Media Management

Media management refers to management of media organizations. So it

constitutes two different terms-management and media organizations. For
proper understanding of the concept, we must have a reasonable
understanding of both the concepts ‘management’ and ‘media organization’.
Let’s start from there.

Management
Organization:

A group of people working in concert to fulfill some commonly agreed goals.

The people working in an organization do two types of work- operative work
and administrative work. The people who do more administrative work see
that others are working towards the common goal of the organization. They
get the work done by the efforts of others. They are called the managers.

Management:

The process through which they get the work done is known as management.
Thus management as a process is ‘the art of getting the work done’.
Management gets the work done through a number of functions:

Functions of Management
PLANNING
Deciding in advance: What to do? How to do? When to do ?Who is going to
do it?.
It is a blue print of the actions to be taken.
Planning is meant to bridge the gap between where we are today and where
we want to reach.
Sets the goal of an organization.
Being a basic function of management, planning deals with chalking out a
future course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals.
It is an exercise in problem solving & decision-making. Planning is
determination of courses of action to achieve desired goals.
Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals. Planning is necessary to ensure
proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion, uncertainties.

ORGANISING
It is the process of bringing together physical, financial and human resources
and developing productive relationship amongst them for achievement of
organizational goals.

1
According to Henry Fayol, “To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.
To organize a business involves determining & providing human and non-
human resources to the organizational structure.
Establishing the framework of working: How many units or sub-units or
departments are needed. How many posts or designations are needed in each
department. How to distribute authority and responsibility among employees.
Once these decisions are taken, organizational structure gets set up.
As a process, organizing involves:
Identification of activities of tasks.
Classification or grouping of activities.
Assignment of duties.
Delegation of authority and responsibility.
Coordinating authority and responsibility relationships.

STAFFING
Staffing involves the activities of recruiting, selecting, appointing the
employees, assigning duties, maintaining cordial relationship and taking care
of grievances of employees.
It includes training and Development of employees, deciding their
remuneration, promotion and increments.
It also involves evaluating their performance.

Staffing is the function of manning the organization structure and keeping it

manned. The main purpose of staffing is to put right man on right job.
Staffing involves:
Manpower Planning (estimating manpower in terms of searching, choose the
person and giving the right place).
Recruitment, selection & placement.
Training & development of the employees.
Employee compensation – Remuneration and other benefits.
Performance appraisal of the staff.
Promotions & transfer of the employees.

DIRECTING
Giving direction or instruction to employees to get the job done.
Providing leadership to employees.
Motivating employees by providing monetary and non-monetary incentives.
Communicating with the employee at regular intervals.
Directing refers to that part of managerial function, which actuates the
organizational methods to work efficiently for achievement of organizational
purposes.
It is considered life-spark of the enterprise, which sets it in motion the action
of people because planning, organizing and staffing are the mere preparations
for doing the work. Direction is that inert-personnel aspect of management,

2
which deals directly with influencing, guiding, supervising, motivating sub-
ordinate for the achievement of organizational goals.

The function of directing is executed through:

Supervision- implies overseeing the work of subordinates by their superiors.
It is the act of watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates
with zeal to work. Positive, negative, monetary, non-monetary incentives
may be used for this purpose. Leadership- may be defined as a process by
which manager guides and influences the work of subordinates in desired
direction.
Communications- is the process of passing information, experience, opinion
etc. from one person to another. It is a bridge of understanding

CONTROLLING
It implies measurement of accomplishment against the standards and
correction of deviation if any to ensure achievement of organizational goals.
The purpose of controlling is to ensure that everything occurs in conformities
with the standards. An efficient system of control helps to predict deviations
before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether
or not proper progress is being made towards the objectives and goals and
acting if necessary, to correct any deviation”.
Therefore controlling has following steps:
Establishment of standards of performance.
Measurement of actual performance.
Comparison of actual performance with the standards and finding out
deviation if any. Corrective action.

Principles of Management:

Henry Fayol developed his classical organization theory which focused on

the broader arrangement of people in the organization. He developed a
comprehensive approach to many aspects of organizing and was the first to
carefully articulate the primary functions of a manager. He defined managing
in terms of five functions: planning, organizing, commanding, coordinating,
and controlling.
Fayol listed fourteen principles of management for smooth and effective
management of an or8ganization:

Henry Fayol’s 14 Principles of Management

1. Division of Work: The work should be divided among the individuals on
the basis of their specializations, so as to ensure their full focus on the
effective completion of the task assigned to them.

3
2. Authority and Responsibility: The authority and responsibility are
related to each other. Authority means the right to give orders while the
responsibility means being accountable. Thus, to whomsoever the
authority is given to exact obedience must be held accountable for
anything that goes wrong.
3. Discipline: The individuals working in the organization must be well-
disciplined. The discipline refers to the obedience, behavior, respect
shown by the employees towards others.
4. Unity of Command: According to this principle, an individual in the
organization must receive orders from only one supervisor. In case an
individual has the reporting relationship with more than one supervisor
then there may be more conflicts with respect to whose instructions to be
followed.
5. Unity of Direction: Unity of direction means, all the individual or
groups performing different kinds of a task must be directed towards the
common objective of the organization.
6. Subordination of Individual to General Interest: According to this
principle, the individual and organizational interest must coincide to get
the task accomplished. The individual must not place his personal interest
over the common interest, in case there a conflict.
7. Remuneration of Personnel: The payment methods should be fair
enough such that both the employees and the employers are satisfied.
8. Centralization: Fayol defines centralization as the means of reducing the
importance of subordinate’s role in the organization, and the extent to
which the authority is centralized or decentralized depends on the
organization type in which the manager is working.
9. Scalar Chain: This means there should be a proper hierarchy in the
organization that facilitates the proper flow of authority and
communication. It suggests that each individual must know from whom
he shall get instructions and to whom he is accountable to. Also, the
communication either going up or down must pass through each level of
authority.In certain circumstances where the quick flow of
communication is required, the rigidity of a scalar chain can pose
problems. Thus, Henry Fayol has suggested “gang plank” which means
anybody in the hierarchy can interact with each other irrespective of their
authority levels.

4
 10. Order: This principle is related to the systematic arrangement of things
and people in the organization. This means every material should be in its
place, and there should be a place for every material. Likewise, in the
case of people, a right man should be in the right job.
11. Equity: All the employees in the organization must be treated equally
with respect to the justice and kindliness.
12. Stability of Tenure: The employees should be retained in the
organization, as new appointments may incur huge selection and training
cost.
13. Initiative: The manager must motivate his subordinates to think and take
actions to execute the plan. They must be encouraged to take initiatives
as this increases the zeal and energy among the individuals.
14. Esprit de Corps: This means “unity is strength”. Thus, every individual
must work together to gain synergy and establish cordial relations with
each other.

Media Organizations:

Organization which produce, distribute, and promote information and

programming (messages) are media organizations. Examples are: newspaper
organization, radio or television centre, advertising/public relations agencies
etc. Media firms develop, produce, and distribute messages that inform,
entertain, and /or persuade.

At their most basic level, information firms are like other manufacturers: they
produce and distribute a product (messages) and then, in order to sell that
product, they select an audience and develop marketing, promotion, and sales
strategies to reach the audience.

Media Organizations as Manufacturers:

The diagram illustrates the basic manufacturering process of a media

organization.

Gather Develop Produce Distribute

Information Messages Messages Messages

Promote and Sell to Promote and Sell to

Advertisers and Clients Media Audiences

5
As depicted in the figure the various steps in manufacturing a media message
are: gathering information, developing message, producing message,
distributing message, and selling and promoting the messages to the media’s
advertisers & clients, and audiences. Each step in the process involves a
variety of activities. Although specific facets of the activities differ across
media, overall they are highly similar from one kind of information
organization to another.

 Gathering Information and Developing Messages:

Gathering information for stories involves creating a list of ideas to be
investigated and then sending reporters to check sources. After
developing the raw material the reporters and editors complete the stories
together that may entail pulling together several forms of information-
words, photography, and graphics.

