Docstoc

Media Use and Effects

Document Sample
Media Use and Effects Powered By Docstoc
					 8. Inter-media Competition


8.1 Cross-elasticity
8.2 The theory of the niche




                              1
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?




                                                                    2
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
           decreases
          It makes sense to increase the price




                                                                     3
Price Elasticity

   Price Q   Revenue

   90   1     90       100
                        90
   60   2     120       80
                        70
   40   3     120       60
                        50
   28   4     112       40
                        30
   20   5     100       20
                        10
   15   6     90         0
                             1   2   3   4   5   6   7   8   9   10
   12   7     84




                                                                      4
Cross-elasticity

    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
             extent
            An empirical method to determine the existence of
             competition

                                                                                5
Presentations

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




                                         6
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



                                                                            7
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
         limited
        Is indirect in the sense that exploitation of resources by a unit
         lowers the total amount of resources available to the others



                                                                             8
Space

  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




                                                                  9
Resource Dimensions

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




                                            10
Gratifications

    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
         consequences
        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.




                                                                        11
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




                                                               12
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
         capitalism
        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
     wasted


                                                                         13
Media Contents

    Media contents as scarce resources
      Scoops

      Prominent interviewees

      Independently produced contents

      Movie re-runs




                                          14
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




                                                           15
Relationship among Resource Dimensions




 Gratifications sought     Opportunities          Spending

                           Contents

 Gratifications obtained   Time spent by audience

                           Media research firms

                           Advertising spending


                                                             16
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




                                                                      17
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




                                                                    18
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




                                                                19
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?




                                                                20
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
   competition




                                                                21
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




                                                           22
Questions?




             23
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)




                                                                        24

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:4
posted:9/1/2012
language:English
pages:24