Impact of the Internet on entertainment media industries: The double effects of Metcalfe and McLuhan

Abstract

Digital technology and the Internet have revolutionized the entertainment media industry by harnessing network effects and transforming content creation and distribution. However, these advances have also brought challenges, especially regarding intellectual property, with significant long-term implications for entertainment media companies. While the existing literature on this topic is limited, this study aims to analyze the impact of these trends using the Metcalfe and McLuhan effects and provide insights to help traditional media companies thrive in this changing environment. The Metcalfe effect, exemplifying network effects, suggests that the increasing number of Internet users generates economies of scale, amplifies content value, and facilitates the emergence of distribution channels and revenue opportunities in the entertainment media industry. Additionally, the McLuhan effect emphasizes the transformative role of information media in reshaping content production and dissemination. However, the rapid development of the Internet has inadvertently facilitated the piracy of entertainment media content, necessitating the attention and implementation of effective countermeasures by industry stakeholders.