Sunday, February 6, 2011

Why does economics drive most media companies?

Economic success is the backbone to the survival of any company, especially the media companies. Mass media companies either sell a product or service to consumers with the intent of bringing in enough revenue to meet costs and make a profit. If the economy in which it operates is doing well and people are finding a need to buy their product or service, which for media companies would be to buy their books, music, see their film, etc., then they will see an increase in their profits. This ties into the idea of a capitalistic society. Capitalism would not exist if companies were not driven by economics. Another source of revenue for mass media companies is advertising. In general, advertising contributes heavily to the budget of the media companies. If the economy is doing poorly and companies limit their advertising to mass media companies then these companies must look for other sources for funding. This can be seen in any major magazine subscription. The magazines that have survived year to year have developed relationships with major companies to advertise their products and in return make a lot of profit for them. These media companies realize the importance that the economy’s influence has on the survival of their companies.

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