The End of Accounting and the Path Forward for Investors and Managers

Chapter 12Strategic Resources & Consequences Report: Case No. I—Media and Entertainment

Customers are the most important strategic asset of media and entertainment companies, particularly because in most subsectors, the customers’ identity is known to the provider of services, enabling active management of the customer franchise. Achieving sustained competitive advantage in media and entertainment is a major challenge due to fierce competition and low entry barriers. Accordingly, detailed information on companies’ strategic resources, their vulnerabilities, deployment, and productivity is essential for investors and lenders to make successful investment decisions and monitor managers. In this chapter, the proposed Strategic Resources & Consequences report will first be demonstrated on a specific company—Sirius XM—to highlight the unique investor insights offered by our proposal, followed by the outline of a general resources & consequences report for media and entertainment companies. The chapter provides a new indicator: an estimate of the lifetime value of the subscriber franchise, the main strategic asset of the company.

This is the first of four detailed case studies, each for a major economic sector, intended to demonstrate with specificity our proposal for the new information disclosure: the Strategic Resources & Consequences Report. We open our case studies with a large, vibrant, and very innovative sector—media and entertainment.

Sector Synopsis

Media and entertainment ...