Media Economics and Digital Revolution - Essay Example

Topic: In what ways are the basic rules of media economics changed by the digital revolution and in what ways do they remain the same? Media economics and digital revolution are explanatory terms. Before discussing the effects and impacts of digital revolution on media economics, it is important to know the scope and meaning of these terms. Media economics pertains to media specific questions based on economic theory and practice. Media economics, thus, encompasses in its scope policies and patterns of media groups and its branches like journalism, news industry, film industry, print, broadcast, advertisement, public relations and entertainment programmes implicit in it social and economic issues. Digital revolution has effected cost reduction by replacing analog into binary representation of ones and zeroes, felicitating multiple generations of copies similar to the original. Digital revolution goes far beyond multimedia applications of storing all information in a binary digital format. The horizon of digital revolution has expanded to the extent of putting an end to privacy, to quote the example of Walmart labeling all its products with RFID tags, causing worry to the privacy groups. Hoskins, McFadyen and Finn of University of Alberta have very appropriately and forcefully analysed links between media and communication in their book “Media Economics: Applying Economics to New and Traditional Media. They have reasoned with arguments on questions like the Internet affecting the information-rooted entertainment and cultural products; how is broadcasting generally regulated and often supported, segregating newspaper publishing from it. Media economics rules have taken different moulds as multi-faceted aspects of digital revolution unfold. On the basis of microeconomic principles and concepts, it peeps into media industries to discuss and analyse topics in the resulting media environment. In media industries, demand and supply of products is affected by their variables. When packet switching to circuit networks is employed for the Internet, the economies of scale work to give competitive advantage to US in comparison to other countries and on top of that the mergers of entertainment industry such as Disney’s acquisitions of Miramax and ABC, AT&T’s acquisition of the cable company TCI happen. Digital revolution through the medium of the Internet affects the supply of media goods and services. The time has come when possessing a commercial television-broadcasting license is “like having a license to print your own money” Braddon, 1965, p. 240 Here comes the all-important role of digital technology in affecting the demand of media products in a positive way. Supply of media goods increases manifold with the introduction of technology. Newspaper distribution at a central plant makes it unfeasible to its reach beyond the radius of 200 miles but new technology delivers content via satellite, enabling the publishers to reduce costs and increase sales by deleting “distant market” price. The example of Amazon.com in revolutionising the retail sale of books at lower prices, thus changing the rules of media economics, furthers the change that is happening with Apple’s iTunes music Store resulting in reducing costs and increased supply. To make the transition to digital, many governments are giving time to existing broadcasters, banning the entry of other players till 2005 by delaying the introduction of direct-to-home (DTH) satellite delivery, interfering in the rules of media economics to felicitate digital revolution. Economic theories of supply and demand as well as elasticity concepts, earlier applicable to media economics are getting eroded to accommodate digital revolution. In their book “Image Ethics in the Digital Age, Gross, John and Jay have raised the acquisition issue of two competitor companies by Getty Images PLC to solidify its position in Stock Photography Industry. Digital technology has changed the very face of the industry. Although engulfed by “visual content industry” it has evolved into another scale in its commercial, aesthetic and archival logics finding their perfect incarnation in the potential ensemble of digital technologies, fast, effective image manipulation, efficient data storage and management, unlimited duplication from digitised originals with no loss of quality; and almost instantaneous online delivery worldwide. On the contrary, a different view comes into focus when Hans Magnus Enzensberger in his powerful essay on “Constituents for a Theory of the Media” advocates through the example of student movement in favour of traditional means of communications. Students’ knew that their song in the streets of Chicago “The whole world is watching” would get audience through ABC, CBS and NBC, not via WWW. It shows that the power of movies and TV is greater than the scattered reach of the new digital media. Henry Jenkins has pointed out about the danger signals guessed earlier of converging of media power in the hands of few in the digital culture, enlarging the rule of cultural gate keeping in Contacting the Past: Early Radio and the Digital Revolution. Before the arrival of digital revolution, industry specialists were forecasting democratisation of media power, which didn’t materialize. Gholam Khiabany of London Metropolitan University has written on continuities and changes of new technologies. With the herald of digital age, its enthusiasts prophesized freedom from political, economic, government and business powers that had captured the scene, which proved a myth. Nothing has changed Dyson, 1998. Negroponte (1995) foretold the fall of big media houses, which didn’t materialise.“Media barons of today will be grasping to hold on to their centralized empires tomorrow” (p. 58). On the other hand, big media is in a better position to exploit the benefits of digital technologies than smaller ones. Internet was thought to be a tool to disseminate rather than centralise information. The decline in values of digital companies since 2000 shows that technology can’t save capitalism from its dead sure crisis and bring change in the roots of capitalism. Digital economy can’t put up an exemplary clean road to growth and better distribution of resources and problems remain “as real as virtual reality”. Another aspect of digitalization – online news – is no different from what is being provided by traditional sources of information. Giant news companies and brands have captured the web media, which, according to Paterson, is neither interacting, different, original, nor more pertinent than traditional media. Yahoo and Amazon are just few names that have recorded success; hundreds others have failed. New companies have based their business plans on the current scenario of offloading their assets to bigger players. Actually, it is not the technology but the system of culture industry that sets the terms and conditions to succeed. The Internet is not a tool of democratic institutions. Worldwide potential of Internet has nothing to do with democratic values. Media economics is not going to be effected by digital diffusion. Social relations need to be changed to herald the Internet as a democratic medium of change in media economics. Works cited list Gholam Khiabany, Department of Applied Social Sciences, London Metropolitan University, Trends in communication (2003). Globalization and the Internet: Myths and Realities. Retrieved August 11, 2006, from http://www.leaonline.com/doi/pdf/10.1207/S15427439TC1102_05 Media economics from Wikipedia, the free encyclopedia. Retrieved August 11, 2006, from http://en.wikipedia.org/wiki/Media_economics Digital Revolution from Wikipedia, the free encyclopedia. Retrieved August 11, 2006, from http://en.wikipedia.org/wiki/Digital_Revolution Books: Colin Hoskins, Stuart M. McFadyen, Adam Finn, University of Alberta, Media Economics: Applying Economics to New and Traditional Media. Retrieved August 11, 2006, from http://www.sagepub.com/textbooksProdDesc.nav?prodId=Book226319 Colin Hoskins, Media Economics: Applying Economics to New and Traditional Media, Chapter 5: Production and Cost. Retrieved August 11, 2006, from http://www.sagepub.com/upm-data/5125_Hoskins_Final_Pages_Chapter_5.pdf Colin Hoskins, Media Economics: Applying Economics to New and Traditional Media, Chapter 3: Markets. Retrieved August 11, 2006, from http://www.sagepub.com/upm-data/5124_Hoskins_Final_Pages_Chapter_3.pdf Introduction to Democracy and New Media, The Digital Revolution, the Informed Citizen, and the Culture of Democracy (Cambridge: MIT Press, 2003) ed Henry Jenkins and David Thorburn, Retrieved August 11, 2006, from http://web.mit.edu/transition/subs/demointro.html Image Ethics in the digital Age – Ed Lary P Gross, John Stuart Katz and Jay Ruby, Published at Minnesota Press, Retrieved August 11, 2006. Read More