Characteristics of Media Management

Media Management Characteristics

• Economic competition constitutes a dynamic process in markets.. • An overview of the relevant markets is provided in Figure 2‐

1. • The specific characteristic of media enterprises consists of

the fact that they sell their services not only in one, but two business markets simultaneously.

Fig 2.1

Media Management Characteristics

• The services that media enterprises provide usually take the form of a service package of information and entertainment (content) on the one hand, and advertising space on the other. • Both these partial services are traded

on different markets. For the content, the consumer markets are relevant. The advertising spaces, however, are traded on the advertising markets to advertising customers.

Media Management Characteristics• Media enterprises do not usually

produce all the content that is contained in their service packages themselves. • For that reason, the procurement

markets for the content are also important in both the information and entertainment areas. • Furthermore, the procurement markets

for content also constitute, to some extent,business markets. • The enterprises can, for example, purchase

the complete rights to an event and then resell them in the form of secondary utilization rights.

Structure of interdependence in media markets

Multi Dimensional Competition

• The competition between media enterprises can be analyzed according to different dimensions.• The first dimension is the type of competition. • The second dimension constitutes the different

submarkets in which the media enterprises compete with one another.

• The difference between intramediary and intermediary competition is the third dimension of competition.

• Finally, the fourth dimension concerns the object of competition itself and thus raises the question of what it is for which the media enterprises are competing.

First Dimension• In the first dimension of competition among media enterprises, one

distinguishes between the types of competition, i. e. between economic and journalistic competition.• Competition is labeled economic competition if its standard for success is

expressed monetarily and can be measured in profits, market shares or sales figures.

• Journalistic competition, however, is subject to qualitative measures of success such as the timeliness of the information, diversity of opinion or balanced reporting.

Second Dimension

• In the second dimension, a submarket analysis of the competition is generated. • Here the competition in the recipient markets for

media enterprises is the most important one because a significant portion of the revenues is realized in the recipient market on the one hand, and success in the recipient markets has a major influence on the success in the advertising market on the other.

“More Readers Means More Advertising Revenues As Companies would want to advertise in that media”

Third Dimension

• The distinction between intermediary and intramediary competition constitutes the third dimension of media competition. • On the one hand, all media productions

are subject to competition that is intrinsic to their category. This is called intramediary competition because here the differing products of one media category compete with each other in all the markets.

Fourth Dimension

• The question of the object of competition as the fourth dimension of media competition is relevant only for the consumer market.

• Whereas the competition for the advertising sales in the advertising markets and in the content‐procurement markets is determined by attractive content, the competitive situation in the consumer markets is ambiguous.

• On the one hand, media enterprises compete for expenditures of purchase of media products, but on the other hand, they also compete for their time budgets and the attention of their recipients.

Vs.

Customers are driven to particular channels that buy superior advertising content• http://adsoftheworld.com/media/tv/google_google_app_how_to • http://adsoftheworld.com/media/tv/loreal_true_match • http://adsoftheworld.com/media/tv/nike_the_next_wave • http://

adsoftheworld.com/media/tv/horror_channel_frightfest_wearehorror • http://

adsoftheworld.com/media/tv/dove_chocolate_each_and_every_day • http://adsoftheworld.com/media/tv/hsbc_super_rare • http://adsoftheworld.com/media/tv/pedigree_mothers • http://adsoftheworld.com/media/online/nike_nike_soul

Product Specifications

• The first and most serious mistake that an analyst of the television industry can make is to assume that TV stations are in business to produce programs. They are not.• TV stations are in business of producing

audiences.• These audiences, or means of access to them, are

sold to advertisers

Media Products as Combined Products

• Media revenue can usually be broken down into sales and advertising revenues.• The media enterprises seek to attain the highest

possible number of target group contacts while simultaneously minimizing wastage.

Media Products as Combined Products

• Because the service in the advertising market cannot be rendered independent of the service in the recipient market, but rather both service components are combined into one end product, the media production is a combined production.

Media Products as Combined Products

Media Products as Public Goods

• Media products exhibit some of the characteristics of public goods. • Features of public goods are the non‐exclusivity of

consumption and non‐rivalry in consumption. • The non‐exclusivity of consumption denotes the fact that no

recipient can be prevented from using a public good. The use of the good cannot be made dependent on remuneration. • The second feature, non‐rivalry in consumption, is related to

the fact that the consumption of the individual recipient does not limit the consumption of the other recipients.

Media Products as Services

• Media products are a composition of tangible assets and services. • The immateriality of the product, the allocation of

service productivity in the form of personnel, material or immaterial resources and the integration of external factors are considered constituent characteristics of services.

Media Products as Meritoric Goods

• Media products are frequently denoted as meritoric goods, because the demand for them is too small in comparison with the societally desired level of penetration that is determined by state decision‐makers.• Therefore, it is concluded that the consumer preferences are to

be adjusted through subsidization or consumer stress/pressure to consume. • This is reflected, for example, in the lower sales tax for printed

products or fixed book prices that are justified by the goal of promoting diversity of opinion and providing a diversity of information.

Media Products as Meritoric Goods

• Media products are frequently denoted as meritoric goods, because the demand for them is too small in comparison with the societally desired level of penetration that is determined by state decision‐makers.• Therefore, it is concluded that the consumer preferences are to

be adjusted through subsidization or consumer stress/pressure to consume. • This is reflected, for example, in the lower sales tax for printed

products or fixed book prices that are justified by the goal of promoting diversity of opinion and providing a diversity of information.

Quality of Media Products

• It is precisely the quality of media products, because of its purely subjective measurability, that is an important factor for media and internet management. • Indeed, in journalism, the timeliness, relevance,

correctness, and procuration of information are overwhelmingly cited as objective criteria for quality of media products

Quality of Media Products

• However, management’s limited influence on the quality of media productions is due to the fact that the media productions are creative processes that frequently cannot be standardized

Quality of Media Products

• In principle, three characteristics of quality can be drawn from the consumers‘ perception of quality assurance: search qualities, experience qualities and credence qualities.

• Search qualities can be assessed by the consumer, at least in part, through inspection prior to purchase.

• Experience qualities can only by assessed after consumption of the product.

• With respect to credence qualities, the consumer has no opportunity to assess the quality even after consumption of the service

• https://www.youtube.com/watch?v=dHeJFwVMvDI

Quality of Media Products

Market Structure

• For media and internet management, two aspects of the market structure are of special significance: the concentration, i. e. the structure of the suppliers and consumers in the respective markets and the market entry barriers that exist for established and potential suppliers.

Market Entry barriers

• Market entry barriers are defined as “anything that requires an expenditure by a new entrant into an industry, but imposes no equivalent cost upon an incumbent“.• They decrease the probability of the entry of a new

supplier into a market and in this manner, protect the established enterprises. • There are three different kinds of market barriers:

structural, strategic and institutional market entry barriers.

Structural Market Entry Barriers

• Structural market entry barriers are created by the product characteristics and the media production process. Economies of scale and network effects, exchange costs, increasing returns and the spiral effect all belong to structural market entry barriers.

Strategic Market Entry Barriers

• Strategic market entry barriers are constructed by market participants in order to prevent the entry of new suppliers in the market. • Product differentiation strategies work as strategic

market entry barriers. They serve to exhaust the market potential in order to reduce the sales potential for new suppliers.

• https://www.youtube.com/watch?v=d-WlxLbIAgg

Institutional Market Entry Barriers

• Institutional market entry barriers are barriers justified by legislative or administrative measures. • It is especially the areas of TV and radio that are

affected by institutional market entry barriers, because they are mostly subject to strict regulation.