How the Recession Affected the Media Industry

According to this article, the recession heavily damaged part of the media industry. Of the 37 ratings made by the S&P in European media space in 2010, 90% were negative. Newspapers lost a lot of revenue from advertising as well as a decline in newspaper subscriptions. As you can see in the above chart from here, newspaper advertising revenue declined by 25 percent in the United States. With the recession, newspapers are moving away from print and onto cheaper online content. This diversification is likely to greatly help the industry in the long term.

Other parts of the media industry seem to be doing well. This article discusses how the movie industry is doing quite well. More people are going to the movies despite higher prices. With consumers seeking an escape from realities, the movie industry looks like it will continue to be doing well in the future.

Differentiation Between Facebook and Google+

Different media companies are like any other company in that they are always fighting to differentiate themselves from their competitors. Companies want to detract as many consumers from their competitors as possible. This is done through differentiation. A current important struggle between two media companies is occurring when Google launched its Google+ to directly compete with Facebook. I will be focusing on the difference between Facebook and Google+ as opposed to Google as a whole. This article gives a good idea of the differences.

For the social media world, companies try to differentiate themselves in a number of ways such features unique to a company or number of users. Examples of ways that they differentiate themselves is that Facebook has hundreds of millions of users and google+ has many new features that Facebook does not. One of the key features that Google+ has is that it lets users create groups among their friends to create privacy. This is different from Facebook where everything you post is visible to all your friends. While Google+ is still in its experimenting phase, we can see it as being major competition in the near and long term future.

Scandal of the Year

The media industry has a long history of ethics scandals over the years. This article from the Economist talks about the highly covered hacking scandal in England by News International’s tabloid, News of the World. While tabloids have always been known for using questionable methods to gather information and come up with good headlines, News of the World took this way too far. In possibly the worst ethics scandal of the year, News of the World was revealed to have hacked the phones of possibly thousands of victims. While it had already confessed to hacking a number of celebrities and politicians, when it was revealed that they hacked into the phone of a teenage murder victim, it sparked public outcry. The scandal was not limited to the hacking of phones and also included the bribery of police officers for information and was accused of possible interference in the police investigation after they deleted messages from the dead girl’s phone. It also became known that they had also been hacking into the phones of soldiers deployed in Afghanistan and victims of terrorist attacks as well.

This scandal would lead to the end of News of the World, despite it being one of the top selling tabloids in the country. It would also harm the reputation of Rupurt Murdoch, one of the most powerful and wealthiest men in the world. He owns many news corporation worldwide, including Fox, the Wall Street Journal, and NewsCorp, which the FBI is investigating.

Social Media Use In Small Businesses

Keeping up with current events, social media is making starting up a new business easier than ever. An article in the Miami Herald shows that while most leading companies have already become accessible through social media, small businesses are just now seeing the potential. The most prominent new frontier opened up to small businesses with social media is advertising. Businesses can keep people up to date with upcoming promotional events and sales. Advertising in newspapers and on TV is extremely expensive, especially for small businesses. As a business gathers friends and followers on media sites, it becomes very efficient for businesses to advertise to this group of people. While most ads in other places would be useless for a majority of the people exposed, advertising to your followers saves money and targets people who would be most likely to respond.

With the use of social media sites by ordinary consumers constantly increasing, new and small businesses are given instant access to more views than ever before than if they had not gone to sites such as Facebook or Twitter.