Strategic Management in the Media

Theory to Practice

Lucy Küng

• Publisher: SAGE Publications Ltd
• Year: 2016
• ISBN:
  9781473988125
• Edition: 2
• Topic: Sciences sociales
• Subtopic: Étude des média

?Küng's book stands out for its focus on concepts, drivers, and dynamics. Its scope and learning are brilliant and dazzling. This updated edition will be a source of insight for students and a tool for industry veterans who seek the perspective of academia.?
– Eli Noam, Columbia Business School

?A landmark contribution to scholarship, Küng's excellent book provides an empirically rich and analytically sharp-sighted guide to contemporary organizational strategies in a complex and dynamic media environment.?
– Gillian Doyle, University of Glasgow

?In the age of relentless technological disruption, unlimited distribution and non-professionalization, media firms are more dependent than ever on strategic management. Küng articulates the dimensions of media industries to account for an ever-increasing array of challenges and strategies.?
– David Craig, University of Southern California

In this Second Edition of a book many found invaluable for research and teaching, including myself, Küng accomplishes a challenging task: to preserve all the best qualities of the First Edition while both extending the scope and deepening understandings about strategic management theory in application to media industries.?
– Gregory Ferrell Lowe, University of Tampere

With the media industries facing unprecedented change and challenge from top to bottom, it has never been more vital to understand the elements of strategy and how they apply to media organizations.

This new edition:

• Shows innovation, disruption and strategic adaptation in action, with a stronger focus on a case-based approach
• Takes readers deep into case studies on BuzzFeed, The Guardian, Netflix, the New York Times and the BBC
• Explains strategic theory and concepts with insight and clarity
• Shows how to understand change and decision-making within media organizations.

This is the essential guide to change and management in the media industries – ideal for students of media studies, media economics and media management.

1 Introduction

Between the economic determinations of the marketplace and the cultural discourses within media representations … lies a terrain that has yet to be fully explored and adequately theorised. (Cottle, in Cottle, 2003: 13)

The media industry is changing fundamentally and fast. This represents a very real challenge to managers tasked with planning a strategy and implementing it successfully, to researchers studying the field, and to those designing and delivering academic courses focused on the sector. This book seeks to provide assistance in several ways. First, it maps the contours of the media industry, detailing histories, business models, value drivers and current strategic issues in the various sectors that together constitute the industry. Second, it identifies the common themes surfacing in the strategic environment and the challenges these pose, as well as particular aspects of media organisations that influence the activities of strategic choice and implementation. Third, it explores the strategic models, concepts and approaches that are particularly relevant to this strategic context and these types of organisation, seeking to demonstrate their relevance through application to media industry cases and examples. Finally, it reviews the discipline of media management and the body of theory within it that addresses strategic management, and identifies a number of future research approaches and themes.

The goals therefore are clear. But the complexity of the media industry – a mammoth and diverse set of sectors that is moving ever closer to the technology sector – and the sprawling and fragmented nature of strategic theory complicate the task. In order to cut through this complexity, the book has been written with three guiding principles in mind:

1. In terms of the media industry, it seeks to move beyond simply describing developments to interpreting them, and to providing insights that will aid strategy-making in the media industry.
2. In terms of strategic theory, it limits the selection covered to those that have a direct relevance for the field, and then attempts to move beyond simply outlining concepts to demonstrating their relevance through application (what consultants call showing the ‘so what’). It also deliberately seeks to work with a broader set of strategic and management theories drawn from a wider range of disciplines than is often the case in media management research.
3. In terms of language, the goal has been to strip out jargon as far as possible. This is partly to ensure relevance for practitioners as well as scientists, and partly because researchers and students in the field of media management, as this chapter discusses, have entered the field from many different areas of scholarship – liberal arts, social science, economics, political economics, mass communications and journalism studies to name just a few – and have therefore not been exposed to mainstream management theory and are likely to find some if its usages confusing.

Structure of the book

At base, the field of strategy is concerned with how organisations align their internal organisations to master the demands of their external environment. There are a number of strategic and organisational levers they can employ to achieve this. These range from highly analytic planning approaches, based on exhaustive research and data analysis, to prescriptive and pragmatic tools, which seek to transform the inner workings of organisations through gaining a deeper understanding of intangible phenomena such as cultural beliefs and levels of motivation.

