Media Economics Reflection

Back in 2001, NBC which had the market structure in place (mentioned in Media Economics) bought Telemundo Communications Group, a Spanish speaking network that targets a very specific niche (The Long Tail), the Hispanic community. The fact that the fastest growing minority in United States is the Hispanic community (according to the U.S. Census Bureau) and the product differentiation that Telemudo represented played an important role for NBC to make this purchase decision.  

The above example came to my mind after reading Media Economics and The Long Tail.  I realized that thanks to the new digital technology the way that the industry used to work has definitely changed.    Even though both books address different subjects, they complement each other in regards to the media business industry.  

On one hand Media Economics provides the tools to structure the business, such as the four different aspects of competition; perfect competition, monopolistic competition, oligopoly and monopoly.   It also provides important information on demand, competition, pricing, performance, strategy, advertising, labor, government regulations, product differentiation and barriers to entry.  On the other hand The Long Tail provides the tools on how and where to look for business within niche markets.

Some other good examples are provided by The Long Tail, like; KitchenAid, Daily Kos, The History Channel in Spanish etc.  All of these businesses target very specific niches.  KitcheAid focus on customers that belong to a very specific niche, the “color niche”, Daily Kos focus on readers of a very specific niche, the “liberal politics niche” and The History Channel en Espaῆol that focus on viewers of a very specific niche, the “Spanish speaking niche”.  I’m sure that all of these companies applied many of the concepts introduced in the Media Economics book in order to make their business successful within these niche markets.

In conclusion, even though Media Economics and The Long Tail are very different books, both books are very important in the media business industry. Media Economics provides the tools to structure the business and The Long Tail provides the tools on how and where to get the business. 

References:

U.S. Census Bureau, News Room, (2008.) Minority Population, Hispanic. Retrieved July 27, 2008, from http://www.census.gov/Press-Release/www/releases/archives/population/010048.html

White E. (2001). It’s a Deal: NBC buys Telemundo. Media Life: News.  Retrieved July 27, 2008, from http://www.medialifemagazine.com/news2001/oct01/oct08/5_fri/news1friday.html

 

Class Reflection for Week 5:

It was interesting to learn more about Amazon’s services, especially about the internet’s workforce completed hits (Mturk).  I think that this new tool, for employers, can save a lot of money, as it is an easy way to get cheaper labor from workers overseas.  However, I think about the American workers. If, one day, more American employers use this venue to get the work they need done for less money, what would happen to the American workers? Would they be forced to charge less for their work in order to compete with overseas workers?  Would this new service from Amazon hurt the American workers in the long run?  I know that it will benefit many people from other countries, whom instead of risking their lives in trying to come to the United States, offer their work throughout this Mturk service; they will make the same amount of money without having to leave their families and countries…

This class made me also think about what “free” really means.  Does it mean available or does it mean no charge.  In regards to “free” as in no charge, I think that some artists just want to have their work shown even if they don’t get pay.  Some artists just want the immortality, others would like to be able to work on their art and get pay for it, in order to earn a living.  The same thing happens with consumers, some consumers are willing to pay for art and some are not.  In regards to “free”, as available for everyone, I don’t see why not.  As long as the consumers don’t make money out of this free art or without giving some credit to the artist, especially if the artist just wants to be recognized, I think it will be okay don’t you?

Class Reflection Week 4

The first part of the lecture was overwhelming in regards to the amount of new web sites offering so many different services.  The one that surprised me the most, was the one in which you can make a wish list and then anybody can use it as a reference in case that they need to buy you a gift.   I guess that I’m old fashion, I like to listen to my family and friend needs and have an idea of what it will be a good gift for them.  Then I like to go outside and look for it.  The time that someone spends in buying you a gift is also important; I think it shows that you really care instead of giving the gift as an obligation or payment for something…

I like Minebox, the program that McCann is working on, because it will save a lot of time managing the e-mail.  I wish that this program was available when I was managing a state wide program.  Minebox: connects to inbox and makes a match with a prioritized list based on who sent you more e-mail, who you response more quickly, who you sent attachments (people who matters through social network). Gets you quickly to what you need to find from your inbox (e-mail).  This is a tool that in the future, if available, I’ll definitely use it, because it will save me time and I can use this time to go out to buy a gift for my daughter or my best friend.

One internet tool that made me thought about the potential market for internet tools in Latin-America (these internet tools need to be culturally appropriate), was HelpShare activities.  I noticed that there were more questions than answers in Latin America. 

