MEDIA MANAGEMENT AND ENTERPRENEURSHIP

Unit III: [Managing Media Organisations and Start Ups]

1. Establishing a Media Organization or Start Up: Steps Involved
2. Human Resource Management: Roles and Responsibilities
3. Methods of Revenue Generation by Media Organizations and Start Ups
4. Managing Cost and Revenue Relationship

Establishing a Media Organization or Start Up: Steps Involved

There are a few essential steps you need to take before starting a business, any
business.

1. Do your market research: Just because you build it or sell it doesn't necessarily
mean anyone will buy it. The first essential step is to research your potential market.
Who needs what you are offering? Is there space for your product or service in the
market or is the market saturated? Is the market national? Is it a niche? Can you define
your ideal customers? These are all questions that need to be answered before you even
consider starting a business. Too many entrepreneurs have found out the hard way that
there was not enough market share for them to capture. Others have realized that their
target market audience was far too limited to make their business work.

2. Show yourself the money: You can't start a business without capital.
Determine what you have, what you will need and how you will go about
getting it. If you plan to seek investor funding or financing, start writing a
business plan and practice your pitch. Research the costs associated with your
business. Know how much money you'll need and decide where it could
come from.

3. Hire a good business attorney: You don't necessarily need to have an

attorney on a retainer, but you'll want to hire an attorney experienced with new
businesses to help you get started. Your attorney can advise you about such
things as drafting contracts, reviewing your lease and determining the right
business structure.

3. Hire a good accountant: An accountant will work in conjunction with your

attorney and be instrumental in determining the best form of ownership. He
can also help you establish bookkeeping and other record keeping procedures
that can keep you on track for years. Most important, a good accountant will
help with tax planning. "You will also want an accountant who understands the
state laws, since every state has its own little intricacies, such as sales tax
issues," Talis says, adding that it's important for your accountant to be familiar
with startup ventures.

4. Decide on a business structure: Your choices include sole proprietorship,

partnership, corporation, "S" corporation or limited liability corporation (LLC).
Personal liability, taxes, paperwork and regulations vary greatly among the
different legal business structures. Your attorney and accountant will play a key
role in assisting you in this important decision.

5. Decide on a business name: It may seem obvious and simple, but the name
is how your business will be known to the world. The right name says a lot
about your company. Make a list of potential names and narrow the list down
to the one that best describes your company in a few words, while being
catchy, easy to remember, easy to pronounce and easy to spell. You should also
consider how it will translate to a web domain name. You'll also need to do
research to see if there are a) similar business names and b) similar domain
names.

Get all necessary licenses and permits: Along with a business license, you may need to
get additional licenses depending on the type of business and local laws. Many
professionals, such as contractors and real estate agents, need to be licensed in the states
in which they work. Additionally, you may need licenses to manufacture and/or sell
specific products such as liquor, firearms or even lottery tickets. Research all licenses
applicable in your county and your state. It's also extremely important to know the
zoning laws before you open a business
 Human Resource Management: Roles and Responsibilities

Introduction
Human Resource Management is the organizational function that deals with
issues related to people such as compensation, hiring, performance
management, organization development, safety, wellness, benefits, employee
motivation, communication, administration, and training.

Human Resource Management

HRM as “planning, organizing, directing, controlling of procurement,
development, compensation, integration , maintenance and separation of
human resources to the end that individual, organizational and social
objectives are achieved.”

According to Decenzo and Robbins, “HRM is concerned with the people

dimension” in management. Since every organization is made up of people,
acquiring their services, developing their skills, motivating them to higher
levels of performance and ensuring that they continue to maintain their
commitment to the organization is essential to achieve organsational
objectives. This is true, regardless of the type of organization – government,
business, education, health or social action”.