This book explains and applies concepts from each of the three core areas of strategic theory: rational approaches, adaptive approaches, and interpretative ones. Central aspects of managers’ strategy ‘work’ in media organisations are explored sequentially – starting with understanding the strategic environment and then moving through analysing a company’s competitive positioning, strategic resources and competencies, responding to technological change, options for how the organisation is structured, increasing levels of creativity and innovation, managing culture and mindset, and finally looking at the role of the leader, particularly in terms of shaping the ‘social architecture’ of the organisation through interpretative elements such as culture and mindset. Key concepts that are relevant for the media industries are explained, and then ‘embedded’ in case studies that explain how these theoretical constructs ‘play out’ in real-life organisations. Some cases feature in a number of different chapters, with each ‘appearance’ illustrating different dimensions of strategy in the media. This underlines the complex and multi-faceted nature of strategic management, the interlinked nature of strategic phenomena in firms, and, taken together, these cases will hopefully provide a richer and more nuanced understanding of the examples presented.

What is media management?

The topic of strategy in the media industry is a subset of the field of media management. Since this is an embryonic field it is worth establishing at the outset of this book what this currently constitutes, which areas of scholarship it emerged from, and by extension its boundaries and internal dimensions.

The core task of media management is to build a bridge between the general theoretical disciplines of management and the specificities of the media industry. This goal seems relatively clear. However, the field of media management in its present form is neither clearly defined nor cohesive. A review of the syllabi from the many media management courses that have sprung up over the last decade all over the world exhibit an enormously diverse range of theories, topics and core readings.

This is partly a function of relative newness. In contrast to media economics, which since its emergence in the 1970s has acquired an established set of theoretical approaches and an extensive body of literature, media management is still in its infancy; The International Journal of Media Management was established at St Gallen in 1998, the Journal of Media Business Studies in Jönköping 2004, the European Media Management Association (EMMA) in 2003 and the International Media Management Academic Forum (IMMAA) in 2004. Media management therefore is both a new field and a rapidly growing one.

But, as mentioned in the quote at the start of this chapter, it is also an under-explored and under-theorised field (Cottle, 2003). To date, mainstream management scholars have largely neglected the media industry. This could be because managerial practices and organisational patterns in the cultural industries are often at odds with established views of management (Lampel et al., 2000). It could also relate to the fact that ‘mainstream’ management researchers seldom limit their research to a particular sector, preferring to choose sectors and cases according to the phenomena they are investigating.

This means that the bulk of research into management and strategy in media organisations has been carried out by researchers with scholarly roots outside the study of management and organisations. Chief among these are media economics, media studies, political economics, and mass communications and journalism studies, giving rise to a body of theory which, Albarran has observed, ‘crosses interdisciplinary lines, theoretical domains, and political systems’ (Albarran et al., 2006: 3). The range of scientific backgrounds shared by researchers active in media management has given rise to a rich and varied literature applying an equally diverse range of theories from various disciplines including economics, econometrics, sociology, anthropology, technology management, political science, information science and political science.

To map out the current dimensions of the field’s literature and the scope for the future development of the field, it is helpful to clarify the perspective and approach of the non-management academic disciplines that address, not always directly, the issue of management and strategy within media firms.

Media economics

Media management has grown up in the shadow of media economics. The latter applies economic principles and concepts to the media industries and has dominated scholarly analysis of the media sector (Picard, 2002a). Media economics tends to work at industry sector or market level. It looks at conditions and structures in the media industries and markets, and focuses on the deployment of resources, particularly financial ones, to meet the needs of audiences, advertisers and society (Picard, 2002a). Of particular concern are revenue and cost structures, pricing policy, the economics of the key processes of production, distribution and consumption and its effects on the behaviour of media firms, structural analysis of the sector, national market analysis, media ownership and concentration, competitive strategies of media firms, market structure and share, regulation, public policy and subsidy issues, consumer and advertiser demand, the impact of new technologies and consumer behaviours on the media and content industries, and the way these changes are impacting and influencing the development of media business models.

Audience economics is an extension of the media economics literature and addresses the implications of the media industry’s dual product marketplace. It focuses on the economic dimensions and implications of audience behaviour and audience measurement, viewing media audiences as a product market with unique characteristics and significant points of interaction with media industries (Napoli, 2003).