 Producing Finished Copies of Messages:

In producing the message, Technical difference exists between the print
and electronic media. In print it involves typesetting, platemaking, and
press runs. In television or film it involves film or video editing, splicing,
sound dubbing, and colour coordination etc.

 Distributing the Message:

Distribution entails transporting or screening the messages to the media
audiences. In the case of print publications, the messages are distributed
via trucks to delivery persons who take the papers to newsstands or
homes, or they distribute electronically via data base. Broadcasters send
their programmes through the air from their transmitter and tower directly
to the listener/viewer. Advertising agencies simply send copies of their
advertisements or commercials they produce to the specific media
vehicles selected for dissemination of the advertisements to a target
audiences.

 Promoting and Selling The Product:

Media companies not only develop and produce information products,
they also sell them. That necessitates making choices about the markets to
serve and about promotion, sale, and, for many media, advertising
strategies.

Media companies serve two markets. The first we call the audience market
i.e. the consumers of the media organization’s products. The second is the
Advertiser Market i.e. the clients or advertisers who advertise their products
in the media. Any media company must develop and maintain reasonably
good audience and advertiser markets for itself. The media companies
develop appropriate messages and suitable strategies for promoting and
distributing its products.

6
The above discussions reveal that at the most basic level, media
organizations as manufacturing process are similar to other manufacturing
companies. So the good management principles developed from time to
time for effective management of manufacturing companies are equally
applicable to media organizations as well. Further, the unique
characteristics of media companies make their management more
challenging.

Unique Characteristics of Media Companies:

The uniqueness of media companies lie in the following factors:

1) Nature of the Products:

 Perishable commodity
 Must produce a product during every production cycle

 Demands constant creativity and innovation,coordinated

workflow, and deadline pressure
 Defects are easily visible

2) Types of Employees:
 Educated, professional, extremely hardworking, very creative;
 Ability to work independently, knowledge of the media laws;
 Primary allegiance to standards of journalism (the profession)
and secondary allegiance to the company they serve;

3) Special Organizational Factors in media Companies:

 A flexible, horizontal structure may be better than the

traditional, rigid, vertical hierarchy preferred in most industrial
corporations;
For producing fresh, innovative, informative, high-quality
messages, employees should have some freedom from rigid
work schedules.

4) Societal Role of the Media

 As the watch dog and interpreter of public issues and events,
media have a special role in the society,
 Constitutionally protected though indirectly;
 Enjoy some kind of economic and franchise protection
 More visible then other companies-mistakes easily detectable
 High public expectation of media being creditable and
trustworthy;

5) The Blurring of Lines Among Traditional Media:

7
  Many companies operate varying combinations of
newspapers, broadcaststations, magazines, databases,
directmail firms, book publications, billboard organizations, or
combined advertising and public relations agencies.
 Interdependence among various media industries is becoming
more important as new ways of delivering information create
opportunities that transcend the boundaries of single medium.
 In each medium changes in technology, combined with the
blurring of lines among the traditional media, make viewing
the firm as it is or was in the past an anachronism.

Challenges for Media Managers:

The ultimate goal of media management is to deliver information or

programming that people want or need in the most effective manner possible,
irrespective of traditional media boundaries.
As the various media services are becoming interdependent, the media
managers has to have specialised knowledge about each of these industries,
to be sure, but increasingly they will need media management knowledge that
will enable them to span and connect diverse operations.

As the nation moves from industrial to information society, the media

represent one of the more dramatically changing growth sectors. The speed of
the change coupled with the unique nature of the media that makes managing
media firms a challenging job.
Understanding the implication of these changes and to think about the many
new options for serving their audiences is emerging as an essential pre-
requisite for success of media mangers. This is here the principles of media
management become important. These changes are the backdrop against
which the essence of the media manager’s job is cast.

Qualities of Media Managers:

In today’s competitive media environment, building brands in the field of

media demands expertise and thorough understanding of the media. To be
successful media manager today demands specialized knowledge and skills
which one can develop through education and training. If aspiring for the
challenging jobs you should:

 Have Creativity and Managerial Skills

As a new generation media manager you should be working round the
clock to create liaisons between the media and communication
focused industries. The primary goal is to reach target audiences
effectively and efficiently and thereby increase company market share
and revenue. Accomplishing this requires one to “synthesize
creativity, technical competence and managerial skills and have a

8
 working knowledge of both creative and business aspects of the
media, from production and editing of media software to its buying
and selling”

 Challenge the Conventional

Be it information, entertainment or advertisement that is disseminated
through the media, in each case managers “need to know not just how
to communicate, but also how to make and manage communication”.
It is glamorous job, but one that requires extreme hardwork, presence
of mind, complete product knowledge, commitment, awareness of the
competitors’ position and constant up gradation of skills. Honesty and
willingness to innovate-since the medium of communication has to
evolve-the courage to challenge the conventional and a bit of number
crunching, which is necessary.

 Equip yourself
Media management being rather new academic discipline, no
standardized courses is on offer. While there are two-year
programmes in executive MBA,in media and communication in
universities abroad, the Indian counterpart is mostly called PG
Diploma in Entertainment and media management.

Main functions of Media Managers:

John M. Lavine and Daniel B. Wackman in their book “Managing Media

Oganisation” have identified the following primary functions of media
managers:

1. Planning and Decision Making;

2. Organizing Work and Technology;
3. Financial Management;
4. Working With People;
5. Leadership of the Media

Media as Industry and as a Profession:

Today mass media is both an industry and a profession. During the early
years it was started as a mission- to serve the society and the people.
Gradually it emerged as a profession engaging thousands of people fulfilling
certain responsibilities towards the society. But with the passing of time,
profit motive and big money crept into the system and media emerged as a
big industry all over the world. Today it is very complicated and difficult to
isolate functions of media as an industry and as a profession. As an industry
media is more concerned about its business goals. But as a profession it more
concerned about its social responsibility.

9
Goals of media organizations:
The main goals of media organizations are the following:
i. Know and serve its market
ii. Produce quality products and /or services
iii. Attract, develop and retain best possible employees
iv. Increase and maintain profits
v. Position the organization to prosper in future
vi. Protect the company’s franchise
From the organisation’s point of view, increasing profit is essential to meet
the other goals, but certainly not the top priority. For many progressive
managers, effectively serving the media’s market and the needs of their
employees are the primary goals, for if both are taken care of, adequate profit
will be realized. Thus long-term business perspective demands that profit be
put in their proper place; not as the principal goal of media firm, but as vital
key element on the list.

Responsibilities of media as profession (Social responsibility of

media):
From the point of view of the people and organizations who constitute the
media’s markets, there are variety of need the organizations are expected to
cater to, whch include the following:
i. Delivery of timely and useful information about events and issues
ii. Interpretation of news reports
iii. Development of ways to socialize individuals and to pass on values and
culture to succeeding generations
iv. Enhancement of opportunities for the hearing of a diversity of political,
social, and cultural voices
v. Opportunity to receive both news and advertising about the business
and economic systems.

These are some of the media’s major social responsibilities. The support, the
society provides the media, in terms of economic advantages, protective laws,
and, of course, its constitutional privileges, depends on the media’s
effectiveness in carrying out these social responsibilities. Short-term actions,
which ignore these social obligations, undermine the media’s public support,
and hence the special place the media hold in a society.

It must be kept in mind that a long-term perspective towards social

responsibility does not conflict with an aggressive business perspective. In
fact, they complement each other.
A mature managerial philosophy emphasizes that, information organizations
should fulfill their societal responsibilities, not just because they have a social
obligation to do so, but because doing so is good for business.

Media managers are central when it comes to deciding:

10
  The degree of emphasis the organization places on profit and other
business goals;
 The level of media organizations commitment to social
responsibilities;
 The balance between business goal and social responsibility.

To create an even balance between business considerations and social

responsibilities is the most important and challenging job for media managers
of today. They make this difficult decision, under the shadow of the major
influencing trends, the media world is witnessing today.

