week 5 print media 08semb

7/31/2019 Week 5 Print Media 08SemB

1/19

1

Recap:Three strategies to deal with culture

Universalization (e.g., Doraemon)

Localization

Transculturation


2/19

2

5. Economics of Print Media

5.1 Economics of the daily newspaper

5.2 Economics of books and magazines


3/19

3

5.1 Economics of the Daily Newspaper

Newspaper markets

Financial performance

Government policies

Globalization


4/19

4

The Newspaper Market

One of the most profitable of all media industrieseven though the circulation is in decline

A means of reaching mass audiences, rather than

segmented audiences, in the eye of advertisers


5/19

5

The Newspaper Market

Primarily a monopoly (96%) in the U.S.

Where there is competition, differentiatednewspapers exist (e.g., broadsheet vs. tabloid)

Barriers to entry are high, because of Costs

Advertiser preferences


6/19

6

The HK Newspaper Market

Facts

Monopolistic competition
http://en.wikipedia.org/wiki/Hong_Kong_newspapershttp://en.wikipedia.org/wiki/Hong_Kong_newspapers


7/19

7

Financial Performance

Dual product market

Circulation spiral: circulation advertising

Increased prices as a result ofinelasticdemand

for newspapers; i.e., no close substitutes areavailable for consumers to choose other productsat a lower price

Daily vs. weekly papers

TV, cable, and radio


8/19

8

Advertising

Newspapers get 5 times more advertising revenuetoday than they did at the end of WWII

3 major categories:

National advertising Retail advertising (from local businesses)

Classified advertising

More substitutability is evident in the advertising

than in the information product market


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Operating Budgets

Revenues

Advertising 65-80%

Local/retail 55-60%

Classified 20-35%

National 10-15%

Circulation 20-35%

Expenses

Editorial 7-10%

Advertising 5-6%

Circulation 9-10%

Promotion 1-2%

Mechanical 13-15%

Newsprint 15-30%

Administration 8-12%

Building and land 1-3%


10/19

10

Cost Structure

High first-copy costs

Relatively low reproduction costs because ofeconomies of scale


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11

Government Policies

No comprehensive economic policy toward thenewspaper industry has ever been established inthe U.S.

Tax exemptions and incentives Anti-trust laws


12/19

12

Globalization

The newspaper industry is less affected byglobalization and remains primarily a domesticindustry

Agree? Disagree? Newspapers vs. magazines vs. books

Overseas Chinese newspapers


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13

5.2 Economics of Books and Magazines

Market structure

Financial performance

Government policies

Globalization


14/19

14

The Book/Magazine Market

Americans are spending less time and money onconsumer books and magazines

Books

Intense competition Minimal barriers to entry

Mergers and acquisitions since the 1960s


15/19

15

The Book/Magazine Market

Magazines

Monopolistic competition

Total number of magazines purchased: 1.3 copies/adult

Average cost for a single copy at newsstands: US$2.13 Growing consolidation

AOL Time Warner was the largest owners of magazines inthe U.S.


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16

Financial Performance

Books

Most books are discounted by publishers to bookstores,distributors, etc.

Profit and loss (P&L) analysis

Magazines

Revenue streams

Paid circulation

Newsstand circulation

Ads

Business model


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17

The Prospects of E-books?

Low consumer acceptance

Too expensive

Inconvenient and unappealing


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18

Web-based Magazines

E-magazines can break new stories, updateexisting articles, and provide useful links

Allow advertisers to buy both print and electronic

ads simultaneously Convergence is the key

Prospects?


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19

Globalization

The major export destination of U.S. books

Canada

UK

Australia Hong Kong

Mexico

The Netherlands

Taiwan

The Philippines

week 5 print media 08semb

Documents