DEFINING THE MEDIA INDUSTRYAND INFLUENCES

Sociology, LU

1. Defining an industry

2. Can we define an industry?

3. Defining the Media Industry

4. The dimensions of industry development

5. Social relationship

6. Impacts on other sectors

7. Medias role and limitations

8. Summary

Outline

“An industry is a group of

firms producing the

same principle product

or service”Porter (1980:7)

1. Defining an Industry

“Industry structure is relatively stable, but can change over time as an industry evolves”

Porter (1980:7)

“It is increasingly difficult to define precisely where an industry begins and ends…what industry are you in is becoming harder and harder

to answer”

Hamel (1997:76)

“Industry definition is common in merger analysis, and often the decisive factor in antitrust cases…many merger challenges have

been denied due to disagreements over definition”

Gaynor, Kleiner, Vogt (2013)

2. Can we define an Industry?

So are we talking about one industry with many sectors?

Traditional Media Content Broadcasting (television and radio) Print (newspapers , magazines, books) Film (cinema, DVD)

Entertainment Content Recorded music Theme parks Gaming Social Media (blogs, Youtube, Facebook)

Cultural Content Performing arts

3. Defining the Media Industry

“The media industry is not a monolith, but

rather a conglomeration of different industries

that have the creation of mediated content as a

common activity”

Kung (2008:17)

Industry boundaries need to be considered

Identify sectors that are interrelated (buyer needs, shared value chains, logistics, R&D)

Sectors where interrelationships are weak, and or substitution is high, are likely to be separate industries

Related industries linked by strong interrelationships may well be a single industry

“We are entering the media economy. The traditional boundaries of the media

and entertainment industry have become

meaningless.”

Ross Dawson, Chairman,

Future Exploration Network (2008)

The lines between organizations represents joint ventures, consortia, and other strategic alliances

The size of the nodes reflect new relationships

The companies most central to the network are depicted at the center

The Media Economy

Source: The Future of Media Summit (2008)

The dimensions of industry development

Determinants State Direction

Drivers of industry

development

Inhibitors of industry

development

Paths of Industry development

Dimensions of

industry

development

Source: De Wit and Meyer (2005:183)

The dimensions of industry development

Dimensions of industry development –structural change

Convergence or divergence in business models

Concentration or fragmentation of market share

Vertical integration or fragmentation of value chain

Horizontal integration or fragmentation of different businesses

International integration or fragmentation of international boundaries

Expansion or contraction in demand –industry lifecycle

Paths of industry development

Gradual Development – one business model is dominant but adapts incrementally

Continuous Development -dominant business model is adapted frequently

Discontinuous development traditional business model is suddenly displaced

Social relationship

According to Anthony Giddens:

i. Normal chaos of love

ii. Plastic sexuality

iii. Time space distanciation

iv. Identitiy crisis

v. Falsification

vi. Mulitiple choice

vii. No gender

According to Ulrich Beck:

i. Risk society

ii. New modernity

iii. Restructure

iv. Reflexive modernity

v. Uncertainty

Pressurize society

Frustration

Compettion in consumption

Conflict or war

Interest class changes

Individualism

Ploitics has been central capital

Religion is secondary

Environmental degradadtion

Demonstration

Influence in other sectors

i. Mass deception

ii. No control

iii. Greatest rumor

iv. Hot and exclusive news

v. Not only entertainment has business

vi. Ensuring accountability

vii. Corruption in role

viii. Fault in structure

ix. Inadequate independence

x. Latest and greater interdependency

Media’s role and limitations

6. Industry Definition and Corporate Perimeter

Strategy

PerimeterValue

Imitation

Strategic Stretch

Profitable Growth

Competitive Growth

‘Me-too’ Competitor

Multi-business

OrganisationStart-up

Source: Frery (2006)

6. Industry Definition and Corporate Perimeter

“The overarching mission of

the strategist is shaping the

perimeter of the

organization, defining – or

setting the limits of its

scope”.

Frery (2006:73)

Defining ‘What business we are in?’

How the firm is positioned in the industry

Need to identify a profitable perimeter

Divesting rather than harvesting mature or unprofitable businesses

Diversification into new or growth markets

Vertical integration

Geographic scope and internationalisation

Changing the perimeter in essence is a strategic positioning move

8. Summary

Define an industry based on a group of firms producing the same principle product or service

Difficult to define precisely where an industry begins and ends due to collaborative activities, networks and diversification

A number of macro and micro factors that act as drivers for industry development

The paths to industry development are;

Gradual Development – one business model is dominant but adapts incrementally

Continuous Development - dominant business model is adapted frequently

Discontinuous development traditional business model is suddenly displaced

Changing the corporate perimeter is a strategic positioning move