Media Economics and Technological Revolution - Coursework Example

Media Economics and Technological Revolution [2063] Media economics is considered to be that branch of economics, which calls for the application and implementation of theories, notions and fundamental principles of economics at macro and micro level in the media domain. In recent times, the expression has gained worldwide attention and therefore, it has gained substantial significance in the academic world(Albarran, 2002, 21). Technology and social media are the two terms, which have gained significant importance in contemporary society. Both of these expressions are connected to one another. Furthermore, it seeks to analyze the impact of technology on basic rules of media economics in the lights of broad and diverse academic resources. THE DEVELOPMENT OF MEDIA ECONOMICS IN CULTURAL INDUSTRIES In order to understand the impact of technology on media economics in cultural industries, it is essential to understand the concept of cultural industry (Albarran & Dimmick, 1996, 48). Cultural industry can defined as that industry that incorporates different types of medium including television, music, print media along with art and architecture. From research, it is evident that this industry has adopted technology. The developments and growth of mass media in the cultural industry created foundations for media economics. The concept of media economics first emerged in the fifties(Albarran, 2002, 32). The cultural industries played an important role in offering the main fundamentals for investigating and analyzing the economics of media. “Content providers, offering information and entertainment, became the suppliers, whereas consumers and advertisers formed the demand side of the market. Furthermore, various regulatory agencies (e.g., Federal Communications Commission [FCC], Federal Trade Commission, and other government entities) affected macroeconomic market conditions, and the relationship among suppliers in various industries created microeconomic market conditions” (Albarran, 2002, 115). During the fifties, the emergence of media economics became the subject of study of several micro and macro economists. For instance, Rau concentrated on studying the competition between newspapers, Steiner studied the competition in the radio industry and Reddaway studied the economics of several newspaper firms (Albarran, 2002, 201). The initial studies related to television and cultural industry sought to understand the structure of the market and the competition it had with other forms of medium(Albarran & Dimmick, 1996, 48). Furthermore, it concentrated on studying the influence of technology on revenues. In the same manner, “Concentration of ownership has been another topic studied across media industries. Representative studies of media concentration across industries include Albarran and Dimmick (1996), Bagdikian (2000), and Compaine (1985b), along with specific studies of industry concentration in newspapers (Lacy, 1984, 1985; McCombs, 1988; Picard, 1982, 1988a; Rosse, 1980), broadcast television (Bates, 1993; Litman, 1979), motion pictures (Gomery, 1993),and trade books (Greco, 1993)” (Albarran & Chan-Olmsted, 1998, 114). Furthermore, researchers have also examined and studied the structure of ownership in cultural industries in terms of management policy. Other factors that have been an area of interest among the researchers include the competition in the cultural industries, the behavior of the consumer, supply and demand of the product, etc (Albarran & Chan-Olmsted, 1998, 158) . The term media economics was further developed after the creation of Journal of Media Economics, which concentrates on providing academic and research journals on the subject of media economics. IMPACT OF TECHNOLOGICAL REVOLUTION: OVERVIEW The previous section of the essay concentrated on presenting an overview of development and importance of media economics. This section of the paper seeks to analyze the impact of technology on media economics of cultural industry(Oakley, 2004, 88). Researchers have identified two important factors, which influence technological revolution: globalization and regulation. Cultural industries are “heavily dependent on technology for the creation, distribution, and exhibition of various forms of media content, changes in technology affect economic processes between and within cultural industries” (Barker, 2000, 173). Barker (2000, 173) has identified the three essential aspects in this regard. The early developments made in the field of computing have allowed cultural industries to improve the effectiveness and efficiency in several domains and has made data storage easy. At the same time, it has open new doors for communications and exchange of information and knowledge. Secondly, ongoing developments in computers, “has involved the transition from analog to digital content. As computers became more powerful and sophisticated, the ability to convert text and graphics digitally soon led to digital audio and video files and once content is digitized, it can easily be distributed and shared with others” (Barker, 2000, 189). The cultural industries have moved towards the digital world. Finally, computer technology aided with Internet has changed and revolutionized the face of cultural industries. Primarily, internet has been used to