Media Business Model Innovation A comparative case study of Multi-Channel Networks Yeseul Ha Master’s thesis in Nordic Media Department of Media and Communication UNIVERSITY OF OSLO 1 December 2019 1 Media Business Model Innovation: a comparative case study of Multi-Channel Networks 2 © Yeseul Ha 2019 Tittel Media Business Model Innovation: a comparative case study of Multi-Channel Networks http://www.duo.uio.no/ Trykk: Reprosentralen, Universitetet i Oslo 3 Abstract This research explores the multi-channel networks from the business perspective in responding to current challenges in the turbulent industry. Since some of the giant channel networks has diminished, some voice anticipates the demise of the MCNs, and the boundary of its roles is somewhat vague and fuzzy in the media industry. This research is designed for three purposes. First, clarifying its specialties compared to the other players in the media field. Second, to find how the channel networks resolve the current challenges in a business model innovation lens. Third, to reveal the different dynamics in non-American countries in order to see how environmental factors affect the MCN’s performance. Therefore, three existing multi-channel networks are selected to analyze in different regions, Sweden, South Korea, and the U.K. The regions are chosen to compare on a global spectrum, and four employees of the selected companies participated in a qualitative, semi-structured interview. In order to analyze the case units, an analytical framework is designed based on the business model and business model innovation literature. Also, the relevant theoretical propositions are introduced to explain the surrounding issues with new concepts. As a result, there are three findings. First, the three MCNs have interdependencies with traditional media players such as talent agents and advertising agencies and established broadcasters. Also, they have evolved based on new digital technologies as a convergent space. Second, there are some external driving forces around the MCN industry as dynamic contexts, and the three cases are influenced by the environmental forces. As a result, some opportunities and challenges are found in technology, regulation, and market contexts. Lastly, the 4C roles of MCN business models, namely, communication, community, content, and commerce, are defined as an attempt to formalize the industry. Since the topic is relatively understudied, and there is no study on a global spectrum with the empirical data that covers three distinct countries, this research can be a cornerstone to see the different dynamics of multi-channel networks around the world. 4 List of Figures Figure 1. MCN 1.0 Business Ecosystem .................................................................................. 11 Figure 2. MCN 2.0 Key Business Dimensions ........................................................................ 12 Figure 3. Business Model Design Parameters .......................................................................... 20 Figure 4. Comparison between the traditional and modern digital business............................ 22 Figure 5. The V4 Ontological Structure of Business Models .................................................. 22 Figure 6. Four Pillars and Nine Business Model Building Blocks. ......................................... 24 Figure 7. Business Model Canvas ............................................................................................ 25 Figure 8. Dynamic Business Model Framework ...................................................................... 28 Figure 9. The Innovation Landscape Map................................................................................ 31 Figure 10. Simplified Schema of Dynamic Capabilities, Business Models, and Strategy....... 34 Figure 11. YouTube-centered Screen Ecology ........................................................................ 39 Figure 12. SME Intermediaries-centered Screen Ecology ....................................................... 40 Figure 13. Multiple-Case Study Procedure .............................................................................. 45 Figure 14. Conceptual framework for inductive case study ..................................................... 45 Figure 15. MCN Business Model Code Framework ................................................................ 52 5 List of Tables Table 1. Case Introduction ....................................................................................................... 15 Table 2. The Information of Primary Data Collection ............................................................. 49 Table 3. The Analysis of Value Proposition ............................................................................ 58 Table 4. Analysis of Value Network ........................................................................................ 62 Table 5. Analysis of Value Architecture .................................................................................. 68 Table 6. Analysis of Value Finance ......................................................................................... 71 Table 7. The Analysis of Dynamic Context ............................................................................. 81 6 Table of Contents List of Figures............................................................................................................................ 5 List of Tables.............................................................................................................................. 6 Table of Contents ....................................................................................................................... 7 1. Introduction ........................................................................................................................... 9 1.1. Multi-Channel Networks ................................................................................................. 9 1.2. Evolution of MCN Business Models............................................................................. 10 1.3. Previous Studies ............................................................................................................ 12 1.4. Case Introduction .......................................................................................................... 14 1.5. Rationale of the Research .............................................................................................. 15 1.6. Research Questions ....................................................................................................... 16 1.7. Structure ........................................................................................................................ 16 2. Literature Review and Theoretical Framework ................................................................. 17 2.1. Business Model Framework .......................................................................................... 17 2.1.1. Business Model Design .......................................................................................... 18 2.1.2. Four Dimensions of Business Models .................................................................... 20 2.1.3. Four Pillars and Nine Building Blocks................................................................... 23 2.1.4. Dynamic Business Model Framework ................................................................... 26 2.2 Business Model Innovation Framework......................................................................... 29 2.2.1. Theoretical Framework of Innovation .................................................................... 29 2.2.2 Business Model Innovation in Media Sector .......................................................... 31 2.2.3. Business Model, Business Strategy and Innovation ............................................... 33 2.3. Intermediaries in New Screen Ecology ......................................................................... 35 2.3.1. The New Screen Ecology ....................................................................................... 35 2.3.2. Platform Strategy .................................................................................................... 37 2.3.3. Social Media Entertainment Intermediaries ........................................................... 39 2.3.4. Globalizing Social Media Entertainment ............................................................... 41 7 3. Methodology ........................................................................................................................ 43 3.1. Research Design ............................................................................................................ 43 3.2. Conceptual Framework ................................................................................................. 45 3.3. Case Selection ............................................................................................................... 46 3.4. Data Collection and Analysis ........................................................................................ 47 3.4.1. Primary Data........................................................................................................... 48 3.4.2. Secondary Data....................................................................................................... 50 3.4.3. Data Reliability....................................................................................................... 50