Organization and Media Enterprise: VVM & Media Firms (Entities)

Value Statement

1) The values of a company are the operating philosophies or principles that guide an organization's internal conduct as well as its relationship with customers, partners, and shareholders

2) The core values are a few values that are central to the firm.

3) Core values reflect the deeply held values of the organization

4) Values are independent of the current industry environment/management and are lifetime. If the values don’t match the industry, find a market that views the values as an asset

NYT Values Statement

1) Content of the highest quality and integrity. This is the basis of our reputation and the means by which we fulfill the public trust and our customer's expectations

2) Fair treatment of employees based on respect, accountability, and standards of excellence

3) Creating long-term shareholder value through investment and constancy of purpose

4) Good corporate citizenship

BBC Values Statement

1) To be the most creative organization in the world.

2) Trust is the foundation of the BBC: we are independent, impartial, and honest

3) Creativity is the lifeblood of our organization

4) Audiences are at the heart of everything we do

5) We respect each other and celebrate our diversity so that everyone can give their best.

6) We are one BBC; great things happen when we work together.

BBC Mission Statement

To enrich people's lives with programs and services that inform, educate, and entertain

Vision Statement

1) It is a statement about what the organization wants to become

2) It should resonate with all members and help them feel proud, excited, motivated, and part of something bigger than themselves

3) Vision gives shape and direction to the organization's future.

Microsoft's Old Vision

A computer on every desk and in every home

Mission Statement

1) Acts as an "invisible hand" that guides people in the organization. It addresses the employees, the shareholders, and the customers.

2) It is a succinct representation of the enterprise's purpose for existence. It can incorporate measurable criteria, addressing concepts including

(1) moral and ethnical position of the enterprise

(2) public image

(3) the target market

(4) products/services

(5) the geographic domain and expectation of growth and profitability.

Steps to Writing a Mission Statement

1) Client Statement: Who is our target population, where are they, and what needs do they have?

2) Product: How are we going to cover the need, what do we want to accomplish?

3) Statement of Purpose: what do we want to accomplish

4) Client Statement: how are we going to do it?

5) Value Statement: beliefs and principles of our program.

Media Firms

Definition: Media firms are businesses involved in producing and distributing content like news, entertainment, and information. They operate like traditional firms, dealing with production costs, distribution, labor, and market competition.

Key Characteristics: Content Creation (Reliance on creative professionals), Distribution Networks (Requires extensive distribution channels such as print, digital, and broadcast.

Economic Pressures in Media Firms

Revenue Models:

- Advertising-based (media firms, especially in TV, print, and online spaces, rely heavily on advertising revenue)

- Subscription Models (increasingly popular, especially for streaming platforms, newspapers, and digital magazines)

- Licensing and Syndication (selling rights to content to third-party platforms for distribution)

Cost Structures:

- High initial costs (producing media content like movies, TV shows, magazines is expensive)

- Low Reproduction/Distribution costs (especially in digital media where distributing copies is nearly costless)

Types of Media Firms

Sole proprietorships, Partnerships, Private corporations, Public corporations, Non-profit

Sole Proprietorship Media Firms

Definition: firms owned and operated by one person

Characteristics: commonly seen in small/local newspapers, blogs, and freelance content creators

Advantages: flexibility, direct control, low capital requirements

Disadvantages: limited resources, high personal risk

Example: Independent bloggers or freelance videographers, podcasters

Partnerships Media Firms

Definition: firms owned and operated by two or more people sharing profits, risks, and responsibilities

Characteristics: commonly seen in small production studios, niche advertising agencies, or creative services

Advantages: combines capital and skills of multiple individuals, shared risks

Disadvantages: Potential for conflicts between partners, shared liabilities

Ownership and Capital: personal liability for owners but more capital and resources than sole proprietorships.

Private Corporations Media Firms

Definition: companies incorporated under legal statutes, operating independently from their owners.

Examples: commonly seen in regional media houses, small and mid-sized production companies

Advantages: legal protection for owners, easier to raise capital through private investment

Disadvantages: Complex management, reporting requirements

Corporate structure: includes board of directors, shareholders, and management teams.

