این فصل را با ذکر تمام تیترهایش (تاکید میکنم تمام تیترهایش) به انگلیسی ساده و روان خلاصه کن     Integrated Media Conglomerates and Cross-Media










Due to the digital revolution, cross-media has become a new and importanteld of media management. Earlier within media management, this did not exist in such a
way, because multiple utilization of channels was traditionally only used to a very small extent. In this digital age of convergence of media markets, cross-media marketing strategies are key success factors.
In this context, cross-media is referred to as the lateral or even multilateral expansion of media distribution to various media channels or media submarkets. Cross-media management is the strategic foundation for integration efforts of companies in the media sector.
Nowadays, hardly any media company can do without an adequate cross-media strategy and a focused cross-media management. This is particularly true for large integrated media companies that dominate the industry in many submarkets today. Therefore, to broaden the understanding of cross-media management this section deals with various forms of cross-media strategies in the media sector (for the following see Wirtz et al. 2014a).1


14.1	Introduction

The competitive landscape of the media industry is characterized by increasing penetration movement with innovative information and communication technologies and ongoing industry convergence. Two major processes determine the development of competition in theeld of electronic media and communications. On the one hand, especially in the Internet sector, a greater number of enterprise
formations in the sense of Schumpeterian pioneering companies are reported. Examples of this development are companies such as Facebook, eBay, and Google.

1See also for the following chapter Wirtz (2011b) and Wirtz (2019b).

 
Ⓒ The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020
B. W. Wirtz,Media Management, Springer Texts in Business and Economics, https://doi.org/10.1007/978-3-030-47913-8_14
 
237
 

On the other hand, fundamental transformation processes of value chains in the information and communication sector can be observed.
In this environment, there is a signicant repositioning of established media companies, which is characterized by a change in the current value-added structures
and competitive strategies (Wirtz 2000b). The repositioning and change of the value- added structures let integrated media and Internet companies arise. By acquiring ownership interests, integrated media companies push vertically and laterally for- ward into new (media) product offering areas and merge economic activities in various media markets (Wirtz 1994).
In this context, the lateral or even multilateral expansion of media distribution to various media channels or media market segments is referred to as cross-media. Cross-media management is the strategic foundation for integration efforts of companies in the media sector. Nowadays, hardly any media company can do without an adequate cross-media strategy and a focused cross-media management. This is particularly true for large integrated media companies that dominate the industry in many submarkets today.
After the emergence of integrated media companies in the mid-1990s was particularly characterized by mega-mergers with vertical orientation or rather by the advance of telecommunications providers in the media industry in the late 1990s, one can observe in the light of the increasing commercialization of the Internet, especially the emergence of integrated media and Internet companies.
On one side, traditional media companies are trying to increase their position in the Internet sector through corporate investments or the acquisition of ownership interests. For example, in 2000, Pearson plc acquired the National Computer Systems Inc. (NCS). This acquisition has enabled Pearson to become a leading integrated provider of educational materials and to distribute its own content on the various Internet-based systems of NCS as well as to create new personalized teaching courses (Business Wire 2000). On the other side, Internet companies advance into the realm of traditional media. The most prominent example in this context is the acquisition of Time Warner by AOL.

	Fundamentals of Cross-Media Management

In recent years, the development and design of multi-channel strategies in the media sector has experienced an increasing importance (Lin et al. 2013). In the course of time, both in business practice and in the literature, the term cross-media has been established. Here, cross-media is primarily associated with generating competitive advantages in the context of convergence trends in the media industry. In particular, the future success of traditional media companies is often linked with the use of cross-media strategies to a high degree.
Thereby, the terms cross-media and cross-media management are often used without being clearly dened. This heterogeneous understanding of the term has been reinforced, above all, by the fact that the term cross-media has acquired a high relevance in various media or business disciplines. Especially within integrated
 

media management, distribution marketing, and communication marketing, the concept of cross-media management plays an important role. Whereas media man- agement has a signicantly more nuanced understanding of the concept, within marketing the multi-channel use for various marketing activities is the focus of
attention.
In addition, interdisciplinarily speaking, in the literature and practice, it can be observed that cross-media is too often limited to the digitalization of media content for distribution via online channels. Although the modern information and commu- nication technologies exercise a decisive inuence on the cross-media concept, it also includes the integration of traditional media forms and channels outside of the
emerging online media. It is therefore necessary for a cross-media analysis to take on the widest possible perspective of consideration. Cross-media as a comprehensive management approach therefore requires a unied understanding of the concept. In
this context, cross-media should be dened as below:


