Media Economics

Media Economics:
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Media Economics: The Deadline Meets the Bottom Line
Introduction
The chapter ‘media economics’ creates insight on the economic realities of the social responsibility of the media. The media regulatory bodies provide several economic and legislative measures to enhance the control of the information in the industry. The chapter also explains how various mediums adjust to the real economic, technological authenticities of the media. Also, the chapter sought to assess the bottom line and value creation to both the stakeholders and stockholders in the theory of economic success. The chapter will answer the big question that most people ask on whether the news is worth paying for. It will elaborate on various ways of how media makes money. Just like in any other perfect competitive market structure, the media industry experiences an ever-increasing competition which results from technological advancement and minimum entry barriers. Various media companies are competing for the largest market share by creating a wide market coverage. Advertising is one of the main revenue streams to the media agents, and the clients will always seek the platform with adequate reach to the target audience. Therefore, the media’s competitive advantage is measured with the market share since it is their primary ability to generate revenue.
Competition and its impact on news
The attempts of gaining and maintaining a sustainable market share start by meeting the market needs.

Specific media companies strive to uphold a high level of professional ethics and filling their corporate social responsibility to please the majority of the public. According to Patterson & Lee, the primary responsibility of the media is to inform the public of the trending event which has a direct or indirect impact on their day to day activities. Wide coverage of news attracts a large audience which eventually restores confidence to the advertisers who even become willing to pay higher prices and subscription fees for the ads to continue with such media channels. The hyper-competition in the media industry plays a significant role in ensuring that people are getting the best services. It is also essential in upholding compliance to the set rules and regulations. Technology has imposed a dynamic organizational environment in the media industry. However, specific firms should not take this as a threat but instead the opportunity to offer the best service with the utilization of the modern technology for a competitive advantage. Unlike legacy journalism which emerged in the era of low to moderate competition, digital natives and news companies need to have strategic decision to make them profitable and price worthy (Patterson & Lee 163). The hyper-competition in the media industry creates news surplus in the market due to increased supply and constant demand. Economists have also failed to explain how we can achieve market equilibrium since news is not like any other traditional commodity regulated by pricing.
The survival of television
Television is one of the most media channels worldwide, and it has dominated the media market followed by the newspaper. They are the more accessible to the public and more efficient medium of passing information to a broad audience. Some people might wonder how the little cable and satellite subscription fee or the insignificant amount we pay is economical to sustain the media companies. However, the media services and more specifically the television were initiated by some advertisers to the public for free (Patterson & Lee 165). The advertiser aimed to use the platform to communicate their proposition to the public and create awareness for their products and services. Apart from passing news to the people, television also takes the role of entertainment to attract more and more audience for their clients. However, with the recent market conditions, TVs have introduced more revenue streams to meet their operational costs and sustain survival in the market. Other television channels are making use of synergy, mergers, and acquisition in the attempt of reducing operational cost and boost their competitive advantage. For instance, NBC and CBS launched their satellite cable to increase their competitive advantage against their greatest rival, EPSN (Patterson & Lee 166).
Stockholders are also after wealth maximizations, and they firmly believe that achievement of this is through the media enhancing their social responsibility. The decision-making process in the media companies has to be guided by the professional ethics to ensure the protection of the public interest. Different philosophers have a different perception of the business stockholders and how companies should operate to satisfy the needs and expectations of the individual stakeholders. The organizational achievement is assessed with the value creation to the society through social responsibility. Adherence to business ethics is also essential for the survival of the media companies (Patterson & Lee 171).
Conclusion
The chapter clarifies the concept of media economics and the bottom line by explaining how the players in the industry make money to sustain their operations. The analysis has shown that more than 90% of the media revenue comes from the advertising services. However, the advertisers are keen on choosing the specific channel or the media agent to advertise with and give them the attention of the target audience. Therefore, media company’s stockholders invest more the social activities in acquiring a significant market share to attract the advertisers at a worthy price. The chapter also answers the question of why a subscription to the media channels is so cheap. For instance, the price of the newspaper is far much lower than even the printing cost. However, all these strategies are to ensure the mediums are accessible to a large audience as possible.

Work Cited
Patterson, Philip, and Lee Wilkins. Media Ethics: Issues and Cases, 8th Edition. Boston: Mcgraw-Hill Education, 2014.