Major Influencing Trends in the Media

1. Many Faceted Movement Towards Bigness-ownership, financial,
employment
2. Dramatic Advances In Technology-communication technology,
computers, Internet
3. Increased Emphasis on Markets and the Market Perspective-market
driven media content
4. Heightened Profit Consciousness-search for new income streams, reduce
investment risks

1. Movement towards Bigness:

The move towards bigness of media companies has many facets: ownership
concentration, financial bigness, and bigness in terms of employment
provided.
i. Ownership concentration in media is taking place through mergers,
take-overs, acquisition, large scale investments-leading to emergence
of multimedia conglomerates.
ii. Big money is involved in the management of today’s media
organisations. Media companies generate a lot of money through
sales, and advertising. They also make large scale expenses in
technology and process innovations, salary and fringe benefits to
employees, huge investments in expansion and diversification
existing projects and new projects.
iii. Media organisations are moving towards bigness in terms of
employment opportunities provided. They engage thousands of
employees to look after both editorial and business side of the
organization.

2. Advances in technology:
In recent times, dramatic changes are taking place in the media technology,
which is changing the way information is received and delivered. The
application of new information and communication technologies are giving a
different shape to the media industry. For example, computer and satellite
technologies have changed television news programming in conjunction with

11
other technological developments in camera and editing equipments. For the
media managers, these represent a potent of extraordinary and exciting
change. The ongoing technological developments create new possibilities for
the kind and amount of information that can be presented as well as the best
methods to present it. But these leaps of unavoidable technological up
gradations cost media firms a great deal. They involve enormous outlays for
new broadcast or print equipments-amounts well beyond the capabilities of
many smaller media firms. This, in fact, is forcing many media firms to
consider selling out to bigger companies, or shifting towards marketing
perspective.

3. Increased emphasis on marketing perspective:

Increased competition for audiences and advertisers has placed greater
emphasis on the marketing perspective. Media managers are using more
thorough information about audience preferences to tailor their products to
match research results. As part of marketing strategies, information
conglomerates capitalize of audience synergism to create multimedia
products that generate many income streams from one creative effort, such as
a film that spawns records, CDs, music video, books, and on occasions,
television spin-offs. In the face of increased competition for audiences, media
firms promote their products much more aggressively than ever before. Brand
managers are recruited to handle this job of brand promotion. In addition,
product improvements and new product features are increasingly attend to by
media companies. As a visible marketing strategy is that TV networks spend
millions of rupees promoting the image of their ‘star news anchors’.

4. Heightened profit consciousness

With the media increasingly seen as an industry, profit consciousness is
influencing every decision in the management of media. The strong
motivation for short-term profits, often de-motivate media managers to
commit huge sums as long-term investments for the future. Often decisions
are made to heighten current profits, often at the expense of the future.
This, combined with the three preceding trends, collectively concentrate
many media manger’s attention on profit consciousness, which leads to some
reactions with far reaching consequences. The most visible reactions of
heightened profit consciousness among media managers are the following:
i. search for new income streams to maintain profitability, this includes the
option of increasing subscription price of media products;
ii. attempts to find out ways to reduce investment risks

Ownership patterns of Mass Media in India:

At one time all newspapers were local, and most were individual enterprises.
One individual was generally the owner publisher, editor and printer. One
individual managed every thing of the newspaper and management was some
kind of a family affairs. As opportunities to serve increased, the newspaper
size expanded and its operations became more complex. Gradually it

12
expanded into a big organization and a number of persons were engaged to
look after its various aspects. Newspaper organizations as individual
enterprise, gave way to other types of newspaper ownership, management
and operations.

No. of ownership units in 2014-15

Forms of Ownership No. of ownership Percentage of total
units ownership in units
Government 51 0.17%
Partnership 211 2.29%
Individuals 19765 71.68%
Joint Stock Companies 2099 22.92%
Society/ 355 1.38%
Association
Trusts 289 1.52%
Others 17 0.04%
Total 22787 100

Dominant forms of Media Ownership in India

The dominant forms of media ownership in India, especially the print media,
constitute Sole proprietorship, Partnership, Joint Stock company,
Group/chain ownership, Societies, Cooperative ownership, Trust ownership,
Political ownership, Ownership by religious bodies, etc. In the pre-
independence era, individual ownership was the dominant form. The post-
independence media reform measures, however, changed the media
ownership pattern in the country. The steps that followed the Press
commission recommendations to arrest the growing concentration of media
ownership transformed most of the sole proprietorship firms into companies.

The predominant forms of media ownership:

Sole Proprietorship
In this type of media ownership, the media organization is established,
managed and run by an individual. The individual owner has full authority in
decision-making for the organization and is accountable for them, and hence
this form is called sole proprietorship. This type of the ownership is best
suited for small-scale media houses.

Partnership
According to definition presented by The Indian Partnership Act 1932,
"Partnership is the relationship between persons who have agreed to share
profits of a business carried on by all or any of them acting for all''. In this

13
type of media ownership, the decisions related to media organizations are
made by two or more persons, and there is a sharing of responsibilities. It is
not necessary that all partners have equal share in the venture, as such their
authority and responsibility is defined accordingly. Based on their share in
the media venture, there are two types of partnership: 1. General partnership
and 2. Limited partnership. A partner with more than 50 % share is a general
partner, but one with limited share is limited partner.

Jt. Stock Companies

It is an association of individuals created under the law. It is a separate legal
entity, having perpetual existence independent of the presence of its founding
members. Power and liabilities of the corporation is distinct from the
members of the organization. The Indian Companies Act 1956 provides for
two types of Jt. Stock companies: Private Limited Company, and Public
Limited Company. The process of formation, functions, powers and
responsibilities are clearly spelt out in the law.

Cooperative Societies
It is the form of ownership, which aims to promote economic interests of its
members according to the cooperative principles. It is the group of people
joined together to achieve mutual economic benefit.

Political parties as owners of newspapers

In India almost all major political parties publish newspapers to promote their
ideology besides publication of news for public consumption. The Samna
published by Siva Sena in Maharastra is an example.

Societies
A non-profit society registered under the Indian Societies Act 1860 can
publish a newspaper. Such societies publish newspaper to serve the interest
of certain segments of the society without seeking profit.

Trusts Ownership
When the property belonging to one individual is used by another individual
for the benefit of a third group it is known as trust ownership. The owner of
the property who trusts on another person with regard to use of the property
is known as the author of the trust. The person who accepts the trust of the

14
author is known as the trustee. The group in whose benefit the property is to
be used is called the beneficiary. As such when the property or assets of one
individual is used by another individual or a group to publish a newspaper to
serve the society without seeking profit from it is known as a trust
publication.

Group/Chain Ownership
This type of ownership deals with the management of two or more
newspapers handled by the same media organization. They lack a joint
holding but follow a chain of command for its functioning. This pattern
effective financial management and can also manage human resources
effectively. When one publishing group publishes more than one publication
from the same place, it is known as a group. Ex. The Times of India. When
the same publishing house publishes a newspaper from more than one place,
it is called a chain. Ex. The Indian Express.

Employee Ownership
This type of ownership pattern discloses the importance of employees in an
organization. It considers that employees are the major contributors in
decision-making procedures, and this form of ownership helps in resolving
employee-related issues for the growth of the organization. In this ownership
pattern, quick decision-making is difficult.

Hierarchy, functions and organization structure

Types of organization:
Three common types of organizations are found in business and industry.
These are
1) pyramid
2) functional
3) staff and line

A pyramid type organization is similar to that of a military organization.

Authority is assigned by ranks and titles in an unquestioned delegation of
superior and inferior positions.

In functional type organizations, authority is assigned by levels of work or

particular duties, with each function having its own final authority. Such
structure would not be practical for a newspaper because departments’ would
be pulling away from and against each other instead of pulling together.