Moreover, the functional management term of the cross-media concept should be picked up and extended by the aspect of corporate management. Thereby, corporate management can be understood as a purposeful, formative intervention in the value creation process of companies. Thus, cross-media management has a particularly instrumental character, since it aims at monitoring the corporate long-term goals.
Thereby, cross-media management covers both the strategic and the operational levels. Here, strategy is to be understood as“a planned set of measures of the company to achieve its long-term goals”(Chandler 1962, p. 23). In contrast, opera- tional management is carried out under a short-term time horizon. Cross-media
management is concerned, as the general media management, with the strategic and action-oriented options in respect of the sales of media products with special emphasis on the media-specic environment. Cross-media management can be
dened as below:


	Manifestations of Cross-Media

In the media sector, different growth strategies can be observed. Regarding a systematization of the concept, it makes sense to rely on established growth
approaches, since cross-media strategies are special cases of general growth strategies. An early and very popular approach to the systematization of such strategies was established by Ansoff (1965).
This approach is very suitable for the present context, since the various strategy alternatives are presented in a product-market matrix. The so-called Ansoff Matrix differentiates between existing and new markets, as well as between existing and new products. Within cross-media systematization, it is necessary to extend the original matrix.
Further, it can be distinguished whether the new media market or the new media product is similar to an existing market or product. Media markets, which can be described in this context also as a media industry or a distribution channel, are, for example, the book market and the TV or newspaper market.
In this context, media products or media formats are understood as text contributions (book text or edited text), images, audio contributions, or audiovisual materials. Figure 14.1 shows a growth matrix adapted to the media context, from which two basic cross-media forms can be derived.
In an existing media channel, with the same form of media, a higher market penetration can be achieved through single media penetration. A similar media product, such as a book text and an editorial text (but in the same medium), can be referred to as single media differentiation, based on the product policy.
If the product expansion is an entirely new media format, for example, an audio contribution in regular textual online environment, one can speak of single media diversication. Here, it should be noted that each of these forms of growth only covers one media channel, and thus cannot be assigned to cross-media.
If, in addition to an existing media channel, a new channel is used, this can be referred to as cross-media growth. When talking about the same or an equal media product, it can be referred to as lateral cross-media; in the case of a similar or new

media product, it can be referred to as multilateral cross-media. In this context, mainly the presence of several media distribution channels is crucial.
Based on the multi-channel marketing, one can speak of a media multi-channel strategy. Figure 14.2 displays the different growth strategies, depending on the number of media products and the number of distribution channels. The various forms of cross-media and related strategies are presented in Sect. 14.2.3.


	Causes and Catalysts of Cross-Media

The causes and catalysts that have led to the development of cross-media marketing of content and still press ahead this trend can be divided into market- or environment-oriented and business-related aspects. Within the market- and environment-oriented causes, the already described industry convergence on the media, communications, and information markets as well as the growing penetration of the media markets with innovative information and communication technologies plays a central role.
 

