Explore Media Companies
Learning Objectives
After completing this unit, you’ll be able to:
- Define the types of media companies.
- Explain the core functions of a media company.
- Summarize how media companies operate.
Media Company Overview
You know the media industry is a big umbrella, in fact, it's huge. This industry doesn’t just serve up movies and radio anymore. Over time, they’ve found creative ways for people to consume content using all kinds of technology.
Media companies do more than just deliver fun content. They deliver various media products and services and use advertising sales to make money.
Various types of media companies compete in the media industry. Some companies target a specific audience, while others focus on niche content. Many media companies deliver content in multiple formats. Let's look at some of the media company types:
| Media Company Type |
Description |
Examples |
|---|---|---|
|
Broadcasters and studios |
Broadcasters create scripted, unscripted, and live shows for TV or radio distribution. Studios include film studios and radio and television stations that create content for TV and other platforms. |
Broadcasters: BBC, 21st Century Fox, and Sony Pictures Studios: NBC, Universal, and Disney |
|
Mass media and publishing |
Mass media includes newspaper and digital content providers that produce mostly text-based content for mass audiences. Publishing companies are business-to-business (B2B) and business-to-consumer (B2C) companies that print books, magazines, journals, and newspapers. |
Mass media publications: The New York Times and The Huffington Post Publishing companies: McGraw Hill and Pearson |
|
Streaming media |
Streaming media businesses deliver audio and video content through apps on mobile devices, set-top devices, connected devices, and smart home products. |
Netflix, Spotify, Roku, and Amazon |
|
Agencies |
Agencies are businesses that advise companies on how and where to advertise. They often act as the buying layer between a brand, like Pepsi, and a media publisher, like NBC. They also manage public relations and conduct research. |
WPP and Publicis |
|
Video games |
Video games are electronic games played on a video screen using a standalone device or over the internet. |
Video games: Call of duty, Overwatch, and Mario Video game publishers: Blizzard Entertainment, EA Sports, and Ubisoft |
|
Sports groups |
Sports groups are clubs and leagues that promote products and services through sporting events or teams. |
Sports groups: Manchester United and Boston Red Sox |
|
Digital media and entertainment platforms |
Digital media and entertainment platforms are digital-native platforms that create their own content and also source user-generated content, which is mainly consumed through web browsers and apps on mobile devices. |
YouTube and Facebook |
|
Pay television |
Pay television includes cable and satellite companies that bundle different video packages and offer subscription-based services. |
Comcast, Spectrum, and DirecTV |
|
Entertainment and leisure |
Entertainment and leisure are companies and content services that provide entertainment through outdoor and live events. |
Six Flags, AMC Theaters, and Ticketmaster |
|
Business information and data |
Business information and data include scientific, technical, medical, educational, and training content. |
Thomson Reuters, Wolters Kluwer, and Dow Jones |
|
Retail media network |
Retail media networks are specialized advertising platforms that allow retailers and e-commerce companies to sell advertising space on their digital channels to third-party brands. |
Amazon Advertising, Walmart Connect, and Kroger Precision Marketing |
|
Educational media |
Educational media includes services that provide educational content for academic institutions, such as K–12, colleges, and universities. These companies also provide vocational education for technicians, such as plumbers and welders, and professional education for employees, such as programmers and doctors. |
Coursera, Cengage, Coursera, and Khan Academy |
Core Functions of Media Companies
You’ve now looked at the different types of scenarios wherein media businesses faced industry challenges and adapted like pros. So how do these businesses make money? It’s pretty simple. Media providers generate revenue by charging for content, merchandise, services, experiences, and ads. The concept is simple, but pulling it off, not so much.
The success of any media company lies in its ability to keep customers front and center and create experiences that meet their needs. As a media business, you have to know your audience, including their interests, values, and past behaviors. Moreover, you must market your content accordingly, through the right channels.
Unifying revenue streams with a customer-centric strategy allows media companies to engage customers throughout the customer lifecycle, from acquisition to retention. This includes revenue from subscriptions and advertising to commerce transactions. It’s more cost-effective for media companies to retain customers than to find new ones, so they constantly look for opportunities to minimize customer churn.
Here are a few examples of how media providers can retain customers and increase customer lifetime value.
- Consumer choice: Offer many options for content subscriptions.
- Monetization through inventory: Provide advertising-supported content in place of paid subscription packages.
- Licensing: Sell or license content to reach consumers through third-party partners such as distributors or merchandisers.
- Commerce: Use commercial transactions to sell content-based products, such as game downloads and experiences, like tickets for theme parks and events.
How Do Media Companies Operate?
Media companies have four pillars of operation: creation, marketing, distribution, and end-consumer experience.
The operation begins with creating high-quality content. Next, marketing the content and distributing it to key user groups. And media companies must do all this while providing a superior user experience.
Creation
Almost everyone has a social media account today, and people take advantage of it to share their views with the world. The means are endless—vlogs, podcasts, articles, commentaries, online gaming—you name it. The media industry isn’t just about movies and television shows anymore.
What does it all mean for media companies? They must take advantage of the new opportunities, lean into the disruption, and devise business models that benefit the company and consumers.
It's important to deliver high-quality content, even while under cost pressure. Businesses also need to enable virtual production strategies by remote teams, a principle accelerated by the pandemic. Plus, they need to attract the best talent in the creative industries. Companies can do this by creating high-quality content, devising virtual production strategies, and onboarding the best talent.
Marketing
Consumers today demand more recommended content and personalized ads and promotions—they’re even more willing to pay premiums so they don’t have to watch or listen to ads. However, studies show that consumers often appreciate the ads they see while using social media, as opposed to the ads they see on TV. The long and short? Marketing can happen in many different ways and places—including the grocery store!
Media companies can make money in two main ways: by marketing directly to consumers through their content using ads, sponsorships, or merchandise, or marketing indirectly, by monetizing their first-party customer data and insights. And don’t forget about privacy rules and regulations, which only add complexity for companies.
Distribution
Media companies have come a long way. In the olden days, they could only serve content to an audience through one distribution channel. Even though some businesses still do this, they now have alternative means of distribution. Media companies can now move from indirect to direct distribution by taking advantage of customer relationships, first-party customer data, and insights. This move provides further monetization opportunities while helping companies adhere to privacy rules and regulations.
End-Consumer Experience
User-centric media experiences are critical, and consumer expectations are high. They want their media company to know them, including their likes and dislikes. Consumers want recommendations for new content and products, and they want to consume the content anywhere, anytime, on any device.
Today's consumers reward customer centricity with their loyalty, and media companies who are successful at building relationships can thrive and continue to grow.
You’ve taken a deep dive into the media industry, but it’s incomplete until you understand the revenue models and the challenges facing the industry today.