MEJO424 Management of Electronic and Digital Media Reading Notes PDF

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Management of Electronic and Digital Media Reading Notes EXAM I STUDY GUIDE Chapter 1: Managing Electronic and Digital Media In this chapter you will learn: An overview of the contemporary electronic and digital media industries The levels of management found across the media industries The skills, functions and roles of electronic and digital media managers The demands placed on managers by audiences, advertisers, and owners  Consumers have the power o Today’s managers operate in a multiple platform 24/7/365 environment where consumers control what they access and when they access entertainment and information content  Management roles o Management: a process by which individuals work with and through other people to accomplish organizational objectives  Responsible for decision making, problem solving, creativity, negotiation, and interpersonal skills o Leadership: leading a group of people or an organization (simple definition)  Leadership is multi-faceted and complex  Leaders cast a vision for their unit and organization  Followers (a person chooses to follow)  Leaders are good at motivating individuals and helping each person grow and develop  Leaders are expected to provide a moral compass and exhibit strong ethical principles and integrity o Entrepreneurship: a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk  Adept at starting new businesses, taking risks, and often selling their new business—ideally for a profit  Today’s media managers need to think like entrepreneurs and function with an entrepreneurial spirit to remain relevant in a rapidly evolving landscape  Seven traits of an entrepreneur: tenacity, passion, tolerance of ambiguity, vision, self-belief, flexibility, and rule-breaking o Management and leadership have always been intertwined; entrepreneurship has typically been treated separately as an occupation or a field of study  Electronic and digital media: traditional radio, television, cable/satellite, and telecommunications (telephone) industries— and “new media” like internet sites and other digital platforms, including social media  The manager is charged with the responsibility for achieving objectives planned by company strategy; plan=budget  Qualifications of a manager o Leadership  Motivate  Manager shares the vision of the business; paints a picture of how things can and will be  Sincere interest in the welfare of employees at the business and in the community  Delegate  Getting work done through other people  Communicate  Being able to listen is a key component to being and effective communicator o Intelligence and Knowledge  Acquired knowledge specific to the industry  Must remain current  Industry; market; station o Judgment  Expect the unexpected o Personal Integrity  Ethics and more  Wholeness  Balanced composite of sensitivities and values based on insight and experience o Sense of Responsibility  Owners  Advertisers  Audiences  Employees o Attitude Toward Work  Attitude is the most important thing an employee or manager brings to a job

An Overview of Electronic and Digital Media in Society  The electronic and digital media industries provide a variety of entertainment and information platforms, influence culture, and help make sense of our social reality  Managers in the electronic media must maintain efficient, profitable operations to meet the expectations of owners and stockholders  Audiences can access info and entertainment content via many different distribution platforms and consumer technologies  Media managers must respond to the needs of their customers, recognizing that their audience has numerous options for entertainment and information content  Several demands—for information and entertainment by the audience, for profits by stockholders, and for access by advertisers—place managers of electronic media facilities in a challenging position as they try to serve the needs of the market along with the needs of the marketplace o This balancing act is made all the more difficult by constant changes in competition, technology, regulatory issues, social issues, and consumer tastes and preferences  Traditional electronic media companies like broadcasters and cable and satellite systems engage in similar activities o There are four separate but interrelated activities:  Development  Concerned with new tech innovations  Technology stimulates the growth of the electronic and digital media and improves the quality of media consumption  Advances in mobile delivery and the adoption of multiple platforms are but two examples of changing innovation in the media industry  Production  Consists of the manufacture of both hardware and software for the electronic media  Hardware includes TV and radio receivers, DVRs, mobile devices  Software includes such products as TV and radio programs, sound recordings, and advertising messages  Distribution  Concerned with getting content products to consumers  Today many forms of distribution platforms are available, ranging from the traditional broadcast networks to satellite-delivered services, the internet, broadband, cloud-based services, and applications for mobile devices  Exhibition  This is where the consumer uses and engages the product  The pervasiveness and portability of technology means that exhibition can occur at any time and place  This flexibility has added to the challenge of reaching targeted audiences, since consumption of media content can take place anywhere o Though the media share similar activities, each industry experienced considerable change as a result of media convergence  This is usually thought of as the integration of video, audio, the internet, and computing systems, as well as distribution technologies  Companies have converged operations to save resources  The 21st century media landscape is filled with converged media operations, but the industries had distinct, separate beginnings Management in the Electronic and Digital Media  Managers are found at many different levels within organizations  Levels of Management o Lower-level managers: center on supervising others and monitoring individual performance o Middle managers: typically plan and allocate resources and manage groups of people o Executive managers: monitor the entire organizational environment, identifying internal and external factors that impact their operation  Although tasks and duties vary at these levels, all managers share certain skills, functions, and roles  Management skills: the basic competencies needed by electronic media managers o Six broad areas of skills needed in the management process  Technical  While technological advancements make it impossible to keep up with all the changes taking place, managers still need basic competencies in such areas as equipment operation, signal transmission, content distribution, and digital applications  Human  Successful managers exhibit strong interpersonal skills and are particularly adept at leading and motivating employees