On this basis, three market-related drivers or catalysts can be derived: digitaliza- tion, the industry convergence, and the changing usage patterns of the recipients. With digitalization, which today encompasses all types of traditional media formats, particularly lower costs for porting of content to new media channels have emerged. This is mainly due to the much lower cost of adapting efforts for the cross-channel utilization of media formats. Thus, for example, a digital picture can be utilized in a
book, a magazine article, and an online channel with little extra effort.
Only the proceeding, fast-moving industry convergence and the possibilities of innovative information and communication technologies have led to the availability of new channels and to the absorption of these channels in integrated cross-media
strategies. The pressure on traditional media companies to use new digital channels was signicantly increased by new market entrants, especially from the electronic business sector. As an example, the online video platform Hulu can be cited, with which many traditional media companies have created an additional marketing channel on the Internet.
The third market-related aspect is the change in recipient behavior. It can be observed that the user preferences have moved toward new marketing channels in many industries. To an increasing degree, this leads to substitution of traditional media channels through new media channels. Furthermore, it appears that nowadays users even expect additional content via online channels in traditional channels. Even within windowing (extension of value chains through the marketing on different distribution channels) and versioning (differentiation of media products), user preferences have changed so that recipients prefer a stronger multi-channel use. The central business-related drivers and catalysts are higher revenue
opportunities, lower marketing costs, and a more efcient brand transfer. In this context, the higher revenue opportunities arise especially from multiple use of media content. Very often, these have very highrst-copy costs but can be distributed through digitalization in a cost-effective way on different channels. Per additional media channel, there is additional revenue potential to cover the highrst-copy costs.
Decreasing marketing costs arise primarily from the economies of scale and interconnection/integration effects that integrated media companies can achieve through the use of cross-media. These interconnection effects or composite effects occur when there is a coordinated, cross-media channel use beyond the boundaries of individual marketing channels. This aspect plays an important role, especially in the distribution of media content as well as in product development.
The third superordinate, business-related driver for cross-media marketing within the media management is the brand transfer. Branding is a very complicated and cost-intensive marketing activity. Within cross-media management an established brand can be expanded to new channels with relatively little adjustment and coordi- nation needs.
An example is theHarry Potterbook series. The strong trademark Harry Potter allowed an efcient secondary use as a movie and furthermore as a computer game. In doing so, an established brand message could be reverted to. Figure 14.3 illustrates the market- and business-related drivers and catalysts of cross-media.
	Cross-Media Strategies, Processes, and Success Factors

In recent years, with increasing importance of cross-media management, various cross-media strategies emerged. Basically, the strategy alternatives can be distin- guished based on the number of used exploitation stages as well as the company- specic coordination of media formats and channels. Using these cross-media strategies as well as general approaches to strategic management, key cross-media processes can be identied.
Furthermore, strategic success factors can be derived and systematized. First of
all, however, a fundamental understanding of the interaction between media channels and media formats and of the resulting cross-media potentials is necessary.

Potentials of Cross-Media
The systematization of cross-media approaches has shown that the combination of media format and media channel is one of the central challenges in cross-media management. Media channels (in the broadest sense also referred to as branch channels) are the book market, the market for newspapers and magazines, the radio market, the TV market, the movie market, and the online market. In the cross-media context, in terms of potential and adaptation effort estimates, it makes sense to differentiate between a stationary and a mobile online market.
In this context media format is understood as text contributions, images, audio contributions, or audiovisual material. Due to the signicant differences, in
 

production and scope, among others, the text format is also to be subdivided into book texts and edited texts. Thereby, any combination of media formats and media channels has its specic characteristics that are of major importance for implementing a targeted cross-media management. Overall, a number of different
combination possibilities emerge. For these characteristics the adaptation effort and the potential can be estimated.
The adaptation effort can generally be ascribed to the similarity of the combina- tion to the original exploitation combination, including classical exploitation combinations, such as“book text”in a book. The more alike the target channel of a media format to its original using channel, the lower is the adaptation effort. For
example, a book contribution can easily be reprinted as a serial story in a daily newspaper.
The movie version of the same work, such as a TV series, is considerably more elaborate and consequently associated with signicantly higher costs. An exception in this context is online formats. In principle, all media formats can be adjusted to the online environment through digitalization. Since nowadays the majority of the content is already produced digitally, the adaptation effort required for these
channels is often comparatively moderate.
The potential of a combination of media format and media channel depends not only on the similarity of the channels but on other factors as well. Both development trends in the media industry (e.g., toward online channels) and media format-specic characteristics need to be noted. For example, the transmission of audio content on TV is possible without increased effort.
Nevertheless, for this combination of pure audio format and audiovisual medium, no cross-media potential can be identied. Figure 14.4 shows possible combinations of media format and media channel and evaluates them according to their adaptation efforts and the cross-media potential.
It should be noted that within the media channel, book, audio books, and also ebooks are subsumed. All other digital formats are assigned to the online distribution channels. It is apparent that in traditional media channels, beyond the original exploitation combinations, there is limited cross-media potential. The various text formats can be utilized within the print media channels relatively easily and with medium-to-high cross-media potential.
Moreover, the book text has cross-media potential in terms of radio utilization (as a reading) and for the TV market or rather movie market (as a script for a movie or a series). However, the relatively high adaptation effort must be considered. The media format image has cross-media potential in the media channels TV and movie as an imagery for marketing purposes.
However, both the stationary and the mobile online channel offer high-to-very high cross-media potential. All media formats, with restrictions regarding the book text format, can be perfectly transferred to the online channel.