15
In staff and line type organization, control is graduated down in levels, with
each stratum having its final authority. The departments are headed by
executives who are directly responsible to a superior, but each executive is
given full responsibility and authority within the group supervised. The staff
and line type structure is most suitable for a media organization, for it
provides functional autonomy to various departments, to get their work done.
This type of organization provides freedom, which is essential for creative
work.
Let us discuss how an organization structure is created. The process of
creating the structure is known as organizing.

Organising
‘Organizing’ is establishing a structure in which employees in different
positions, can most effectively do their own work, as well as coordinate their
activities with others. The following steps are followed in organising (the
sequence of organizing):
1. Identify the task to be performed
2. arrange the tasks in sequential order (work flow sequence)
3. assign the tasks to positions (jobs)
4. determine how to coordinate and control the flow of work
5. put all the parts together in an overall structure

There are four key factors, which influence the organization structure:
i. mission and strategy of the organisation
ii. technology used for its work processes
iii. skill level of the organisation’s employees and managers
iv. size of the organization and its resource base

As these factors varies from organization to organization, so also their

structure.

Major divisions of a newspaper

Newspaper organizations are commonly organised into the following major
dividsions:
1. Editorial
2. General management
3. Finance
4. Circulation
5. Advertising (marketing)
6. Personnel management
7. Production(mechanical)
8. Reference

16
 Publisher

General
Manager

Editor/Man Advertising Circulation Production Finance Personnel

aging Editor Director Manager Superintendent Manager Manager

The hierarchy, structure and functions of these departments of a media

organization, especially a newspaper, are discussed here under.

Hierarchy
Hierarchy refers to the layers of personnel with varying designations, in the
organization. Organizations with large number of layers are known as tall
organization, in which, there exists large number designations, in between the
chief and the employees at the lowest level. But organizations, with few
numbers of layers in between the chief and the lowest level are known as flat
organization. In case of flat organizations, the scope for interaction between
the superiors and subordinates is much higher compared to tall orgainsation.
The nature of the media organization’s work, and its employees, demand flat
type of organization structure.

Editorial Department
The organizational structure and the number of personnel working in the
editorial department of a newspaper depends on the size of the newspaper,
the philosophy of the proprietor, the type of ownership, and the nature of
technology in use. A typical editorial news department structure is presented
hereunder.

17
 Editor

Chief Resident Managing Resident Other

Correspondent Editor Editor editor functions
(Central office) (Other units)

City Photographers
Correspondents Special correspondents Departmental work
Correspondents Discipline
Foreign correspondents Personal report
Photographers Parliament/assembly news
City
Correspondents

Special writers Asst Editor Asst.Editor

(Day) (Night)

 Translators  Photographers  News editor  Trainees

 Trainees  Designers  Cf. Dy editor  Photographer
 Correspondents  Feature writers  Sr Dy editor s
 Cartoonists  Jr dy editor  Cartoonists
 Trainees

 Chief Dy. Editor  Editors-

 Sr Dy. Editors sports.
 Sub Editors Commerce,
 Chief of desk culture, law

Main sections of the editorial news department:

All reading material except advertisement is assembled in the editorial
department of a newspaper. A large editorial news department will have five
general divisions:

1. The Newsroom
2. Copy desk
3. Editorial room
4. Picture division, and

18
 5. Library

Newsroom:
All general news is either prepared or processed in the newsroom. The world,
national and state news is brought in by wire for editing. The city editor
assigns reporters to cover local news stories. News is received by telephone,
telegraph, personal interviews.

Copy Desk:
Located in the newsroom but almost a separate division, where copies turned
in by reporters and checked by city editor are examined by experienced copy
readers. They eliminate unnecessary and inappropriate words and phrases,
correct spelling and punctuation, check facts, indicate paragraphs, and write
headlines.

Editorial Room:

Editorial Department Personnel and their Responsibilities

Editor:
 The editor heads the editorial news department of a newspaper.
 Write editorial/select subject and ask editorial writers to write editorial
 Supervises the editorial page, confers with the editorial writers,
 Over sees all matters pertaining to the newspaper policies
 Ensures that the philosophy of the publisher is reflected in the contents
of the newspaper
Managing editor:
The managing editor and the news editor handle news material and ensure
that the editorial news department has sufficient personnel and proper
facilities for gathering news and handling features.

The managing editor ensures that the editorial department has sufficient
personnel and proper facilities for gathering news and handling features.

News Editor:
Ensures that all available news is sought and properly handled.

City Editor:
 Sees that community news is covered
 As the key person, carefully lists all coming events and at the proper
time directs reporters to cover them
 The city desk is constantly open for ‘news tips’, to which reporters may
be assigned to run down the facts
 Some reporters cover regular beats for news.
Rewriters:
Handle previously used copy or fresh copy that needs revising

19
Editorial Response Systems:
 Letter to editor- 10 % of readers
 Readership study/survey/rating studies- acceptance of the newspaper-
determine the reactions of the readers to features, news, presentations,
ad copy and display, format and typography, page positions
 Circulation audit
 Guest editor
 Citizen journalists
 Online newspresentations
 Readers forums

General Management Department

Finance and accounts Department
The main responsibilities of the finance department of a newspaper include
the following:
1. accounting and budgeting
2. financial analysis
3. examine/ascertain the cost-benefit ratio that would result from a
managerial decision.
The importance of these responsibilities and hence the finance department to
the newspaper organization can be realised from the money and assets wheel
presented hereunder.

Media company as a wheel of money and

assets
Money

accounts receivable – Spent for material and labour

collected to pay expenses costs–
and to create extra profit to create products and services

Product inventory and/or

services are sold to create
money=cost+ profit

i. A media firm spends money to buy equipments, materials including

news material, and pays salary to its employees;

20
 ii. The equipments, material are used by the employees to create
products and services (inventory) i.e. newspapers, magazines, and
broadcast programmes;
iii. The media firm sells its (inventory) products and services, to the
subscribers/audiences as well as the advertisers/clients, there by
creating accounts receivable;
iv. The media firm collects accounts receivable i.e. money owed to it by
advertisers, subscribers, or clients, who purchase its products or
services;
v. The accounts receivable i.e. the money collected is paid for all costs
associated with production and distribution of the products as well as
to earn profit on the investments. With this profit in hand, the firm has
more money to start the cycle again.

For effective management of this cycle, the responsibilities mentioned above

are of paramount importance.

Accounting and Budgeting

The four main functions of the accounting department are the following:
1) general accounting-every thing necessary to give management and
owners atrue picture of the financial condition and fiscal operations.
2) department record keeping-the tabulating necessary in each
department to reveal to management the business being carried on
there and the progress being made.
3) cost finding-the process applied in determining the actual cost of a
given salable unit of the newspaper such as column inch advertising
or a single issue of the newspaper.
4) Budgeting-outlining in orderly form contemplated monthly or annual
receipts from all possible sources and the monthly or annual
expenditure considered necessary.

Managerial accounting:
It looks at a company’s financial statements not just to gain a financial
perspective, but to provide management with indicators of performance that
will lead to actions to improve the company’s operations.

Financial accounting:

The kind of accounting done by certified public accountants and bankers

when they focus on the financial health of a company. They use the
company’s income statement and balance sheet to develop ratios that
describe various aspects of a company’s financial condition and performance:
stability of company, how well a company utilizes its assets, and the firm’s
profitability.

Financial Analysis:

21
To explain what a company is doing, has done, or plans to do. In brief, it is
analyzing the company’s financial performance, in terms of income
expenditure statements.

The Income Statement:

It includes three major categories of entries-
i. Revenue- sources of income
ii. Operating expenses- expenses directly linked to operations
iii. Non-operating expenses-expenses linked to the firm’s long-term
investments.

