INTRODUCTION
- More than 75% of citizens in the EU uses digital media
- Belgium is one of the top users of DM and daily use is also above average
- The use of digital devices is on the rise
- The rise of smartphone and digital media use is associated with the rise in social networking sites
- Wide range of demographic groups use SNS
- SNS use is increasing each year
- Computers and laptops remain important, but the smartphone has overtaken the place of the
computer for news use
Demand for and instant access to news has never been higher, the use of digital media (for several
uses + news use) is of unprecedented relevance.
DIGITAL MEDIA
- Perspectives
o Communicative: media as institutions in which media content is produced and aggregated
Traditional media going online
Pure online media
Pure online platforms
o Technological
Digitization = the change process where analog, material information units are
replaced by dematerialized, binary information units
o Economical
The use of digital technologies:
Changes business models
Provides new revenue and value-producing opportunities
Allows moving to a digital business
Media economy
Market forces → imperfect market forces
Market in balance
Perfect market
o Well-informed, rationally acting consumers
o Relatively large number of producers, free access to production
Influenced by
o Monopolistic market
o Oligopolistic market
o Government intervention
o Can lead to market failure
MEDIA MARKETS
- Serve 2 different types of consumers: audience vs. advertisers
- Provides different and diverse products: information vs. entertainment
- Influenced by political, cultural and economic factors
o Globalization
o Regulation
o Technology
, o Social aspects
- Characteristics
o Specific
High dependence on technological innovation makes media volatile markets →
provides possibilities for newcomers
Digitization of distribution
Reduced market entry barriers
Higher competition (global vs. local players)
Difficulties to adapt for established suppliers
Stronger price competition because consumers can easily compare prices
High fixed costs vs. low variable costs
Economy of scale vs. economy of scope
o Atypical: double/multi-sided markets: serving different ‘customers’
Culture/society: cultural/public goods
Non-rivalry + non-excludability (can lead to free rider behavior and
difficulties of financing)
vs. club goods: media content for which users need to pay to use them
» Pay as you go
» Subscription
» Freemium
» Advertising
» Non-commercial (maintained by a community e.g. Wikipedia)
Media contents are partly club goods, partly public goods
Politics: opinion formation
Economy: advertising, adding value and capital
o Regulation and de-regulation
Social responsibility (Anglo-American countries): intervention as low as possible
Social market (continental Europe): more protected
Commercialization: interplay supply and demand → competition for demands →
quality and efficiency → free market due to absence of governmental intervention
But: orientation towards mainstream demand → lack of diversity and
qualitative information, free market generates dependence on commercial
income, commercialization views the customer and not the citizen
THE VALUE CHAIN
Digital technologies have simplified the aggregation and the re-use of news content through news aggregators
→ technological progress has made value chains more diverse and complex, non-linear and non-unidirectional:
you can skip stages and make them irrelevant.
Longer and more complex value-added structures bring new opportunities, but also more
fragmentation, externalization of production processes and new intermediaries and competitors.
, EVOLUTION OF MEDIA FORMATS AND MEDIA TYPES
Technological developments → made changes in value chains possible and/or justified their need.
→ creation of new media types and merging of existing ones (= concentration)
- Interactive media
- Virtual reality
- Augmented reality
Media convergence (= merging of formerly distinct functions, markets and fields of application) affects:
- Industry structure
- Media organizations
- Media actors
- Audience behavior/preferences
- Needs for public policy to protect consumers
IMPACT OF TECHNOLOGICAL INNOVATION: CURRENT TRENDS
USER-GENERATED CONTENT (UGC)
- Passive consumption → active interaction: users determine content
- Facilitated by the arrival of social media
- Receivers tailor content for their own consumption and broadcast it via social media
→ users gained greater agency in the communication process
- Expressivity, performance and collaboration
- Amateur production/alteration of content & sharing content with others by posting it on a website,
blog or social network
- Combination of UGC with professionally generated content
- Due to new technologies, media companies have the possibility to actively integrate consumers into
their value creation processes (exploit the consumer’s potential to create additional value)
o Content production
Providers provide the platform, users provide concrete content
Popularity based on peer behavior: views, ratings, comments...