Cross-Media Strategies
In the context of cross-media strategies, the number of used exploitation stages and the company-specic coordination of the media formats and channels are of special

importance. Based on these criteria, various strategic alternatives can be identied. First, in this context, a distinction should be made based on the number of stages in the cross-media marketing chain. It should be noted that one can only speak of a
cross-media strategy at a use of at least two different channels.
Therefore, the simplest form represents the two-stage cross-media strategy. Through intelligent use of channels, integrated media companies can expand the
multi-channel utilization up tove channels. This can be illustrated by the example of a book text as the original media format. The classicalrst utilization is the printed book, which can also include special formats such as audio books.
Another utilization channel, and thus the basis for a two-stage cross-media strategy, is the movie. Herewith, a book text (or mostly a modied version in the form of a script) is used as a template for a movie adaptation. This is usually followed by a broadcast on TV, as a third utilization channel. As part of the
windowing, the extension of the value chain for media content, the specication of the channel (e.g., pay TV and free TV), and the sequence and timing also play an
important role.
However, here it should be noted that the typical sequences of channels have experienced increasing changes in recent years. This mainly concerns the temporal dimension of the cross-media exploitation. The use of content in different channels is converging. So nowadays, very often there is less time between the broadcast of a movie in cinemas and broadcasting it on pay TV. With new channels in some cases, even the complete elimination of temporal utilization windows can be observed.
 

Therefore, the cross-media exploitation does not need to be linear. The fourth exploitation stage, the online publication of the book text (e.g., on a website), is conceivable after the TV broadcast as well as together with the book publishing. Moreover, a book text can easily be utilized as a serial story in a magazine, and thus a
fth exploitation stage can be developed. In this case, ave-stage cross-media strategy is present. Figure 14.5 presents the different stages of cross-media strategies
with the example of book text.
Furthermore, cross-media strategies can be differentiated by the type of channel coordination. In principal, three different coordination forms are possible from which three types of strategies can be derived: the isolated cross-media strategy, the combined cross-media strategy, and the integrated cross-media strategy. The three types of strategies differ in terms of their design, their requirements toward the enterprise, and their coordination.
The isolated cross-media strategy is characterized by the fact that the various media channels are completely independent of each other in terms of coordination and their control is channel-immanent. Therefore, a channel-specic management is required. Usually a lead channel structure is existent, that is, a media channel is superior to the other channels.
The isolation of the channels in the context of this cross-media strategy can go as far as that competition between the channels exists. This is, for example, the case with a publishing company who markets digital versions through an online channel in addition to the classic book.
Within the combined cross-media strategy, the various media channels are partially coordinated with each other, but the control is still channel-immanent. This leads to a situation in which the media channels mesh with each other and support each other in competition, a so-called coopetition among the channels. Within this strategy type, there is mostly a higher-level channel. However, the management is usually across the channels.
In an integrated cross-media strategy, all media channels are fully coordinated with each other and controlled across channels. The media channels are usually managed in such a way that they complement each other and that no competition between the channels arises. This requires a high degree of central control of the activities. In recent years, a clear trend toward integration of different media channels in the sense of an integrated cross-media strategy can be observed. Espe- cially international media groups such as Time Warner and News Corp use this strategy.
The demands on the organization change in dependence on the cross-media strategy used. Whereas the isolated cross-media strategy requires a high empower- ment of the individual channel management, there are high interdependencies between the various media channels within the integrated strategy. Also, the coordi- nation effort and the degree of centralization increase with growing channel integra- tion. Figure 14.6 illustrates the strategy types of cross-media management.
Process of Cross-Media Management
The process of cross-media management is divided into four areas that build on each other to show the entire course of an idealized development of medial multi-channel systems. The cross-media management process predominantly orients itself to the general procedure of the planning process in the context of strategic marketing. As a consequence, the initial strategic situation of the company, market segmentation, and
the strategy denition in medial multi-channel systems result.
Strategic decisions are long-term oriented and will help to secure or even expand a company’s competitive advantage. The planning process for the cross-media strategy development begins with a general business analysis to identify the company’s own strengths and weaknesses as well as the opportunities and threats of the environment and thereby to obtain a complete overview of the initial situation.
This situation analysis is particularly important for a medial multi-channel strat- egy, in order to understand the specic requirements for the cross-media manage- ment and if necessary adapt the target denitions and planning processes.
Building on the strategic initial situation, a segmentation of the market takes place, in order to achieve a target group-specic, successful handling of the market. For this purpose a variety of potential segmentation criteria (geographic, sociodemographic, behavioral, psychographic, and benet-oriented) are used. On the basis of the market segmentation, the denition of the company’s individual
cross-media strategy takes place.
The process of cross-media management ends with the design of cross-media systems and is based on a four-step planning process. In therst step, potential media channels are identied based on the market segmentation strategy and the strategy denition. Following this, the form of the cross-media system is determined in order to differentiatingly develop the channels. Here, the core activities are the
determination of the media stage number, the media positioning, and the determina- tion of the medial degree of differentiation.
The third step in the design process is concerned with the identication of requirements specic to the media channels, in order to carry out a specic channel selection on this basis. The design process is completed with the cross-media product
positioning. In the course of this, the channel-dependent positioning planning for the media product is created. Furthermore, the media product needs to be adapted to the media channel. Figure 14.7 illustrates how the master planning process compresses to the design process of the cross-media system.

