all three of the films that Laika and Focus have teamed up on have grossed over $100 million world wide, making them highly profitable[17]. There is still room for more success in the coming months, seeing that “The Boxtrolls” received 13 nominations in this years Annie Awards, and is only expected to receive more nods as award season get underway[18].

Upcoming

Focus Features consistently releases 10-12 films a year, making them a highly productive production house for the scale of their operation[5]. As of now, Focus has announced a few new projects that will be coming up in 2015 which will have the potential to make quite a splash in the market place in the upcoming year.

[25] 50 Shades of Grey Poster

One of the more anticipated Focus Features releases of 2015 is the adaptation of the novel 50 Shades of Grey. The popular 3 part book series will be treated as a trilogy by focus and will follow the saga of the novels quite closely. The film is scheduled to be released on Valentines Day, offering an interesting option for holiday viewing[19].

[26] Black Sea Poster

Another highly anticipated 2015 Focus release is the upcoming release starring Jude Law, “Black Sea”. The apparent action movie casts Law as a submarine captain who is working with a team of Russian and English crew members to salvage Nazi gold in a sunken U-boat. The film is scheduled to be released January 23 of 2015[20].

Future of Focus Features

The future for Focus Features appears to be very bright. With a recent 3 film deal with Laika Studios, this is a air of optimism, because with the success of the studio’s earlier films, we can only assume that with the proper marketing and distribution the next 3 should be just as successful. Also with the “50 Shades of Grey” series on the horizon, there are multiple prospects for continued growth. As we see the success of Comcast and NBCUniversal and their continued growth, the potential for the expansion of Focus Features is exponentially increased.

Citations:

1. Focus Features Announces More Key Senior Hires, hollywoodreporter.com, RT; 12/01/14

2. Brokeback Mountain, Boxofficemojo.com, RT: 12/01/14

3. Brokeback Mountain Awards, imdb.com, RT: 12/01/14

4. Studio Market Share, Boxofficemojo.com, RT: 12/01/14

5. Focus Features, Boxofficemojo.com, RT: 12/01/14

6. Contender: Lead Actor Preview, Variety.com, RT: 12/01/14

7. How Oscar Nominations Affect the Box Office, Businessinsider.com, RT: 12/01/14

8. Comcast Earnings Release, cmcsk.com, RT: 12/01/14

9. The Theory of Everything, Rottentomatos.com, RT: 12/01/14

10. The Theory of Everything, Boxofficemojo.com, RT: 12/01/14

11. Kill the Messenger, Rottentomatos.com, RT: 12/01/14

12. Kill the Messenger, Boxofficemojo.com, RT: 12/01/14

13. Alexander and the Terrible, Horrible, No Good, Very Bad Day, Boxofficemojo.com, RT: 12/01/14

14. The Boxtrolls, Rottentomatos.com, RT: 12/01/14

15. The Boxtrolls, Boxofficemojo.com, RT: 12/01/14

16. Laika Studios, Laikastudios.com, RT: 12/01/14

17. Focus Features, Laika Ink Three-Film Pact, hollywoodreporter.com, RT; 12/01/14

18. Boxtrolls leads Annie Award nominations, bbc.com, RT; 12/01/14

19. 50 Shades of Grey, fiftyshadesmovie.com, RT; 12/01/14

20. Black Sea, focusfeatures.com, RT; 12/01/14

21. Focus Features Logo, thewrap.com, RT; 12/01/14

22. The Theory of Everything Poster, imdb.com, RT; 12/01/14

23. Kill the Messenger Poster, imdb.com, RT; 12/01/14

24. The Boxtrolls Poster, imdb.com, RT; 12/01/14

25. 50 Shades of Grey Poster, imdb.com, RT; 12/01/14

26. Black Sea Poster, imdb.com, RT; 12/01/14

Sirius XM Radio

Posted on October 5, 2014 by areeves

by Allie Reeves

[1] SiriusXM Logo

The Sirius Story:

Sirius XM Holdings Inc. is a satellite radio service that offers commercial-free streaming on over 175 channels in the United States and Canada. These channels are comprised of every type of radio – music, news, sports, talk, and more [2]. It is currently the largest radio broadcaster and caters to about 26.7 million subscribers [3].

[30] SiriusXM Programming

Currently, the most popular way for subscribers to enjoy SiriusXM Radio is in the comfort of their cars. SiriusXM has arrangements with over forty automakers for installation of their services directly into the vehicle [3]. However, as of recent, SiriusXM has become available to stream directly online in your home or office, as well as an app that can be accessed on Smartphones and Tablets.

SiriusXM currently offers three different packages: Sirius Select, Sirius All Access, and Sirius Mostly Music. The packages can be bought on a monthly or annual basis and range in price from $9.99 to $199 [4].

[4] Most Popular Packages for SiriusXM Customers

The Sirius Team:

[6] Scott Greenstein, President & Chief Content Officer

[5] James E. Meyer, CEO

[7] Patrick L. Donnelly, Executive Vice President and General Counsel

Finances:

[31] SiriusXM finances as of December 1, 2014

SiriusXM recently released their 2014 Third Quarter Results, which revealed a 10% increase in revenue since this time last year, putting the company at a record high of $1.1 billion. This is higher than analysts originally anticipated for the company, as they put the company’s assumed revenue at $1.04 billion. The company also increased its subscriber count by 1.2 million [8].

Interest in shares of SiriusXM increased rapidly during the month of November. As of November 14^th, there has been an increase of 2.8% since October 31^st up to 247, 283,696. The company is now up to a $3.75 price on their stock [32].