Income Statement
Total revenue
-total operating expenses
= operating profit (loss)
-total non-operating expenses
= profit (loss) before income taxes
-income tax paid
= net profit (loss)

Budget:
It simply lays out expected revenues and expenses for the next year. The
main components of a budget are:
Revenue- each source of revenue listed separately
Expenses-each expenses category listed separately. They are divided into two
categories:
i. Operating expenses
ii. Non-operating expenses
Departmental budget:
Departmental budgets includes the following items-
Salaries
Telephone
Rentals
Media
Memberships
Maintenance
TA
Miscellaneous expenses

22
Financial concepts:
Understanding of some important financial concepts is very essential to be an
effective media manager:
Operating revenue
Operating expenses
Current assets
Fixed assts
Current liabilities
Long-term liabilities
Working capital = current assets-current liabilities
Cash flow
Expenses
Profit and loss
Opportunities for improving profits:
Return on investment
Payback
Capital investment
Net worth
Accounts receivable turnover.

Main sections of the finance and accounts department:

Budget
Accounts
Bills
Salary
Advance
Audit
The common functions of the finance and accounts departments can be
summarized as follows:
1. general accounting to reveal the financial condition and fiscal
positions. The balance sheet of a company containing the statement of
assets-current.fixed, intangible and others, and liabilities, networth of
the company etc.
2. record keeping
3. cost finding
4. budgeting
5. financial analysis
6. revenue collections and payments
7. expenditure control

Circulation Department
The importance of the circulation department of a newspaper lies in the fact
that it is indicator of a newspaper’s acceptability and social commitments. It
is the foundation of a newspapers success, without which the newspaper

23
cannot survive. It is the main source of revenue for a newspaper, for without
good circulation no advertising revenue can be mobilized. In medium
newspapers the advertising and circulation functions may be under the direct
supervision of the business manager. But in well established newspapers like
the advertising, circulation is also made into a separate department under the
direct supervision of the circulation director or manager. The circulation
department is often divided into a number of divisions like city circulation,
state circulation, national circulation, mail circulation, traffic or fleet etc.

Circulation Director

City State National Mail Traffic/fleet

Circulation Circulation Circulation Circulation Manager
Manager Manager Manager Manager

Circulation Billing and  Sales people

Promotion Collection  Carrier boys
 Huckers
 Agents
Fig. Circulation Department Structure

Main functions of the circulation Department:

 Packaging and dispatch
 Transportation and distribution
 Relationship with agents
 Postal subscription
 Billing and collection
 Print order
 Circulation audit
 Supply of information to RNI
 Marketing and circulation promotion

Advertising Department
Advertising department is the chief source of revenue for any media
organization in general and a newspaper in particular. The main task of the
advertising department of a newspaper is to well serve all the available
accounts and keep the advertising volume at high level. In addition, also

24
constantly search for new accounts. The advertising department of a big
newspaper is divided into three units namely the local display advertisement
unit, the general or national display advertisement unit, and the classified
advertising unit. The organization chart of the advertising department of a
newspaper is shown in figure.

Advertising
Director/Manager

Local display/ General/Nation Classified Research

retail al advertising advertising Director
advertising Manager Manager
Manager
Researchers
Special Street, Interviewers
Ad sales people advertising correspondence, and
Artists representatives telephone sales people
Copy writers at large factory
centres

Advertising Department Personnel requirements:

To man the jobs of the advertising department of a newspaper, a number of
people with appropriate skills and qualifications are engaged. However, the
number of people engaged varies from organization to organisation,
depending on the size and structure of the organisation, philosophy of the
management, and the duties performed by the advertising department.
Irrespective of the size, some common sections are found in the ad
department. People with degignations commonly found in advertising
departments of newspapers are:
Advertising Director or Manager
Display Advertising Manager
Classified Advertising Manager
National Advertising Manager
Copywriters
Artists
Advertisement Sales People
Telephone Solicitors
Special Advertising Representatives
Research Director
Researchers, and
Interviewers.

25
Functions:
The advertising director/ manager is the chief of the advertising department
and the overall responsibility of the department lie on him. The success or
failure of the department depends on his abilities. He sees that
1) all available accounts are well served
2) keeps the advertising volume at a high level
3) he is constantly on the alert for new accounts

In the performance of these duties, he is actively assisted by various teams of

personnel with expertise different areas of advertising business. The local
display/retail advertising manager is the second most important person in the
hierarchy, who reports to the advertising director. With active assistance from
a force of advertising sales people, he takes care of advertising for the local
business firms, and continually searches for new accounts. The classified
advertising manager is responsible to mobilize classified advertisements for
the newspaper with the help of the street, correspondence, and telephone
sales people. The national advertising manager mobilizes advertisement and
provides service to the clients at the national level, with the help of the
special advertisement representatives stationed at industrial centers, and the
advertisement sales people. The copywriters, artists, and photographers do
the lead role in performing the creative work of writing the ad copy. The
research director, researchers, and interviewers help in the advertising efforts
by way of conducting research on the market and advertisements to collect
the much needed information inputs to make the advertising efforts more
effective.

Structure and Functions of the Personnel Management

Department

The personnel management department of a newspaper shoulders the

responsibility of managing the company’s human resource. It is primarily
responsible to ensure that the company had adequate supply of suitably
qualified manpower available for the company’s jobs and are well-motivated
to work with team spirit. Starting from accessing the human resource
requirements, the personnel department takes all possible steps for
recruitment and selection of appropriate number of suitably qualified
personnel to man the jobs of the company and properly developing and
compensating them so as to ensure they put their fullest potentiality for the
development of the company as well as their personnel development.

Depending on the size of the organization, the personnel department if often

divided into a number of divisions such as Recruitment, compensation,
training and development, career planning, employee welfare etc.

26
 Director/Manager
Personnel

Manager - Manager - Manager- Manager- Employee

Recruitment Compensation Training and Career Welfare
Development planning

Main functions of the personnel management department:

 Human resource planning
 Recruitment and selection
 Placement and induction
 Training and development
 Career planning and adjustment- promotion, transfer
 Compensation
 Employee welfare-employee benefits and services
 Discipline
 Employee motivation

Structure and Functions of the mechanical/Production

Department
Mechanical department of a newspaper is given with the most important
function of producing the newspaper as finished products for distribution to
the readers. It is responsible for procurement, maintenance and development
of appropriate printing machinery for timely printing of the newspaper copies
and commercial printing work whenever taken.

27
 Mechanical Superintendent

Composing Press Supervisor

Room Supervisor

 Operators of Photo  Plate makers

Type Setting machines  Offset Press
 Paste-up and make-up Operators
personnel  Helpers
 Proof Readers  Artists

Structure and Functions of the Reference Department

Apex Bodies: (RNI, DAVP, INS, ABC)

Office of the Registrar of Newspapers for India
The office of the Registrar of Newspapers for India (RNI) is a statutory body
of the central government responsible for issue of certificates of registration
to newspapers published under valid declaration, and compilation of a
register containing relevant data regarding ownership and circulation of all
newspapers published in India. The office of the RNI was created on 1st July
1956, pursuant to the recommendations of the first press commission in its
report in 1954. Provisions for the duties and functions of the RNI were
incorporated in the Press and Registration of the Books Act 1867 through an
amendment. The main functions of the RNI are as follows:
 Compilation and maintenance of a ‘register’ of newspapers containing
particulars about all newspapers published in India
 Issue of certificates of registration to the newspapers published under
valid declaration
 Oversees the allocation of titles, newsprint and certificates for the
import of printing and allied machinery required by newspapers
 Scrutiny and analysis of annual statements sent by the publishers of
newspapers, containing information on circulation, ownership etc.
 Preparation and submission to the government of India an annual
report containing a summary of all available information and statistics
about the press in India with particular reference to the emerging
trends in circulation and in direction of common ownership units etc.

28
  Conducts frequent checks to verify the periodicity and circulation of
newspapers to ensure that newspapers are published in accordance
with the provisions of law.

Directorate of Advertising and Visual Publicity

DAVP is the nodal agency to undertake multimedia advertising and publicity
of policies and programmes of the Government. All types of advertisements
of all ministries and departments of the government of India excluding
railways are released to the press by the Directorate of Advertising and
Visual Publicity. The advertisement campaigns of this unit are mostly
focused on communal harmony, national unity, family welfare, healthcare,
rural development, welfare of weaker sections and the handicapped,
empowerment of women, drug abuse prevention, economic reforms,
promotion of handicrafts, etc. For this purpose electronic media, print
media, exhibitions, outdoor publicity like hoardings, kiosks etc. are utilized.

