ECON 106T Lecture Notes - Lecture 9: The New York Times, Brand Equity, Clickstream
Document Summary
Movie industry: number of american movies growing (610 in 2009; 471 in 99, blockbusters growing bigger (32 movies over m; 21 in 99) Music sales: album sales declined 20% since 2004, hits hold up best; albums ranked 300-400 hold up worst. Fragmentation: due to long tail and falling costs of production and distribution. Consolidation: people want to share same culture (e. g. terminator), new technology helps distribution and communication, increased role of brands (e. g. ny times) Build capacity to respond to a threat: build base of loyal (locked in) customers, build network, have more capacity that you need. Limit-entry pricing: price low in order to prevent entry, signals you are tough and builds customer base, example: airlines before southwest enters. After entry, play tough: this may scare off first entrant, give you a reputation and prevent future entry, example: walmart and unions.