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Managers need to be dynamic, visionary, and motivated in order to lead their operations effectively and create a spirit of cooperation and participation among all employees  Conceptual  Managers must understand the complexities of the internal and external environment and make decisions based on sound judgment  Change is constant, so managers must be able to respond quickly to the environment  Financial  Managers need strong financial skills in order to meet financial goals, manage budgets, and deal with unexpected contingencies  Marketing  Managers must know how to position their products effectively and know what vehicles and platforms are needed to build audiences  Know how to use the four Ps of marketing  Entrepreneurial  Today’s managers need to be innovative, tenacious, and not afraid to take risks, as well as exhibit a sense of passion Management functions: the tasks that managers perform o Chester Bernard identified three managerial functions:  Providing a system of organizational communication  Procuring proper personnel  Formulating and defining the purposes and objectives of the organization o Henry Fayol came up with the POC3 Model specifying the functions of management as:  Planning  Organizing  Commanding  Coordinating  Controlling o Later, management scholars replaced commanding and coordinating with motivation; POMC model o Media managers are involved in:  Planning  Involves establishing organizational objectives and providing others with the resources needed to accomplish their tasks  Strategic planning has been complicated given the transition of traditional electronic media to new forms of digital media  Traditional media, new media, and social media must be considered because they all have an impact in terms of reaching audiences  Organizing  Determines who or what unit is responsible for specific company objectives  Most electronic and media operations maintain departments (such as operations, sales, engineering, and news) to handle individual responsibilities such as coming up with its own planning objectives, budget, and staff to meet necessary goals  Motivating  Motivating employees to a high level of performance helps any organization accomplish its goals  Employees want managers to recognize them for their individual achievements and contribution to the organization, and they want opportunities for continued growth and advancement  Controlling  Involves several areas of responsibilities o Giving feedback to other managers and employees o Monitoring the progress toward completion of organizational objectives and financial goals o Making changes as situations demand  Positive feedback helps motivate employees  Monitoring is another essential control function o Managers must keep tabs on the progress of organizational objectives and help solve related problems  Facilitating  Managers must empower their employees with the needed resources to complete organizational tasks, such as personnel, money, or equipment  Usually at the executive or middle levels of management  Communicating  Media managers have many ways to communicate with employees, who need and expect managers to keep them abreast of information important to their jobs

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Negotiating  Negotiation with employees o Salary and benefit packages o Contracts for talent o Bargaining with guilds or unions o Dealing with vendors o Requests from low and middle level managers for new personnel positions  Negotiation in program acquisition o Fees for copyrighted material o License fees o News services o Local productions  Advertising prices o Determined by the available supply of commercial inventory and demand by advertisers Management roles: the different roles that managers adopt as they interact with different constituencies, such as employees, owners, consumers, and peers o One classic study identified three types of roles managers adopt in their daily environment:  Interpersonal: concerned with leadership  Informational: address communication  Decisional: involve decision making o Three roles best exemplify contemporary electronic media managers:  Leader  Being a good leader involves accepting responsibility for the organization as well as for its employees  Adapting to change, making decisions, maintaining open lines of communication, and leading others to the completion of goals are essential qualities of strong leaders, along with setting a vision and exhibiting passion  Representative  To the public and local community, media managers for broadcast stations serve as figureheads in a variety of contexts  Managers also represent various trade and professional organizations such as the National Association of Broadcasters, the National Cable and Telecommunications Association, and the Radio Television Digital News Association o Tasks in these organizations may involve serving on committees, consulting with regulators, and working with lobbyists at the national and state levels  Liaison  Executive-level managers serve as important liaisons to the parent company, as many media companies are owned by corporations  Managers report on progress and problems in their operations

Chapter 2: The Media Business Environment In this chapter you will learn: The product and geographic dimensions that form electronic and digital media markets Different types of market structure and their characteristics How economic, technological, regulatory, global, and social forces are driving change across the electronic media industries What a strategic alliance is and the types of strategic alliances found in the electronic and digital media industries How strategic alliances and partnerships impact management Electronic and Digital Media Markets  Understanding the characteristics of markets helps management develop strategies regarding content, advertising, branding and emerging digital platforms  Defining the Market o Market: a place where consumers and sellers interact with one another to determine the price and quantity of the goods produced o A market consists of sellers, buyers, and products  Dual-Product Markets o While media companies produce one product, they participate in separate good and service markets o In the first market, the good may be a radio format, a television program, a cable channel, or a website o In the second market, in which many media companies operate, involves the selling of advertising  As demand for advertising rises, companies charge higher prices to increase revenues and profits  A drop in audience ratings or other media usage often causes a decline in advertising expenditures and a reduction in revenues

