Media economics

From ArticleWorld

Media economics concerns the economic aspects of the mass media, including the news as well as entertainment. The economy of the media can be studied on a local, national, or international scale. This study concerns the business practices of the media, especially advertising methods and the ownership structure of broadcasting stations.

Advertising in the media

Television and radio producers do not make money directly from the programs they air. It is the advertising that is the lifeblood of the news and entertainment industries. In an average year, television and radio stations spend about $150 billion on ads. If the advertising program is successful, a media corporation can expect to earn 200-300% of its initial investment.

The amount of advertising in the media has also increased dramatically in the last three decades. In the 1970s, Americans were exposed to 560 ads a day. In the 1990s, this number jumped to 3,000. Children are also affected; during the same three decades, the number of ads directed towards children more than doubled, exceeding 40,000 advertisements a year in the late 1990s.

The television and Radio Advertising Bureaus of the United States are responsible for reporting the revenue generated by the advertising industry in the broadcast media. In 2001 the total money earned by the broadcast advertising industry was $54.5 billion. The radio advertising industry accounted for $17.7 billion of this. This number increased to $19.4 billion only a year later.

Media holdings in the United States and worldwide

The Federal Communications Commission keeps a record of the number of stations extant in the United States. As of 2004, there are 13476 radio stations, 1744 commercial and educational television stations, 610 Class A television stations, 2128 low power television stations, and 8579 signal routers, boosters and translators. The total number of broadcasters and signal boosters in the United States alone is 26537.

This is a substantial portion of the total share of worldwide media broadcasting stations. The estimated total number of radio and television broadcasters in the world is approximately 65500. 27% of these stations can be found in the US. It is also estimated that a large number of stations outside of the United States are owned by US-based multinational media conglomerates.