I also injoyed the discussions, especially the one about a new model for newspapers.  I think that people who like to be informed, will pay to read the news on the internet, but I think that the problem is on how much to charge and the restriction on what newspapers you have access to with this fee.  For example if you pay for the Seattle Times, then you can only read the Seattle Times.  I wish that they come up with a system that I can pay one fee and they give me a password that I can use to be able to access any newspaper I want.

Questions

Why this new technology changed the way we use to do business?

How this new way of doing business affects parts of the world with no access to internet?

What is the solution to ensure internet access for everyone around the world?

The Long Tail Book Review By Rubi Romero

The Long Tail: Why the Future of Business Is Selling Less of More. Chris Anderson. New York: Hyperion, 2006. 226 pp.

During my first visit as a tourist from Mexico to the City of Seattle back in 1991, I noticed that there were no Latino products nor Spanish channels, newspapers, books or radio stations.  Eventually as the Latino population increased over the years in the city, Latino products became available.  And thanks to the internet, Spanish media content and other Latino products were even more accessible for Latinos living in Seattle, but only to those who had access to internet and knew how to use it (not to mention the lack of having a credit card or the fear of using a credit card due to identity theft or credit card fraud). I think that being part of the Latino community in United States, I have been benefited from the growth of the Long Tail as a result of the demand for Latino products in this city.

This experience very much relates to The Long Tail book, in which, the author presents the reader with an overview of the Long Tail framework throughout the years and the benefits that technology has provided for its growth. First, the author introduces the reader to space limitations that the bricks and mortar industry has to face due to limited shelf space. Then, the author switches the attention of the reader to the on-line industry. He mentions that thanks to the new technology and the digitalization of media content, physical space is no longer a problem. He also makes references to the importance of web based companies like Amazon, Google, e-Bay, Craigslist, Wikipedia and social networks as a way to facilitate this new on-line business model for consumers. However, the author neglects to mention that this new technology is not available to everyone, including those with non-mainstream taste. Therefore if the growth of the Long Tail in the on-line business depends on this new technology, then it is important to mention that the lack of internet accessibility for everyone is also a constraint in the growth of the Long Tail.

According to the author this technology has changed the way of doing business and he quotes “The Web simply unified the elements of a supply-chain revolution that had been brewing for decades” (41).  Furthermore, in chapter three, the author provides a brief overview that shows how this Long Tail has been fed throughout the years. First, with the creation of the Sears-Roebuck and Company’s catalogue, this allowed the rural community to purchase their products without having to travel long distances.  Then the arrival of a food chain “supermarket” model that offered more choices, more products and low prices for the consumer.  After that, the toll free 800 number came into the picture facilitating the catalogue purchasing industry to a new level.  Finally, the internet era was born creating the on-line business industry with an ultimate and unlimited on-line catalogue that opened the door to more choices for consumers.

In chapter four, the author states “The true shape of demand is revealed only when consumers are offered infinite choice” (52). Then he continues by adding that more stuff lengthens the tail by democratizing the tools of production like personal computers, cutting the cost of consumption by democratizing distribution, and connecting supply and demand.  Making everyone a producer or publisher and everyone a distributor (thanks to the internet) facilitates the creation of more niches.  This allows the tail not to only grow longer, but thicker as well. Moreover, throughout the rest of the book the author supports his theory by providing examples that apply to the different industries: music (iTunes, Rhapsody), books (BookQuest, Amazon, Wikipedia), broadcasting (YouTube, Podcasting), Marketing (Google, My Space), movies (Nextflix), news (Bloggs) and non-media content products (e-Bay, Craiglist).  He also adds that with all these industries using this on-line model a new era of unlimited products has been born, but that in order to make it easier for consumers to find what they’re looking for, the use of filters through search engines and recommendations through social networks are essential.

There is no doubt that the evidence provided by the author is valid; however, the books argument is based on the on-line market business which requires accessibility to internet. As Anita Elberse states on her “Should you invest in the long-tail?” article, there is more money to be made through the niche offerings than in blockbusters, but only in the digitized world. This means only on business made on-line and not on the bricks and mortar industry. Therefore, the tail’s growth is limited to the on-line industry, which creates constraints based on technology accessibility for everyone.  According to Internet World Stats, the internet users on-line around the world are 1,401,724,920 against 6,676,120,288 billions of people around the world. This means that only about 21% of the world population has access to internet.  In addition, the United States has 246,402,574 internet users versus a population of 337,167,248, this means that only 73% of the US population are internet users. As a side note this doesn’t mean that every internet user make purchases on-line.  Therefore the growth of the Long Tail on-line is limited by the accessibility of internet to everyone.

