The Economics and Financing of Media Companies: Second Edition / Edition 2

The Economics and Financing of Media Companies: Second Edition / Edition 2

by Robert G. Picard
Pub. Date:
Fordham University Press


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The Economics and Financing of Media Companies: Second Edition / Edition 2

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.

Product Details

ISBN-13: 9780823232574
Publisher: Fordham University Press
Publication date: 06/01/2011
Edition description: 2
Pages: 270
Sales rank: 587,115
Product dimensions: 6.00(w) x 8.90(h) x 0.90(d)

About the Author

Prof. Robert G. Picard is Director of Research at the Reuters Institute at the University of Oxford, the author and editor of 25 books, and editor of the Journal of Media Business Studies.

Table of Contents

1Media Firms as Business Entities1
Commercial Media and the Theory of the Firm3
The Roles of Profit and Return4
Media Firms and Risk6
Market, Financial, and Operational Characteristics of Media9
2Business Models, Workflows, and Value Chains in Media Firms21
Media Products and Services21
Life Cycles of Media24
Business Models in Media25
Workflows in Media Firms26
Media Value Chains30
Core Business36
Value Chains and Convergence in Publishing Industries38
Suggested Readings46
3Economic Forces Affecting Media48
Market Forces48
Capital Availability and Rent48
Audience/Consumer Demand49
Advertiser Demand51
Cost Forces54
Economies/Diseconomies of Scale54
Economies/Diseconomies of Scope54
Economies/Diseconomies of Integration55
Fixed and Variable Costs56
Cost Structures of Media Result from Effects of Economic Forces59
Content Costs59
Production/Distribution Costs60
Marketing and Advertising Costs63
Transaction Costs66
Nonmonetary Costs68
Regulatory Forces and Intervention69
Technical/Structural Regulation70
Behavioral Regulation71
Barriers to Entry and Mobility in Media Markets72
Capital Requirements72
Economies of Scale73
Product Differentiation73
Switching Costs73
Limited Access to Distribution Channels75
Government Policies75
Competitive Advantages79
Overcoming and Reducing Barriers79
Suggested Readings80
4The Influence of the General Economy on Media81
Growth and Contraction of the Economy81
Interest Rates92
Exchange Rates94
Preparing for Economic Changes97
Preparing for Fluctuations in the Economy98
Preparing for Changes in Inflation99
Preparing for Changes in Interest Rates99
Preparing for Changes in Exchange Rates99
Suggested Readings100
5Audiences and Consumers102
Wants and Needs of Audiences105
Audience Measures106
Audience Fragmentation109
Time and Media Use111
Demand and Prices of Media Products and Services116
Customer Satisfaction118
Audience Substitution of Media and Communications119
Strengthening and Stabilizing Audience and Consumer Relationships120
Suggested Readings121
6Media, Advertisers, and Advertising122
Why Advertising Exists123
Differences among Advertisers and Their Strategies125
Effectiveness of Different Media127
Mechanisms of Advertising128
Advertising Spending on Media and Media Products131
Demand and Pricing of Advertising132
Media Substitution by Advertisers136
Media as Advertisers137
Suggested Readings138
7Competition in Media Markets139
Competition and Market Power140
Product and Audience Differentiation Constrain Competition142
The Role of Geographic Markets143
Benefits of Competitive Advantages146
Brands and Branding Aid in Competition147
Competition among and between Media149
Intermedia Competition150
Intramedia Competition151
Suggested Readings153
8Concepts in Media Financing and Financial Management154
Understanding Financial Flow156
Problems of Financing a New Firm or Product156
Financing Continuing Operations160
Credit Management161
Credit Evaluation164
Credit Risk Management165
Bad Debt166
Internal Credit Management Reports166
Cash Management Issues167
Suggested Readings169
9Capital Markets and Media Firms172
Wants and Needs of Capital Sources172
Venture Capital Helps Fund New Companies and Expansion174
Self-generated and Borrowed Capital Supports Most Existing Media176
Stock Markets Support Large Media Firms177
Stock Market Operations179
Stock Markets Worldwide181
Major Media Companies Traded on Stock Markets182
The Globalization of Media Capital185
Suggested Readings186
10The Development of Large Media Companies188
Growth Pressures and Strategies193
Growth through Diversification197
Growth through Mergers and Acquisitions198
Growth through Joint Activities201
The Pursuit of Synergies204
Organization and Management of Large Firms206
Company Cultures207
Managerical Conflicts207
How Large Is Large?209
Suggested Readings210
11Trade and Globalization in Media Products and Services212
Trade in Media Products and Services213
Barriers to Trade in Media Products and Services218
Regional and Global Trade Agreements222
Methods of Globalization223
Direct Export224
Product Licensing and Rights Purchases224
Format Licensing224
Joint Ventures225
Direct Foreign Investment225
Patterns of Media Globalization226
Suggested Readings229
12Indicators of Economic and Financial Health of Media Firms230
Indicators of Economic Health230
Market Share Change or Maintenance230
Changes in Demand231
Indicators of Financial Health231
Sales Revenue Growth or Decline232
Change in Results234
Debt Growth or Decline234
Change in Asset Value235
Indicators of Company Internal Health237
Capacity Utilization241
Employee Turnover241
Personnel Skills and Knowledge242
Innovation (R&D, New Products/Services)243
Resource Dependence243
Suggested Readings248
About the Author263

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