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University of Southern California
Marshall School of Business
Information and Operations Management
Fall 2014
DSO-443: The Business of Digital Entertainment
Instructor:
Class Hours:
Email:
Office Hours:
Office:
Francis Pereira, Ph.D.
Tu/Th: 2 PM – 3:50 PM
pereira@marshall.usc.edu
Thursday 4:00-5:00 pm and by appointment
401J
COURSE OBJECTIVES:
This course has two major objectives. The first is to present a framework for understanding how
the entertainment and media industries (motion pictures, television/cable, publishing, radio,
music and the arts) are organized and operate. At the center of the framework is the value chain
which is surrounded by professional organizations such as unions as well as regulatory agencies.
Theories from economics and management science are used to build out the framework for
understanding how the influence of technology may alter the traditional structure. The second
objective is to understand the perspective of new players from the online world, telecom service
providers, video gaming and others who are seeking new business models that both challenge
and offer new opportunity to the media industries.
COURSE MATERIALS:
The course will rely on texts, cases, readings from academic journals and the popular press.
Select chapters from the books listed below will be assigned. Note: lectures will follow the
assigned chapters from the textbooks to a great extent. Please read the assigned material and read
the case study in advance of the class period so that you are prepared to discuss and present in
class. We will also have guest speakers representing both the entertainment and technology side
of the equation. Schedules permitting, we will arrange site visits to companies representing
“Digital Hollywood” will provide first-hand experience and exposure to current strategies,
collaborations and new offerings.
Required Text: Entertainment Industry Economics, A Guide for Financial Analysis,
Harold L. Vogel, (Cambridge University Press, 2007, Eight Ed.).
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Cases and Readings: Readings will come primarily from trade publications, the popular press
and academic journals. Cases from the Harvard Business School and Stanford Business
School will be used to supplement lectures and allow you to apply basic concepts and
information.
You are also encouraged to peruse the U.S. popular press including the Wall Street Journal,
Fortune, Business Week, the New York Times, Variety and The Hollywood Reporter.
Lecture Notes – Handed out in class
Background readings: For those of you who want to bolster your understanding of the subject
matter, there are extra references listed.
EVALUATION:
Your grade for the class will be based on the following assignments and criteria:
Class Participation (10%)
As in any upper division class, the expectation is that you will come to class fully prepared to
discuss the material. To get the most out of the classroom experience, you should engage
actively in discussion. Articulating your ideas has several benefits for the class and for your
professional development. Most notably, active participation will surface novel ideas, encourage
critical thinking and will lead to a more interesting class. Thus, you are expected to voluntarily
voice your opinions and ideas.
Case Studies (30%)
Each student will be responsible for two, 2-page case write-ups. Questions will be provided to
guide your write-up. All write-ups are due on the day the case is discussed in class.
In addition, students working in teams of two, will be responsible for one case presentation on a
specified question. Questions for each case will be distributed the week before the session when
the case will be discussed.
Individual Research Paper and Presentation (25%)
Each student will be required to write a 5-6 page paper and present the findings in class (10
minute presentation). The paper will require research and independent analysis. Topics will be
suggested, but you are required to focus your investigation within the guidelines that are given.
Team Project and Presentation (35%)
There will be a team project in the class. Students will work in groups of three, to analyze a key
issue facing the new media industries. Students will be free to select any topic that interest them,
but selected topics will be need to be approved by the instructors.
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Laptop Computer Policy
Students may use laptop computers during the lecture period solely for note-taking purposes.
However, these laptop computers may not be connected to the Internet or use to check e-mails
during the lecture period.
Notice on Academic Integrity
The use of unauthorized material, communication with fellow students during an
examination, attempting to benefit from the work of another student, and similar behavior that
defeats the intent of an examination or other class work is unacceptable to the University. It is
often difficult to distinguish between a culpable act and inadvertent behavior resulting from the
nervous tensions accompanying examinations. Where a clear violation has occurred, however,
the instructor may disqualify the student's work as unacceptable and assign a failing mark on the
paper.