Public Corporations Media Firms

Definition: media firms whose shares are publicly traded on stock markets.

Examples: large global corporations like Disney, News Corp., Viacom

Advantages: easier access to capital through stock markets, global presence

Disadvantages: Accountability to shareholders, financial transparency required.

Key Financial Tools: shares, dividends, and public financial reporting

Non-Profit Media Firms

Definition: Firms structured as not-for-profit organizations, focusing on serving the public interest rather than generating profits.

Examples: public broadcasters (BBC), public interest media (ProPublica)

Funding Models: Funding by grants, donations, and government subsidies

Goals: Deliver public service content including educational programming, investigative journalism, and cultural broadcasting.

Key Economic Interests of Media Firms

- High Labor Intensity: media firms rely heavily on creative professionals (journalists, producers, designers)

- High First-Copy Costs: Media production costs are concentrated in the initial production phase (writing, filming, editing), with low additional costs for reproducing or distributing digital versions

- Economies of Scale: larger firms can distribute content widely at low cost once the initial production is done.

Economic Forces Impacting Media Firms

- Technological change: the shift from traditional to digital distribution is forcing companies to innovate

- Globalization: media firms are competing on a global scale, and many firms seek to expand internationally to access larger markets

- Audience fragmentation: audiences are increasingly segmented across platforms, making it harder to capture and retain attention.

Financial Pressures in Media Firms

- Capital Raising: media firms, especially start-ups and tech-driven companies, require significant investment in technology and infrastructure

- Revenue Volatility: media companies, particularly those dependent on advertising revenue, face high revenue fluctuations due to shifts in market conditions or changing consumer preferences.

- Profitability Concerns: maintaining consistent profitability is a challenge, with the constant need for innovation and content development

Commercial v.s Noncommercial Media

Commercial Media: focus on profit maximization through advertising, subscriptions, and sales. Examples include private television networks and for-profit newspapers

Noncommercial Media: serve public service or educational roles, typically funded by donations, grants, or public funding. Examples include public broadcasters like PBS and NPRs.

Organizational Structures in Media Firms

- Small Firms: flat and flexible, with fewer hierarchical layers. Employees often take on multiple roles

- Large corporations: complex structures with specialized departments such as editorial, marketing, finance, often a global workforce

- Hierarchical Levels: executives, management, operational staff.

Capital Requirements for Media Firms

Types of Capital Needed

- Physical Capital: studios, equipment, distribution networks

- Human Capital: skilled labor such as journalists, videographers, editors

- Financial Capital: to fund new projects, technologies, and content development

Raising Capital

- Through venture capital, public offerings, loans, or partnerships.

Risk Management in Media Firms

Types of Risks

- Market Risk: the unpredictability of demand for content

- Technological Risks: the rapid evolution of distribution technologies (streaming, apps)

- Financial Risk: Advertising-dependent firms face uncertainty from fluctuating ad budgets

Mitigating Risks

- Diversification of revenue streams (digital platforms, subscription models)

- Strategic partnerships and alliances

The Changing Media Environment

- Media Abundance: overabundance of content, channels, and platforms creates intense competition for attention.

- Audience fragmentation: with more options than ever, media audiences are splintered, creating challenges in building a large, unified audience base.

- Power Shift to Consumers: The rise of interactive and user-generated content (Youtube, Tiktok) puts more control in the hands of audiences.

How Media Firms Adapt to Economic Challenges

- Diversification: developing multiple revenue streams, including advertising, digital subscriptions, merchandise sales, and partnerships

- Technological investment: constantly upgrading digital distribution channels from mobile apps to streaming platforms.

- Innovation: media firms must continuously innovate in content and technology to retain competitive advantage.

Theory of the Firm and Media Firms

- Profit Maximization: the neoclassical view of media firms prioritizes profit generation and firm value, both in the short-term (annual profits) and long term (shareholder value)

- Resource-based Theory: media firms that efficiently use unique resources (content, talent, intellectual property) can give competitive advantages

- Behavior theories: decision-making in media firms is influenced by incomplete information, fast-changing markets, and creative uncertainties.