No one knows exactly what the future holds for the streaming industry. Economic growth refers to an increase in the aggregated production and market value of economic commodities and services in an economy over a specific period. Do not delete! Advertisement as an economic factor also plays its part in influencing media operations. Top 10 Economic Factors Affecting Business #1- Interest Rate #2 - Exchange Rate #3 -Tax Rate #4 - Inflation #5 - Labor #6 - Demand / Supply #7 - Wages #8 - Law and Policies #9 - Government Activity #10 - Recession Economic Factors Affecting Development #1 - Education and Training #2 - Natural Resources #3 - Power and Energy Resources For streaming to survive, internet speeds must also rise to keep up with data-heavy demands of streaming. In 2023, it may become clear that video, social, messaging, and interactive are all part of the same ecosystem of engagement. Firstly, it should be understood that the political structures within which the media operates influences its form and its operations. There are various economic factors that affect marketing such as inflation, interest rates, exchange rates, recession and taxes. In July 2014 the Zinef conducted a training needs assessment for editors in conjunction with the world association of editors (WAN-IFRA). Conversely, a decrease in investment cash flow in the country increases and increases the countrys liquidity. In 2007, Netflix launched its next innovation by offering one of the first web platforms for SVOD. Cable may become an outdated technology, such as VCR and Cathode Ray Tube Television. , allowing for easier use of common streaming apps. To run the clearinghouse model, Netflix had to license all of its content from third parties, which ate into its profit margins. Advertising revenue in India is projected to reach Rs. Many countries have started outsourcing work from other countries. Finally, GAO reviewed FCC's forms, processes, and reports. Tune in to the audiobook version of our 2023 media and entertainment industry outlook. The acronym PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal factors that can impact the industry. In fact, Government has sent mixed signals on its policy direction with regard to guaranteeing freedom of expression and access to information. Project Lead, Media, Entertainment and Sport, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. This section briefly examines some of the criticisms raised and how governments, individuals, and marketers have addressed them. The investor needs to be prepared for changes in economic factors and their consequences. For example, print media is supposed to report impartially and unbiased as is assumed and expected of every other medium. Streaming video, social media, and gaming are helping to enable new business models and reshaping media and entertainment. Wealth refers to the overall value of assets, including tangible, intangible, and financial, accumulated by an individual, business, organization, or nation. Instead, gaming is represented throughout. This is seen in facts like what sells is what they publish (Fred,1963). Along with being an industry which contributes largely to the global economy, such as 28 billion to the UK economy in 2018 (Caldwell 2019). Beer could be considered a normal good , meaning demand increases as incomes rise, or an inferior good , meaning demand decreases as . To more effectively monitor and report on the ownership of broadcast outlets by minorities and women, the Chairman, FCC, should identify processes and procedures to improve the reliability of FCC's data on gender, race, and ethnicity so that these data can be readily used to accurately depict the level, nature, and trends in minority and women ownership, thereby enabling FCC and the Congress to determine how well FCC is meeting its policy goal of diversity in media ownership. An advantage of this approach is that it keeps people subscribed to the streaming service, even if some of their favorite shows move somewhere else. , Sep 13, 2022. The increase in the demand price of goods or services increases inflation and money supply. In another large departure from tradition, Netflix transitioned to becoming a part clearinghouse and part production company. Sitemap. This report reviews (1) the number and ownership of various media outlets; (2) the level of minority- and women-owned broadcast outlets; (3) the influence of economic, legal and regulatory, and technological factors on the number and ownership of media outlets; and (4) stakeholders' opinions on modifying certain media ownership laws and regulations. Social login not available on Microsoft Edge browser at this time. All entertainment strategies should consider video games, from simple mobile games to massively multiplayer services and rich hyper-realistic narrative game worlds. This explosion can be explained by the very low barriers to entry around streaming. The industry, which encompasses everything from textile and apparel brands to wholesalers, importers and retailers, employs more than 1.8 million people in the United States. Your email address will not be published. It has spawned internet movements such as the self-proclaimed cord cutters, who are committed to solely using SVOD instead of cable TV. Email Us: Contact US, 2023 The Sunday News | Disclaimer | Copyright. Economic development is developed to raise the average standard of living in the country. By using our website, you agree to our use of cookies (, Top 10 Economic FactorsAffecting Business. Part of the reason it is hard to predict the future of streaming is that consumers preferences are currently unknown. But the real story for 2023 is that these three sectors are increasingly becoming more interdependent as part of a broader and richer media and entertainment ecosystem. They not only compete with each other for attention, time, and revenues, but with social media, user-generated content, and video games. Social media sentiment monitoring . Some of the most significant factors include economic growth, unemployment rates, and inflation. The views expressed in this article are those of the author alone and not the World Economic Forum. 