For Students with Disabilities
Any student requesting academic accommodations based on a disability is required to register
with Disability Services and Programs (DSP) each semester. A letter of verification for approved
accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early
in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00 p.m.,
Monday through Friday. The phone number for DSP is (213) 740-0776.
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TENTATIVE SCHEDULE AND READING ASSIGNMENTS
Week
Aug 26
Topic and Readings
Course Overview
Introduction to Interactive Digital Media
Aug 38
What are Business Models?
Michael Morris, Minet Schindehutte and Jeffrey Allen, “The
Enterpreneur’s Business Model: Towards a Unified
Perspective,” Journal of Business Research, 58. (2005) 726735.
The VISOR Model
Sep 2
Introduction to Information Communication
Technologies and Standards
Economist, “Mobile Marvels,” Special Report, September 26,
2009.
Silverman & Whittig,” Google’s Android, “Will it Shake up
the Wireless Industry in 2009 and Beyond,” Stanford
Graduate Business School. July 28, 2009. [CS1]
Guest Speaker
Richard M. Grimmes
Chief Executive Officer, Capital Tower Group.
Sep 4
Convergence in Telecommunications
IBIS, “Wired Telecommunication Carriers in the U.S.,” May
2012.
Schifrim & Burgleman, “France Telecom-Orange in 2011,”
Stanford Graduate School of Business, June 22, 2011. (SM194). [CS2]
Sep 9
New Technologies and Challenges to the Media
Industries
Comments
5
Harold L. Vogel, “Economic Perspective, “ Entertainment
Industry Economics, Ch. 1
Harold L. Vogel, “Basic Elements, “ Entertainment Industry
Economics, Ch. 2
Martin Fransman, Convergence, the Internet and
Multimedia: Implications for the Evolution of Industries and
Technologies.
Sep 11
Creative Destruction in the Music Industry
Harold L. Vogel, “Music, “ Entertainment Industry
Economics, Ch. 6
Deighton & Kornfeld, “Nettwerk: Digital Marketing in the
Music Industry,” Harvard Business School, March 9, 2012
(9-510-055) [CS3]
Sep 16
The Video Games Industry
Harold L. Vogel, “Games “ Entertainment Industry
Economics, Ch. 10
Hagiu, “Wii Encore,” Harvard Business School, September
1, 2011. (9-712-426) [CS4]
Sep 18
Evolution in the Gaming Industry
Eisenman & Wong “Electronic Arts in Online Gaming,
Harvard Business School Case 9-804-140 [CS5]
Economist, “Special Report: Video Games,” Dec 10, 2011
Industry”
Sep 23
The Publishing Industry
Harold L. Vogel, “Publishing “ Entertainment Industry
Economics, Ch. 9
Bharat Anand et. al. “eReader: Amazon’s Kindle,” Harvard
Business School, December 9, 2009. 9-709-486 [CS6]
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Herter,” From Book Reviewing to Crowd-sourcing,”
Searcher, June 2012.
Pew, “State of News Media 2012: Newspapers.”
Sep 25
The Broadcast Industry
Vogel, “Broadcasting” Entertainment Industry
Economics, Ch. 7
Economist, “Peggy-Sue Got Old,” April 7, 2011
David Yoffie & Michael Slind, “TiVo 2007: DVRs and
Beyond,” Harvard Business School, December 20, 2007
[CS7].
Guest Speaker (Invited)
Jack McKenzie
Vice-President, Magid & Associates
Sep 30
The Cable Industry: New Challenges Ahead
Vogel, “Cable” Entertainment Industry Economics,
Chapter 8
Comcast, Harvard Business School, 9-507-080, October 2008
[CS8]
Guest Speaker
Chris Prekopa
Corporate Director, Business Sales and Marketing
Time Warner
Oct 2
Hollywood and Films I
7
Vogel, “Movie Macroeconomics,” Entertainment Industry
Economics Creative Industries,” Ch. 3
Mohr, “Buzz Marketing for Movies,” Business Horizons
(2007) 50, 395-403
Oct 7
Hollywood and Films II
Vogel, “Making and Marketing Movies,” Entertainment
Industry Economics Creative Industries,” Ch. 4
Stephen Bradley & Nancy Bartlett, “Broadband and Video
Games: Playing and Winning Together,” Harvard Business
School, April 18, 2008.