In terms of strategy in the media field, media economists have looked at strategy formulation and implementation by large media organisations, in particular at the antecedents and/or consequences of change, with a focus on the environment, structure and performance, often applying rationalist models from the Industrial Organisation (IO) School. This has provided insights into media firms’ diversification strategies (Chan-Olmsted and Chang, 2003; Dimmick and McDonald, 2003), structure, performance and strategic alignment (Albarran and Moellinger, 2002), transnational (Gershon, in Albarran et al., 2006) and competitive (Sjurts, 2005) strategies. A more pragmatic set of economically-influenced insights into the defining characteristics of the media industry come from analysts and consultants who have worked in the industries. These texts include Wolf’s Entertainment Economy (1999), Vogel’s Entertainment Industry Economics (1999), Knee et al.’s The Curse of the Mogul (2009) and Parry’s The Ascent of Media (2011). The media economics literature thus addresses the behaviour of media firms in aggregate, and provides valuable insights into the economic forces affecting the sector, the influence these have on strategic options, and the types of strategic choices media firms are making within these contexts and why. It therefore provides a valuable starting point for examining processes and phenomena inside media organisations, and for understanding the non-rational processes that also influence strategic behaviour.

Political economy approaches

When media management does not fall under the umbrella of media economics, it is often a subset of political economy scholarship. This field combines perspectives from economics, politics and sociology to analyse the structure of the media industries and regulatory and policy issues, looking particularly at the economic determinants, ownership structures and political allegiances (Cottle, 2003).

Political economy approaches involve the ‘study of social relations, particularly power relations, that mutually constitute the production, distribution, and consumption of resources’ (Mosco, 1996: 25). In practice, the application of such theories to the media field tends to involve (often but not exclusively neo-Marxian) critical studies of cultural production, looking also at the public policies that shape media systems and the political debates about media and communication policies (McChesney, in Cottle, 2003). Typical examples would be Burns’ seminal study of the BBC (1977), Tracey’s study of how political, technological and economic forces have undermined public service broadcasting (1998), or Tunstall and Palmer’s study of media moguls (1998).

Media studies

This cross-disciplinary field applies concepts from sociology, cultural studies, anthropology, psychology, art theory, information theory and economics to analyse the output of media organisations as a means of understanding society and its cultural discourses, and the effects of mass media upon individuals and society, as well as analysing actual media content and representations (Cottle, 2003). A typical study might analyse a film’s aesthetic or narrative quality, but within the perspective of the filmmaking process and the movie industry’s economic, technological and industrial context. There are separate strands looking at journalism, film, gaming, audience studies, television studies and radio studies, how corporate ownership of media production and distribution affects society, and the effects and techniques of advertising. Contemporary media studies include the analysis of new media, with an emphasis on the internet, social media, gaming and other forms of mass media which developed from the 1990s onwards.

Mass communications and journalism studies

The nature of media content and how it is processed and delivered to audiences forms the core focus of this discipline. It encompasses how the mass media have come to be organised in the way they are, how the mass media actually function – how content is produced and delivered – and the effect such content – particularly journalistic content – has on audiences, individually and collectively.

Media management – the state of play

These, then, are the major ‘host’ disciplines that have made the main incursions to date into the field of media management. The current state of the discipline reflects this development path. Viewed from a management perspective, media organisations have been largely addressed as businesses rather than organisations, at a macro rather than micro level, and much attention has been focused on the exogenous changes (technology, policy, regulation and consumption, for example) and their impact on media firms’ output.

Viewed from an historical perspective, research into management in the media can be seen as reflecting changes in its strategic environment. The 1980s and 1990s were characterised by liberalisation, deregulation and globalisation, and scholars responded by focusing particularly on issues of industry structure, the growth of the conglomerates and its implications, increases in alliances and joint ventures, and transnational management. Towards the end of the 1990s a first and second tier of global media conglomerates became established. These were multiproduct divisional entities that presented a more complex management task, and media management scholars began to focus on the specific challenges they presented, particularly in terms of structures and processes. A focus on strategic resources emerged during this period, applying approaches such as the resource-based view (RBV). The turn of the millennium saw dramatic developments in the media industry’s underlying technologies. This gave rise to research looking at the emerging distribution architecture and its ramifications for the established media industry, as well as at the concept of convergence and its ramifications. The current fast pace of technological change, the development of new boundary-spanning categories of media products, and increasing competition for audience attention have led contemporary researchers to focus on business models, and approaches to organisational adaptation, particularly the issue of innovation.

Defining the media industry

Having defined the theoretical boundaries of the field, it is time to establish the boundaries of the empirical context, the media industry. Defining the media industry was always surprisingly tricky, and it is even more so since convergence has gained hold.

Even before convergence muddied the waters...