32 %. Share of respondents. So, because the media are in a business of maximising profits just like any other business organisation in capitalism (Masoo,1946), this influences media content and in turn, influences media operations. All a streaming service requires is content, either created or licensed, servers to deliver the content, and a user interface to interact with the consumer. 61 %. Apple, famous for its device ecosystem, will launch Apple TV+, its all originals streaming service, on November 1st of 2019, completely foregoing the clearinghouse model many services have kept in place. Published: Mar 12, 2008. An advantage of this approach is that it keeps people subscribed to the streaming service, even if some of their favorite shows move somewhere else. In this new era, companies will likely need to adapt quickly to consumer preferences to stay competitive, and consistently introduce new products to strip competitors of their customers. The following are the top 10 economic factors that affect the business: Interest rate is a major factor that affects the liquidity of cash in the economy. , who are committed to solely using SVOD instead of cable TV. 70.1% of the music industry market share is split between three major companies Universal, Sony, and Warner U.S. music royalties reached record levels in 2017 at $7.3 billion. So, the interest rate affects the economy. Streaming Video On Demand (SVOD), as streaming is formally known, is uprooting many of cable TVs major networks. Media regulations Zinef also forwarded its position paper on the state of the media to the Information Media Panel of Inquiry in September last year. This type of domination, too, can result in citizens' production of illegal underground media. When an economy is growing, businesses may be more likely to expand and hire additional workers. While networks were often hesitant to give up rights to popular content, clearinghouses capitalized on the fact that people would settle for less popular shows at a lower price. Schwab Foundation for Social Entrepreneurship, Centre for the Fourth Industrial Revolution, This is what different countries are doing to stop coronavirus from spreading, How the coronavirus market turmoil compares to 2008 and what we can do, The economic effects of COVID-19 around the world, The world needs a COP-like process for pandemic preparedness, Recession in 2023? While the media industry provides the public with many national choices, media outlets located in a local market are more likely to provide local programs that meet the needs of residents in the market compared to national outlets. In the same footing, another political factor that affects media operations is the actual media ownership. Required fields are marked *. Prepared by: MECA REVERENTE ERJOHN PEERO Importance of Socio-economic Factors Socio-economic factors are important characteristics that mostly influence consumers. A higher return on investmentwill attract investors. This type of service is often referred to as a , for other networks content. Thus this affected media operations because this means that the minister could authorise persons and organisations that obliged to his political affiliation. Applied Economics. Streaming Video On Demand (SVOD), commonly known as streaming, provides content such as TV shows, movies, and sports through websites or apps. For instance, sex sales, that is what they publish because they are after sales and making a profit. Deloitte's DigitalDemocracy Survey has a new name. The Economics Driving the Streaming Industry, Streaming entertainment caught the world by storm, just like VCRs and DVRs did when they were first introduced. Media organisations should also make it a point to improve the quality of media products. Devices, services, and streaming all join forces to capture a large segment of the market. In the first decade of the 20th century, this became a major political issue in the United States. Characteristic. Alternatively, consumers may find online cable most attractive. And skill training helps one develop oneself, which results in high wages and the development of the economy. Conducting a PESTEL analysis of the media . Economic environment Thus they have to operate in a way that will increase profit and income like producing in bulk, selling them where there are a lot of potential buyers like urban areas, and writing stories that sell the paper or issues that affect a greater number of the public like an election campaign. In addition to the aforementioned, media polarisation also affects media operations. "This is the holy grail for advertisers", Lipsman explained. Small and medium-sized enterprises in the hospitality industry are generally SMEs. Production companies often have exclusive control over the content they create, which means if enough people are interested in it, it will differentiate their product. With change or modification in the law, the economy of the country changes. In a few decades, this may be the question of children around the world. At the same time, more socializing may be shifting into messaging services that lean into utility more than entertainment. Thus, advertising poses as an important factor. Just as clearinghouses in finance facilitate collection and movement of securities, the streaming clearinghouses facilitate the collection of various media to entertain consumers. This venture into streaming has since