Willy Shih et al., “Netflix” Harvard Business School, April
27, 2009. [CS9]
Weinberg & Pehlivan, “Social Spending: Managing the
Social Mix,” Business Horizons (2011) 54, 275-282.
Oct 9
The Consumer and the Digital Home
Center for Media Design, “Video Mapping Study” Ball State
University, 2009.
Bohn & Short, “How Much Information?” USCD, Dec 2009.
Oct 14
Technology Disruptions in the Creative Industries
Michael Smith et. al. “Converting Pirates Without
Cannibalizing Purchasers.” Wharton School, November
2009.
Sorensen, “Digital Platforms and Infrastructures,” 2012
Babcock, “Where Cloud Works,” Information Week,
February 6, 2012.
Chris Anderson, “The Long Tail,” Wired Magazine
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Oct 16
Leveraging Media Assets
Elberse, Calhoun & Johnson, “The NFL’s Digital Media
Strategy,” Harvard Business School, November 30, 2010. (9511-055). [CS10]
News Corp.
The Walt Disney Company: The Entertainment King,
Harvard Business School, 9-701-035, January 2009 [CS11 ]
Oct 21
Research Paper Presentations
Oct 23
Research Paper Presentations
Oct 28
Site Visit: Los Angeles Times*
Oct 30
Globalization and the Entertainment Industry
Jonathan Taplin, Crouching Tigers: Emerging Challenges to
U.S. Entertainment Supremacy
Iyer & Lakshimi, “Hollywood in India: Protecting
Intellectual Property” Harvard Business School, February
25, 2011 (9-711-017)[CS12]
Nov 4
Exploiting Social networks and Entertainment
Kaplan & Haenlein, “The Britney Spears Universe: Social
Media and Viral Marketing at its Best,” Business Horizons
2012, 55, 27-31.
Economist, “World of Connections,” January 2010.
Thomas Eisenmann and Brian Feinstein, “Facebook
Platform,” Harvard Business School, March 12, 2009 [CS13]
Guest Speaker
Ron Ploof
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Nov 6
Evolving Business Models in Interactive Digital
Media
Edwards, Grinter, Mahajan & Wetherall, “Advancing the
State of Home Networking,” Communications of the ACM,
June 2011.
Ramchurn et. al., “Putting the ‘Smarts’ into the Smart Grid,”
Communications of the ACM, April 2012.
Guest Speaker
Liz Gasser
Senior Director, Business Development
Qualcomm
Nov 11
Evolving Business Models in Interactive Digital
Media: The Next Frontier
Luis Von Ahn & Laura Dabbish “Designing Games With A
Purpose” Communications of the ACM, August 2008, Vol.
51., No. 8.
Dartmouth Business School, “Hulu, to be or Not to Be” June
2009.[CS]
Nov 13
Social Networks and Entertainment
Site Visit: Blizzard
Nov 18
New Opportunities for Interactive Digital Media
Juan Pablo Conti, “The Androids Are Coming,” Engineering
& Technology,” May 2008.
Constance E. Bagley and Reed Martin, “Warner Bros, and
BitTorrent,” Harvard Business School, August 14, 2007.
*Nov 19th
Guest Speaker
William Davidson,
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SVP Global Markets & Investor Relations
Qualcomm
Nov 20
Mobility and Digital Media
CTM Report of Worldwide Mobile Data Services Study:
2008 survey of mobile data service users
Guest Speaker (Invited)
Frank Chindamo, CEO, Fun Little Movies
Nov 22
Thanksgiving
Nov 27
Interactive Digital Media and Health
Hamermseh, Barley & Graham, “Proteus Biomedical:
Making Pigs Fly,” Harvard Business School, April 2, 2010.
(9-809-051). [CS15]*
California Healthcare Foundation, “How Smartphones are
Changing Health Care for Consumers and Providers.” April
2010.
Dec 2
Final Presentations
Dec 4
Final Presentations