Media Economics

23. 4. 2009              Simona Škarabelová

EU- reasearch „Culture Economics in Europe“:



n  In year 2003 was the turn in area of culture in Europe 654 mld Euro.

n  It is about 100 mld more than in car industry.

n  In the years 1999 – 2003 shown the culture an increas about 12,3 % more, that was whole increase
in EU-countries.

n  Employment was in EI decreasing, but there iwere more work in culture area.

Media economics

n  is a term applied to the study of the way economics and financial pressures affect a variety of
communications activities, systems, and organizations and enterprises, including media and
telecommunications.

n  only explores the specific application of economics laws and theories to media industries and
firms, showing how economic, regulatory and financial pressures direct and constrain activities and
their influences on the dynanics of meida markets.

The field of inquiry:

n  is concerned with the way these forces affect the kinds of media and communications available in
society;

n  it focuses on the ways media behave and operate;

n  it explores the kinds of content these forces produce in the media;

n  it considers the implications of these factors for culture, politics and society as a whole.



Whitin the study of media economics…



n  …there are tree different traditions evident:



n A theoretical tradition



n An applied tradition



n A critical tradition.

The theoretical tradition

n  Emerged from the word of economists who have tried to explain choices and decisions and other
economics factors affecing producers and consumers of communications goods and services.

The applied tradition

n  emerged from business economics and management department at universities and from researchrs
for communications industry associations.

n  Has often explored the structure of communication industries and their markets, with an emphasis
on understantdint trends and changes.

The critical tradition emerged

n  from the work of political economists and social critics, primarily within communications
studies, concerned about issues of welfare economics.



n  Across the three traditions, however, there is a common underlying precept that media are
economic entities which work whithing economic context to produce and market content to consumers.

Media

n  operate with a variety of business models and value-creation processes and in a wide variety of
settings.

n  Content can be sold or provide free to consumers. The state and private persons may provide
financial support for non-market purposes.

n  Advertisers can provide none, some, or all of the income.



n  The need to understand media economics is growing rapidly.

n  In developed nations the rise of enormous commercial enterprices in communications, the rapid
development of next elecronic communications systems and the commercialization of broadcasting are
dramatically changing the communications landscape and the economic and financial pressures on the
media and communications systems.

Television

n   had become a commercial mass medium by the 1950s, competing for audienceswith radio and other
media.

n  Finding the money – there are tree sources of funding for television programmes:

n Advertisers,

n Taxpayers (in your country too?)

n Viewers (fees)

Economic characteristics:

n  Non-exhaustibility is a principal economic feature of television programmes.

n  With few incremental costs, a programme can be translated into other languages and reach wider
markets.

n  These economies of scale encourage programme producers to sell in international as well at
domestic markets.

n  Non-excludability – it is costly to change wiewers form frii over-the-air television.

n  If some agreed to pay for the signals, free -rides could not be excluded.

Role of government:

n  Governments have been intimately involved in the television indusstry from the outset because of
its effect on the political process.

n  Governments have used licensing of the spectrum as a way to control entry into television
bradcasting and programme content.

The future

n  The Internet and the replacement of analogue by digital signals threaten current economic
relationship.

n  Television viewership is decreasing, especially among the young, the some people spending more
time on Internet for e-mail, chat, homework or downloading music, as wellas content traditionally
provided by television.