propelled the company to stratospheric heights, allowing its valuation to be in excess of $100B. At the moment the fragmented mix of clearinghouse and original content is confusing for companies and consumers alike. The industry itself is "recession-resistant" (Frue 2018). See Terms of Use for more information. However, this begins with understanding the role of environmental and external factors, and how they come into place in business. Production companies often have exclusive control over the content they create, which means if enough people are interested in it, it will differentiate their product. The rights were entirely owned by the third party production firms, who could therefore price shop among different streaming services. For more details, review our .chakra .wef-12jlgmc{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;font-weight:700;}.chakra .wef-12jlgmc:hover,.chakra .wef-12jlgmc[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-12jlgmc:focus,.chakra .wef-12jlgmc[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);}privacy policy. in the next few years. Cookies help us provide, protect and improve our products and services. Issue Date July 2015. Up to 20% of Netflixs content could be lost to those three companies streaming services alone, which will result in major disruptions in Netflixs consumer base. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. Another perk is that many streaming services are ad-less, and provide a lot of instant content for cheap prices. Such economic statistics are considered, and they affect media operations. In the year 2014 Zinef got funding from Unesco to produce a consolidated barometer for media reforms. In April 2009, FCC issued new rules that enhanced its data collection efforts. media are still largely controlled by a relatively small group of powerful interestscommercial corporations. We cast a wide net and cover media impacts on education, family choices, labor and migration decisions, environmental choices, health, crime, public economics, attitudes, consumption and savings, and development economics. For streaming to survive, internet speeds must also rise to keep up with data-heavy demands of streaming. So, we can see how the above economic factors affect the economy. There are various examples of economic factors that affect business and economic development. Netflixs streaming service was modest at first, with a simple interface and few shows, but has since grown dramatically. This is mainly because it is responsible for the medias income. Each of the below-given economic factors influences the growth of the country. Government activity also affects the economy. Economic Factors Affecting to Two Wheeler Industry The two-wheeler market in India is the biggest contributor to the automobile industry with a size of Rs.100000 million. This competition is evident as cable prices have remained relatively stagnant, The rise of Netflix was aided by technological advancements, such as improvements in Internet speeds and an explosion of mobile devices. Gaming may also highlight the tight communities and fandoms that can help sustain and amplify entertainment franchises. But to date we are glad to announce that we have managed to mobilise over 40 editors and our membership continues to grow. Speedtest.net reports in their, that 170 out of the 176 countries measured have average speeds that meet Netflixs, Internet connection speed recommendations. The doubts are grounded on contradictions in official pronouncements on the media. This years outlook doesnt have its own chapter on video games. In another large departure from tradition, Netflix transitioned to becoming a part clearinghouse and part production company. Explore the 2023 media & entertainment industry outlook, US Telecom, Media & Entertainment Sector Leader, Telecommunications, Media & Entertainment, Adapting to continuous change in the industry. This is called censorship, and of evidently suppresses media objectively and its independence as the fourth state. Image:USA TODAY Sports, .chakra .wef-1vg6q84{font-weight:700;}Project Lead, Media, Entertainment and Sport, World Economic Forum Geneva. Examples of economic factors affecting business include: Economic Factors Affecting The United Kingdom, What is PESTLE Analysis? In the absence of detailed viewer data, which remains a corporate secret, Netflixs stock prices are indicative of its success. This move hurts the clearinghouse model that companies like Hulu and Netflix were built on, as Disney owns huge franchises such as Marvel and Star Wars. The same applies to state-owned media like ZBC and The Herald, for instance, which will avoid anything that sheds light or cripples the ruling party ZANU PF.So this has got an impact on media operations. The Zinef funds are still being administered by the Media Monitoring Project of Zimbabwe as we currently do not have a full-fledged secretariat. Like most other parts of business analysis, this is particularly useful for executives in any company who are looking to beat competitors, increase revenue streams, and grow their organization. Inflation: Inflation can be defined as the rise in the prices of various items over a period of time. Read more >, We are now accepting submissions for our Fall 2022 volume. Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty, or the University of California, Berkeley in general. Netflix isn't available in all countries. But, if the interest rate on loans increases, cash flow in the country decreases, resulting in a decrease in the nations liquidity. It also helps when to invest, where to invest, and when to take money out from a particular company or sector, as changes in economic factors will affect the return on investment. 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