Competitors:

[11] Apple Inc. Logo

SiriusXM’s current competitors are Apple and iHeartMedia, as well as regular terrestrial radio. Pandora and Spotify have also been named as competitors, but in a recent interview with James Meyer, CEO of SiriusXM, the two services were ruled out.

[12] iHeartMedia Logo

Meyer explained these companies are streaming services, which he doesn’t view as competition, but as its own distinct technology. Meyer also stated that out of them all, terrestrial radio is their primary competition, with 220 million people that use it everyday [9].

However, with Apple’s new CarPlay, that might not be the case for much longer. CarPlay gives drivers access to all of their music, podcasts, and audiobooks with the touch of a button, and major auto companies like Mercedes-Benz, Volvo, and Ferrari are already on board. The venture is still in its early stages, but since SiriusXM is primarily used by vehicle subscribers, CarPlay could end up being a serious competitor [10].

[13] Apple CarPlay

The Sirius Edge:

What sets SiriusXM apart from its competitors at Apple, and iHeartMedia is the company’s original content that can only be accessed through subscriptions to SiriusXM.

[15] The Howard Stern Show, one of the most popular talk shows on SiriusXM

Some of the most popular original content shows include The Howard Stern Show, The Oprah Winfrey Show, and NFL Radio, although many more are available [3]. This original content helps keep subscribers tuning in, and keeps SiriusXM’s churn rate at an impressive 1.9%. It also helps the company keep their acquisition costs low, which has recently become problematic for companies like Pandora [14].

[17] SiriusXM Town Hall Event in the Fishbowl

SiriusXM is also known for their “Town Hall” Series. These intimate gatherings take place in the SiriusXM fishbowl, a private listening studio, where entertainers sit down with a live studio audience comprised of about 30 SiriusXM subscribers who have won an invitation to the event [16].

[19] Taylor Swift at a Town Hall Event for SiriusXM

Recently, SiriusXM was able to snag Taylor Swift for a Town Hall Event. Subscribers had the chance to ask her questions and listen to songs off of her newest album, 1989. This event comes after Swift’s recent decision to pull her music off of Spotify, giving even more leverage to SiriusXM [18].

The Today Show for SiriusXM:

This past year, SiriusXM announced a major deal with NBC, in which simulcasts of the hit NBC show, The Today Show, would be broadcasted on the satellite radio service. The format of bringing a morning show to radio has been done before, unsuccessfully. However, what makes this different is that SiriusXM will not be airing segments of the popular morning show, they will be airing the program identically as it airs on television [20].

[24] The Today Show

This move was a strategic boost for both companies. The show airs during popular morning drive time, when radio listening is at its highest. The deal will allow NBC to access SiriusXM’s 26 million listeners, and SiriusXM hopes to draw in more subscribers that are already fans of the show.

[21]

Suing Sirius:

SiriusXM has come under fire in the past year over use of music recorded before 1972. More recently, individual bands have started going after the company, claiming that they deserve compensation. Although songs recorded before February 15^th, 1972 are not covered by federal copyright law, some artists and labels have been seeking protection under individual state laws – and the courts have been agreeing. As of November 17^th, the 1960s rock band, The Turtles, has had two victories against the satellite radio company [22].

[25] Rock Band The Turtles in the 1960s

The court ruled that music recorded before 1972 still has a public performance right and that digital services cannot use it without permission or compensation. SiriusXM has requested to dismiss the lawsuit, but it has been rejected. The judge ruled that SiriusXM has until December 5^th to show any factual issues that would be cause for a trial. If none are found, she will rule in favor of the band, and “assess damages” [23].

What’s Next:

[28] Joel Osteen

SiriusXM recently announced that Golf Hall of Fame member Sir Nick Faldo will receive his own show, where he will talk golf and get to know golf enthusiasts, while they get a chance to know him [26]. SiriusXM also launched a new pop channel, Venus, as well as adding some of their popular internet only channels like Y2Kountry and Utopia to their satellite lineup. Joel Osteen Radio will also be coming to SiriusXM, a station rooted in the power of “positive thinking with messages of inspiration” [27].

[33] Holiday music channels at SiriusXM

SiriusXM is currently celebrating the sounds of the holiday season with the addition of two new Holiday Music channels, Holly and Holiday Traditions. They plan to release more within the upcoming month [33].

Also effective January 2015, there will be an increase of 1.4 percentage points in the U.S. Music Royalty Fee applied to most SiriusXM audio packages, in order to fund royalty payments to the music industry [29].

Sources

1. SiriusXM’s Logo 2014, Fbnstatic.com, RT: 11/20/2014

2. What is SiriusXM?, Siriusxm.com, RT: 11/20/2014

3. Corporate Overview, Siriusxm.com, RT: 11/20/2014

4. Our Most Popular Packages, Siriusxm.com, RT: 11/20/2014

5. Chief Executive Officer, SiriusXM, Siriusxm.com, RT: 11/20/2014

6. President & Chief Content Officer, SiriusXM, Siriusxm.com, RT: 11/20/2014

7. Executive Vice President and General Counsel, SiriusXM, Siriusxm.com, RT: 11/20/2014

8. “SiriusXM Reports Third Quarter 2014 Results”, Investor.siriusxm.com, RT: 11/20/2014

9. “Sirius XM CEO: I Don’t See Spotify As A Direct Competitor”, Benzinga.com, RT: 11/22/2014

10. “Is Apple’s New Toy a Sirius XM or Pandora Killer?”, Fool.com, RT: 11/22/2014

11. Apple Inc. Logo, Worldofdtcmarketing.com, RT: 11/22/2014