Success Factors of Cross-Media Management
The success of cross-media management depends on many factors. Many of these factors have been highlighted in the previous explanations. In the following, the key success factors of cross-media management are shown in an aggregated form. A basic prerequisite for the implementation of a cross-media strategy and thus a key to success of cross-media management is the availability of multiple channels.
Although one can already speak of cross-media when there are two channels available, with each additional channel, new advantages arise that sometimes scale disproportionate to the number of channels (such as economies of scale).
However, each additional channel increases the coordination effort. Therefore, the channel coordination shall be identied as an additional important factor for a successful cross-media management. This is especially true for coordinated and integrated cross-media strategies. The success of cross-media management also crucially depends on the sharing of channels and resulting synergies. First,
co-branding should be mentioned, which allows to transfer a trademark to another channel or rather to synchronously develop the brand for multiple channels. Since branding is a lengthy and often expensive process, co-branding, as part of the cross- media management, is highly important for success or rather is a major success factor.
The success factor cross selling/cross-promotion is closely related to co-branding. Here, a media channel is used for cross-media marketing of new media products. This results in considerable sales growth potentials. Further, various media channels can be bundled by companies for a joint marketing.
The so-called bundling of services is an important success factor in establishing new channels and the enforcement of an integrated cross-media strategy. In the
media bundling of services, different media formats are combined in media offer packages.
Another success factor is called windowing, or versioning, of media products through various media channels. Properly designing exploitation windows and creating market- and segment-specic product versions is particularly important
and critical to success when using many channels (up tove-stage cross-media
strategy).
Moreover, multiple customer loyalty can be identied as a key success factor of cross-media management. Only if customers can be tied to the company via the boundaries of singular channels can a cross-media marketing strategy be established. In this context, the channel-customert is considerably important. To plan the target
group channel design is therefore an important step in the cross-media management
process. Figure 14.8 illustrates the success factors of cross-media management.



	Integrated Value-Added Structures and Business Models

The market-/business-oriented causes and catalysts result in the establishment of integrated value-added structures and integrated business models. The following section willrst illustrate the dimensions of integration strategies. It will continue to present integration strategies at the value-added level as well as the business model level. In conclusion, these integration strategies will be evaluated in further detail.
 

