E-business in the entertainment sector: the Egmont case

摘要

The new millennium has seen the rise and the fall of ‘dotcom’ firms, coupled with hype and disappointment over what the Internet will bring to business. While investors may have taken a dislike to web-based firms, problems of embracing or responding to the Internet challenge remain for managers of established firms. For instance, Gartner (2001, quoted after The Economist 2002) predicts that 70% of firms will have an incoherent e-business strategy within a year. For existing players it may be simple to set up a web-presence, but it is difficult to create a sustainable business model. This is especially true for industries in which many large, established firms face tremendous changes in both product design and business processes; for instance, those that deliver digital, or digitisable, goods. The media sector, and more specifically the entertainment sector, are prime examples. This paper investigates challenges and issues for entertainment firms active in different stages of the entertainment value chain. While they operate in a growing market, the digital character of their products places them at the centre of industrial changes triggered by the Internet and other new media. The paper provides an analysis of the changing business environment for media firms, investigates the specific approach chosen by one major player, Egmont, and concludes by assessing the important factors for media firms doing successful and profitable business in the new era. While the focus of this case is retrospective—considering the market at the time of Egmont's deliberations—the paper has the benefit of hindsight in terms of e-business developments and outcomes.