The Economics and Financing of Media Companies: Second Edition

The Economics and Financing of Media Companies: Second Edition

Robert G. Picard
Copyright Date: 2011
Published by: Fordham University Press
Pages: 270
https://www.jstor.org/stable/j.ctt13x0d0c
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  • Book Info
    The Economics and Financing of Media Companies: Second Edition
    Book Description:

    In this updated and expanded edition of the acclaimed Economics and Financing of Media Companies, leading economist and media specialist Robert G. Picard employs business concepts and analyses to explore the operations and activities of media firms and the forces and issues affecting them.Picard has added new examples and new data, and he covers such emerging areas as the economics of digital media. Using contemporary examples from American and global media companies, the book contains a wealth of information, including useful charts and tables, important for both those who work in and study media industries. It goes beyond simplistic explanations to show how various internal and external forces direct and constrain decisions in media firms and the implications of the forces on the type of media and content offered today.

    eISBN: 978-0-8232-4909-1
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. PREFACE
    (pp. vii-xii)
  4. CHAPTER 1 Media Firms as Economic and Business Entities
    (pp. 1-24)

    To understand media industries, one must understand what drives media companies, how their markets work, and the pressures that lead executives to make choices about the ways their companies will be structured, the activities they will undertake, and the performance they require. Companies raise capital, create facilities, employ personnel, create media products and services, and sell these products and services in the market. Some companies are successful and survive in the market, some that were once highly successful cease to be successful, and some are never successful and disappear. In the aggregate, these companies create the broader media and communications...

  5. CHAPTER 2 Business Models, Workflows, and Value Chains in Media Firms
    (pp. 25-58)

    Media companies are producers that acquire and combine resources to create a product or service that is purchased by others. The characteristics of media products and services, the ways they are intended to be provided in the marketplace, the methods by which they are produced and distributed, and the value created by these processes are central concerns in understanding commercial and competitive issues.

    This chapter focuses on the work of media firms by exploring the nature of media products and services, the business models upon which different media are based, copyright protections for the content products, the type of work...

  6. CHAPTER 3 Distribution and Retail Sales of Media
    (pp. 59-71)

    Producing content is a fundamental activity of media firms, but that content must reach consumers before the firms can be considered as actually doing business. The processes of getting the content to customers are central and often-ignored aspects of media enterprises that are crucial to determining the success of the content. Media encounter differing degrees of distribution complexity because of dissimilarities in their nature, their geographical distribution areas, types of distributors involved, warehousing requirements for physical media products and the extent to which retail networks and retailers are involved.

    Media distribution environments are determined by whether physical or nonphysical products...

  7. CHAPTER 4 Economic Forces Affecting Media
    (pp. 72-100)

    Four major categories of economic forces affect operations and choices of managers in media firms: market forces, cost forces, regulatory forces, and barriers to entry and mobility.

    Market forces are external forces based upon structures and choices in the marketplace. Cost forces are internal pressures based upon the operating expenses of firms. Regulatory forces represent the legal, political, and self-regulatory forces that constrain and direct operations of media firms. Barriers represent factors that make it difficult for new firms to enter and successfully compete in a market.

    The ability of a media firm to be established, prosper, and grow is...

  8. CHAPTER 5 The Influence of the General Economy on Media
    (pp. 101-119)

    General economic and financial forces are important to media and communications firms because these business enterprises are simultaneously consumers and producers. Changes in the economy and economic activity affect the consumption of goods and services by media and communications firms as well as the production and sales of media and communications goods and services.

    A number of influences of the general economy are significant to financial developments of media firms and have impact on the well-being of companies and the choices available to managers. This chapter focuses on four economic factors that need to be well understood because of their...

  9. CHAPTER 6 Audiences and Consumers
    (pp. 120-138)

    The concepts of consumers and audiences are not synonymous when dealing with media and communications industries. Despite the tendency to use the two interchangeably in common discussion, the differences between the two concepts are important and affect how their activities are measured and understood.

