Economics of Mass Media

31 01 2012

Mass media is a shorthand for different devices of communication like radio, TV, newspaper etc. which reaches larger no. of people or audiences.

Media economics embodies economic theoretical and practical economic questions specific to media of all types. Of particular concern to media economics are the economic policies and practices of media companies and disciples including journalism and the news industry, film production, entertainment programs, print, broadcast, mobile communications, Internet, advertising and public relations. Deregulation of media, media ownership and concentration, market share, intellectual property rights, competitive economic strategies, company economics, “media tax” and other issues are considered parts of the field. Media economics has social, cultural, and economic implications.

Location of media economics research in academe varies depending upon the tradition and history of institutions. In some universities it is located in business schools whereas in others it is located in communication, media and journalism schools or departments or in departments of economics.

The term “cultural economics” is sometimes used as a synonym for media economics but they are not substitutable. Cultural economics includes a wide variety of activities that do not necessarily involve mediated dissemination such as museums, symphonies, operas, and festivals. At times these may cross over into media economic issues, such as when audio or video recordings are made of performances or museum holdings are put on CDs

Operating mass media is expensive. The equipment and facilities needs major investment. So mass media must turn profits to stay in business. Where does the money come from?

Advertising Revenue – Advertising space on newspaper and magazine pages, advertising time on TV, ads on Web pages and in social media, product placement in films, etc. Global media revenue will rise to $2.2 trillion a year by 2012, boosted by advertising in digital and mobile media and an explosion in the adoption of broadband interest in things like watching videos on the Internet and on devices like the i-phone.

Circulation Revenue – Fees collected from a media audience, such as newspaper, magazine or website subscriptions
Audience Donations – Voluntary payments by members of an audience to a mass medium, such as money collected by a PBS fund-raising drive.

Private Support – Payments, often called underwriting, from corporations, foundations or other organizations that fund the operation of a mass media outlet.

Government Subsidies – Government money used to pay for the operation of a mass media outlet, such as PBS.
Auxiliary Enterprises – Other methods of raising money, such as merchandising, facility rental, etc.

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