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Media Economics

Media Economics. J201 Mass Media & Society November 22, 2013. Economics: A Standard Definition. The study of how societies use scarce resources to produce valuable commodities and distribute them among various groups (allocation of resources) . Media Economics defined:.

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Media Economics

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  1. Media Economics J201 Mass Media & Society November 22, 2013

  2. Economics:A Standard Definition • The study of how societies use scarce resources to produce valuable commodities and distribute them among various groups (allocation of resources).

  3. Media Economics defined: “The study of how media industries use scarce resources to produce content that is distributed among consumers in a society to satisfy various wants and needs” (Albarran). “A term employed to refer to business operations and financial activities of firms producing and selling output into various media industries” (Owers et al).

  4. Economics Can Also Influence: • Decisions about: …What? (Production) …For Whom? (Allocation) …How? (Capital, control, organization) …And WHY?

  5. Major Media Corporations

  6. Time Warner • 32,000 employees worldwide • TV, film, publishing, websites • Revenues from: • Content (43% of revenues) • Subscriptions (33%) • Advertising (21%) • Other (3%)

  7. Walt Disney Company Breakdown of Revenue Sources, FY2010 • 149,000 employees • Some key recent acquisitions: • 2006 = Pixar • 2007 = Club Penguin • 2009 = Marvel Entertainment • 2010 = Playdom Source: Standard & Poor’s

  8. Segments: • Media networks (62% of FY 2010 revenues) • Entertainment (38%) • Ad sales, feature films, affiliate fees, TV licensing, ancillary sources (incl. merchandise) • More than 2,000 websites • Distribution partnerships with Hulu, Netflix, Microsoft, Yahoo, Bebo, Veoh, etc. • 159 channels in 159 countries in 30 languages

  9. NBC/Universal Comcast = video, high speed Internet and phone services GE =aircraft engines, power generation, water processing, medical imaging, NBC Universal

  10. News Corporation • 51,000 employees Television Direct Broadcast Satellite TV Newspapers and Information Services Book Publishing Integrated Marketing Services Filmed Entertainment Other (advertising, digital) Cable Network Programming

  11. 29 TV stations • 130 radio stations • Book publishing: Simon & Schuster, Scribner, etc. • CBS Films • CBS Outdoors • CBS Records (TV show soundtracks)

  12. Sony Corporation • Principal business segments: • Consumer & Professional Devices • Networked Products & Services • Pictures (movies, TV, etc.) • Music • Financial Services • Sony Ericsson • Other (Blu-Ray, DVD, CD manufacturing, plus other) • 168,200 employees

  13. Some Other Major Media Corporations • Publishing: Tribune, Gannett, Hearst, Bertelsmann • Telecom: Verizon, AT&T, T-Mobile, Sprint, Charter Communications • Tech: Apple, Google, Microsoft, Yahoo! • Radio: Clear Channel (owned by Bain Capital/Thomas H. Lee Partners)

  14. http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6

  15. Video: “The Impact of Media Ownership”

  16. Structural Trends in the Media Industries

  17. Structural Trends • 3 goals • Economies of scale • Synergy (development and promotion) • Branding • Segmentation/specialization • Diversification • Globalization • Joint ventures

  18. Purpose of Media?

  19. Purpose of Media? Information Entertainment Public service Make money Communication Influence Other purposes?

  20. Balance Purposes with Needs of Stakeholders • What are stakeholders? • Who are media’s stakeholders? • What do these stakeholders need/want?

  21. Where does the public interest fit in? And why does it matter? • History of media • Print, broadcasting • FCC, Radio Act of 1927: “serve the public interest, necessity and convenience” • What about the introduction of newer media?

  22. Media & the Public Interest • Information should circulate freely • Ownership should be broad and diversified • (Some) media should be publicly accessible “Serve” vs. “Target” “Citizens” vs. “Consumers” “Consumer control” vs. “consumer choice”

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