= influencers
o Content aggregation
Distribution of content-information overload
Development of self-learning submission algorithms
o Content distribution
From user to prosumer (producer + consumer), but many do not participate:
participation in equality rule (90-9-1)
Motives:
Intrinsic motivations
Immaterial incentives
Financial incentives
Refuse:
Time resources
Lack of interest
Privacy concerns
- More than 75% of citizens in the EU uses digital media
- Belgium is one of the top users of DM and daily use is also above average
- The use of digital devices is on the rise
- The rise of smartphone and digital media use is associated with the rise in social networking sites
- Wide range of demographic groups use SNS
- SNS use is increasing each year
- Computers and laptops remain important, but the smartphone has overtaken the place of the
computer for news use
Demand for and instant access to news has never been higher, the use of digital media (for several
uses + news use) is of unprecedented relevance.
DIGITAL MEDIA
- Perspectives
o Communicative: media as institutions in which media content is produced and aggregated
Traditional media going online
Pure online media
Pure online platforms
o Technological
Digitization = the change process where analog, material information units are
replaced by dematerialized, binary information units
o Economical
The use of digital technologies:
Changes business models
Provides new revenue and value-producing opportunities
Allows moving to a digital business
Media economy
Market forces → imperfect market forces
Market in balance
Perfect market
o Well-informed, rationally acting consumers
o Relatively large number of producers, free access to production
Influenced by
o Monopolistic market
o Oligopolistic market
o Government intervention
o Can lead to market failure
MEDIA MARKETS
- Serve 2 different types of consumers: audience vs. advertisers
- Provides different and diverse products: information vs. entertainment
- Influenced by political, cultural and economic factors
o Globalization
o Regulation
o Technology
, o Social aspects
- Characteristics
o Specific
High dependence on technological innovation makes media volatile markets →
provides possibilities for newcomers
Digitization of distribution
Reduced market entry barriers
Higher competition (global vs. local players)
Difficulties to adapt for established suppliers
Stronger price competition because consumers can easily compare prices
High fixed costs vs. low variable costs
Economy of scale vs. economy of scope
o Atypical: double/multi-sided markets: serving different ‘customers’
Culture/society: cultural/public goods
Non-rivalry + non-excludability (can lead to free rider behavior and
difficulties of financing)
vs. club goods: media content for which users need to pay to use them
» Pay as you go
» Subscription
» Freemium
» Advertising
» Non-commercial (maintained by a community e.g. Wikipedia)
Media contents are partly club goods, partly public goods
Politics: opinion formation
Economy: advertising, adding value and capital
o Regulation and de-regulation
Social responsibility (Anglo-American countries): intervention as low as possible
Social market (continental Europe): more protected
Commercialization: interplay supply and demand → competition for demands →
quality and efficiency → free market due to absence of governmental intervention
But: orientation towards mainstream demand → lack of diversity and
qualitative information, free market generates dependence on commercial
income, commercialization views the customer and not the citizen
THE VALUE CHAIN
Digital technologies have simplified the aggregation and the re-use of news content through news aggregators
→ technological progress has made value chains more diverse and complex, non-linear and non-unidirectional:
you can skip stages and make them irrelevant.
Longer and more complex value-added structures bring new opportunities, but also more
fragmentation, externalization of production processes and new intermediaries and competitors.
, EVOLUTION OF MEDIA FORMATS AND MEDIA TYPES
Technological developments → made changes in value chains possible and/or justified their need.
→ creation of new media types and merging of existing ones (= concentration)
- Interactive media
- Virtual reality
- Augmented reality
Media convergence (= merging of formerly distinct functions, markets and fields of application) affects:
- Industry structure
- Media organizations
- Media actors
- Audience behavior/preferences
- Needs for public policy to protect consumers
IMPACT OF TECHNOLOGICAL INNOVATION: CURRENT TRENDS
USER-GENERATED CONTENT (UGC)
- Passive consumption → active interaction: users determine content
- Facilitated by the arrival of social media
- Receivers tailor content for their own consumption and broadcast it via social media
→ users gained greater agency in the communication process
- Expressivity, performance and collaboration
- Amateur production/alteration of content & sharing content with others by posting it on a website,
blog or social network
- Combination of UGC with professionally generated content
- Due to new technologies, media companies have the possibility to actively integrate consumers into
their value creation processes (exploit the consumer’s potential to create additional value)
o Content production
Providers provide the platform, users provide concrete content
Popularity based on peer behavior: views, ratings, comments...
= influencers
o Content aggregation
Distribution of content-information overload
Development of self-learning submission algorithms
o Content distribution
From user to prosumer (producer + consumer), but many do not participate:
participation in equality rule (90-9-1)
Motives:
Intrinsic motivations
Immaterial incentives
Financial incentives
Refuse:
Time resources
Lack of interest
Privacy concerns
