Theories of Media Economics

by

Gracie Lawson-Borders

• LAST REVIEWED: 12 September 2014
• LAST MODIFIED: 26 June 2012
• DOI: 10.1093/obo/9780199756841-0118

Introduction

The business of media includes economics and research, and studies in the field examine numerous aspects of economics in the industry. The statement has increased in its impact in the digital economy, in which the digitization of data has had a profound effect on the operations of media organizations. The old commercial model based on two primary revenue streams of advertising and paid subscriptions has been usurped by a plethora of entry points in the digital arena. Theories are used to help explain this phenomenon, and as the field of media economics grew, the number of theories, paradigms, and approaches flourished. In addition, theories from other fields are used to study media industries. Research dating to the 1960s examined economic aspects of communication and media in numerous journals. Early research through the 1980s examines the economics of media, the makeup and strategies of organizations that capitalize on their audience and delivery of content. Theories from business and management relative to innovation, markets, and vertical and horizontal integration have been used to address media economics. As the field and scholars expanded the research throughout the latter part of the 20th century, more work honed in on the specifics of media industries and challenges faced due to the particulars of the field, from regulations to advertising and changing markets. In 1995, a special issue on theory and media economics in the Journal of Media Economics, cited under Journals, included work by scholars with various focus across industries on the business of media and economics. The field received a boost with the publishing of the Handbook of Media Management and Economics (Albarran, et al. 2006, cited under Central Texts). The edited text is a compilation of scholars addressing theories, methodological tools, application, emerging technologies, and other changes. Economist Eli Noam (Noam 2009, cited under Central Texts) provides a different perspective in his concentrated look at media ownership and concentration inclusive of the financial elements, markets, and strategies that have facilitated mergers and acquisitions, which created corporations with billion-dollar assets and vast influence on the public. Media economics focuses on the strategies and operations of media companies. In the following sections are samples of research, through articles and books that provide insight into scholarship examining the economics of media.

Central Texts

Numerous texts have been published on media economics, and the list continues to grow. The works listed here are beneficial for examining the changing landscape of economics and media. Albarran, et al. 2006 serves as a close analysis of the scholarship that exists, as well as raising questions for new trajectories. Croteau and Hoynes 2006 offers a look into the business of media from the financial concerns of media companies to the public interest need in US media. For an exploration of the theories and practices of media economics, Alexander, et al. 2003 looks at various media businesses within the industry. Compaine and Gomery 2000, in a seminal work, offers an overview of media industries to create a detailed picture of the makeup of different media industries. Doyle 2002 takes a look at concepts and trends integral to understanding how various media operate. Küng 2008 takes the perspective of strategic management and uses several international media organizations as examples. Another in-depth look at media industries over a twenty-five-year period can be found in Noam 2009, which examines concentrated ownership of large conglomerates. Picard 2003 provides a good look at the successes and failures of different media organizations and takes into account all the variables affecting the industry. The texts highlight research that addresses the visceral nature of the media business and economic exigencies of a changing environment. The emerging digital technologies from the 20th century into the 21st century have challenged and reshaped the study of media economics.

• Albarran, Alan B., Sylvia M. Chan-Olmsted, and Michael O. Wirth, eds. 2006. Handbook of media management and economics. Mahwah, NJ: Lawrence Erlbaum.

  This edited book takes a broad look into the economics of media. There are thirty chapters that serve as a compilation of work by numerous scholars. The introductory chapters establish the foundation for the works that address everything from economics and management of different media industries to theories, methodological tools, application, emerging technologies, and future work in the field.

• Alexander, Alison, James Owers, Rodney A. Carveth, C. Ann Hollifield, and Albert N. Greco, eds. 2003. Media economics: Theory and practice. 3d ed. New York: Routledge.

  Examines theory and practice of media economics, through examination of media industries and strategies that affect markets, financing, and management of such industries. Third edition includes chapters on the Internet, advertising, and book and magazine publishing. Looks at media economics through a lens of how it works, the techniques and strategies used by media organizations in an evolving business environment.

• Compaine, Ben, and Douglas Gomery. 2000. Who owns the media? Competition and concentration in the mass media. 3d ed. Mahwah, NJ: Lawrence Erlbaum.

  First published in 1979, this seminal text gives a detailed look at the intricacies of the financials, management, competition, and systems of media. The authors have aggregated the dynamics of the media industry by chronicling the ownership, operations, and financials of corporate media. Includes statistics on the financials of the various industries.

• Croteau, David, and William Hoynes. 2006. The business of media: Corporate media and the public interest. 2d ed. Thousand Oaks, CA: Pine Forge.

  Provides an analysis of the media business that incorporates a market model and public sphere model to examine media. The authors use social and economic theory to provide a critical view of how media operate economically and of the societal influences of media. The second edition includes the influences of technology, conglomeration, and mergers that have affected media into the 21st century.

• Doyle, Gillian. 2002. Understanding media economics. London: SAGE.

  The author connects the business of media with the economics of media, by examining concepts pertinent to the operation of media organizations. Concepts addressed include numerous corporate finances, resources, markets, advertising, and economies of scale. The book examines the makeup of television broadcasting, print media, and film, and the early evolving of what was called new media.

• Küng, Lucy. 2008. Strategic management in the media: Theory to practice. London: SAGE.

  The book provides insight on strategic management from the internal mechanisms that guide media organizations to success. The media industry, from print to broadcast and new-media technologies, is examined to provide insight into theories, concepts, and practices used to reach audiences and maximize profits. Several media organizations such as CNN, the BBC, and others are used to illustrate how concepts are put into practice.

• Noam, Eli M. 2009. Media ownership and concentration in America. New York: Oxford Univ. Press.

  DOI: 10.1093/acprof:oso/9780195188523.001.0001

  The author presents an in-depth look at more than twenty-five years of data on the media industry, and the exigencies that have created powerful concentration ownership of markets, with transnational corporations leading the way. The business and economic strategies employed through the decades fueled mammoth media machines. The business of media and economics is examined through a lens of concentration and ownership.

• Picard, Robert G. 2003. The economics and financing of media companies. New York: Fordham Univ. Press.

  This seminal work provides grounding for understanding media economics and its application to the media industry. Explains the intricacies that allow some media to prevail and some to misstep when market, product, competition, regulation, globalization, and other economic factors that contribute to success are not acknowledged. This work is a useful book for students, teachers, and practitioners for examining the media industry.