Handbook of Media Management and Economics

Alan Albarran, Bozena Mierzejewska, Jaemin Jung, Alan Albarran, Bozena Mierzejewska, Jaemin Jung

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138729292
• eBook ISBN: 9781351747523
• Topic: Business
• Subtopic: Management
• Index: Business

Winner of the 2019 Robert Picard Book Award

The Handbook of Media Management and Economics has become a required reference for students, professors, policy makers and industry practitioners. The volume was developed around two primary objectives: assessing the state of knowledge for the key topics in the media management and economics fields; and establishing the research agenda in these areas, ultimately pushing the field in new directions.

The Handbook's chapters are organized into parts addressing the theoretical components, key issues, analytical tools, and future directions for research. With its unparalleled breadth of content from expert authors, the Handbook provides background knowledge of the various theoretical dimensions and historical paradigms, and establishes the direction for the next phases of research in this evolving arena of study. Updates include the rise of mobile and social media, globalization, audience fragmentation and big data.

Part I

MME Research

Foundation and Overview

1
Media Management and Economics Research

A Historical Review

Alan B. Albarran

Trying to assess the literature reviewing the history of both media management and media economics research is a daunting task. One reason for this dilemma is the vast amount of material available. The earliest scholarship attributed to the study of what could be classified as media management or media economics research traces its roots back to the 1940s in the United States. There may have been published sources in other countries prior to the 1940s available in other nations, but even Google falls short in trying to locate such material, not to mention language and cultural barriers.

Media management and media economics are treated by many scholars as separate but related fields of study. Media management and economics are linked interdependently to one another. The industries are by their very nature economic institutions exhibiting a variety of management approaches and practices. One cannot study management without considering the economic aspects of a business enterprise, and vice versa. Yet, most of the scholarship developed since the 1940s has tended to focus on either media management or media economics as separate and distinct subjects. This may have been influenced by the size of media companies and the proximity to available data to study. From the 1940s to the 1970s media companies tended to be bifurcated into smaller, family-owned enterprises, or large corporate owners, such as the major newspaper groups (e.g., Pulitzer, Hearst, New York Times, Gannett) or national broadcast networks (ABC, CBS and RCA, which initially owned NBC).

Consolidation of the various sectors of the media industries began in the 1970s. As media companies consolidated, management strategy and practice became more focused on the financial and economic conditions of their portfolios of media brands and what we identify today as platforms. Investment bankers, hedge funds, insurance companies and financial brokers all recognized media as a stable cash-generating business for investors. Hence, a greater emphasis on financial performance became the norm, with corporate owners and stakeholders demanding growing profits and return on investment. Management priorities were centered on building free cash flow and increasing the value of the enterprises they managed.

Consolidation also brought with it growing confusion over what the word “media” represents, and what constitutes a “media” firm. Historically, media referred to publishers of newspapers and magazines; broadcasting in the form of radio and television; music and sound recordings, and so forth. Distribution was then a powerful tool of media companies. Now we think of these older industries as “traditional” or “legacy” media that still exist, but complete in a world where distribution is no longer controlled by media firms due to the disruption of digital media. Instead, power has shifted to the consumer using mobile media, streaming media, social media and transmedia and emerging fields like artificial intelligence and augmented reality.

Three other areas of change since 2006 include the rise of user-generated content, popularized by video sites like YouTube and Vimeo. News organizations, at first resistant to using user-generated videos and photos of news events, now regularly feature video captured by smartphones from consumers. Advertising is becoming more sophisticated as a field with the rise of big data, efforts to measure audience engagement, and the actual effectiveness of advertising expenditures. Technology has enabled more precise positioning of advertising, especially via social media and e-commerce platforms (e.g., Facebook, Amazon). The rise of false or “fake news” is impacting the perception of journalism and its relationship to society. User-generated content, changes in advertising effectiveness, and fake news all have managerial and economic considerations for the media industries.

