Paper Example on Media Economics: Cost and Revenue Structure and Technology

Paper Type:  Essay
Pages:  5
Wordcount:  1210 Words
Date:  2022-04-07


The types of media discussed in this paper include music, film, books, newspapers, radio, magazine, video games, and television. The costs of making media content consist of initial development costs, such as acquiring scripts, payment for talent, and cost of showing samples of recordings of shows before permanent airing. Also, production costs for the payment of salaries and materials are part of the total cost. Distribution and marketing of content use more money than that used in production (Berry & Waldfogel, 2015). Besides, there are overhead costs for constant maintenance of structures and payment of rent for structures. The media uses technology in the production process, thus making technology an important aspect of media economics.

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Cost and Revenue Structure

Media industries are commercial, and thus their main objective is to make money. These industries have different ways in which they make money. The major revenue models for media companies include;

Advertising- this is the most important source of revenue for these companies. Media outlets place ads between their content to advertise other brands. This earns them money as advertisers pay them for the ads. Media outlets are unable to cover all their costs by selling their content only (Campbell, 2015). Increasing their costs would make them lose customers as customers prefer to use other outlets. The media outlets thus have to use advertising as a way of acquiring more revenue.

Subscription- this is another form of revenue model that provides media stations with steady revenues. People pay for subscriptions for news and journals. The information contained in magazines, journals and newspapers with subscriptions are always catchy news that cannot be gotten elsewhere with ease. The Wall Street Journal and The Economist are examples of sites that provide unique news and thus enjoy subscription by many people.

The profitability of different media industries has changed from better to worse over time due to several reasons. Firstly, some of the companies simply make information available to the users. This is a bit outdated because, in today's society, readers choose the content that they want to view or subscribe to since they are more enlightened. Consumers of information are also interested in viewing content they can comment about and present their views (Peitz & Reisinger, 2015). This shift in the demand and preferences of customers is also known as social media revolution. The companies that are still stuck at providing information without improving aspects such as customer contribution tend to perform worse in the long run.

Additionally, most media companies are struggling with how they can make their content more profitable in the face of competition. To succeed in the media industry, one has to provide the customers with unique content that lacks in the industry. The knowledge on dissemination and delivery of the content and the target audience is necessary for the success of a new company (Peitz & Reisinger, 2015). A new company should also pool different skills and bring them together to achieve their targets.


Technology has a way of making some things more affordable and others less affordable. Technological determinism presents an argument that technology develops based on its cultural uses. The use of expensive technology to develop media content makes content providers come up with expensive content thus making it less affordable.

Technology does not change the content that media provides but makes it possible for new norms to be created. The new norms open up new opportunities for the companies, and thus improve the profitability of these companies. The Internet is one of the major technological changes that have affected the nature of business in the media industry. The internet is a good medium of advertising, and it has been embraced by most media companies. Most journals are now available online, and the users can read and comment on the posts without having to buy the hard copies (Silverstone, 2017). This has increased efficiency in production as the cost of printing and paperwork has significantly reduced. Newspapers are also available online. Customers can also stream movies and films from YouTube and other channels making it easy to enjoy media content without incurring high costs. Also, most websites sponsor ads, which have revolutionized marketing.

Media economics have influenced the adoption of technology. Media economics have made the people over-reliant on social media channels and application for their day to day work. Media economics, for example, has influenced shopping to be directed to online shopping applications and news to be accessed via news applications or the pages hosted by news channels (Silverstone, 2017). Due to the influence of media economics, technological advancement has come up; while some have passed the test of time, some have come up and flopped along the way. One of the successful media technologies is the multi-channeling of information. Since many people are no longer single-tasking, advertising is taking different channels such that when not on the television, it still is functional on different social sites so that it is no longer a one-time thing (Lin & Atkin, 2014). The Daily was a digital newspaper corp service that was provided by Apple and required subscriptions to maintain the service. The newspaper program failed terribly because there were other free information sources in the social media and the subscriptions were too expensive for the customers.

In the future, most media content will be available online, and hard copies might disappear completely. Newspapers, journals, and magazines will no longer exist in print. Movies and films will also be available for streaming and discs will be phased out. Television is the only type of media that is not bound to change in the future since (Berry & Waldfogel, 2015). Artificial intelligence is a forthcoming trend that will influence the media in the coming future. AI currently can create trailers based on previous movies. Proceeding on this path, it is being manipulated to create advertisements based on personal pictures and previous experiences (Lin & Atkin, 2014). Personalizing news and business adverts will make the impact of media to be felt to a greater extent.


In conclusion, media companies use different cost and revenue models and structures in their operations. The source of funds for most of these firms includes advertising, subscriptions, pay for use and sale of content. The revenue from the sale of content has to be complemented by these other services to enable the firm to meet its costs and still make a profit. Technology is critical in media production since most customers enjoy digital content. Technology makes some activities cheaper while others become more expensive. This is dependent on the cost of the technology used; expensive technology provides expensive content while cheap technology provides cheaper content.


Berry, S. T., & Waldfogel, J. (2015). Empirical modeling for Economics of the Media: Consumer and Advertiser Demand, Firm Supply and Firm Entry Models for Media Markets. In Handbook of Media Economics (Vol. 1, pp. 91-120). North-Holland.

Campbell, R., Martin, C., & Fabos, B. (2014). Media & Culture: Mass Communication in a Digital Age. Bedford/St. Martin's.

Lin, C. A., & Atkin, D. J. (Eds.). (2014). Communication Technology and Social Change: Theory and Implications. Routledge.

Peitz, M., & Reisinger, M. (2015). The Economics of Internet Media. In Handbook of Media Economics (Vol. 1, pp. 445-530). North-Holland.

Silverstone, R. (Ed.). (2017). Media, Technology and Everyday Life in Europe: From Information to Communication. Routledge.

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