    Consumers are individuals or firms who acquire and consume something, typically through a monetary exchange. Individuals purchasing subscriptions to satellite television systems or buying CD players are clearly consumers, as are online content providers purchasing the rights to content to place on their sites.

    The termaudience, however, focuses not merely on acquisition but upon actual...

  10. CHAPTER 7 Media, Advertisers, and Advertising
    (pp. 139-154)

    Advertisers are critical to the success of commercial media because they provide the primary revenue stream that keeps most of them viable. Broadcasters, trade magazine publishers, and newspaper publishers exhibit the highest levels of dependence on advertising income among media firms (see Figure 7-1). Advertisers, however, do not provide these financial resources in order to make media possible, they do so in order to pursue their own interests and purposes.

    As a result, those working within and managing media enterprises need to understand the purposes and choices of advertisers and the dynamics of the relationships between media and advertisers if...

  11. CHAPTER 8 Competition in Media Markets
    (pp. 155-169)

    Competition in media markets represents the rivalry of media firms to provide products and services. Many media managers believe their firms face high competition in their product markets but, in reality, the competition they face is relatively moderate or low, depending upon their product and location. By comparison to other industries, the degree of competition among media products is not very high because of limited choice. In many cases, competition is noticeably low.

    Media firms face little product competition by comparison with producers of undifferentiated agricultural products such as milk or pork and lower competition than that faced by dishwashing...

  12. CHAPTER 9 Concepts in Media Financing and Financial Management
    (pp. 170-184)

    Financing involves meeting the monetary needs of a firm so that it may be established, operated, and developed. Issues of financing range from creating sufficient funds to establish a firm, to obtaining money to pay for operations, to gathering funds to invest in growth.

    Certain types of financing tend to be available only at particular stages in company or product development. Those intent on creating and developing companies need to understand the constraints and relations that result from seeking capital at different stages.

    The research stage represents the point at which ideas are pursued and elements that are necessary to...

  13. CHAPTER 10 Capital Markets and Media Firms
    (pp. 185-199)

    Capital markets are locations in which individuals and firms seek money needed to create enterprises, to start new initiatives, to purchase new equipment and facilities, and to finance operations. Capital in the form of debt and equity are exchanged in organized and structured markets as well as placed through private sources. All companies, including media firms, must have capital and access to capital to continue operations.

    When individuals save money they can use that money to buy goods and services or they can invest that money or lend it to others for a fee. Money that is saved can be...

  14. CHAPTER 11 The Development of Large Media Companies
    (pp. 200-219)

    Large media companies result from the creation of an administrative organization that is used to pursue growth-oriented business strategies. Until the last half of the twentieth century, media firms tended to be small and midsized enterprises. Even the companies operated by publishing giants such as Hearst, Northcliffe, and Pulitzer were relatively small enterprises in terms of revenue, employment, and facilities when compared to other industries.

    The development of large media firms resulted from changes in technologies that produced additional types of media, from strategies of growth and expansion, and from the availability of capital, particularly through equity markets, to finance...

  15. CHAPTER 12 Trade and Globalization in Media Products and Services
    (pp. 220-234)

    Mid- and large-sized media companies are increasingly expanding their activities internationally as they attempt to benefit from additional opportunities and markets for their content and services. Even some small enterprises are finding innovative ways to operate globally. Their activities involve trade in their products and, sometimes, globalization of the firm by establishing itself in locations outside the country of its origin.

    Trade is a term used to describe the movement of goods and services among countries and involves a number of activities ranging from shipping products to consumers outside the country of origin to establishing relationships with domestic distributors and...

  16. CHAPTER 13 Indicators of Financial and Economic Health of Media Firms
    (pp. 235-252)

    In order to evaluate the operations of their firms and to compare performance over time or among firms, managers employ a variety of economic and financial indicators to measure the health of their media firms. These include indicators of economic and financial health and indicators of internal company health.

    The economic health of media companies is exemplified by the state of its markets and consumers’ desire for the products and services produced by those companies. Changes in these indicators of the health of companies and their industries can be observed to determine elements of their future and the potential need...

  17. GLOSSARY
    (pp. 253-264)
  18. INDEX
    (pp. 265-274)