Dual Products of the Media –Content and AdvertisingWayne Fu
What media firms sell?
Dual Product Market Operation
Media firms simultaneously trade in twodistinct markets–content (program) andadvertising.
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Selling content to the audience
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Selling advertising capacity to advertisers
Attention of consumer audiences
opportunities of potential sales
Advertising and Media Funding
Advertisers pay for the cost of the media operatorsto reach audiences
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100% of OTA or FTA television costs
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More than 70% of newspaper or magazine costs
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Pay-channel
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Internet content
Some facts: In Singapore, advertisers spend aboutS$760 for each paper sub and S$700 for each TVhousehold each year
Advertisements as a good or bad to audience?
Do media audience members receive utilityfrom advertisement or commercialmessages?
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Do they welcome advertising matters comingwith the content?
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Are they forced to pay for inclusion of theadvertisements/commercials?
Advertising in Media Content
Increasing proportions of advertising in media content(newspaper, television program)
Fluff –semi-advertisements or advertorials
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Sale-promotional materials vs. serious editorial matters
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Consumerism: creating buying mind
Advertising –unnecessary costs to the society? social waste?
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Passed on to end-buyers through higher prices of advertisedgoods
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Excessive commercials time
However,
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Advertising keeps “free”the consumption of the mass media
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Advertising to inform consumers
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Advertising as transaction facilitator
Relationship of the two mediaproducts
Are the two media product markets areseparate ones?
Specifically speaking, for a media operator,is its advertising price affected by how itsaudience consume it content products, andvice versa?
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