Abstract
The digital age is changing everything forever. Media is changing in many ways ranging from the way people screen it to the way it is operated as a business. Profitable mainstream media of yesterday is struggling to survive against disruptive innovation brought by new technologies and being challenged by giant technology companies such as Google and Facebook, which are forming a duopoly, especially in terms of digital advertising revenues. These conditions are forcing media managers to be more literate than ever. Although there is a definition for media literacy and business literacy, there is no definition for media business literacy yet. This study will try to make a definition of media business literacy, which should involve stakeholders, markets, products, customers, competitors, financial terminology, and financial statements. After this broad definition, the rest of the chapter will focus on the changing media industry structure providing an insight on some financial and numerical information that needs to be understood by everyone interested in media business.
TopIntroduction
In the digital era we are living in, understanding and learning what is happening around us is becoming more critical each day. Although media literacy is a renowned concept, the concept of media business literacy may seem irrelevant at first glance. However, as The Organization for Economic Cooperation and Development (“OECD”) puts is, literacy is “having adequate skills for today’s demands”. Therefore, media business literacy might be considered as having the adequate skills to understand what is required for media business’ prospects and sustainability.
Defined as the Fourth Estate by some experts, it is a visible fact that media is different from many industries with its power to shape public opinion. Many even argue that media should consider social welfare instead of being commercial. In some countries like Germany, United Kingdom and Italy public funding is an important source of revenue for television and radio stations. However, one must not forget that many media companies are commercial entities and in countries like United States they operate on competition basis. Thus, one must accept that media is a business which has sustainability concerns just as any other business. The sustainability concerns of the media business are even accelerated by the fact that media business is a transforming business as emphasized by Robert G. Picard who is one of the founding fathers of media economics discipline.
As dynamics of the media business have been changing more than ever in the past decade, some of the traditional media companies have succeeded to adapt while some have failed and even went bankrupt. Therefore, media business and specifically the financial aspects of the media business needs an in-depth understanding. The purpose of this study is to identify the bond between literacy, media and media business while creating an awareness on the monetary side of the media business. For this purpose, first the terms literacy, media literacy, media business will be defined trying to make a through definition for media business literacy; secondly the old industry norms will be compared to new industry norms; finally the topics to be followed up for being media business literate will be highlighted focusing on those that directly affect the bottom line of media companies.
Key Terms in this Chapter
Media Business: The industry and market formed by companies operating in and across different mediums, main ones being but not limited to internet, television, newspapers, magazines, radio, cinema, and outdoor.
Audience and Consumer Demand: The preferences of the readers, listeners, viewers in terms of media type and devices.
Advertising Industry: Industry composed of different mediums and different companies earning advertising income and agencies enabling the placing of advertisements in these mediums and their components through creative and administrative support.
Media Business Literacy: The ability to access, analyze, evaluate and communicate business trends, ownership structure, management and leadership styles, human resources requirements, marketing strategies and financial resources of media industry under the pressure of economic conditions, new technologies, changing social structure and regulations, limited access to capital for traditional media and the need for more skillful labor able to handle multitasking.
Digital Media: Use of digital technologies in the media business including digital born companies as well as digital activities of traditional media.