CASE 14.1 The National Geographic Society In 1888, a group of 33 men met in Washington, DC, to create a nonprofit organization, the National Geographic Society, for the increase and diffusion of geographic knowledge. The founders were engaged in various professions and not all were geographers or explorers. Their goal was to expand public interest and provide education concerning exploration and discovery. The National Geographic magazine was soon launched to further that goal. Gilbert H. Grosvenor would become the societys president in 1899, and he transformed the magazine, expanding its circulation from 1,000 to 2 million (This Day in History, 2019).

During the twentieth century, the magazine became iconic, bringing images of distant places and cultures back to a western audience. Copies were displayed reverentially in peoples homes, and teachers used them as an educational resource in schools. It was trusted and loved (Harvey, 2019). It also became highly profitable and helped to support well-known missions of exploration and discovery, including Robert Pearys journey to the North Pole, Richard Byrds flight to the South Pole, Jacques Cousteaus exploration of the oceans, Jane Goodalls observations of wild chimpanzees, and others (This Day in History, 2019).

Subscriptions to the magazine, which were characterized as membership in the society, reached 15 million by the early 1990s (Hu, 2018). But by the 2000s, print magazines were becoming less popular, and subscriptions to the National Geographic magazine were declining. National Geographic had established a presence on television as early as the 1960s, producing specials for broadcast networks. In 1997, National Geographic moved further into television by launching its own cable channel in Europe. A U.S. channel was created in 2001. The channels initially were successful and profitable, but by 2010, they were competing for viewers against new cable channels. Some thought that the quality of programming had declined, coming to include low-cost, male-skewing reality shows, chasing the audiences of non-fiction competitors like Discovery and History, who were having a lot of success with [shows like] Ice Road Truckers and Deadliest Catch (Harvey, 2019). Subscriptions to the magazine had dropped to 3.5 million by 2015, from 15 million in the 1990s (Hu, 2018). Although the society received gifts of more than $17 million from 70,000 donors in 2016, philanthropy totaled only 15 percent of its revenue (National Geographic Society, n.d.-b). Both the reputation and financial future of National Geographic were at risk.

National Geographic had partnered with 20th Century Fox in creating its first cable channel in 1997, and, in 2015, that partnership was significantly expanded. A new for-profit entity, National Geographic Partners, was created to manage all National Geographic media assets, which included its TV channels and the magazine. The new company would be 73 percent owned by Fox. The National Geographic Society, which continued to be a nonprofit organization, would receive $725 million for its endowment fund as a result of the transaction and 27 percent ownership of the new company (Harvey, 2019). Some people expressed concern about whether the new partnership would inhibit National Geographic in its commitment to science and environmental issues, but later reports indicated that such changes had not occurred (Harvey, 2019).

By 2019, even a media behemoth like Disney found itself challenged by newer options, including Netflix, Prime Video, HBO, and others. In order to expand its own presence, Disney purchased 21st Century Fox for $71.3 billion; the purchase included Foxs interest in National Geographic Partners. (The merger did not include the Fox News Channel, Fox Business Network, or Fox Sports, which continued to be owned by the independent Fox Corporation.) Media assets owned by National Geographic Partners would become part of Disneys new video streaming service, Disney Plus. National Geographic, which had come to be called just Nat Geo, would also become more visible at Disney theme parks and on other TV outlets around the world (Schwartz, 2019).

The merger would enable Disney to face increasing competition from Netflix and other services and bring increased revenue and visibility to the National Geographic Society. But some people again expressed concerns. Would Nat Geo be required to produce venturesome programming that might compromise the seriousness of its brand? Would the need for programs that include drama interfere with Nat Geos ability to present environments as they are? Would the merger result in Disneyfying the natural world (Harvey, 2019)?

The National Geographic Society remains a global nonprofit organization that uses the power of science, exploration, education and storytelling to illuminate and protect the wonder of the world. Through supporting research, exploration, conservation, and education, National Geographic works to achieve three strategic aims: inspire people to place greater value on the natural world and its people; secure the natural systems essential for all life on Earth; and drive innovation that helps create a planet in balance (National Geographic Society, n.d.-a). Its work includes grants to support projects related to these aims (National Geographic Society, n.d.-c).

Questions Related to Case 14.1 Where in Figure 14.1 would you place the National Geographic Societys relationship with for-profit National Geographic Partners? Considering Figure 14.3, what leverageable assets did National Geographic possess that made it an attractive partner for 21st Century Fox and later for Disney? How might the National Geographic Society have evaluated the possibility of its partnership with 21st Century Fox with regard to the information presented in Table 14.1 in this chapter? Some people expressed concerns about National Geographics partnership with 21st Century Fox as well as the subsequent purchase of National Geographic Partners by Disney. How do the concerns described in this case relate to those discussed in the section of this chapter titled Sorting Out the Issues? Do you share any of these concerns? If so, why? Reflecting back on the discussion of brands in Chapter 10, do you think the partnership with Disney will affect Nat Geos brand? If so, in what ways and why?

Figure 14.1 Earned-Income Strategies

The two types of earned-income strategies are corporate partnerships and business ventures.

Corporate partnerships:

Licensing Sponsorship Cause-related marketing Other strategies, such as operational relationships, joint ventures, etcetera Business ventures:

Services Products Distribution and retail

Source: Adapted from Community Wealth Ventures (now Community Wealth Partners), 2001, p. 7. Used with permission.

Figure 14.3 Leverageable Assets

The data from the chart are as follows:

Things you have:

Physical assets Location and space Distribution and sales network Brand and reputation Patent Access to desired resource Relationships such as membership, suppliers, etcetera Things you do:

Continuously innovate Manage information Produce low-cost goods Sustain privileged assets Interact with clients Manufacture products Produce events Things you know:

Understanding of specific issue Process expertise Market expertise People and key decision makers

Source: Community Wealth Ventures (now Community Wealth Partners), 2001, p. 14.