Media Use and Effects by dfhdhdhdhjr


									 8. Inter-media Competition

8.1 Cross-elasticity
8.2 The theory of the niche

Competition between Media Industries

    Questions about competition between media industries
      How do different kinds of media products compete for
       the same market resources and revenues?
      How do media products compete with other kinds of
       entertainment or simply consumer goods?
      How does the rise of new media affect the profitability of
       old media?

8.1 Cross-elasticity

    Price elasticity of demand
        % change in quantity / % change in price
        >1
          elastic demand: revenue increases when prices decreases

          It makes sense to decrease the price

        =1
          unit-elastic: revenues unchanged when price decreases

          The price should be kept at the level

        <1
          inelastic demand: revenues decrease when price
          It makes sense to increase the price

Price Elasticity

   Price Q   Revenue

   90   1     90       100
   60   2     120       80
   40   3     120       60
   28   4     112       40
   20   5     100       20
   15   6     90         0
                             1   2   3   4   5   6   7   8   9   10
   12   7     84


    Cross-elasticity in demand
        % change in quantity / % change in price of another product
          E.g., price of Eastweek and demand for Next Magazine

          E.g., price of Apple Daily and demand for Oriental Daily

          E.g., bus prices and demand for KCR

          E.g., VCD/DVD prices and demand for movie tickets

        Product substitutions
        A measure of the extent to which the two products are
         competing with each other
            If cross-elasticity is significantly greater than zero, then the
             two products are competing with each other to a certain
            An empirical method to determine the existence of


     Hollywood Movies and Local Movie
     Online vs. print newspapers

8.2 Theory of the Niche

    The theory of the niche consists of a set of concepts and
     propositions concerning competition and coexistence
        A niche refers to, in the most general sense, the relationship
         between a population or an individual to its environment
        An industry is usually considered as a population located within
         a community
        Communities consist of populations within a specific
         geographic boundary
    The theory predicts that a new medium will compete with
     established media for consumer satisfaction, consumer time,
     and advertising dollars

Conceptualize Competition

    Ways to conceptualize competition
        Number of channels
        Number of channels plus intensity of competition
        Competitiveness as the absence of a price-setter
    In the theory of the niche, competition
        Refers to the situation in which organizations or industries are
         using the same or similar resources
        Exists when ecological similarity exists AND resources are
        Is indirect in the sense that exploitation of resources by a unit
         lowers the total amount of resources available to the others


  Space as a resource in a natural environment
  Space is a resource for media organizations in the minimal
   sense of land for buildings, printing press, etc.
  For media organizations, space defines the geographic limits
   of resources such as audiences, patrons, or advertisers
        E.g., bookstores
        E.g., Apple Daily and Oriental Daily in Hong Kong

Resource Dimensions

    Gratifications obtained
    Gratification opportunity
    Consumer spending
    Time spent by consumers on the media
    Advertising spending
    Media contents


    Uses and gratifications research
        Social and psychological origins of needs
        Needs generate expectations of mass media or other sources
        Expectations lead to differential patterns of media exposure
        Media exposure results in need gratification and other
        Need gratification generates further needs and expectations
  Gratifications as a resource for media companies
  Gratifications occur within “domains”
        News, entertainment, business and economic news, etc.

Gratification Opportunities

  Characteristics of a medium, rather than attributes of
   individual consumers
  Opportunities for satisfying media-related needs depend a
   good deal on where or when individuals or populations are
   located in time and space
    E.g., traveling on a plane

    E.g., traveling on a bus

    E.g., television in an elevator

    Place-based media

Time Spent with Media

  Time as a scarce resource: population time budget
  Time and leisure
        Increase in leisure time in developed countries as societies
         moved from production-based capitalism to consumerist
        One thing that development in (media) technologies does is to
         free up time for individuals
          E.g., SPSS and word processing programs

          E.g., computer downloading time

          E.g., the fast-forward option

    Time is not storable and transportable and can easily be

Media Contents

    Media contents as scarce resources
      Scoops

      Prominent interviewees

      Independently produced contents

      Movie re-runs

Other Resource Dimensions?

  Do sponsorship and product placement constitute new
   resource dimensions?
  In some countries, government subsidies could be a scarce
   resource that media companies compete with each other

Relationship among Resource Dimensions

 Gratifications sought     Opportunities          Spending


 Gratifications obtained   Time spent by audience

                           Media research firms

                           Advertising spending

Niche Breadth

  Is a measure of the area of a niche along a particular
   resource dimension
  Specialist populations have relatively narrow niches
  Generalist populations have rather broad niches

                                  Generalist             Specialist
     Natural environment          Human beings           Panda
     Media industries             Newspapers             Cable TV

        Niche-breadth strategy
          Diversification, multinational operation, economies of scope

Niche Overlap

 Refers to ecological similarity between two populations
 Measures the relationship between populations in terms of
  the similarity or difference in their resource utilization patterns
 The greater the overlap, the stronger is the competition
  between the two

Competitive Superiority

 When two species overlap almost completely, intense
  competition would result
 It is possible that only one species will remain in the end
   E.g., the demise of evening newspapers in Hong Kong

 Competitive exclusion
 Functional alternative

Limiting Similarity

  Some difference that lowers niche overlap is important for
   populations to co-exist
    E.g., hawks (鷹) and owls (貓頭鷹)

  Is there limiting similarity between online and print newspaper?
    Gratifications obtained: do readers want different things?

    Gratification opportunity: the need of a computer, and others?

    Consumer spending: paper as a family purchase, and others?

    Time spent by consumers: any way to differentiate?

    Advertising spending: any difference?

    Media content: any competition at all?

Differences and Competition

  In media industries, differences can be developed to lower
   niche overlap between media industries
    How old media redefine themselves when a new
      medium arise
  Exclusion vs. competitive displacement
  Changes in resources can also affect the outcome of

Limitations of the Theory of the Niche

     How to deal with changes in the nature of a population?
     Definition of a population may become more and more
      problematic in the age of technological convergence


Concluding Remarks

    Throughout the century, as new media technologies were developed
      The ecology has become more and more complicated

    Generally speaking, there are 3 possibilities when an ecological
     environment is invaded by a new species
      Niche overlap and competition may increase with the result that
        organizational mortality may occur in some industries, or at the
        extreme an entire industry may perish (i.e., competitive exclusion)
      Resources may increase so that competition does not increase
        substantially despite the presence of a new competitor
      The new competitor may take over some of the resources
        formerly used by other populations (competitive displacement)


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