Media Industries in the Digital Age (eBook)

How Media Businesses Work Today

Amanda D. Lotz, Timothy Havens (Autoren)

eBook Download: EPUB

2024
283 Seiten
Polity (Verlag)
978-1-5095-6592-4 (ISBN)

Infos

The digital communication technologies that emerged at the turn of the century have profoundly disrupted long-practiced norms of nearly every media industry. In particular, internet distribution has fundamentally changed the foundation of the media industry to enable the emergence of new sectors while posing a challenge for others.
 
Media Industries in the Digital Age reframes our understanding of media businesses in the light of these substantial changes. To develop an integrated understanding of media industries today, the book foregrounds the different funding sources that are now common. It begins by mapping the foundations and developments of media industry operation, and exploring all forms of advertiser-funded and consumer-funded media to identify connections across sectors, including digital and legacy media. The final section grounds the book's conceptual work in examples of media making to explore how some 'old' media have successfully adapted to internet disruption, and the differences and similarities of media making outside of corporations. Looking to the future, the book anticipates implications for the emerging 'metaverse' media experiences and the key issues generative AI poses to the sector. Ultimately, the book argues that the contemporary differences in media industry operation vary by sector, but meaningful patterns can be identified by considering how advertiser, consumer, or government funding sets different priorities.
Offering a new and original way of understanding the media industries today, this book is enlightening reading for students and scholars of media studies and media industries, as well as global industry professionals

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2
What Everyone Needs to Know about Media Industries

Media industries have particular attributes that lead them to operate differently than many other industries. Some of the difference comes from the nature of the goods they make. Different consumers seek different things from stories, songs, and news, and the same consumer may even want quite different things at different times to an extent unusual in other sectors. Other differences stem from how we use media in ways unlike many of the durable and consumer goods that form the basis of a lot of economic and business theory. We’ll focus on three distinct attributes of how media industries operated in a complex-professional mode for much of the twentieth century. The account highlights key attributes, but in practice each attribute intersects with the others to make their implications difficult to tease apart.

The unpredictability of media goods is one such attribute, a feature that has been described by economist Richard Caves as the “nobody knows” property.1 In many industries, if you were preparing a new product, you would do market research to assess demand for the product and design and redesign it to encompass the features most desirable to your core market. Such a development process doesn’t work for media. Think of the songs or movies you love the most. Could you have described to a creator how to make them? Often an idea sounds good, but the execution just doesn’t work as imagined. Commercial media are made to attract the attention or payment of audiences but are also expressions of artistry by creators who combine their own desire for creative expression with an intuitive sense of what might appeal to audiences. (For some, creative expression is the priority, others are more concerned with commercial success. This is one of those “pinball game” moments where variation comes into the process.)

Perhaps as a consequence, most media goods are commercial failures. Certain data are difficult given the scale of media production and the lack of public records, but generally the Pareto principle, or the 80/20 rule, is regarded as a norm; in other words, 20 percent of media goods produce 80 percent of the revenue. Research by Alderman in 1999 found that just 88 hit recordings, or 0.03 percent of releases, accounted for 25% of sales; or more recently, Luminate Data reported that in 2023, 45.5 million tracks had zero streams.2 When we think about media industries, our brains automatically bias toward content we know about, and if we know about it, it is more likely to be a success. We are largely unaware of the 80 percent of media goods that contribute much less to media companies. The businesses of complex-professional media are based on balancing a portfolio of spending in which a small percentage of goods are “hits” that allow many others an unsuccessful turn “at bat.”

Unpredictability combines with the second peculiar attribute of media industries: substantial sunk costs or high “first copy” cost. These terms describe how media industries must spend nearly the entire cost to make and circulate their products before knowing how audiences regard them. For instance, filmmakers must make a complete movie, sometimes spending hundreds of millions of dollars, before having any indication of whether audiences will turn up to see it or what level of revenue is likely to be earned. The unpredictability of the industry exacerbates the requirement of committing the full expense before having a sense of the good or being able to earn any revenue from it.

Contrast the norms of many typical industries that can have a more iterative process of design and product testing. In the car industry, a significant amount of money may be sunk into development – for instance, to designing a new car model. But an automaker then makes prototypes of the car to test it with consumers before committing to dedicating production lines and spending the significant costs of manufacturing each car.