	Dimensions of Integration Strategies

In the United States, a signicant increase in mergers and acquisitions can be observed within the media, communications, and Internet industries. The numerous takeovers and mergers in this general sector can qualify this trend. Integration
strategies in the information and communication branches indicate that businesses are attempting to span multiple strategic development levels in order to broaden their activities to include all value-added levels and multimedia branches. This constitutes the foundation for cross-media marketing of content.
When implementing cross-media marketing, companies will often pursue a dominant position in newly emerging markets. Companies in the media, communications, and Internet sectors execute integration strategies at two levels. At the value-added level, companies strengthen their position on already taken value-added stages through integration or incorporate upstream and/or downstream business areas. In this manner, they aim to penetrate all levels of the multimedia value-added chain. At the business model level, companies integrate separate models in order to build a multifunctional, hybrid business model.


	Characteristics of Integration Strategies

The following section illustrates integration at both the value-added level and the business model level. Thereby, we will draw on the previously described multimedia value-added chain and the business model classication. Figure 14.9 depicts these characteristics.

Integration at the Value-Added Level
Based on growing convergence, companies in the media, communications, and Internet branches implement integration strategies in the context of their value- added structures and activities. Old value-added chains are dismantled and recongured via cooperation or merger with the value-added chain activities of other companies. Figure 14.10 illustrates the unbundling of value-added structures
and the rebundling of previously separate value-added areas in the establishment of a single multimedia value-added chain. 
Increasing integration efforts made by companies in the media, communications, and Internet sectors are creating a multimedia value-added chain, which can be divided intove value-added levels. Therst level includes the production of content and offer of services. Media companies such as The Walt Disney Company
or news agencies such as Reuters act as content providers and occupy a central role within the multimedia value-added chain.
Players at the second level combine different content and services in segment- specic packages or channels. These accumulators of content are customer-oriented and represent the point of contact between user markets, content procurement markets, and advertising markets. At the level of value-added services, different products and services are offered to support processes such as consultation, account-
ing systems, or the development, establishment, and operation of servers.
The central tasks of the next level are the provision of access, the establishment of connection and transmission, as well as the management of networks. Thenal level of the multimedia value-added chain is the interface with end consumers. Here, the hardware and software components required for the reception of content, such as digital TVs, multimedia PCs, mobile telephones, browser software, or intelligent
agents, are prepared. Figure 14.11 illustrates central tasks and providers and offers examples of businesses that occupy one or more levels in the value-added chain.
Integration strategies at the value-added level aim to improve competition conditions in domestic markets, as well as to gain a competitive edge in new markets through integrated service bundles. In order to improve the situation in domestic markets, enterprises preferably implement integration strategies at the horizontal value-added level. The merger of Time Inc. and Warner Communications
 

exemplies horizontal integration with a focus on content in relation to the value- added chain.
Following the merger, Time Warner almost covers the entire production of content. Additionally, vertical strategies were also adopted in order to dominate the complete multimedia value-added chain through the incorporation of upstream or downstream business sectors. In this context, the connection of previously separate services with cooperative, comprehensive value-creation systems is supposed to establish network and integration solutions. For this purpose, different levels of the multimedia supply chain are assembled through cooperation, alliances, and lately increasingly the acquisition of other companies.
The acquisitions and mergers of the Australian media company, News Corpora- tion (News Corp), provide an excellent example of horizontal and vertical integra- tion strategies at the value-added level. The historical starting point for the company was Rupert Murdoch’s acquisition of Adelaide News from his father. A rapid expansion of the company by further acquisition within Australia followed.
The international expansion of the printing business reached its peak during the 1960s and 1970s. News Corp, founded in 1979 by the Australian newspaper publisher, coordinated worldwide expansion into various media sectors. By the mid-1980s, the expansion focused on print media (newspapers and magazines). With the successful acquisition of the American movie studio, 20th Century Fox,
in 1985, as well as seven American TV stations, the companynally found its footing in the movie and TV industry.
This marks the beginning of the integration efforts focusing on horizontal cross- media. In the year 1987, the acquisition of the publishing company Harper & Row
signied entry into the book industry. In 1990, together with the publishing company William Collins, also acquired in 1989, HarperCollins Publishers, one of the world’s largest English-language publishing houses, was founded. Furthermore, the com-
pany maintains a major presence in the music industry by owning the labels Fox Music and Fox Music Publishing. It is additionally active with Fox Interactive Media in the area of Internet content production. In summary, News Corp covers the entire area of content production.
With the acquisition of US-American TV stations, News Corp entered a new value-added level, content aggregation. In 1986, the company launched the fourth countrywide broadcasting network in the United States: the Fox Television Network.
As a result, numerous cable TV channels in the United States as well as pay TV channels worldwide were added to the company’s service portfolio.
The addition of these pay TV channels led the company to another business
model level. Today, the company not only offers free TV and pay TV but also offers pay-per-view and video-on-demand services worldwide and therefore is in the position to further utilize and distribute its content internally.
At the value-added level of transmission/connection, News Corp was able to establish platforms through own foundations and the acquisition of satellite TV platform providers. The goal of these vertical integration activities was to offer the production and distribution of content without outsourcing.
 