OBJECTIVES OF HRM
Societal objective. To be socially responsible to the needs and challenges of
society while minimizing the negative impact of such demands upon the
organization. The failure of organizations to use their resources for society's benefit
may result in restrictions. For example, societies may pass laws that limit human
resource decisions.
Organizational objective. To recognize that HRM exists to contribute to
organizational effectiveness. HRM is not an end in itself; it is only a means to assist
the organization with its primary objectives. Simply stated, the department exists to
serve the rest of the organization.
Functional objective. To maintain the department's contribution at a level
appropriate to the organisation's needs. Resources are wasted when HRM is more or
less sophisticated than the organisation demands. A department's level of service
must be appropriate for the organisation it serves.
Personal objective. To assist employees in achieving their personal goals, at least
insofar as these goals enhance the individual's contribution to the organisation.
Personal objectives of employees must be met if workers are to be maintained,
retained and motivated. Otherwise, employee performance and satisfaction may
decline, and employees may leave the organisation.

Nature of HRM
HRM involves management functions like planning, organizing, directing and
controlling

It involves procurement, development, maintenance of human resource

It helps to achieve individual, organizational and social objectives

HRM is a multidisciplinary subject. It includes the study of management,
psychology, communication, economics and sociology.

It involves team spirit and team work.

It is a continuous process.

Recruitment & Selection

The recruitment and selection is the major function of the human resource
department and recruitment process is the first step toward creating the competitive
strength and the strategic advantage for the organisations. Recruitment process
involves a systematic procedure from sourcing the candidates to arranging and
conducting the interviews and requires many resources and time. A genera
recruitment process is as follows:

Identifying the vacancy:

The recruitment process begins with the human resource departmen receiving
requisitions for recruitment from any department of the company. These
contain:
Posts to be filled Number of
persons Duties to be performed
Qualifications required
Preparing the job description and person specification
Locating and developing the sources of required number and type of
employees (Advertising etc).
Short-listing and identifying the prospective employee with required characteristics.
Arranging the interviews with the selected candidates
Conducting the interview and decision making

i. Identify vacancy
ii. Prepare job description and person specification
iii. Advertising the vacancy
iv. Managing the response
v. Short-listing
vi. Arrange interviews
vii. Conducting interview and decision making
The recruitment process is immediately followed by the selection process i.e.
the final interviews and the decision making, conveying the decision and the
appointment formalities.

Purpose & Importance of Recruitment

Attract and encourage more and more candidates to apply in the
organisation.
Create a talent pool of candidates to enable the selection of bes candidates
for the organisation.
Determine present and future requirements of the organization in
conjunction with its personnel planning and job analysis activities.

Recruitment is the process which links the employers with the employees.
Increase the pool of job candidates at minimum cost.

Help increase the success rate of selection process by decreasing number of visibly
under qualified or overqualified job applicants.
Help reduce the probability that job applicants once recruited and selected will
leave the organization only after a short period of time. Meet the organizations
legal and social obligations regarding the composition of its workforce.
Begin identifying and preparing potential job applicants who will be appropriate
candidates.
Increase organization and individual effectiveness of various recruiting
techniques and sources for all types of job applicants.

Methods of Revenue Generation by Media Organizations and

Start Ups

Media organisations require funds to survive. Such funds could be sourced from the
following sources among others:
Advertising: This is perhaps the primary economic base of media industries; except the
government-owned ones which are financed by the government. Advertisers pay for adverts
space in newspapers and magazines and for air time in the broadcast media to air their
commercials during certain time to the listening or viewing public.
Government fund/subsidy: Some media organisations, particularly the government owned
media houses attract subsidies, entitlements and other funding from time to time. However,
such funds in most cases do not come for free as the popular adage says: “He who pays the
piper dictates the tune.”
Public relations services: Media outfits can generate money from independent bodies on
contract basis for carrying or airing news, features or documentaries in their favour as part of
public relations services.
Affiliate compensation: Local broadcast station sometimes get remunerations from networks
for carrying their programming.
Sale of time/space: This is one of the common sources of revenue for media organisations.
Sale of time/space could be to religious bodies, political parties, private individuals, groups,
and organisations among others.
Trade-out arrangements: This is another means of sourcing revenue for the media. Trade-
outs simply mean a situation where a media organisation provides time or space in exchanges
for goods or services offered by the advertisers.
Co-operative advertising: This is an arrangement where a media outfit and her business
partner reach an agreement to split part of the cost of advertising with the company whose
products are advertised for services rendered to the media organisation. In such case, both
parties will render services in completion of their business deal.
Barter arrangement: This is when a media organisation agrees to receive programming in
return for providing advertising time.
Time brokerage: This is when a station sells a block of time to another party (broadcast
station) who in turn programmes the time block and also sells commercial in it. For example,
if you operate a radio station and find it difficult to sell commercial time during a particular
time period, you might decide to sell that entire time block, say two hours, to another party.
That party in turn will programme the time slot and sell advertising in it.
Promotion: This is another huge source of fund generation for media organisations. Before
now not many media organisations ventured into this, in recent times, more and more media
establishments are realising the importance of promotion as vital means of fund generation.
Other (Minor) Sources of Revenue for Media Organisations
Other sources of fund for media organisations include: commercial printing, bulk-delivery
services, special projects, advertorial, supplements, subvention, profits, sales of stocks,
payment for news items and live coverage of events, loans, cover prices of newspapers and
magazines, recording facilities, disposal of back copies of publications, etc. (Nwachukwu,
1992; Ogbuoshi, 2003).

