Reading Passage Question
The new millennium is poised to intensify competition as never before. The digital age is well and truly here. In the US, more than a third of consumers will be looking at some form of digital appliances by the turn of the century. TV signals, superfast cable modems linked to computers are all contributing to this explosion. Intensifying competition will eat into the earnings of networks, cable operators, and Internet start-ups.
This explosion has made it attendant upon media companies to consolidate themselves. And small is no longer beautiful. General Electric’s NBC-TV network is reportedly a likely target. Time Warner Inc Vice-President Ted Turner has already evinced his interest in adding NBC to his company’s cable systems CNN and WB Television network. Barry Diller of USA Networks is also contemplating the merger of his shopping network’s 12 TV stations.
Ironically, the continued fragmentation of the media market will enable the broadcast networks to rake in the money despite their falling viewership. Though the beginning of the Millennium is going to see viewership of the four big networks plummet, network advertising is expected to increase over 1999 and the contribution to this will come from the Summer Olympics, media buying for political campaigns and so on.
The battle between cable TV and direct-broadcast is expected to be the deadliest. With restrictions removed on satellite operators beaming local channels to their customers, vast opportunities beckon satellite operators. And they will keep offering cut-rate equipment in an effort to gain market share – they could pull in 33% more subscribers. The competition with satellites will force cable to offer digital services, Internet access, and a larger number of cable channels. The number of people having access to two-way Internet service will close to double. This will enable cable operators to generate $33 billion in revenues, a robust hike of 12%. Adding to their coffers would be steep increases in pay-per-view revenues and Internet access fees.
With computer prices in the US dropping to under $600, nearly two-thirds of US customers will have on-line access in 2000. This would lead to advertising revenues of $4.7 billion for Net sites in 2000. After realizing the futility of trying to proscribe consumers from down-loading music, major music companies have decided to sell music down-loads of major artists. Universal Music, the world’s largest music company will begin selling downloads along with Bertelsmann and Sony Music.
As the convergence of TV and computer comes into its own, large media companies will have a tough job on their hands trying to prevent the loss of audiences to other on-line diversions. Hollywood studios will find their ability to produce content richly rewarded. DVD sales are expected to double in 2000. Studios can make a lot of money by repackaging movies already sold into the DVD format. Will the DVD boom undermine the movie boom being experienced by Hollywood? This is brushed aside with disdain by movie moguls.
“The New Millennium is Poised to Intensify Competition as Never Before” is a GMAT reading comprehension passage with answers. Candidates must have a solid grip in English GMAT reading comprehension. There are 4 multiple choice questions in the above GMAT Reading Comprehension passages. GMAT Reading Comprehension Questions are delineated to evaluate candidates’ abilities to analyze and be conceptual for the answers. Candidates can brace up and take preparation by answering GMAT Reading Comprehension Practice Questions.
Solution and Explanation
- Of the following, the most suitable title for the above passage would be
(A) The Era of Convergence
(B) Opportunities in the Media Business
(C) The Digital Explosion
(D) The Expanding TV Networks
(E) Competition in the New Millennium
Answer: C
Explanation: Option(C) can be treated as the correct answer for the above question. The passage states that the digital age is well and correct. In the US, most of the consumers will be looking at a few forms of digital appliances between the end and the starting of the century. This explosion is occuring due to TV signals, swift cable modems which are connected to the computers. Earning of the networks will be harmed due to excessive competition, and start-ups of the Internet connection.
The digital explosion has made it accompanied upon media companies for their strengthening.
- The irony expressed at the beginning of Paragraph 3 is that
(A) as competition among media giants has increased, the viewing patterns across the US have fallen.
(B) the revenues of the media broadcasting corporations will continue to grow even though the industry is marked by mergers and acquisitions.
(C) even as the large TV networks attract lesser number of viewers than before, their advertising revenues will rise at a faster rate.
(D) as the digital age descends upon the media world, the smaller players are likely to become targets of acquisition by the larger players.
(E) the revenues generated by large corporations are on the increase even though the number of people watching their broadcasts is getting reduced.
Answer: E
Explanation: The beginning of the third paragraph states something ironic. It describes that the clash in between cable TV and direct-broadcast is expected to be dangerous. Vast opportunities signals to the satellite operators with the removal of prohibition on satellite operators, broadcasting local channels to the customers. They continue to keep offering reduced rate material in order to gain profit in the share market. The share where they could increase more subscribers by 33 percent. So, option(E) is truly giving justice to the question.
- Which of the following best describes the reaction of the music companies in the Internet age, as described in Paragraph 5?
(A) If you can’t beat them, join them.
(B) You cannot stop an idea whose time has come.
(C) Technology rules the world.
(D) Those who adapt, survive.
(E) The core of our defense is the faith we have in the institutions we defend.
Answer: B
Explanation: We can conclude that option(B) covers all the possible parts of the question. It is said that with the decreasing prices of the computer in the US by $600, almost two-thirds of customers thrived to online access in 2000. This directed to advertising revenues of $4.7 billion in 2000 for Net sites in the year of 2000. Major music companies decided to sell the music of important and famous artists. They decided this after being conscious about the ineffectiveness of trying to prescribe the customers from downloading music. Along with Bertelsmann and Sony Music, Universal Music, which is the world’s largest music company, also began to sell the downloads.
- The most logical continuation of the passage would be a discussion on
(A) why the magic of Hollywood movies will endure.
(B) how the convergence of the TV and the computer will affect the media market.
(C) what the future holds for the DVD market.
(D) how the DVD and the Hollywood business can co-exist and continue to flourish.
(E) why the movie moguls can afford to overlook the DVD rush.
Answer: D
Explanation: The passage defines that the famous music companies are determined to sell music downloads of the important artists. They became determined after they realized the ineffectiveness of convincing the customers to download the music. Hollywood studios are able to find their capacity to make highly rewarded content. DVD sales were expected to increase double in the year of 2000. Studios were thought to be able to make more bucks by repackaging movies which are already sold on DVD. Hence, option(D) would be regarded as the logical statement of the passage.
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