Characteristics of media management

1. Characteristics of Media
Management

2. 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.

3. Fig 2.1

4. 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.

5. 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.

6. Structure of interdependence in media
markets

7. 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.

8. 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.

9. 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”

10. 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.

11. 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.

12. 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_weareh
orror
• 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

13. 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

14. 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.

15. 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.

16. Media Products as Combined Products

17. 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.

18. 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.

19. 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.

20. 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.

21. 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

22. 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

23. 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

24. Quality of Media Products

25. 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.

26. 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.

27. 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.

28. 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

29. 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.