Managing Cost and revenue relationship

One of the most important aspects of media is the fact that the media industry is just that: an
industry. Most media producers and outlets are commercial in nature, with the main objective
of making money. There are several methods or "revenue models" that media companies use to
make money. The four most common revenue models are discussed below.

Advertising
Advertising is the most common of all revenue models in traditional media and online. TV
shows, newspapers, and websites offer their content (programming, news stories, etc.) at no
charge (or at a low price) in order to attract a large audience.

Advertisers wanting to promote the products they're selling pay the media outlets, who in
turn place ads in between their content for the audience to experience.
Advertising is most commonly used in media outlets that 1) can't cover their entire costs just
by selling their content (like newspapers and magazines), and 2) would have little to no
audience if they charged (or charged more) for their product. For example, a newspaper
would never sell at $5 per copy, and you wouldn't pay $30 for a movie ticket, so advertising
is there to subsidize the cost.
Subscription
Subscriptions are great for media types that are continually being updated - think a
newspaper, a magazine, or cable TV - or have some kind of ongoing value - think websites
like LinkedIn or informational databases. Subscriptions are popular with media companies
because they provide steady revenues over time. This revenue model doesn't work with
media considered a commodity - something you can get elsewhere for little to no cost. An
example of a media commodity is news - you can get it all over the web, so paying for a
subscription to a news website means that site should provide significant value beyond the
common news found elsewhere. The Economist and the Wall Street Journal are examples of
news websites that offer significant value beyond what you might find for free on Google
News.

Pay-per-item
The pay-per-item model works for media types that come in an individual package, offer
no ongoing value, and are sustained through sales alone. An example of this is a pay per
view movie on cable, a movie ticket at your local theater, or a CD or DVD.

Merchandising

Media companies use merchandising as a secondary, or ancillary, income. This is popular with
recognizable media franchises whose fan base would want to purchase related items. An
example might be the merchandising efforts of a company like Disney, which produces and
sells merchandise for all of it's big-budget movies and TV shows. Many times, merchandising
efforts earn more income than the media product it references. For example, the original Star
Wars movies earned more income through merchandising than through ticket sales.
The cost of moving units of information has fallen from very high in the Mass Media Era to
nearly zero in the Infinite Media Era. As a direct outcome, in barely 20 years, the barriers of
cost and capacity that formed and defined our global information systems have been shattered.
The remaining limits are fast disappearing as digital systems gain still more speed and capacity
and as digital devices penetrate every economic level and geography.
This is a change so profound that most of us, being creatures of the Mass Media Era, barely
grasp its implications. Having lived in this restricted system for so long, we barely understand
how its limits have determined its contents and the behaviors of its users at both ends of the
pipe. And we have only begun to see how infinite bandwidth will drastically alter content and
behaviors. Facebook is only a hint of what’s to come.
For humanity in total, this is a huge breakthrough. As universal access to information
arrives among the populations around the globe, it will unlock vast amounts of previously
restricted human potential. Give the world’s people full access to the world’s information,
and huge numbers of them will rise to levels of self- actualization their parents and
grandparents could barely imagine. This process will accelerate through the 21st century and
beyond. For the old mass media, however, this means hard times from now on. It’s the
end of the scarcity model — the limits that both restricted them and made them hugely
profitable. As the print business declines and newspaper companies try to transfer their
business into the digital realm, five basic changes are working against them:

1. The mass media’s digital advertising must compete with vast inventories of
low-priced space on millions of Web sites.

It’s print dollars vs. digital dimes. As John Paton of Digital First Media has often said,
when the print dollars are going away, media companies have to get really good at
stacking digital dimes.