Given this overview, the author considered four research questions to provide a framework to use as a guide for developing this chapter. Rather than repeating the work done in the initial MME Handbook (Albarran, Chan-Olmsted, & Wirth, 2006), the focus is on the decade that followed (up until 2016) for analysis to provide a historical review. The research questions are detailed ahead:

• RQ1: What significant changes have taken place across the media industries since the publication of the original Handbook of Media Management and Economics (2006)?
• RQ2: What were some of the significant MME publications published since 2006?
• RQ3: How do we assess the state of knowledge of MME research since the publication of the original Handbook?
• RQ4: What propositions should guide the research agenda for the next decade of MME research?

What Significant Changes Have Taken Place Across the Media Industries Since the Publication of the Original Handbook of Media Management and Economics (2006)?

To address this question one must consider not just the obvious changes, such as which companies are the industry leaders, new platforms, innovative technologies or the entrance of new entrepreneurs across the media industries, but the environment in which these actions took place. In 2006–2007 the global economy—especially the economies of developed nations—was very strong. Capital and credit flowed freely from borrowers to lenders, often without proper checks and balances. Housing was booming as new subdivisions and housing units were being built to accommodate demand. Employment was strong and near capacity. Apart from the Middle East, where war was waging in Iraq and Afghanistan, there was stability around the globe.

Almost overnight everything changed. In the summer of 2008 the housing boom turned into a major bust, bringing with it the near collapse of the banking system in the United States and upheaval in the financial markets worldwide. Stock markets around the world sank in what would later become known as “the Great Recession.” Millions lost jobs and their homes. Valuations fell dramatically as businesses cut back on capital spending. Credit all but dried up. Only coordinated action by the world’s largest central banks and their respective governments prevented a total meltdown in the financial markets by bailing out our failing banks, slashing interest rates to near zero, and purchasing billions in bonds each month to add liquidity to a damaged global economic system. For the next decade, interest rates in the United States would be raised only one time—not until December 2016. The trough in the markets bottomed on March 9, 2008. But it would take nearly ten years for the markets to rebound to its 2007 levels.

While the economy was gloomy for much of the decade, technology was a bright spot. Billions were invested in broadband network development by cable and telecommunication companies to improve bandwidth speed for Internet applications and more powerful phone networks from slower 3G to 4G and later LTE. The power in broadband networks would benefit the development of many distribution and reception technologies.

In 2007 the world was introduced to the iPhone, which revolutionized the mobile phone industry. The iPhone launched thousands of applications or “apps” with the creation of Apple’s App Store. Competitors followed, including Android phones powered by a Google operating system. Mobile phones were now called smartphones. Growth in broadband also advanced the ability to stream video to the home, leading to a range of new competitors in the video marketplace—Netflix, Hulu and Amazon Video emerging as the early leaders. New television sets were manufactured with built-in Internet capability to access home Wi-Fi networks. The iPad debuted in 2010, giving consumers another mobile device to use for access to the Internet. Streaming also grew in the audio area as well with the rise of Pandora, Spotify and Apple Music, along with a renewed growth in podcasting. Bluetooth-enabled automobiles allowed consumers to listen to music and podcasts in their cars. Other new technologies either in development or making debuts included drones, driverless automobiles, virtual reality games and wearable technology. Artificial intelligence and augmented reality platforms were also emerging.

Social media became mainstream as Facebook, Twitter, LinkedIn, Instagram and Pinterest emerged as popular platforms for sharing information, opinions, photographs and hobbies. The global popularity of social media was quickly recognized by advertisers, leading to a further shift in marketing dollars away from traditional media to digital media. Social media would encounter its own set of challenges with issues like privacy and security, posting of false information and violent live content, and illegal use of copyrighted materials, yet it would continue to grow and expand.

Consolidation among media companies was not as prominent during 2007–2016 due to the great recession and little capital available for expansion. Several mergers were completed in the United States, the largest being Comcast’s acquisition of NBC Universal; Disney’s acquisition of Marvel Entertainment; AT&T adding to its distribution capabilities with the acquisition of DirecTV; and consolidation in the cable television space with Charter buying Time Warner Cable and Bright House. Regulators did not allow some firms to merge due to antitrust concerns. Both AT&T and Sprint Nextel tried to merge with T-Mobile but were ultimately rejected. Time Warner and AOL ended their failed merger in 2009; AOL was acquired by the Huffington Post and later Verizon, while AT&T is trying to acquire Time Warner.