The distribution of TV programs via satellite seemed to be the most appropriate entry strategy at this value-added level. In the target markets of the United States and Europe, already established,nancially strong enterprises dominated the traditional transmission channels (cable and terrestrial transmitters). In other markets such as
Southeast Asia or India, the development of traditional transmission platforms would have required too much time and investment.
Therst attempt made in 1983 to develop such a satellite system, namely, Skyband in the United States, failed (Martinson 2001). In 1989, Sky Television
was founded in the United Kingdom. The company achieved a viewership of one million within 1 year. Just one year after it was founded, Sky Television merged with the second satellite provider in the British market, British Satellite Broadcasting.
The merged British Sky Broadcasting (BSkyB) became one of the most success- ful pay-TV platforms in the world. In 1993, News Corp acquired the DBS provider, Star TV, which dominated the Asian market. Additional participants are in Australia (Foxtel), Japan (SKY PerfecTV!), the United States (DIRECTV), and Italy (Sky Italia).
With the service of Star TV, News Corp is currently the only Western media corporation with a countrywide broadcasting license for all of China. Thus, the goal is to position“Sky”worldwide as the brand name in satellite television. The worldwide activities of News Corp in this sector not only enable it to utilize global
economies of scale benets but also allow the company to develop therst serious alternative to cable. The long-term goal of integration strategies at the value-added level is, therefore, to penetrate all levels of the multimedia value-added chain, so that
customers establish a sustainable relationship with the company through integrated and individualized services.

Integration at the Business Model Level
The basic business models in the media and Internet sector–content, commerce, context, and connection–have already been described. Integration strategies adopted by media and Internet conglomerates can also be interpreted according to these business model classications.
The increase in intra- and intermarket competition intensies competition in the
media and Internet markets. The strategic reaction of companies exists in pursuing
development strategies at the business model level. Existing business models are increasingly being supplemented with the characteristics of models not used to date. The nature of these implemented business models is becoming more hybrid and multifunctional.
The goals of integration strategies at the business model level are thus based on the establishment of hybrid, multifunctional business models that can generate a so-called multi-revenue stream. The most central component of a company’s busi-
ness model is the revenue model. It denes how the company generates its revenue
tonance its services, on the basis of which services, which actors, and in what amount. In this context, multi-revenue stream refers to the fact that an integrated
business model has access to multiple revenue streams. Multifunctionality resulting from a broad product and service spectrum increases the potential of attracting users.
 

Moreover, through the combination, adaption, and aggregation of basic business models into hybrid model, its economic foundations can be strengthened because old revenue models are optimized and new revenue streams are integrated (Wirtz and Daiser 2017).