The origin of DAVP can be traced to the world war-II when the erstwhile
government appointed a Chief Press Advisor followed by the appointment of
an Advertising Consultant under him in 1941. In 1942, the Advertising
Consultant’s office became the advertising branch of the Department of
Information And Broadcasting. With expansion of its scope, the advertising
unit was declared as attached office of the Ministry of Information and
Broadcasting on Oct 1, 1955. The office was renamed as the Directorate of
Advertising and Visual Publicity and became a separate body.

The main set-up of DAVP at the headquarters consists of several wings like
Campaign, Advertising, Outdoor Publicity, Printed Publicity, Exhibitions,
Electronic Data Processing Centre, Mass Mailing, Audio-Visual Cell and
Studio. DAVP releases press advertisements on behalf of various Ministries/
Departments and autonomous bodies. The main functions of the DAVP are as
follows:

 Meets multi-media publicity requirements of different ministries and

departments of government of India including Public Sector
Undertakings.
 Communicates with the grassroots level on behalf of the various
ministries through formulating communication strategies, their
designing, release of press advertisements, printing of folders, posters,
kits, booklets, stickers, etc., outdoor publicity through hoardings, bus-
back panels, banners, computer animation displays, etc. or publicity
through audio-visual media.
 Nationwide distribution of printed publicity materials on behalf of the
government
 Create awareness among the people on socio-economic theme and
seeking their participation in development activities.

29
Indian Newspaper Society
The Indian and Eastern Newspaper Society was started in February 1939, as a
central organization of the newspapers of India, Burma and Ceylon, to
promote common interests of member newspapers. During the war years, the
society advised the government regarding the equitable administration of
newsprint controls. The society actively pursued the project of running a
purely Indian news agency owned and managed by the Indian press. The
society established a news agency known as Press Trust of India in 1947 and
decided to restrict its membership to owners of newspapers subscribing to
any of the Press Trust’s prospective news services.In December 1947 the
Society deputed its delegation under the leadership of Kasturi Srinivasan to
London to settle the terms of an agreement with Reuters in regard to the
Associated Press of India.
The other important subject which occupied the attention of the society
during 1947-48 was supply of news print. A revised News print Control
Order was issued by the government of India with effect from April 3, 1947
which significantly relaxed the terms of their use. A news paper price-page
schedule was also introduced. A five member sub-committee of the Society
considered the proposals and drew up a draft memorandum and articles of
association for the Audit Bureau of Circulation.

The IENS was registered under the Societies Registration Act. With certain
changes in the society’s constitution it evolved the system of accrediting
advertising agencies. The partition of the country brought in its trail many
difficulties- a number of its members being forced to shift to the other side.
Over the years the society has not confined its activities to domestic issues
and problems confronting its members, it has been concerned with
organizations and services connected with newspapers, whose interests,
wellbeing and proper functioning are vital importance to the press. The main
objects of the society are as follows:

 to promote and safeguard the news paper publishing interests of the

members and to take suitable steps in respect of such business as are
affected by action of legislature, Government, law Courts, municipal
and local bodies etc.,
 to collect information upon all topics having a practical bearing for its
members and to communicate the same to them;
 to promote cooperation in all matters affecting the common business
interests of its members; and
 to hold periodical conferences of its members to discuss and
determine action on issues of common business interest.

Audit Bureau of Circulation

The Audit Bureau of Circulation is an independent, self-financing, private
body, charged with the responsibility of conducting regular audit of the ‘net
circulation of newspapers’ and to issue certificates of net paid circulation

30
every six months. Though a private body but enjoys high reputation for
reliability and impartiality.
ABC is one of the several organizations of the same name operating in
different parts of the world. Though affiliated to each other each of these
organizations are entirely different from each other.
During the early 1890s, with the growth of mass advertising, some
newspapers and magazine publishers began inflating the number of readers
for their publications in order to at least collect more advertising revenue. In
an effort to check this deceptive practice, advertisers and publishers joined
together to form the ABC in 1914. The main purpose of the ABC was to
establish ground rules for counting circulation, to make sure that the rules
were enforced, and to provide verified reports of circulation data. In India it
came into existence in 1948 with headquarters at Bombay with the following
objectives:

 To issue standardized statements of circulation of members

 To verify the figures shown in these statements by auditor’s
examination of necessary records
 To disseminate circulation data for the benefit of advertisers,
advertising agencies and newspaper publications.
Functions
The publishers maintain detail record of circulation data of their publication.
In case of newspapers, these records would include such information as the
number of copies delivered by carriers, the number of papers sold over the
counter and the number delivered by mail. Twice in a year, the publishers file
their detailed circulation data with the ABC which the ABC in turn
disseminated to its clients for information. Once every year, the ABC audits
publications to verify that the figures that have been reported are accurate. An
ABC representative visits the publication and is free to examine records and
files that contain data on press runs, invoices for newsprint and transcripts for
circulation records. Accordingly errors if any are rectified to prepare
authentic reports of the circulation of different publication.

The ABC reports are helpful to both the advertisers as well as the
newspapers. On the basis of the verified circulation figures, the advertisers
prepare their advertising plans. With the same verified circulation figures,
newspapers try to win over the advertiser’s confidence. The figures also help
the publishers to understand their position, strength and to chalk out future
strategies.

Media Economics
(Economics of print and electronic media)
Media economics is concerned with how media operators meet the
informational and entertainment wants and needs of the audieneces,
advertisers and society with the available resources. It deals with the factors

31
influencing production of media goods and services and the allocation of
those products for consumption.
Economics
Economics is the study of how limited or scarce-resources are allocated to
satisfy competing and unlimited needs and wants, and of the forces that direct
and constrain that activity. Scarcity exists because resources are finite, where
as wants tend to be infinite, exceeding available resources.
Economics is the study of production and consumption of resources and
products, as well as the choices made to meet needs and wants.
Production is the creation of goods and services for consumption. And
consumption is the use of goods and services or resources to satisfy wants
and needs.
Individuals and firms are both producers and consumers in that they consume
resources and produce goods and services.
According to the level of analysis, economics is divided into two branches:
macroeconomics and microeconomics.
Macroeconomics studies and analyses the operation of the economic system
as a whole, usually at the national level.
Microeconomics, on the other hand, considers the market system in
operation, looking at the economic activities of producers and consumers in
specific markets. It considers the behaviour of individual producers and
consumers, as well as of aggregate groups of producers and consumers in
those markets.
Needs and wants
Needs and wants are both public and private. Private needs and wants include
subsistence, convenience, individually determined wants and needs. Public
wants and needs include such items as military forces to protect against
foreign aggression, police forces to protect individuals and property from
criminals etc.

Media organizations function in the economic system to meet both private

and public needs and wants. Media caters to the wants and needs of four
different groups:
1. media owners
2. media audiences
3. advertisers, and
4. media employees.

Media owners want: i) preservation of the firm and its assets

ii) high rate of return on their investment
iii) Company growth
iv) increase in value of the firm , and thus their
investment.
Media audiences want; i) high quality media products and services at low
cost
ii) wish to acquire the product wit ease

32
Advertisers want: i) access to their targeted audiences at low price
ii) high quality service from media employees

Media organization employees want:

i) good compensation
ii) fair and equal treatment
iii) safe and pleasant working conditions
iv) psychic rewards for their labour.

All these groups are involved in both consumption and production.

Media also serve public wants and needs by providing forums in which ideas
and issues may be conveyed that are necessary for the maintenance of social
order and progress. Public wants for media include multiple stable media
outlets, organised use of resources, and content diversity.

