EC15 TB chapter 10 PDF

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E-commerce 2019: business. technology. society., 15e (Laudon/Traver) Chapter 10 Online Content and Media 1) Which of the following is not a current trend in online content? A) Americans continue to spend more on streaming music than downloaded music. B) Readership of newspapers in print form continues to exceed online readership. C) E-book sales growth slows. D) Explosive growth of the mobile platform accelerates the transition to digital content. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 2) Cord cutters and cord shavers are shrinking the number of pay TV subscribers yearly by approximately: A) 3%. B) 5%. C) 7%. D) 9%. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 3) Which of the following U.S. media channels generates the most revenue? A) broadcast television/pay TV B) video games C) newspapers D) box office movies Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 4) In 2017, the various entertainment industries together accounted for about __% of total media industry revenues, while the print media industries collectively accounted for about ___%. A) 24%, 76% B) 76%, 24% C) 89%, 11% D) 11%, 89% Answer: B 1 Copyright © 2020 Pearson Education, Inc.

Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 5) Which of the following statements about Millennials is not true? A) Millennials are more likely to have read a book in the past 12 months than older adults. B) Millennials overwhelmingly prefer e-books to printed books. C) Millennials watch 100 to 130 hours of regular cable TV per month, about the same as older adults. D) Millennials are nearly twice as likely as older adults to use streaming services such as Netflix, Hulu, and Amazon. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 6) In 2018, time spent with digital media accounted for ___ of total media time spent A) 23% B) 33% C) 50% D) 75% Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 7) Which of the following types of online content is consumed by the highest percentage of U.S. Internet users A) digital audio B) video C) digital games D) e-books Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 8) All of the following are examples of technology convergence except: A) the iPad. 2 Copyright © 2020 Pearson Education, Inc.

B) Amazon Books Publishing. C) Apple TV. D) smartphones. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 9) All of the following are aspects of content convergence except: A) language. B) design. C) production. D) distribution. Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 10) Which of the following occurs first in the process of content convergence related to books? A) media integration B) media migration C) media transformation D) media maturity Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 11) Which of the following is not an example of industry structure convergence? A) Amazon’s creation of Amazon Books Publishing B) Verizon’s acquisition of Yahoo C) AT&T’s acquisition of Time Warner D) Apple’s development of the iPad Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 12) Which of the following types of online content is consumed by the lowest percentage of U.S. Internet users? 3 Copyright © 2020 Pearson Education, Inc.

A) e-books B) magazines C) video D) digital audio Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 13) The merger of media enterprises into powerful, synergistic combinations that can crossmarket content on many different platforms is referred to as: A) aggregation. B) repackaging. C) media transformation. D) industry convergence. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 14) DRM refers to a combination of ________ for protecting digital content. A) hardware and software methods B) technical and legal means C) user and publisher agreements D) local and remote policies Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 15) ________ convergence describes the development of hybrid devices that can combine the functionality of two or more existing media platforms into a single device. A) Technological B) Content C) Media D) Industry Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 4 Copyright © 2020 Pearson Education, Inc.

16) Content convergence describes convergence in the design, production, and ________ of content. A) sales B) distribution C) marketing D) consumption Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 17) A business model that uses advertising revenue to provide some content for free, combined with an option to obtain additional content for a price is called a(n) ________ model. A) sales B) distribution C) a la carte D) freemium Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 18) Total music consumption in hours of day listening to music has increased even as sales of CDs have drastically declined. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 19) The average American adult spends twice as much time-consuming media than time spent at work. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 20) The proliferation of mobile device has led to a decrease in the total amount of time spent with media. Answer: FALSE 5 Copyright © 2020 Pearson Education, Inc.

Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 21) The video game industry accounts for the second highest amount of U.S. media revenues. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 22) The time spent on desktop computers and mobile devices now exceeds time spent in front of the television. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 23) The a la carte revenue model allows users to pay only for what they use. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 24) Millennials are the first generation to be born into the digital revolution of the 20th century. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 25) Revenue generated by online TV and movies is expected to grow by nearly 30% between 2018 and 2021. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 6 Copyright © 2020 Pearson Education, Inc.