	Evaluation of Integration Strategies

In order to evaluate the integration strategies of the media, communications, and Internet sector, the following section will present the potential advantages and risks of integration. Therst advantage of integrated media and Internet conglomerates is the potential to increase sales that result from the extension of the value-added chain. Through windowing of media content and versioning of digital, media content, new
consumer groups are targeted according to their preferences and variety of demand. A conglomerate’s sales can be signicantly increased the more their offers cater to customers’specic preferences and the actual multiple utilization.
An additional advantage of integrated corporations is the potential for increased
sales due to the cross-selling and cross-promotion of media offers under a singular established brand. Moreover, an integrated media and Internet conglomerate is in the position to offer its customers integrated and individualized media service bundles. Suchrsthand service offers customers a convenience advantage and, at the same time, increases their switching costs, which generates a multiple customer loyalty
toward integrated company.
In the context of service bundling, an integrated company can more efciently skim off a customer’s willingness to pay by executing price bundling strategies. Finally, integration strategies can also produce expansion potential. Through
integrating new business sectors, a company can participate in growth potentials and areas with higher margins.
Yet despite all these potential advantages, integration also poses signicant risks. These are mostly a result of different business cultures, management approaches, or
business systems. The merger of Time Inc. and Warner Communications, along with the associated fusion of content and distribution, is considered one of therst strategically reasonable mergers in the media industry.
Nevertheless,“more than a decade later, the lack of a unied synergistic culture, a
oundering stock price, unimpressive earnings, and continued reliance on debt have stood in the way of this union being termed a success”(Clemente and Greenspan 1998, p. 35). This example shows that even under conditions with high agreement
about targets at the strategic level as well as complementary core competencies and business areas, signicant integration risks exist at the operative level.
Studies on post-merger integration prove the considerable risks of success for
mergers. For example, one analysis of the consultancy, A. T. Kearney, revealed a failure rate of approximately 60% in major mergers (MacDonald and Traem 1999). Thereby, cultural differences represent a serious issue. Especially media companies are characterized by pronounced corporate cultures. In the merger of AOL and Time Warner, on the one hand, the rather aggressive corporate culture of the Internet
 

start-up AOL and, on the other hand, the rather traditional and conservatively characterized corporate culture were opposing each other. The chairman of Time Warner addressed this in an interview as follows:“I was surprised by how challeng- ing it would be to consolidate the new media culture of AOL with the old media culture of Time Warner.”
Whether the potential advantages of integration can be implemented in the end
depends heavily on the degree of harmonization between corporate cultures, man- agement approaches, business operations, and the merging and development of core competencies in all strategically essential business sectors.

	Development Prospects

It is difcult to predict the future development perspectives in the information and communications markets due to the signicant complexity and dynamics of the sector. In 1943, Thomas J. Watson, the former chairman of IBM, made the following assertion about the development of the computer market:“I think there is a world market for aboutve computers.”In the year 1977, Ken Olsen, the former president of DEC, stated in respect to the prospects for the personal computer market:“There is no reason for any individual to have a computer in their home.”Both quotations reveal how troubling prognosis can be even for those directly involved in the market.
Due to fundamental changes in competitive structures and the high degree of competitive drive, developments for market players in the media, communications, and information markets cannot be accurately estimated.
The media sector has changed dramatically over the past several years, especially due to the establishment of the Internet as a fourth mass medium (in addition to television, radio, and print). The increased spread of broadband Internet will con- tribute further to the shift within the media markets. Thereby, the sector convergence of TIME-markets will still be very important. For example, Apple, Microsoft,
Google, and Sony all conrm how corporations“new to the industry”can become serious competitors for established media companies.
Branch convergence and digitalization will likely further propel the trend of integrated media conglomerates. This is mainly due to the fact that integrated media actors can achieve better content applicability within the various forms of
media and channels and thus can better realize economies of scale and scope. In the media industry, integration is also gaining more signicance from the consumer perspective. The following two essential changes in recipient behavior are particu- larly important.
First, the role of the passive recipient is changing to a more active co-designer role, as suggested by the terms Web 2.0 and user-generated content. In the future, media companies will have to integrate content generated by users into their offers. Impressive examples for this strategic imperative for user integration are YouTube and MySpace. These cases increase the degree of customization in media services. This trend toward individualization and personalization, and thus the paradigm shift
from push to pull, is fundamentally signicant for the future of media companies.
 
14.4   Development Prospects	259
The necessity of increasedexibility and openness to innovation in the media industry will become even more pressing, besides the more active recipient role,
also due to changes in consumer expectations and behavior. In this context, a major change in user preferences can be observed, especially among the younger genera- tion of media users.
The trend is moving toward electronic services such as Internet and online/PC/ console gaming. New-generation users want to interact and co-design to a much higher degree than in the traditional media sector of broadcasting. Overall, there will be signicant changes taking place in the media industry during the next several years. These changes will affect all players and require a substantial amount of
entrepreneurial creativity and drive.