Allocation
Choices are made among the wants and available resources to determine
which and how many of the wants will be satisfied with scarce/finite
resources. This process is called allocation of resources. Allocation involvers
three major choices using available resources:
6. what goods should be produced
7. how should it be produced, and who or what will do the work,
where the goods will be made
8. whoa gets to consume the goods or services
The first issue involves answering questions of what should be produced and
made available to meet wants. It also involves deciding on how much should
be produced to meet those wants.
For example, in the realm of media, it involves public choices over whether
the government should allocate available broadcast frequencies for more
local TV stations or for mobile phone communications.
In media the allocative issues are addressed by answering questions such as
whether life disk jockey’s or automated playback should be used in radio
stations, and whether a TV programme should be filmed in a studio in
Hollywood or Bollywood.
The third major issue is who will consume the goods and services. This is
how will they be distributed among people and industries.

Four major allocation patterns are commonly found:

1) traditional decision making, in which choices are based on
repetition of earlier decisions;
2) market decision making, in which the amount of supply and
consumer demand determine prices, which in turn influence
production and who is able to receive goods and services;
3) centralized decision making, in which choices are made by
authorities and planning boards, and

33
 4) mixed decision making, which combines elements of market and
centralized decision making.
Allocation decisions, in India, are made by mixed decision making, with a
great reliance on the market but some central planning.
The market economy is a system in which allocative decisions are made on
the basis of the economic forces controlling operations of the market. Market
economy is the primary basis of the capitalist or free economic enterprise
system.

Adam smith in ‘the Wealth of Nations’ (1776) argued that the market
system’s operation was based on several principles, which are as follows:
1) competition between different producers and competition between
different consumers are the central elements of the system
2) consumers and producers have equal strength in the market
3) economic self-interest of producers and consumers will be used as a
guide in all production and consumption decisions.
4) The market is its own regulator and will operate in an orderly fashion,
producing what is needed and wanted by consumers, at prices
consumers are willing to pay and at which producers are willing to
sell. The market constantly readjusts to meet changing needs and
wants and the demands of consumers of products.

Smith argued that if the market was left alone (“laissez faire”) to operate
according to these basic principles, capital would be accumulated that would
be used for new production, resulting in growth in he national economy. This
would improve the quality of life for all men and women, and society as a
whole would be improved. But smith’s critics such as Robert Owen and
others believed that the market must be tempered by custodians of moral
ethics (the Christian ethics) lest it become an immoral quest for accumulation
that impoverished enslaved workers. Socialists argued hat the market system
created inequalities that must be eliminated.

David Ricardo, Karl Marx and others laid out some principles contradicting
smith’s principles of the market economy. They said, market economy, leads
to diminishing competition between producers, creates unequal power
between producers and consumers. State intervention and control of the
economy, therefore, is inevitable.

The principles of market system have remained the same, but the changes
sparked by government intervention have resulted in mixed economies rather
than pure market economies.

Media and the Market Place

Media in India are for most pat capitalist ventures, operated by private parties
for the purpose of generating profit, and are thus subjected to the operational
principles of the market system. Even not for profit media such as public

34
service broadcasting or organizations operated media are influenced by the
principles of market system and are thus affected by its operations.
These principles affect the operation of the media, and hence, the media
managers must understand how they apply to media. It is also necessary to
understand the issues that are raised in media operations as individual and
aggregate firms produce media goods and services for consumption by
individual and aggregate consumers.

Media firms use scare resources- electricity, paper, equipment, skilled labor,
programming, ionformation-to satisfy their wants i.e. produce media goods
and services and gain profit. Consumers use scarce resources –time and
money-to satisfy their wants and needs i.e. to acquire information and be
entertained by media products or to get their messages carried in the media.
Because the resources are scarce, producers and consumers of the media
goods and services are constrained in their abilities to meet all their wants
and needs. Thus, both turn to allocation to determine what and how media
products will be produced and consumed.

Media economics focuses on these basic issues, concentrating on the

operations of economic principles in media markets. Understanding these
issues is vital for media managers of today and tomorrow.Thes can provide a
framework for understanding the underpinnings of the economics system
affecting media and the specific issues that arise in media economics. These
can be useful to media managers of tomorrow in analyzing and making
appropriate economic decisions in the best interests of the organizations they
serve as well as what is in the interest of the audiences.

Competition and Survival:

The media goods/service market

Media industries operate in dual product market. They create one product but
participate in two separate goods and service markets. Performance in each
market affects performance in the other.
The first market is good, the media product. The goods (sometimes called the
content product) is the information and entertainment packaged and delivered
in the form of a printed newspaper, magazine, or book, a radio or television
broadcast, cable services, or a film or video production. This product is
marketed to media consumers. Performance in this market is measured in a
variety of ways. Circulation statistics –no of copies sold, revenue from sales,
audience ratings etc.
Marketing contents to consumers involves attracting their attention to the
product so that they will exchange their time and/or time and money for the
product. Some media require that consumers pay money for the content
product, but all consumers must pay with their time, a scarce resource.

35
Differing characteristics of goods (whether private or public) affect demand
for goods and consumption of goods. A good is considered to be a private
good if its use by one consumer diminishes its availability to others. A public
good, however, dos not diminish the availability of the good to others. Media
are both private and public goods depending on their attributes.

Media Good/Service Market

Media Good Access to Audiences

(content product) (for advertisers)

private good public good

example- example-
newspaper copy television broadcast

The second market in which media participate is the advertisers market. In

this market media sell ‘access to audiences’ to the advertisers. The
advertisers are charged for the audience access they are provided by the
media. The amount charged, for bringing viewers into contact with the
advertiser’s messages, is more dependent upon the sizes and characteristics of
he audiences to which access is provided.
In both the markets, all media operating, compete with each other to attract
the audiences and/or the advertisers. This leads to inter-media competition for
survival. The sections of the media, which fail to compete with others, in
terms of fulfilling audience wants and needs, get marginalised. Where as, the
sections of the media, which proactively compete with others in the market
survive and grow.

Inter-media Competition
In the broadest sense, all media compete in the content product market by
providing information and entertainment. All though media have content
similarities, newspapers, television,, radio,magazines,books,films,video
cassettes, and other media products serve distinctly different needs and are
used in distinctly different ways by audiences. They are no fully
interchangeable products. For audiences, newspapers and magazines serve
primarily information and idea functions while broadcast media, films and
video serve primarily entertainment functions. Even magazines, which most
frequently approximate the content provided by newspapers, clearly are not
substitutes, because of differences in frequency and approaches to
information.

These differences affect the way in which content is conveyed and the time
and format in which it is available. Because of content differences, day-to-

36
day substitution of different media as a source of information is limited.
However, there appears to be a significant amount of long-term substitution
of different media resulting from development and diffusion of new media
technology.

Intra-media competition
Different units of the same medium operating in the same portion of the same
geographic market generally compete with each other to provide “content” to
audiences and “access to audiences” to advertisers, and can be substituted. Of
course, diffeneces in the content product or audience that is accessible to
advertisers exists because of product diffentiation and market segmentation
result in variance. But the substitutability of units of the same medium is
much greater than that between different media.
But, some substitution with different ‘content’ and ‘audience access’ product
can be made without giving up the attributes that make the product attractive.

This leads to competition in the content product markets. However, the

competition can be any of the following types:
1) perfect competition
2) monopolistic competition
3) oligopoly
4) monopoly

Competition presents challenges as well as opportunities for the media firm

and their managers. To survive and grow under stiff competition, innovative
product, and marketing and advertising strategies are applied.

Marketing of Media

Marketing is all about identifying customer needs and desires and than tailor
a product to match customer needs and interests. Marketing a media product
involves:
1) identify a target market
2) create a mix of marketing elements to both serve the target market
and to achieve the media firms objectives.
The four important ingredients of the marketing mix commonly known as
‘4Ps’ of marketing are: product, promotion, place, price.

Product
The product is the most fundamental of the four Ps. The product should be
designed to match customer need and interests, and should be of reasonably
good quality. If the product is of poor quality and fails to satisfy customer
wants, than, even a perfect match of the other elements of the marketing mix
may not be adequate to help the product survive in the market. So an essential
pre-requisite for marketing of media products is product quality and
attributes.

