Earlier this year a thick volume was published with the descriptive, if uninspiring, title Handbook of Media Management and Economics. The editors of the Journal of Media Economics asked me to use a review of the book to expand on the state of the new field of media economics and management. I have posted the complete review at my Web site. In brief, what I wrote was that it is difficult—maybe impossible—to understand the dynamic of the media landscape today without some basic knowledge of economics in general and the micro economics of the media industry in particular.
For about 20 years I have been using a line with industry and academic audiences: “No newspaper ever went out of business for lack of content.” (The folks running the media know this). And the same applies to those who publish magazines and books, operate radio stations, cable networks and even Web sites.
The responsibility for that survival sits not only with management but with every employee in each enterprise. No matter whether the central mission of a particular media organization is news or information or entertainment, a piece of that mission statement needs to include something to the effect that its product must meet a need or want of some audience.
One of the editors and an author of the Handbook, Sylvia Chan-Olmstead, recounts in the Preface her experience at an academic mass communications conference, where a respondent to one student’s paper that had used media management theories “blasted her study.” The respondent’s argument was that the student should have relied on “serious” mass communication theories and left the “business stuff to the people from business schools.”
That respondent represents the “head in the sand” attitude that remains apparent among some journalists, “reform” advocates and even in some schools of communication. Think about it: For anyone who feels that the media have a special role in society and who wants those who control the media to take that mission into account in their decision-making, would it be best to leave it to “those folks in the business school” or to decision-makers who have been schooled in the ways of the media along with an understanding of how their industry functions and thrives?
Large publishing enterprises that grew along with the steam driven rotary press and the railroads did not fully take shape until the 20th century. The earliest substantive work I have found devoted to a media industry was O.H. Cheney’s Economic Survey of the Book Industry, published in 1931. In that landmark work he noted that management and control methods were inadequate, hazards and wastes were high, and the distribution system could not handle a reasonable volume profitably. Little, if anything, had change in that industry by the time I revisited the book publishing industry in a 1978 study.
Most early “research” of the media industry was in the form of histories, though with an occasional nod to the economic side of the business. James Playsted Woods subtitled his 1949 book Magazines in the United States “Their Social and Economic Influence.” When Alfred McClung Lee published The Daily Newspaper in America in 1947 he included sections on Ownership and Management as well as Chains and Associations. However, he had no research to refer to. For example, he described the acquisitions and divestitures occurring during the 1920s and 1930s at Hearst and Scripps-Howard, among others. He quoted the vice president of the Lindsay-Nunn chain, who said in 1930, “I think it is becoming more and more evident that it doesn’t matter who owns the newspaper as long as it is operated vigorously and fairly. The average reader doesn’t bother about the paper’s masthead.” Lee added “Good theories, perhaps.” But then he speculated with his own theory that perhaps readers do care about editorial policies.
That’s all that existed: speculation and assumptions. Thanks to research that started in the 1960s we now have real data, actionable information that tests the assertions and justification of the stakeholders, strategic planners and policy makers. Plans and policy based on rigorous data is far sounder than those based on opinion.
Today more of us understand that the media are businesses, even if run by a union, a not-for profit organization, or an employee-owned commune. And except for a handful of true idealists who don't mind living in their parent's basement (or come with their own trust funds or well paid spouses) the best people expect to be decently paid. They also expect reasonable travel budgets, resources and up-to-date equipment. That means they need to work for organizations whose income exceeds their expenses and keeps growing, the better to provide them with better wages and resources. Income must be generated to invest in new plant and equipment and to keep pace with old and new competitors.
Whether as journalists, film makers, MBA managers, media entrepreneurs, investment bankers or FCC staff, the capacity to understand developments in the media industry and analyze its activities will only become more challenging. Enhancing our understanding of media economics and applying it to media management is critical for a vigorous and thriving media arena. The coming of age of the disciplines of media management and economics is symbolized by the arrival of this Handbook and could not have been more timely. After all, no Web site ever went dark for lack of content.