26) Smartphones are an example of technological convergence. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 27) Cannibalization is a major challenge facing book publishers. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 28) What is DRM and why is it used? Answer: Digital rights management (DRM) refers to a combination of technical (both hardware and software), and legal means for protecting digital content from unlimited reproduction and distribution without permission. DRM hardware and software encrypt content so it cannot be used without some form of authorization, typically based on a payment. The objective is to control the uses of content after its been sold or rented to consumers. Essentially, DRM can prevent users from purchasing and making copies for widespread distribution over the Internet without compensating the content owners. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 29) Explain the concept of media convergence. Answer: The term media convergence refers to digitally based changes in technology platform, content, and industry structure. Technological convergence means the integration of previously separate platform functionality into hybrid devices that can combine the functionality of many different existing media platforms such as books, newspapers, television, radio, and stereo equipment. Content convergence has three dimensions: design, production, and distribution. Content design convergence occurs as content created in an older media technology is transferred into a new technology. Historically the initial transference involves little artistic change, but as the artists and producers learn how to use the new tools and how to deliver content more efficiently in the new media, the new capabilities can be fully exploited, and the art becomes measurably different. Content production convergence occurs when content, which is the most significant cost of content, is developed only once using technology that can deliver it to multiple different platforms. Production convergence drives content convergence as new tools are developed for economically producing content for delivery to multiple platforms. For example, the text produced in a word processing program can be easily converted to an HTML or PDF file for online delivery. Distribution convergence occurs when the distributors and ultimate consumers 7 Copyright © 2020 Pearson Education, Inc.

have the devices needed to receive, store, and experience the product. Industry convergence refers to the merger of media enterprises into powerful synergistic combinations that can cross-market content on many different platforms and create new works that use multiple platforms. Traditionally, each type of media — film, text, music, television — had its own separate industry, typically composed of very large players. However, the Internet has created forces that make the merger of traditionally separate firms in separate media industries a plausible — perhaps necessary — business proposition. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 30) Describe the three basic revenue models for digital content delivery. Answer: There are three revenue models for delivering content on the Internet. The two "pay" models are subscription (usually "all you can eat," meaning the amount of content that you can consume is unlimited), and a la carte (pay only for what you use). The third model uses advertising revenue to provide content for free, often with a "freemium" option, which makes additional content available for a cost. In many cases, all three of the models work in tandem and cooperatively: free content can drive customers to paid content, as streaming services like Pandora and Spotify have discovered. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 31) Discuss the structure of the U.S. media content industry. Answer: The U.S. media content industry prior to 1990 was composed of many smaller independent corporations specializing in content creation and distribution in the separate industries of film, television, book and magazine publishing, and newspaper publishing. During the 1990s and into this century, after an extensive period of consolidation, huge entertainment and publishing media conglomerates emerged. The U.S. media industry is still organized largely into three separate vertical stovepipes: print, movies, and music. Each segment is dominated by a few key players. Generally, there is very little crossover from one segment to another. Typically, newspapers do not also produce Hollywood films, and publishing firms do not own newspapers or film production studios. The purchase of the Washington Post in 2013 by Jeff Bezos, the founder of Amazon, and an Internet mogul in his own right, was an anomaly. Even within media conglomerates that span several different media segments, separate divisions control each media segment. In the past, delivery content firms, such as Comcast, Altice, AT&T, Verizon, Sprint, and Dish Network were not involved in content creation, but instead just moved content produced by others across cable, satellite, and telephone networks. However, within the last several years, this has begun to change. Comcast led the way with the acquisition of a majority interest in NBC Universal. AT&T's merger with Time Warner and Verizon's purchase of Yahoo, along with its previous acquisition of AOL, are signs that the telecommunications companies are moving into the content and distribution market, as well as the Internet advertising industry, in a major way as revenues from traditional cable Internet and wireless business slow. 8 Copyright © 2020 Pearson Education, Inc.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 32) Which of the following has not been purchased or invested in by a wealthy individual with ties to the technology industry? A) Washington Post B) Time Magazine C) The Atlantic Magazine D) The New Yorker Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 33) Which of the following has the highest share of the e-book market? A) Amazon B) Apple C) Google D) Barnes & Noble Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 34) Which of the following happened during the time period when newspapers used a printcentric business model? A) Google launched its search engine. B) Apple introduced the iPhone. C) Facebook opened to the public. D) The adoption of smartphones and tablets has grown rapidly. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 35) ________ were the most troubled segment of the print publishing industry in 2017. A) Books B) Magazines C) Newspapers D) Periodicals Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 9 Copyright © 2020 Pearson Education, Inc.
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