37
For a media organization, the products are newspapers, broadcast
programme, advertising campaign etc. The media product can be tangible
like a newspaper or intangible like a broadcast message. In the case of media
products, both the contents and the package are important to attract the
audiences.

Three essential considerations for launching a media product:

1) whether a sizable audience exists
2) whether some advertisers could be identified ,who find that audience
attractive
3) bring together all the elements of the marketing mix to develop an
over all marketing plan

There are three basic audience targeting strategies for any media product,
which are- concentration, differentiation, and un-differentiation. Further, to
identify the target audience, the market can be segmented according to their
geographical location, or demographic factors.
To illustrate, the product strategy for launch of a magazine had number of
features, which are as follows:
i. plan to secure articles
ii. utilize an editorial board to review the submissions
iii. set a balance of 80 % articles and advertisements
iv. develop a system to receive articles electronically
v. plan to print the journal in a form that meet quality demands of the
audience

Promotion
Promotion refers to all the tools and methods aimed at convincing customers
to buy or use a media product. Major tools used in promotion of media
products include advertising, public relations, sales promotion, and direct
sales. It is important to understand that a person passes through a number of
intervening stages before making a final decision to purchase/use a
product/service. According to the AIDA model, the purchase decision
process passes through four stages as mentioned in the figure:

Awareness Interes Desire Action

t
The first stage to create awareness about existence of the product. The second
stage to stimulate interest in the product. The third stage is to turn the
person’s interest in the product to desire for the product. The fourth stage is
to push the level of desire for the product, so that action is taken to purchase
or use the media product. Different tools are effective at different stages of
the purchase decision process.

Place

38
Place refers to how a media firm’s product or service is distributed to its
audiences. The location where the audience can use the product. What
combination of carrier-delivery, mail, and news stand are used for a
newspaper. Where a television station puts its tower. What pattern a cable
television follow in wiring a community. All of these are distribution
questions to be answered to determine available and accessible to customers,
its products and services will be. Availability of the product at appropriate
place and at appropriate time can make marketing job little bit easier, but
non-availability of the product at a location convenient to the audiences can
be an obstacle to marketing.

Price
The fourth, one of the important, elements of the marketing mix is pricing of
the products. The media products could be priced or priceless. For example,
free to air television channels are screened to audiences free of cost, but for
the broadcast instruments. But for pay channels and subscription of
newspaper and magazine copies, the audiences are required to pay a price. In
the later case, the price of a media product is affected by the following
factors:
i. quality
ii. package
iii. place of delivery
iv. level of competition
v. socio-economic status of the audiences

Foreign Equity in Indian Media (including print

media)
Another issue that is likely to have far reaching implications for the print
media in India is the entry of foreign capital into the Indian print media
sector. Though the issue has been under constant scrutiny of the government
of India since the country got independence in 1947, it raised intense debate
with the introduction of economic liberalization in the country in July 1991.
Over the years some decisions of the Indian Supreme Court, resolution of the
Indian parliament and recommendations of some committees and
commissions have barred the entry of foreign print media into the country. As
early as in 1959 the Supreme Court had ruled that a non-citizen running a
newspaper is not entitled to press freedom as his fundamental right. The court
ruled that a corporation or a company running a newspaper is not a citizen
and hence it is not guaranteed press freedom, however its editors, directors
and shareholders can claim that right under the provisions of Indian
constitution. So, if a foreign newspaper is run as joint enterprise with an
Indian newspaper, its Indian directors, shareholders and editors can seek the
protection of the court, while foreign collaborators could seat back and avail
the privilege of freedom of press and enjoy the benefits flowing from the
above privilege. The first press commission in its report submitted in 1954
also did not favour the entry of foreign print media into the country, which

39
guided the government of India take a decision on this issue. The central
government in 1955 decided that no foreign-owned newspaper or periodical
should, in future, be published in India and that foreign newspapers and
periodicals which dealt mainly with news and current affairs should be
allowed to bring out their editions in India. Another decision taken by the
government of India in 1956 on this issue was that communication facilities
should be granted to foreign news agencies only where distribution of news
within the country would be effected through an Indian news agency owned
and managed by Indians, and which would have full and final authority in the
selection of foreign news and their distribution and which would also be in a
position to supply Indian news to foreign news agencies. The press council of
India in a reference from the government of India communicated its views
disapproving the entry of foreign print media. The majority view in the
commission was that direct distribution of foreign news agency copy to
Indian subscribers should not be allowed, and it did not favour publication of
foreign papers/ journals in India involving equity and management
participation.

However the closing years of the 20th century generated heated debate with
both the protagonists and opponents speaking on it with almost religious
fervour. Those favoring the move consider the step as a logical outcome of
the ongoing process of liberalization, whereas those opposing it advise
caution against going blindfolded into an unknown area and cite the 1955
cabinet decision disallowing such entry as sacrosanct. They do not favour
liberalization to mean restrictions on our sovereignty and threat to our
democratic economy. They apprehend that the entry of all-powerful foreign
media into India is not in the best interests of the Indian media, economy or
culture. They are of the view that, foreign newspapers are not expected to
have any concern for our culture, ethos or tradition and the cultural and moral
fallout of the entry of foreign newspapers would be far more serious than the
fallout of the advent of satellite TV in the country, where the print media still
has greater influence than the electronic media. A former Prime Minister of
India Mr. V.P.Singh opposes the entry of foreign newspapers into India in the
following words ‘the idea of allowing 26 % foreign direct investment in
Indian print media is ‘subversive’. Its most obvious outcome, as one can see,
will be a comprehensive balkanization of the intellectual space. The advent of
foreign capital would threaten India’s tradition of pluralism and culture of
diversity. ‘ Powered by their immense finances and goaded by an ambition to
control the emerging Indian market, the foreign monopolies will impose their
own agenda on the country’. However the protagonists of the entry of foreign
capital believe that the entry of foreign capital will bring several benefits to
the Indian print media including infusion of capital and know-how, readers
having more choices at lower prices, and help the country get integrated into
the information superhighway.

40
Setting aside all debates on the issue, the government of India in a significant
decision at the later part of 2002 allowed foreign direct investment in the
Indian print media sector. The decision of the government of India allowing
up to 26 percent foreign direct investment in news and current affairs
publications and up to 74 percent foreign participation in technical, medical,
and specialized science journals, is likely to have significant impact on the
print media in the country. It is hoped that a wave of professionalism will
take on in the print media. The coverage of issues is likely to be better and we
would also be exposed to newer styles. The professionals, who are currently a
part of the industry, are also likely to witness a sea change in the conditions
of work, largely by way of the emoluments. Foreign direct investment is
expected to bring in a sound mechanism to evaluate readership, thereby
having major impact on advertising.

Within six months of allowing foreign investment in print media sector, in

yet another policy decision on March 18, 2003 the government decided to fix
a cap of 26 percent foreign investment in television news channels seeking
for up linking from India. The decision on up linking will also allow 100
percent foreign equity to those up linking from India for entertainment. As
such, the entertainment channels continue to be detected by the existing
policy under which all channels irrespective of their ownership or
management control are permitted to uplink from India subject to fulfillment
of eligibility criteria. The 26 percent cap will also apply to those using the B2
bandwidth for broadcasting via V–Sats. Suitable amendments are being made
to make the V–Sat licensing norms conform to the new up linking policy.
After the cabinet decision, among the 24 applicants of news channels for up
linking programmes from India, 12 got permission including Surya, Star-
news, AAJ Tak and Zee-news.

Due to this decision the Zee group will have to bring down its foreign
holding by 30 percent. It can do this in two ways- foreign holders can
disinvest 30 percent of their equity in favour of Indian retail investors or
domestic equity partners or Indian promoters can pump in fresh equity to
bring down foreign holding to 26 percent. The I & B Ministry also said the
26 % foreign equity would include foreign direct investment, foreign
industrial investment, external commercial borrowings and investment by
NRIs in news channels.

41