exchange different information. Furthermore, developments made in the hyptertext language contributed towards the creation of World Wide Web, which completely changed the face of internet (Castells, 1996, 119). More recently, developments made in Social media, blogs, microblogs, podcasts, etc. have further revolutionized the face of cultural industries. In recent times, these industries have recognized the importance of Internet and therefore, have successfully employed and implemented strategies, which incorporate the use of this modern technology, in order to attract users and consumers (Castells, 1996, 121). Furthermore, cultural industries have employed technology in order to enhance and improve the overall image of the brand. The concept of cultural industries has been studied and investigated by Bernard Miege, who worked for UNESCO. The term had been developed to demonstrate and represent the “the abundance of cultural production that occurred in the second part of the last century; this abundance was triggered by the new technology of that time, the introduction of TVs to every home, the development of broadcasting, and later the introduction of video” (Flew, 2002, 198). In the eighties, In United Kingdom, there economic significance of creative and cultural industries emerged. From this perspective, cultural industries were viewed as “set of activities those activities which deal primarily in symbolic goods - goods whose primary economic value is derived from their cultural value” (Flew, 2002, 205). Cultural industries incorporate wide ranging activities including the production of software, advertisements, promotions, marketing, public relations, etc (Florida, 2002, 81). The introduction of the Internet and developments related to it, is seen as a period of technological advancement and revolution. “There began a boom period for new software and other Internet companies (i.e. the rise of Silicon Valley and similar companies jointly known as “the Internet bubble” that recently “burst”)” (Florida, 2002, 98). In this regard, digitalization became an important area of research. Because of digitalization, methods of communication, manufacturing, supply and distribution changed. Digitalization also allowed small business organizations to engage themselves in software and advertising domain (Oakley, 2004, 88). However, it should be noted that digitalization also had negative consequences. ANALYSIS What is the overall impact of technology on the basic rules of media economics in cultural industries? In this regard, it is essential to analyze the overall impact of technological revolution. There is no doubt that digitalization has made several developments in the cultural domain but it had also given rise to several issues related to economics (Hesmondhalgh,2002, 142). In terms of economic development, the majority of the cultural industries are in developed nations as compared to developing countries. Although digital technologies are affordable and economical and are readily available, digital technologies are limited in developing and under-developed countries. This creates an economic disparity and therefore, “division, more precisely this polarization, is present in the societies of the North as well. While the economic and employment-generating potential of these industries is vast and many developing and transition countries have great potential in this area, most are still marginal players, despite their rich cultural heritage and inexhaustible pool of talent. That position reflects a combination of domestic policy weaknesses and global systemic biases” (Hesmondhalgh,2002, 206). The profit of cultural industries is generated from copyright. It is also generated from the copyright they have acquired and in this regard, there are several problems. Landry (2000, 74) asserts that “the interests of multimedia companies have dominated the regulatory processes: a sign of this imbalance is the fact that copyright is not only addressed by the World Intellectual Property Organization (WIPO), but by the World Trade Organization (WTO), bringing intellectual property (as a tangible good) to the trade negotiating table”. This step was primarily taken in United States, Germany, France, United Kingdom and other European countries in order to give them the authority and control “over the flow of intellectual capital - turning intangible rights to be negotiated within the framework of world trade” (Landry, 2000, 123). Furthermore, “intellectual property is considered to be the fastgrowing component of the national economy and represents a significant amount of the GDP in the United States” (Landry, 2000, 125). Other problems include the legislations that are related to digitalization in cultural industries lack clarity and structure and therefore, the cases related copyright infringement take place. The most notable case in this regard was that of Napster(Lessig, 2004, 257). “ In terms of place and space, when one speaks of creative industries one speaks more of cities and of “clusters” such as Silicon Valley and Silicon Alley as the environment for creative industries, rather than of countries. What is more used in the South in terms of the possibilities of new technologies is the easier access to creative goods, through piracy mainly. For illustration in this context, one has to mention the key problems of