Electronic Markets on the media industry

Electronic Markets, Jan 2017

Rainer Alt, Carsta Militzer-Horstmann

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Electronic Markets on the media industry

Electronic Markets on the media industry Rainer Alt 0 2 Carsta Militzer-Horstmann 0 2 0 Information Systems Institute, Leipzig University , Grimmaische Str. 12, 04109 Leipzig , Germany 1 Institute of Applied Informatics at University of Leipzig 2017 2 Dear readers of Electronic Markets It is a truism that information technology (IT) is transforming the media industry. In fact, a brief Google search on the words Bmedia industry^ AND Btransformation^ AND Binformation technology^ at the end of 2016 yielded a total of about 294,000 results. This link between the media and the IT industry has not always been obvious as the case of the well-known example of Apple Music and Apple Computer illustrates. In 1991, Apple Computer reached an agreement with the music label Apple Corps Bnot to get in the music business^ (Anonymous 2006). Since the latter company was founded by the Beatles, songs from this band were not available on iTunes for years and both companies only settled the case after long legal disputes. The story highlights that Bdigitization of music means that today a song is just another computer file […and] to say that a company is Bin the record business^ just because it sells a certain type of file is mindset out of the eight-track age.^ (Anonymous 2006). Although the music and the computing industry have been separate for a long time, both industries have converged not only sweeping away renowned publishers (e.g. Encyclopedia Britannica) or book retailers (e.g. Borders), but also pressurizing existing companies (e.g. Elsevier, Sony, Springer, Wiley) and giving way to numerous new players, such as Amazon, Ebsco, Facebook, Netflix, Proquest, Researchgate, Spotify or Twitter. - While this development might only be an example of Bcreative destruction^ and of companies’ failure to claim an inherent right to a certain industry, it underlines the specifics of the information-based media business: as soon as the content is digitally available, the well-known dynamics of Bbits versus atoms^ (Negroponte 1995, 14) are applicable: BA bit has no color, size, or weight, and it can travel at light speed^. With the advances of IT over the years, it has become possible to digitally represent all relevant media types in the industry (see Table 1): Whether it is audio, video or text and pictures in various formats, the physical elements from the analog world (e.g. tapes, film, paper as data carriers) may be replaced by digital forms. Although some of the latter still have a physical carrier (e.g. the CD or DVD disc), the physical component has been reduced to IT equipment, such as eBook readers, PCs or mobile devices, in many instances. It was in 2002 that the amount of information available in digital form exceeded the analog counterpart (Hilbert and López 2011). Important drivers of this development were the growing use of IT, especially personal computers, that allowed to directly create and use digital content, as well as the evolution of the Internet that comprised the publishing and linking of content (Web 1.0), but also the easy creation and sharing of user generated content (Web 2.0). Although, this made every Internet user at least a potential producer of content, these Web 2.0 Bwebsites are designed to be read by people, not machines^ (Colomo-Palacios et al. 2013, 89). Semantic web technologies were a profound driver in removing this limitation and are recognized as the basis of the Web 3.0 (Gogoulos et al. 2014). By providing formalized languages to model the meaning of content, they enabled computers to interpret and also to create content themselves. In combination with artificial intelligence (AI) technologies that received a renaissance in the big data movement Table 1 Differences of analog and digital media types and scenarios like BWhen the editor is a machine^ (Herbst 2016) following the idea of Brobot reporters^ as well as the fact that Bit is now possible to conceive of future journalism without journalists^ (Cohen 2015, 110), have become a reality. Media process With the majority of information now being available in digital instead of analog representation, transformations of the media industry are a logical corollary. This becomes clearer when looking at the generic process chain in the media industry, which comprises the four steps Binvestigation^ (i.e. the gathering of necessary information to create content), Bcreation^ (i.e. the generation of media content), Bbundling^ (i.e. the combination of various elements in product) and Bdistribution^ (i.e. the sale of content and purchase by consumers). A fifth step, termed Busage^ could arguably be added since the consumption of content increasingly defines the (once) earlier process steps. In contrast to the analog world, where mainly the sale of titles determines their success, the way digital content is used leaves traces that serve as indicators for creating and bundling content that is offered to consumers in the future. Electronic (market) (...truncated)


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Rainer Alt, Carsta Militzer-Horstmann. Electronic Markets on the media industry, Electronic Markets, 2017, pp. 1-5, Volume 27, Issue 1, DOI: 10.1007/s12525-017-0246-5