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.
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
Entry filed under: Reflection.