Business Models for Media Firms: Does Competition Matter for how they Raise Revenue?

The purpose of this article is to analyze how competitive forces may influence the way media firms like TV channels raise revenue. A media firm can either be financed by advertising revenue, by direct payment from the viewers (or the readers, if we consider newspapers), or by both. We show that the scope for raising revenues from consumer payment is constrained by other media firms offering close substitutes. This implies that the less differentiated the media firms’ content, the larger is the fraction of their revenue coming from advertising. A media firm’s scope for raising revenues from ads, on the other hand, is constrained by how many competitors it faces. We should thus expect that direct payment from the media consumers becomes more important the larger the number of competing media products.

A nonlinear product differentiation model à la Cournot: a new look to the newspapers industry

In this work, we develop a new model for competition in markets with differentiated products. In addition, we present a consumer model designed to produce a flexible nonlinear inverse demand system that resembles the classical Multinomial Logit model, and discuss several extensions. We characterize firms competition in quantities based on the inverse demand system. The model is applied to the Spanish newspaper industry. This is a highly competitive two-sided market whose revenues are generated from sales and to a larger extent from advertising driven by its circulation. We then characterize the Perfect Equilibrium by conditional moment conditions, and estimate the parameters using the Generalized Method of MomentsResearch funded by two research projects, S-0505/TIC-0230 by the Comunidad de Madrid and ECO20011-30198 by MICINN agency of Spanish Governmen

Breaking Down the Chain: A Guide to the Soft Drink Industry

Provides an overview of the soft drink industry's earnings, structure, markets, and determinants of demand; major players; supply chain; marketing strategies; and policy and legislative actions in response to the sugar-sweetened beverage tax

Virtual Geodemographics: Repositioning Area Classification for Online and Offline Spaces

Computer mediated communication and the Internet has fundamentally changed how consumers and producers connect and interact across both real space, and has also opened up new opportunities in virtual spaces. This paper describes how technologies capable of locating and sorting networked communities of geographically disparate individuals within virtual communities present a sea change in the conception, representation and analysis of socioeconomic distributions through geodemographic analysis. We argue that through virtual communities, social networks between individuals may subsume the role of neighbourhood areas as the most appropriate units of analysis, and as such, geodemographics needs to be repositioned in order to accommodate social similarities in virtual, as well as geographical, space. We end the paper by proposing a new model for geodemographics which spans both real and virtual geographies

Understanding business strategies of networked value constellations using goal- and value modeling

In goal-oriented requirements engineering (GORE), one usually proceeds from a goal analysis to a requirements specification, usually of IT systems. In contrast, we consider the use of GORE for the design of IT-enabled value constellations, which are collections of enterprises that jointly satisfy a consumer need using information technology. The requirements analysis needed to do such a crossorganizational design not only consists of a goal analysis, in which the relevant strategic goals of the participating companies are aligned, but also of a value analysis, in which the commercial sustainability of the constellation is explored. In this paper we investigate the relation between strategic goal- and value modeling. We use theories about business strategy such as those by Porter to identify strategic goals of a value constellation, and operationalize these goals using value models. We show how value modeling allows us to find more detailed goals, and to analyze conflicts among goals

The Effectiveness of Direct Marketing Media Regarding Attitudes of Different Target Groups of Consumers in Serbia

The characteristics of a given target market are one of the main factors that need to be considered when selecting media to transmit a promotional message and achieve successful advertising. The authors of this paper will present the effectiveness of direct marketing media for different age groups of consumers in Serbia, with the aim of proposing a promotional-media mix of direct marketing media for consumers in different age categories. The aim of the research is to find out which direct marketing media are the most effective and which media are most suitable to respondents as members of a particular target group depending on their age and in relation to consumer habits. Effectiveness was observed on the basis of the frequency of reading promotional advertisents via direct marketing media in relation to the age of respondents

Effects of a Magazine’s Move to Online-only: Post-print Audience Attention and Readership Retention Revisited

For financial reasons, newspapers and magazines are increasingly going online-only. By doing so, some have returned to profitability, but with what consequences for their audiences? To expand the scant evidence base, we conducted a case study of the UK’s New Musical Express (NME) magazine. By analyzing quantitative audience data from official industry sources, we estimate total time spent with the NME by its British audience fell dramatically post-print—by 72%. This fall mirrors that suffered by The Independent newspaper, which went online-only two years earlier. We also report that the NME’s official net weekly and monthly readership increased post-print, although these results are difficult to compare with The Independent’s because the two titles differed in their print publication frequencies. We conclude that the attention periodicals attract via their print editions is unlikely to immediately transfer to their online editions should they go online-only. Building a fuller theory of print platform cessation, however—one that also encompasses changes in readership/reach—requires more comparable data. This case study provides further evidence to suggest that though, for newspapers and magazines, a post-print existence may be less costly, it is also more constrained, with much of the attention they formerly enjoyed simply stripped away

Trust and credibility. Towards a cross-disciplinary perspective on organics combining media and management research

The overall purpose of the paper is to approach the complex relations between consumer and organic products from respectively a media and a management perspective. We argue for the relevance of an interdisciplinary perspective on ecology and trust

Are People Reading Local News? A Content Analysis of Popular News Stories on Nine Newspaper Websites

The news industry has come under tremendous pressure in the last decade. None more so than the newspaper industry, which has seen all aspects of its operation: readership, revenue, staff, distribution and reputation decline dramatically. This study uses content analysis to examine the reading habits of news consumers from nine newspaper-based websites from the Advance Publishing chain. The samples were the stories in the “most popular this hour” list, examined every 5 days from August to September, 2014. These stories were separated into categories such as news, sports, business, etc., and further coded based on their proximity to the news organization. The goal is to understand what stories people are reading and discover any trend in their behaviors. This study is guided by niche theory, and the results show the theories at work as readers of these sites overwhelmingly gravitated towards two niche categories: local news and sports, and disregard the other offerings on the websites

Markets and linguistic diversity

The choice of language is a crucial decision for firms competing in cultural goods and media markets with a bilingual or multilingual consumer base. To the extent that multilingual consumers have preferences over the intrinsic characteristics (content) as well as over the language of the product, we can examine the efficiency of market outcomes regarding linguistic diversity. In this paper, I extend the spokes model and introduce language as an additional dimension of product differentiation. I show that: (i) if firms supply their product in a single language (the adoption model) then the degree of linguistic diversity is inefficiently low, and (ii) if some firms supply more than one linguistic version (the translation model) then in principle the market outcome may exhibit insufficient or excessive linguistic diversity. However, excessive diversity is associated to markets where the fraction of products in the minority language is disproportionately high with respect to the relative size of the linguistic minority.Product variety, language, translation