Media Industry Economics

Today professor David Waterman from Indiana University’s department of Telecommunications presented research which illustrates a confusing phenomenon occuring in the media industry. A professor of media industry economics, he showed that the total revenue for the media industry in the United States is declining while consumption of media products is increasing. He said that there is an increase in online advertising which helps offset the decline in advertising in other areas of the media industry but this online increase is too small to make up the difference in the decline in traditional advertising revenue. He suggests that the media industry is shrinking in terms of revenue but not necessarily in terms of production and/or employment. This coupled with the fact that media use is on the rise, creates a confusing picture for analysts trying to make sense of the media industry today. As audience member professor Harmeet Sawhney suggested during the Q & A, it is possible that the category system (news, radio, television b/casting, DBS/sattelite, cable, recorded music, video games, etc.) used to collect revenue and employment data are no longer adequeate for understanding the fractured and independent nature of media work and production today. While I find professor Waterman’s study very insightful and enlightening, I think an additional study which might help account for the unkown arenas where work (even free labor) is done in the media economy. This additional step may help us to understand the larger picture more completely. It seems it is in these unknown arenas where it might be possible to shed light on the confusing situation professor Waterman has uncovered in his impressive research.

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Posted on September 9, 2011, in IU Telecommunications Brownbag Series and tagged , , , , . Bookmark the permalink. Leave a comment.

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