In conclusion, the author did an amazing job in introducing the Long Tail subject to the reader followed by extraordinary examples that make it very easy for the reader to understand what the author is talking about. However, he neglected to provide vital information in regards to internet accessibility in order for the reader to fully understand the Long Tail framework and constraints. Clearly, the author only focuses on the physical space constraint and how the internet has served as a medium to overcome this factor, but he forgot to mention that not everyone has access to internet.  This limits the growth of the tail, based on limited access to technology for everyone to be able to access the on-line business.  

Week 3 Lecture

It was very interesting to compare the infrastructures of two different industries; the automobile and the digital.  In the automobile’s infrastructure we have roads, gas stations, parking etc. to facilitate the use of a car and the needs around it like; gas, parking and repair shops. In the digital industry, we have the internet, the telephone lines, the software etc.  I never really thought about which one came first in the case of the automobile, did we have roads, gas stations and parking before the automobile was invented or as a result of the automobile did we create an infrastructure for it?  What about the digital media industry? Which one came first?

 

It was also very important to become aware that within the digital technology there are cultural forces that must to be considered before the implementation of a new technology.  For example Mobil (Japan) vs. pipes (USA), in the case of Japan, Pod casting makes more sense in terms of commute, in the case of USA we don’t commute that much, but still room for pod casting only not as much as Japan.  Knowing this, I wonder if Pos casting will be as successful as it is in Japan in countries in Latin America that commute. May be not, one aspect to be considered is why people commute, for example in Mexico, commuting is the only option if you don’t have a car, they don’t usually do it because of limited space, but more because of limited resources to get a car. 

 

Learning more about how digital technology facilitates the concept of networks in terms of connectivity to be able to communicate was very interesting in terms of reducing transaction costs, physical space and time.  

 

I really enjoyed the discussion part of the class.  The two subjects were very interesting.  The discussion on whether to invest in the Long Tail or not made me think about aspects that I didn’t consider before.  I think anybody can come up with a good idea of a unique business, but every business needs customers and even if you make a good market research, the risk still high in terms of space, because that business is limited to that particular area.  However, in the digital industry this problem doesn’t exist, because of internet that allows you to reach out to other states and even countries, of course there is a limitation due to the fact that not everybody around the world has access to internet, but that’s another issue…

 

Reflection

My learning goals for the class are to be able to understand how economics directly applied to the digital media market and how I can use this knowledge to create market opportunities.   I truly believe that my lack of knowledge in this area is preventing me from creating real business opportunities to share my creativity as an artist.  Learning more about the concepts use in information economy and how to apply these concepts to increment business opportunities will enhance my ability and skills to produce art, and training and learning tools in Spanish for consumers not only in the Latino community, but for the community at large.

 

I want to learn how to create weblogs and  how to post and share information, pictures, videos, weblinks etc. and how to have access to other weblogs that may have the same interests in content as I do.

 

I also want to learn more about how to make good book reviews.  This will help me to

Improve my writing skills in English (as English is my second language). This is very important to me because I will use these skills for other classes in this program and professional purposes as well.  I want to be able to increase my vocabulary by using the readings in this class that will introduce me to new words and concepts.  I also want to improve my English speaking skills using the discussion time to listen and talk to my classmates.

Reflection

 One of my biggest surprises for this lecture was to learn that economics as I knew it,  has changed (from industrial to information).  For instance, information economy is based on the exchange of knowledge and information services, but not so much on tangible goods. This was a surprise for me because I never made a conscious distinction between tangible goods and intangible goods.  Therefore, I didn’t think that there was a difference between the economy in the industrial era and the economy in the information era. This learning experience made me think for the first time in business as the art to make business as this new information era provides the opportunity to be creative and produce an income base on this creativity (blue collar vs. creative, thinking people).

 

I was also surprised of how little I knew about how this information technology worked.  For example I didn’t know anything about internet protocols like HTTP, IMAP, TELNET, etc. In addition, I didn’t know that a garden wall was a closed network and that this can be used as a method of creating a monopoly or securing an information system. Also, learning about collapsing space and time made me realized how important this concept was to create information accessibility to be able to create a global community.

 

Lastly, learning more about standards, scarcity, market replacements, supply and demand and competitive markets, opened up a new perspective in the way I think about economics in this information era.

 

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