2. Mass media content is now just a drop in an infinite ocean.

The digital content competition is even stiffer than the advertising competition. Now that
people can get virtually any information they want, they’re shifting huge amounts of their
media time away from news and other mass-media content into personally relevant
information. Generic, one-size-fits-all content like news and mass entertainment, which
ruled in the Mass Media Era, is now just a small part of many people’s diet. Where the
action is now — for both individuals and Web companies — is in what people care about
personally. This is why news alone isn’t enough to support much of a local media business
model.

3. Digital audiences for local mass media Web sites are dwarfed by those of national
and international digital players that meet more individualized needs and interests.
Most newspaper companies are ignoring this, at their great peril. In the pre-digital era,
newspapers dominated the local media landscape, reaching more people every day than any
other single media outlet. In the digital age, national/global Web sites are the giants, reaching
far larger local audiences, far more often, than the Web sites of local media.
The 12 Morris Publishing Group daily markets in the United States with which I’ve been
working are typical. Facebook, Google, Yahoo!, YouTube, Bing, MSN and others dwarf our
digital audiences. Facebook is king, getting about 10% of all local visits
— 20 to 30 times more than Morris news sites. With market shares that small in the digital
realm, traditional local media companies are distant also-rans. Comparing ourselves to other
local media sites — usually TV and radio — is missing the point:

the national/global giants are trouncing us. And they are working harder and harder to sell
advertising to local businesses in direct competition with local media.
4. Social media are unlocking an incredibly vast desire and capacity among humans
to get and give personally relevant information.
When the cost of information falls to near zero, what happens? People start using the pipe to
get and give tremendous amounts of information that’s mainly of personal and inter-personal
interest. This is the kind of information that matters to the individual and maybe his or her
network of friends, but not to many others. The old mass media pipe was too constrained —
and therefore too expensive — to handle stuff like, “I guess I’ll go to Starbucks now,” but
Facebook is full of it.
This appetite for personal and inter-personal information has always been there, but now that it
can be fulfilled for free in digital media, it’s being liberated. And it’s huge. As the information
pipe goes infinite, this stuff is most of the added volume of content, and it’s being exchanged
in an incredible number of small, overlapping personal networks rather than in mass systems.
The amount of interpersonal information generated each day is now far greater than what’s
created by the old mass-media providers, including newspapers.

5. Digital targeting is providing the tools to reach people across thousands of Web sites and
billions of small networks.
For advertisers, the broken digital media system presents a huge challenge and a huge
opportunity. They need to figure out how to reach people who are looking for personally
relevant information (often about a purchase) and using dozens of Web sites and countless tiny
personal networks several hours a day. Advertisers see mass-media audiences splintering, and
they’re trying to figure out how to target the specific people who might buy their products.

It was far easier in “the old days” of the Mass Media Era, when virtually all of the people
could be reached through just a few media channels. But there was tremendous waste
because the advertising couldn’t be targeted.
Digital targeting is technology’s answer to this splintered digital environment. Using detailed
profiles compiled from people’s Internet activity, and serving ads in milliseconds to people
whose data shows the desired characteristics, advertisers can achieve far higher precision at
far lower cost than they could with mass media. Advertising dollars will flow from inefficient
mass media to the new forms of efficient digital targeting, creating the next painful wave of
disruption for legacy media.
These five factors add up to a massive overall disruption of the mass-media business
model. At the heart of it, it’s an audience problem. In the old, information-starved days, we
could guarantee market-dominant audiences just by doing news (or, for the broadcast
media, entertainment). Today, news won’t get us enough audience to be competitive, and
our audiences are too small for digital dimes to make up for the print dollars we’re losing.
Radio and television broadcasters may feel a bit smug these days, watching what’s happening
to newspaper companies. But it’s just a matter of time before the bandwidth of the “infinite
pipe” becomes great enough, and the devices powerful enough, that they will suffer the
same problems.
It’s the end of the Mass Media Era, and with it, the mass-media business model