cultural industries in the Southeastern European region such as the question of accessibility of new technologies, dependence on state aid, small markets, limited production, the influence of international cultural industries and problems with distribution” (Lessig, 2004, 258). Based on the data presented in this essay, it should be noted that technology has changed the basic rules of media economics in cultural industries. Cultural industries are considered to be industries, which are risky in nature. “This comes from the fact that the value attributed to cultural goods can change rapidly over a certain period of time - one can easily go out of style/fashion” (Lessig, 2004, 302). Secondly, cultural industries and emerging technologies need sophisticated infrastructures and advanced environment. Cultural industries revolve around high skilled personnel and therefore, the industry has become a fashionable industry (Nielsén, 2004, 199). Technology and economics of cultural industries is the product of urban regeneration; where traditions and creativity work collaboratively with technological advancements to contribute towards developments. Furthermore, technological revolution has given rise to a cultural class. “Lastly, one can note the changing nature of work in creative industries: due to the influence of products of culture” (Mercer, 2001, 188). Nielsén (2004, 205) asserts that “ordinary manufacturing industry is becoming more and more like the production of culture. It is not that commodity manufacture provides the template, and culture follows, but that the culture industries themselves have provided the template”. SUMMARY AND CONCLUSIONS The last two decades have also witnessed the development of cultural industries and this expression has gained significant attention in the academic domain. This paper concentrated on discussing the developments made in the cultural industries in the lights of new technologies. Cultural industry can defined as that industry that incorporates different types of medium including television, music, print media along with art and architecture. From research, it is evident that this industry has adopted technology. During the fifties, the emergence of media economics became the subject of study of several micro and macro economists. Researchers have identified two important factors, which influence technological revolution: globalization and regulation. The early developments made in the field of computing have allowed cultural industries to improve the effectiveness and efficiency in several domains and has made data storage easy. At the same time, it has open new doors for communications and exchange of information and knowledge. Finally, computer technology aided with Internet has changed and revolutionized the face of cultural industries. Cultural industries incorporate wide ranging activities including the production of software, advertisements, promotions, marketing, public relations, etc. The introduction of the Internet and developments related to it, is seen as a period of technological advancement and revolution. There is no doubt that digitalization has made several developments in the cultural domain but it had also given rise to several issues related to economics. In terms of economic development, the majority of the cultural industries are in developed nations as compared to developing countries. Other problems include the legislations that are related to digitalization in cultural industries lack clarity and structure and therefore, the cases related copyright infringement take place. BIBLIOGRAPHY Albarran, A. B. (2002). Media economics: Understanding markets, industries and concepts (2nd ed.). Ames: Iowa State University Press. Albarran, A. B., & Chan-Olmsted, S. (Eds.). (1998). Global media economics: Commercialization, concentration, and integration of world media markets. Ames: Iowa State University Press Albarran, A. B., & Dimmick, J. (1996). Concentration and economies of multiformity in the communication industries. Journal of Media Economics, 9(4), 48–49. Barker, C. (2000), Cultural Studies: Theory and Practice, London/Thousand Oaks/New Delhi: Sage Publications. Castells, M. (1996), The Information Age: Economy, Society and Culture. Volume 1. The Rise of the Network Society, Oxford: Blackwell. Flew, Terry, (2002), “Beyond ad hocery: Defining Creative Industries”, Paper presented to Cultural Sites, Cultural Theory, Cultural Policy, The Second International Conference on Cultural Policy Research, Te Papa, Wellington, New Zealand, 23-26 January 2002. Florida, R. (2002), The Rise of Creative Class, New York: Basic Books. Hesmondhalgh, D. (2002), The Cultural Industries, London/Thousand Oaks/New Delhi: Sage Publications. Landry, Charles (2000), The Creative City, London: Earthscan. Lessig, L. (2004), Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity, New York: The Penguin Press. Mercer, C. (2001), “Convergence, Creative Industries and Civil Society: The New Cultural Policy”, Culturelink, special issue, Zagreb: Institute for International Relations. Nielsén, T. (2004), Understanding the Experience Industry: A Swedish perspective on creativity, Stockholm: QNB Analys & Kommunikation AB. Oakley, K. (2004) “Developing the Evidence Base for Support of Cultural and Creative Activities in South East England”, South East Cultural Consortium. Read More