Facebook, Amazon, Netflix and Google became known as the “FANG” stocks, and were recognized by financial investors for their remarkable growth and ability to dominate the markets where they are engaged. One of the greatest advantages these companies have is their ability to harvest large amounts of consumer data detailing uses and preferences, allowing them to leverage advertisers and marketers. These companies are part of “big data,” a subject treated by a separate chapter in this new Handbook. Napoli (2016) points out that media industries are “well positioned” to tap in to the potential of big data. Big data is generating new markets for research, and ultimately helps media companies in their strategy and decision-making.

This short review finds that forces such as economics, technology, globalization, consolidation and the introduction of social media all contributed to a very fast-moving and evolving environment. Together, these events would influence the scholarship produced across the media management and economics.

What Were Some of the Significant MME Publications Published Since 2006?

Publication of articles and books in the MME field has flourished since 2006. The growth of scholarship was certainly influenced by some of the significant forces and changes discussed in the previous section, but these were not the only reasons. Many new graduate programs devoted to the media industries, be it media management, digital media, media economics or other focuses, emerged in Europe, Asia and Latin America, to add to the evolving programs across North America. A new generation of scholars emerged, with strong interests in digital media and emerging technologies.

Outlets for scholarship also grew. The Journal of Media Economics and the International Journal on Media Management remain the most prominent journals in the field, along with the Journal of Media Business Studies. Mobile Media and Communication, Digital Journalism, Journal of Social Media Studies, Journal of Digital Media Management, Electronic News, Media Industries, Journal of Media Law, Social Media + Society and Media Watch are just some of the journals where articles related to aspects of media management or media economics may be found.

There are also more conferences devoted to the MME field, allowing researchers to present work in progress and acquire comments and critiques on their work before submitting to a journal. The World Media Management and Economics Conference is a biannual event held around the world, as is the International Media Management Association (IMMA). The former is not an association that requires membership. The European Media Management Association (EMMA) holds an annual conference as well as a special seminar for PhD candidates. The Latin American Media Management Association (LAMMA) is another regional association founded in South America. Other conferences, such as the Broadcast Education Association and the Association for Education in Journalism and Mass Communication, have MME-related divisions and annual paper competitions. These publications and conference venues provide scholars numerous outlets for their research, more so than at any time in the history of the MME field.

To organize a discussion of key publications since 2006, we will first consider published books over the period 2007–2016, followed by journal articles widely recognized in the MME field. This review is limited to works published in English, while recognizing there are many books and articles published in other languages around the world. Regarding published books, compilations and edited volumes will be considered first, followed by books that focus on topics relevant to MME.

Compilations and Edited Volumes

Several compilations and edited volumes have been published that review relevant literature and present different perspectives to readers. Towse and Handke (2013) examined the impact of digitalization in their handbook examining the creative sector of the economy. Picard and Wildman (2015) edited a handbook around the themes of influential factors and practices, platform applications, and economics and policy. Anderson, Stomberg and Waldfogel (2016) edited a two-volume handbook authored primarily by economics scholars from Europe and the United States. Their work is spread among three sections, investigating market structure and performance, individual media sectors and political economy. In terms of political economy, Wasko, Murdock and Sousa (2011) edited the most significant update to this critical approach to media management and economics. Friedrichsen and Mühl-Benninghaus (2013) edited a handbook devoted to the topic of social media management.

Regarding edited volumes, several works are included here that have expanded the field in different directions and their focus on individual topics of exploration. Dal Zotto and van Kranenburg (2008) produced a volume devoted to the relationship between management and innovation in the media industries. Deuze and Steward (2010) feature scholars explaining how their work contributes to a critical understanding of the management of media work. Media work was also th...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Contributors
• MME Handbook Editorial Review Board
• Foreword: Media Industry Sustainability Challenges
• Preface
• Part I MME Research: Foundation and Overview
• Part II Fundamental Issues in MME Research
• Part III Emerging Issues/Areas of Inquiry in MME Research
• Part IV Analytical Tools in MME Research
• Part V Future Directions in MME Research
• Afterword
• Index