Management and Economics of Communication
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Management and Economics of Communication

M. Bjørn Rimscha, M. Bjørn Rimscha

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eBook - ePub

Management and Economics of Communication

M. Bjørn Rimscha, M. Bjørn Rimscha

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About This Book

This handbook combines the perspectives of communication studies, economics and management, and psychology in order to provide a comprehensive economic view on personal and mass communication.
It is divided into six parts that comprise:

1. an overarching introduction that defines the field and provides a brief overview of its history (1 chapter)
2. the most commonly used theoretic frameworks for the analysis of communication economics and management (4 chapters)
3. the peculiarities of the quantitative and qualitative methods and data used in the field (3 chapters)
4. key issues of the field such as the economics of language, labor in creative industries, media concentration, branding etc. (10 chapters)
5. descriptions of the development, trends and peculiarities of the field in different parts of the world, written by scholars from the respective region (10 chapters)
6. reflections on future directions for the field, both from a managerial and from an economics perspective (1 chapter).

The authors of the individual chapters represent different academic disciplines, research traditions, and geographic backgrounds. The reader will thus gain multifaceted insights into the management and economics of communication.

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1 Management and economics of media and communication - History and definition of the field

M. Bjørn von Rimscha


This introductory chapter will define the field by describing the management and economics of media and communication as an interdisciplinary perspective that applies economic theory and methodology to assess whether media organizations efficiently reach their respective objectives also beyond profit maximization. A brief and selective history of the field will be provided before the characteristics that constitute media as economic goods are introduced, and it is considered how this affects media functions. Furthermore, an outline of the chapters in this volume will be presented.
Keywords: media economics, media management, history, good characteristics,

1 Introduction

Economics is the social science concerned with the rational use of scarce goods. When thinking of communication some readers might think of their email inbox and wonder why on earth someone should believe that communication is scarce. Well, it depends on the perspective. Quite possibly, scarcity is only at one end of the transaction: While messages are abundant, potential attention to them is not. An economic perspective it is basically about efficiency. However, variations concerning the objective that shall be efficiently achieved are possible. A language can be efficient if it allows for a parsimonious use of words and symbols to convey a given information. A publisher can be efficient in bringing together solvent recipients with content providers or attractive target groups with solvent advertisers. A public service broadcaster can be efficient in translating license fees in public value as defined in its mandate. Hence, management and economics should not be narrowed down to profit maximization but can be a useful way of thinking about how to achieve very diverse goals with a thrifty use of resources.
Thus, an economic perspective on media and communication is useful as it can be applied to different types of objectives, or “functions”, of the media and communication sector (McQuail 2005: 96-99). Broadly speaking, these functions can be categorized along three objectives:
First, there are social objectives. Media entertain audiences and thus allow them to relax. They provide orientation in a complex world and convey social values and norms to the members of a society. In doing so, they serve an integrative function bringing together the individuals constituting a society. Notwithstanding the obvious differences in the values and norms respectively promoted, on a generic level, the social function of media is present in every society and political system.
Second, there are political objectives. Media establish a public, identify upcoming issues, and provide the platform to articulate opinions. Depending on the political system, this also includes either a function of controlling the powerful and voicing critique or a function of suppressing control and critique.
Third and lastly, the media also have economic functions. These functions only becomes relevant in a capitalist context. Media can be regarded as a profit-maximizing business themselves addressing citizens as consumers, and furthermore they serve as a means for other businesses to publicize, advertise, and market their goods.
Media organizations can be efficient in all of the three functions, and thus the study of economics and management of media and communication is at the intersection between communication studies, economics and management, psychology, and semiotics that each deal with these functions. Each perspective has a different level of investigation and a different object in focus. On the individual level (micro perspective), language is important: Questions in this context might include whether a conversation is efficient. Research is fairly limited in this context, not least because an economic perspective is at times equated with a frowned upon commodified perspective (e. g., Cameron 2006). While commodification is often also criticized in a media industry context (e. g., Mosco 2009) since it ranks economic objectives higher than societal objectives, it is generally accepted to interpret media at least also as economic goods. Thus, media economics and management both provide an economist’s view on mediated mass communication with insights from communication science as moderators in predominantly economic descriptions of the media industry. However, they differ with regard to their perspective on the media and with regard to their objective.
Media economics offers a macro perspective of political economy: Analyses are often descriptive or normative and address the overall question of how a media system as a whole should be optimized in order to best serve society. The “media” aspect in media economics is thus emphasized due to the influence of the media on society and their contribution to a functioning political system and a productive economy. As such, the perspective of media economics resembles that of cultural economics which likewise includes non-monetary aspects of welfare. However, media economics has a narrow focus on media.
Media management, on the other hand, has a meso perspective with regard to the organization involved in communication, be it informative, entertaining, or persuasive. It addresses questions about how to optimize the development, production, and distribution of media products in the light of the special characteristics of media goods. The objective here is usually profit maximization for media companies (or utility maximization in the case of not-for-profit organizations). Thus, the “media” aspect in media management is emphasized due to the characteristics of the media as products that demand a special handling by managers.
Media economics is the older of the two perspectives with the first inquiries dating back to the 1940s. Even though media economics has a broader perspective, most work until 1990 tended to focus on single media industries such as the newspaper, television, or movie industry and focused on specific markets, most notably the USA. This made sense when, during the Cold War, the USA was the obvious example of a free market economy, whereas in countries with a command economy, the function of the media for society was considerably different. In an increasingly multi-polar world that is economically ever more intertwined, media economic perspectives need to become both more holistic and more generic, and research as well as text books have made a start to do so.
Media management is the younger perspective that gained attention only fairly recently when scholars of business administration and strategic management in the 1990s discovered the media as an interesting case in point when investigating products with special traits: On the consumer side, media can be described as experience goods; on the producer side, project-based production and a strong identification of the producers with a creative output stand out. Thus, media management was by and large characterized by theory import, where generic theories were applied to the communication and media industry. With experiences becoming more important than ownership, development and production becoming increasingly organized in projects, and a growing importance of innovation, insights from the media industry can now also be (re-)transferred to other sectors.
In the following, I shall briefly sketch the history of the field (2) and then introduce the characteristics of media and communication goods (3) to explain why it is necessary to take an interdisciplinary look at the field. Some readers might wonder whether there is any difference between communication and media goods compared to other goods. In other words, could questions in this context not just be covered by economists? Why bother with economics of communication also in a communication science context? Tellingly, researchers in the field seem to love asking the question about what is so special about that field (e. g., Nissen 2013; Dogruel 2014; Lowe and Brown 2016). Basically, there is not one distinct feature that makes media and communication stand out. There is nothing extraordinary about media goods in terms of good characteristics. Any good characteristic of media goods can also be found in other goods, be it external effects, economies of scale, or experience good characteristics. And of course, standard business theories and analysis methods can easily be applied (Picard 2005). Although these traits are not unique, they are influential for the ability of media to fulfil also non-economic functions of media for society. That is because media have a split character as they are both economic and cultural goods. Finally, the chapter introduces the plan for the book (4), with chapters that pick up on these issues and in the latter part also discuss regional distinctiveness.

2 History

A great overview of media economic thought beginning in the age of Enlightenment can be found in Mühl-Benninghaus (2016). I won’t go back that far, but I will start with the beginning of the 20th century. Before the study of economics and management became institutionalized in its own right as a subdiscipline of both communications science and economics, works in this field were published in general...

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