Most media are two-sided businesses  Audience  Advertisers o The market for most media is selling an audience to advertisers o For example, a TV network rating periods, or sweeps, are vital in determining advertising revenues  Geographic Markets o Media companies operate in specific geographic markets o Defining a traditional media market involves combining the product and geographic aspects of the market  This process identifies a specific market in which a media firm offers some or all of its products to advertisers or consumers  The number of sellers in a particular market—as well as the extent of the competition among suppliers for buyers—is affected by the characteristics of the market, these characteristics are known as market structure Market Structure  Though the structure of a market depends on many factors, several important criteria help identify the type of market structure  Concentration of Buyers and Sellers in the Market o The number of producers, or sellers, in a market explains a great deal about the degree of concentration in the market o A market is considered concentrated if revenues, or circulation, are controlled by a limited number of companies o Two common approaches of measuring concentration  Measured by ratings/revenue: calculates the share of the market reached by each competitor  Calculating the percentage of revenues (sales) controlled by the top four (or eight) firms, also known as concentration ratio  A market is considered concentrated if the four-firm ratio is equal to or greater than 50% or if the eight-firm ratio is equal to or greater than 75%  Product Differentiation o Product differentiation: refers to perceived differences among products o To establish such differentiation, marketing campaigns establish differences in the minds of listeners, broadcast networks distinguish themselves through individual program schedules, social media sites target specific consumer interests o Have a unique marketing or selling position  Barriers to Entry o Barriers to entry: obstacles new sellers must overcome before entering a particular market o These can be in the form of capital investments (may be expensive to acquire high-quality equipment, personnel), regulatory policies o Low barrier to entry: internet o High barrier to entry: newspapers, TV  Cost Structures o Cost structures: the expenses needed to create products in a market o Fixed costs: one unit of product o Variable costs: labor, materials, which depend on the quantity produced o Industries with high fixed costs, such as cable, often lead to concentrated markets o Economies of scale: the decline in average cost that occurs as additional units of a product are created  Important to businesses in an industry with high fixed costs  Expanding and repurposing can produce economies of scale  Vertical Integration o Vertical integration: occurs when a firm controls multiple aspects of the production, distribution, and exhibition of its products  Types of Market Structure o The four main types of market structure are:  Monopoly  A single seller of a product exists and dominates the market  There’s no clear substitute for the product  Barriers to entry are high in this type of structure  Ex. radio (at one time), newspapers (at one time)  Oligopoly  Features three or more sellers of a product, which may be either homogeneous or differentiated  A market dominated by a few firms that hold a similar share is considered an oligopoly o These firms are interdependent  Broadcast television stations and networks operate in an oligopoly market structure o

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 Barriers to entry are significant Monopolistic competition  Exists when many sellers offer similar products that are not perfect substitutes for one another  Barriers to entry are fewer compared to an oligopoly  Each firm attempts to differentiate its products to the consumer via advertising, branding, promotion, location, service, and quality  Ex. syndicated television programming, magazines Perfect competition  When multiple sellers and a homogeneous product characterize the market  When no single firm dominates, barriers to entry do not exist, and individual companies operate as price takers in the market because buyers establish the price for the product, such as the price for wheat or corn  Ex. agriculture, digital media/websites, buyers establish the price

Business Models  Different business models exist across the media industries, but most fall into one of the following categories: o Advertising: advertisers buy time and space in content products and applications to gain access to audiences o Business to consumer: in this category, businesses market products to consumers; consumers pay for the item on a case-by-case basis  Ex. Amazon o Subscriptions: another form of business to consumer; recurring charge for the product/service, usually on a monthly basis; cable o Consumer to consumer: in this model the actual transactions are conducted among consumers, but a middle entity helps broker the transaction and collects a fee for its services; eBay, StubHub o Freemiums: provides a sample of content for free before the user must either pay or subscribe to receive the complete offer; free then payN&O Forces Affecting Markets  A number of forces, functioning both independently and interdependently have led to a state of constant change across the media industries that continues in to the 21st century  Economic conditions o Refers to the number of economic factors that affect the general business cycle in both national and local geographic markets o Key economic indicators:  Rate of inflation  Local employment trends  Retail sales  Measures of effective consumer buying power  Housing developments  Changes in interest rates and tax laws o Ex. recession  Technological forces o Technology is a catalyst for change across the electronic and digital media industries o User-generated content: led to an expanding array of entertainment and information and an alternative to content delivered by the traditional electronic media  Ex. blogs, photographs, and videos as news items, audio files, music, and social media sites o Ex. broadband  Regulatory forces o Government bodies impact the structure of media markets and marketplace activity through rulings and other actions o Ex. FCC  Global forces o Can best be understood by recognizing that the media industries create products that are marketed around the globe o The growth of regional trade blo...