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The Digital Research Initiative
The University of North Carolina at Chapel Hill
THE
CEO'S
MEMO
To: Eric Chernoff, Chief Financial
Officer
From: Tom Hughes, Chief Executive
Officer
At our next meeting, I plan to brief the
Board of Directors about our strategies for growth markets, especially
in new media. We have a number of initiatives going forward in
broadcast, newspaper publishing and cable involving the Internet.
But these are largely uncoordinated, and I'm not sure any represent
real revenue potential. Growth projections for the internet are
all over the place. Some say it will represent over $40 billion
in revenues by the year 2000. Some predict there will be 15 million
cable modems in use within three years; others forecast only 2
million cable modems by then, saying cable networks can't be upgraded
fast enough to support more growth.
For discussions at the retreat we have
scheduled, lay out some scenarios and options on the potential
of the Internet for Olympia's lines of business over the next
five years. I'd like you to consider the following questions:
-
We have talked to various players in the
Internet business, including Microsoft. Should we consider alliances,
partnerships, or other ties? If so, with whom and why?
-
Is there a creative edge we could exploit,
considering the creative talent at our stations and cable nets?
- Will the Net be most useful in attracting
local ad revenues, or national? Alternatively, does the Net threaten
to shrink our local and/or national ad revnues?
-
Should we consider changes in our investment
strategy because of the Internet? If so, what would we sell,
or buy? (As you know, we have had ongoing talks with firms interested
in acquiring our cable systems and one or more of the cable networks;
others with interests in our newspaper and broadcast properties
are in the wings).
-
Maybe, we should think "outside of
the box," and consider investing in an Internet application
that is not simply a line extension of our existing business,
but something truly innovative that promises high reward, with
higher risk. (One possibility would be some application or innovation
in on-line transactional or advertising services -- I was impressed
by a Wall Street Journal article on how Harte-Hanks has bet boldly
in this manner). Fundamentally, should we approach new media
aggressively, or go slow, waiting for markets to develop before
attempting to get our share of them?
At any rate, I don't expect you to have
the answers. I just want you to frame the options and issues
to provide for a good discussion at the retreat. At the meeting,
I plan to listen and ask questions, and will count on you and
the managers to frame the discussion and bring it all to a conclusion
with some sort of summary that reflects any consensus that is
achieved. I'll take my own counsel on the results."
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This site was created especially for students of the UNC School of Journalism's JOMC 050 Class, and anyone else who may be interested.
For more information, please contactdaikat@email.unc.edu
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