The Complex Nature of Media Products
THE COMPLEX NATURE OF MEDIA PRODUCTS
Introduction:
Throughout economic and marketing literature, the product is generally defined by an arrangement of attributes or properties. Thus, product management plays a significant role in differentiating those attributes to meet the diverse needs and goals of target markets in a favorable, sustainable, and profitable way. Bearing this in mind, it stands to reason that any decision making affecting the product is intimately connected to its nature, which in the case of media products, is unique and complex.
On the whole, media products are comprised of two elements. On the one hand is the weight experience carries, along with the consumer’s confidence in these products, play a vital role in their management.
Second, information goods are subject to scale and scope economies. Both phenomena are connected to the cost framework common to many of them: high fixed production costs for first copies and low variable costs, in some cases almost imperceptible, for reproduction. This structure enables marginal costs to be steadily reduced as the number of articles consumed grows (scale economies principle), besides securing substantial savings in both multiproduct commercialization strategies and in reselling ventures of a multi-formatted product (scope economies principle; Doyle, 2002, pp. 13–15). In addition, because of the unparalleled character of this economic structure, cross-financing is vital for a large number of media products (Ludwig, 2000), on the grounds that sales income is insufficient to finance their production.
Finally, information goods share, in varying degrees, qualities commonly found in public goods, those which depend on non-rival and nonexclusive consumption. As far as the media is concerned, there are a variety of ways to face rivalry and exclusiveness in consumption. Whereas free on-air television and radio have generally been regarded as public goods, newspapers, music, and cinema have more relation to private
Introduction:
Throughout economic and marketing literature, the product is generally defined by an arrangement of attributes or properties. Thus, product management plays a significant role in differentiating those attributes to meet the diverse needs and goals of target markets in a favorable, sustainable, and profitable way. Bearing this in mind, it stands to reason that any decision making affecting the product is intimately connected to its nature, which in the case of media products, is unique and complex.
On the whole, media products are comprised of two elements. On the one hand is the weight experience carries, along with the consumer’s confidence in these products, play a vital role in their management.
Second, information goods are subject to scale and scope economies. Both phenomena are connected to the cost framework common to many of them: high fixed production costs for first copies and low variable costs, in some cases almost imperceptible, for reproduction. This structure enables marginal costs to be steadily reduced as the number of articles consumed grows (scale economies principle), besides securing substantial savings in both multiproduct commercialization strategies and in reselling ventures of a multi-formatted product (scope economies principle; Doyle, 2002, pp. 13–15). In addition, because of the unparalleled character of this economic structure, cross-financing is vital for a large number of media products (Ludwig, 2000), on the grounds that sales income is insufficient to finance their production.
Finally, information goods share, in varying degrees, qualities commonly found in public goods, those which depend on non-rival and nonexclusive consumption. As far as the media is concerned, there are a variety of ways to face rivalry and exclusiveness in consumption. Whereas free on-air television and radio have generally been regarded as public goods, newspapers, music, and cinema have more relation to private