The business of media Do Coca Cola, Gap, HSBC produce their advertising copy directly or do they employ somebody to do it for them? Who do they employ? Who made the radio programmes and music that you listen to? Who owns the Sun, the Guardian, Le Figaro, El Pais? What kind of organisation lie behind them? How can you find out? Who paid for the music playing on the radio?
Media in theUK: Who ownswhat?http://www.mediauk.com/tv
And how’s itdoing?http://www.google.com/finance?q=LON%3ABSYMedia giants in the UShttp://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
The business of media The significance of media organisations as organisations and businesses can often be seen when they themselves are the subject of news stories. http://www.google.co.uk/search?q=rupert+murdock+takeover&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-GB:official&client=firefox- a#hl=en&expIds=17259,22104,27955&xhr=t&q=news+corp+takeover+of+bskyb&cp=8&pf=p&sclient=psy&safe=off&client=firefox-a&hs=5u3&rls=org.mozilla:en- GB%3Aofficial&aq=0&aqi=&aql=&oq=news+corp+takeover&gs_rfai=&pbx=1&fp=f8d6fd944fbe01e9
The business of media The current organisation of the media is neither obvious nor inevitable There’s substantial variety in the nature of the organisations that produce media It’s not always clear who made what But all media organisations are businesses involved in a commercial sphere of exchange – of income generation, of profit and loss. The economics of media applies as much to not-for profit media organisations as it does to for profit organisations We MUST think about the economic environment in which media are produced
Studying media organisations 1. Political economy 2. Organisation approach 3. Cultural approach
Political economy The nature of production and the conditions under which it takes place Where does economic value lie? Where is value generated? How are economic markets managed Are markets regulated? How do the vested interests of individuals impact?
Political economy What is the relationship between a range of meanings available in media and the underpinning economic interests and ownership patterns across different media spheres: The press, Music, TV, Film, Radio, Advertising, The internet Who pays for media at the point of production? What is the primary commodity of any medium? How do consumers pay for this commodity and for the different economic activities of the media?
Critical political economy Power How do government oversee media management and regulation? How does a capitalist economy underwrite the profit impulse of media businesses?
Media and the free marketFree market. (2011, January 12). In Wikipedia, The Free Encyclopedia. Retrieved 17:00, January 12, 2011, fromhttp://en.wikipedia.org/w/index.php?title=Free_market&oldid=407475375
Media and the free market Sir Richard Bransons Virgin media empire has helped to make him Britains wealthiest television and film entrepreneur, with a fortune of £2,600m, according to The Sunday Times Rich List 2010. How does the free market explain such wealth?
Economic value Media products differ from other products because of the combination of the way they generate revenue and in the ways they are consumed Revenue can come from: The final consumer in the form of some kind of payment Selling space in the artefact to advertisers
Audiences as commodity Media do not produce ‘products’ Media produce audiences The pessimistic view – we’re included in a group whose interests we don’t share or we get nothing because we are not attractive enough to advertisers The optimistic view – we get products and experiences that are sharply targeted to our tastes and interests
From product to brand In order to control for uncertainties in the commodity relations (risky or safe?) media use forms of branding to better predict consumer consumption. The importance of branding + synergy (from the Greek = together + work) Synergy is used by media industries to work together to generate greater audiences, publicity, sales and profits New film is released ... What happens? Who coordinates all this activity?
Costs Traditionally, high fixed costs and low marginal costs (music studio + repeated prints) Economies of scale are vital Now ... New publishing paradigm New production technologies New distribution technologies
Size and concentration Concentration Measures the degree to which control of a particular sector of media is in the hands of the most dominant firms. It is usually measured as the percentage of the revenue received by the largest 5 or 10 firms Monopoly and Oligopoly Monopoly describes a condition in which one company or seller has control over the entire market. An oligopoly describes a condition in which sellers are few. This results in the actions of any one of them affecting the market price as well as their competitors.