Modelling Economic Effects of the Media Influence as Methodological Basis for Strategizing the Media System

Abstract

This research focused on the impact of media industry on other sectors of the economy. Advertising is considered as a basic implementation mechanism of media’s economic impact on the economy. The study used the original classification of the effects of economic impact on the market at all levels, developed by the author. It examined the highest level of advertising associated with the shift in market structure and economic interactions of its members and elements. The effects of this type — tertiary ones — include not only changes in the properties of equilibrium due to advertising, but also the emergence of new types of market participants whose economic activity is determined exclusively by advertising-related goals. To describe such effects, models of marketing channels are used — a special kind of production chains that connect the preceding and subsequent units with the help of contracts for advertising and promotional activities, and models of multi-sided markets, complementing the analysis with the study of the behavior of intermediary firms that place advertisements in the media. and linking producers and consumers. Classical models of two-sided markets, considering media as platforms connecting consumers with producers, do not consider the simultaneous consumption of goods and content by the audience and the nature of the producing firms’ problems. Therefore, in this paper, the focus of the study was on the models of a three-sided market, which includes three types of participants (consumers, media firms and industrial firms). It is proposed to put such models of intersectoral relations as the basis for quantitative methods of strategizing the media system, including at the national level. At the level of strategizing of individual media enterprises or holdings, the proposed model makes it possible to predict the long-term strategies of competitors. At the industrial level of strategy development, the proposed methodology makes it possible to build key indicators that determine the strategic priorities of the industry development based on the properties of the three-sided market equilibrium.