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Culture and Mass Media Economy
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Media Economics
3. lecture       Simona Škarabelová

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Mass media
nTelevion- and radio broadcasting, Internet
nWays of communications, that can adress many people in one moment or short time
nOwned by public authority or private entrepreneurs
nFinanced from:
n public money – subvention or fess (BBC in UK),
n private money/advertising (Spain),
ncombination of both
n
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Media economics
nis 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.
nonly 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 dynamics of media markets.

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The field of inquiry:
nIt concernes with the way, how the kinds of media and communications are available in society;
nMedia economics - it focuses on the ways, how media behave and operate;
nit explores which kinds of content is produced in the media;
nIt answers the question, how can media influence culture, politics and society as a whole.
n

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Within the study of media economics…
n
n…there are tree different traditions evident:
n
nA theoretical tradition
n
nAn applied tradition
n
nA critical tradition.

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The theoretical tradition
nEmerged from the word of economists who have tried to explain choices and decisions and other
economics factors affecting producers and consumers of communications goods and services.

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The applied tradition
nemerged from business economics and management department at universities and from researchrs for
communications industry associations.
nHas often explored the structure of communication industries and their markets, with an emphasis
on understanding trends and changes.

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The critical tradition emerged
nfrom the work of political economists and social critics, primarily within communications studies,
concerned about issues of welfare economics.
n
nAcross the three traditions, there is a common underlying precept that media are economic entities
which work within economic content to producers and within market content to consumers.

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Media
noperate with a variety of business models and value-creation processes and in a wide variety of
settings.
ncontent can be sold or provide free to consumers. The state and private persons may provide
financial support for non-market purposes.
nadvertisers can provide none, some, or all of the income.

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nThe need to understand media economics is growing rapidly.
nIn 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.

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Broadcasting
nIs a key sector in modern society, not only economically but, more than most industries,
culturally,socially and politicaly.
nIt is a sector that is more than most subject to government regulation.
nThere is also a sector that is more than most linked to the digital revolution in technology at
the core of the „new global knowledge economy“

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Broadcasting
nRefers to a diverse range of radio and television services for entertainment, educational and
informational purposes.
nThe industry is therefore distinct from live arts and education and from non-electronic media such
as cinema, books, magazines and newspapers.
nThe industry can also be characterized as a process/way from
nprogramme production,
nprograme selection for networks and local stations,
nprogramme delivery
n funding of this whole process.
n

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Television
n had become a commercial mass medium by the 1950s, competing for audiences with radio and other
media.
nFinding the money – there are tree sources of funding for television programmes:
nAdvertisers,
nTaxpayers (in form of public money)
nViewers (fees)

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Economic characteristics:
nNon-exhaustibility is a principal economic feature of television programmes.
nWith few incremental costs, a programme can be translated into other languages and reach wider
markets.
nThese economies of scale encourage programme producers to sell in international as well at
domestic markets.
nNon-excludability – it is costly to change wiewers form free over-the-air television.
nIf some agreed to pay for the signals, free -rides could not be excluded.

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Role of government:
nGovernments have been intimately involved in the television industry from the outset because of
its effect on the political process.
nGovernments have used licensing of the spectrum as a way to control entry into television
broadcasting and programme content.

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The future of mass media
nIn the time of digitalisation???
nIn the time of globalisation???
nIn the time of internet???
n

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Influence of Internet
nThe Internet and the replacement of analogue by digital signals threaten current economic
relationship.
nTelevision and radio broadcasting viewership is decreasing, especially among the young, the some
people spending more time on Internet for e-mail, chat, social networks, homework or downloading
music, as well as content traditionally provided by television.
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