The high first-copy costs of media industries are a challenge, but somewhat balanced by another attribute, their low-to-no marginal cost. Marginal cost describes the costs required to make each unit – for automobiles, the steel, glass, and components that go into each car – which are in addition to the first-copy costs of designing the vehicle. In the media industries, first-copy costs (the substantial costs of making the master copy of a movie or album; the costs of reporting a news story) are offset by the fact that there isn’t significant cost added for each additional consumer.

Low marginal cost was a significant distinction to the operation of media industries even before internet distribution, but internet distribution has reduced marginal cost to seemingly nothing. Before internet distribution, written news stories needed to be printed on a physical good (paper), while songs were bundled together and sold on vinyl, tapes, or CDs. Those physical goods introduced marginal costs: the raw material, the manufacturing process, moving the goods from factories to stores. But even with those costs, the main expense was in the making of the music reproduced on the album, the movie on the DVD, or crafting the novel printed in a book. Before digital technologies, media industries developed practices of bundling together songs into albums or many stories about news, sports, and general interest into newspapers precisely because the economics of releasing each song or story separately made little sense when they had to be distributed on a physical object.

Another attribute of media goods is that they are what economists describe as a public good, or a good that is not used up by one person’s consumption. For example, a bottle of soda is a private good. If you drink it, no one else can. But if you watch a movie, that doesn’t diminish others’ capability to consume it as well. The attributes of low or no marginal costs along with the attribute of not being used up by one person’s consumption explains the twentieth-century norm of mass media; in other words, media designed to reach a broad and heterogeneous audience. The commercial media industries have sought to take advantage of the low marginal cost by seeking scale, whether delivering the most attention or the most possible buyers of movie tickets or CDs.

These three attributes – unpredictability, high first-copy costs, and low-to-no marginal costs – profoundly distinguish the operation and strategies of media industries from many other industries and have been core to the strategies that media industries developed relative to twentieth-century distribution technologies. In later chapters, we’ll address those strategies and how the capabilities of internet distribution have changed their effectiveness. But before moving on, it is helpful to identify a few less defining, but still important, attributes that lead to the peculiar operation of media industries.

Many industries make products aimed to solve a problem faced by consumers, and their design and development process focuses on finding the most effective and elegant way to achieve that end. Media industries blend aspects of art and commerce that make such rational practices difficult and introduce entirely different motivations for creators as well as different ways to gauge success. Some media creation focuses on the commerce side of the balance. Studios spend exorbitantly on “blockbuster” movies with the aim of creating widely popular international hits and spend considerable sums on promoting them. In other cases, studios fund movies they expect to win significant creative awards and to bolster their reputation in the creative community as an organization that cares about artistic innovation. The value of those awards and reputational lift may not be apparent in the calculation of profits, but both media companies and media workers have historically been motivated by factors other than just commercial success. Economist Richard Caves termed the uncommon motivation of many working in media industries that drives passion projects as making art for art’s sake.

Creating art for art’s sake is not the aspect of media making that is the focus of a book about media industries, but it is a crucial motivation of workers in media industries that is less evident in most others. Even when making resolutely “commercial” films, creators may find ways to subtly incorporate stories or characters that align with artistic goals, or they may make some commercial films to pay the bills so that they have time for more artistically driven projects as well. Many media industries structure the work creatives do on a project-by-project basis that both makes their employment precarious but also affords the agency to select projects and pursue them in accordance with artistic passion. The point here is that art for art’s sake is a notable motivator in media industries and its rarity in other industries leads it to not be considered in business perspectives. But any attempt to understand media industries must take art and creativity into account.

Another unusual aspect of media industries is the long period of revenue that their products generate. This may be changing as a result of internet distribution technologies and the business strategies and practices that suit them, but historically, a successful movie, album, or television series might generate substantial revenue for decades after being made. As with major attributes like high first-copy...

Produkt-Details

• Erscheint lt. Verlag: 18.11.2024
• Sprache: englisch
• Themenwelt: Sozialwissenschaften ► Kommunikation / Medien ► Medienwissenschaft
• Themenwelt: Sozialwissenschaften ► Politik / Verwaltung
• Schlagworte: Advertiser-funded Media • Amanda D. Lotz • changed media content • Consumer-funded Media • Digital Advertising • digital communication technologies • How Digital Affordances Alter Media Industry Practices • How have digital communication technologies disrupted media industries? • implications of digital communication technologies • Industrialization of culture • Limits of digital media advertising • Media Advertising • Media Business Models • media industries • media industry operation • Pre-digital media industry strategies • Subscriber Funding • Timothy Havens
• ISBN-10: 1-5095-6592-2 / 1509565922
• ISBN-13: 978-1-5095-6592-4 / 9781509565924