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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

Media Economics

J201 Mass Media & Society

November 22, 2013

Economics a standard definition
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
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).

Economics can also influence
Economics Can Also Influence:

  • Decisions about:

    …What? (Production)

    …For Whom? (Allocation)

    …How? (Capital, control, organization)

    …And WHY?

Time warner
Time Warner

  • 32,000 employees worldwide

  • TV, film, publishing, websites

  • Revenues from:

    • Content (43% of revenues)

    • Subscriptions (33%)

    • Advertising (21%)

    • Other (3%)

Walt disney company
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


  • 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

Nbc universal

Comcast = video, high speed Internet and phone services

GE =aircraft engines, power generation, water processing, medical imaging, NBC Universal

News corporation
News Corporation

  • 51,000 employees


Direct Broadcast Satellite TV

Newspapers and Information Services

Book Publishing

Integrated Marketing Services

Filmed Entertainment


(advertising, digital)

Cable Network Programming

  • 29 TV stations

  • 130 radio stations

  • Book publishing: Simon & Schuster, Scribner, etc.

  • CBS Films

  • CBS Outdoors

  • CBS Records (TV show soundtracks)

Sony corporation
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

Some other major media corporations
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)

Video the impact of media ownership
Video: “The Impact of Media Ownership”

Structural trends in the media industries
Structural Trends in the Media Industries

Structural trends
Structural Trends

  • 3 goals

  • Economies of scale

  • Synergy (development and promotion)

  • Branding

  • Segmentation/specialization

  • Diversification

  • Globalization

  • Joint ventures

Purpose of media
Purpose of Media?

Purpose of media1
Purpose of Media?



Public service

Make money



Other purposes?

Balance purposes with needs of stakeholders
Balance Purposes with Needs of Stakeholders

  • What are stakeholders?

  • Who are media’s stakeholders?

  • What do these stakeholders need/want?

Where does the public interest fit in and why does it matter
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?

Media the public interest
Media & the Public Interest matter?

  • 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”