Thursday, December 2, 2010

Why does economics drive most media companies?

Economics is the driving force in many aspects of today's culture, as people seemed more concerned about money than just about everything else. The media companies are driven by economics mostly due to their stranglehold on all kinds of advertising. In order to advertise your product in the hopes of increasing your product, you must first sacrifice a lot of money to get the advertising space, whether it be during a popular television show or on a radio show during rush hour. This is the main revenue stream for television and radio companies however the money made in the music, movie, or book industries is mostly made directly from sales. The difference between the way a media company makes money and the way a retail store makes money is the in television in radio you're selling time, not a product, and in music, books, and movies, you're selling an experience which creates a near 100% production rate after the media is completed rather than selling an item where it costs the business money to make each unit. As sales and making money are the main purpose of most business, it can be concluded that economics drives media companies, as it drives every company that has every exsisted, the lure of making money is the reason why people continue to create new businesses and work.

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