Thursday, September 16, 2010

Why does economics drive most media companies?

Economics drives most media companies because the amount of money they make has a direct relation to how well the economy is doing. For example, if the economy were to be doing well that means people would be more likely to spend their money. People would spend the money because money is freely flowing through the economy and there is a chance they could earn it back. However, in times of depression or some sort of recession, people are more likely to save their money in fears of losing it all and never getting it back. Aside from the consumers, companies would be weary of investing their cash in any form of media because they know “people wouldn’t buy it”, no pun intended. Media and economy go hand in hand because media is spending money and money is economics. If the economy is not well, the media won’t being doing well either and that is a fact. “The mass media function in the money-driven system of capitalism. As in all businesses, executives who don’t deliver results are replaced. If profits lag, investors pull out their money, reducing the capital available for operations and growth… The investment with the greatest profit potential is a magnet.” (Vivian 54) Without a good economy, investments can’t grow and companies won’t get richer.

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