International Encyclopedia of Communication Online

Extract

Markets are where media function. They also provide the foundation of economic analyses, providing the context and mechanisms for explaining and predicting media and audience behaviors. Economists define markets broadly as any context in which goods and services are offered and purchased. Markets are thus defined by a set of goods or services, the set of firms and individuals that offer them for trade (supply), and the set of firms and individuals that seek to acquire them (demand, or in media terms, audiences). The context of markets includes their scope (reach) and a variety of structural features, including the particular attributes of media technologies and organizations, their products, and their distribution systems. Law and policy often play a role in defining markets, by influencing or even defining some of those structural features and costs. Being able to define media markets, and to understand how particular markets function, is critical to understanding, explaining, and predicting media operations. Being able to discern and predict shifts in markets and consider their implications is similarly critical to media survival in an increasingly competitive environment (→ Media Economics ). Markets are at the heart of economic theory and analysis, where supply and demand functions interact to determine market outcomes. Supply functions are defined in terms of the willingness ... log in or subscribe to read full text