Wednesday, July 06, 2005

Penn State Study Finds Media Diversity Fostered by Vigorous Media Entrepreneurship

A new body of research just being developed appears to support the contention that the media industry is being driven by upstart entrepreneurs rather than by the staid big media companies. The research is in a formative stage. But if further work supports the findings to date it would bode well for the diversity and quality of the media.

The research has been lead by Anne Hoag at the School of Communications at Penn State (and a colleague during my brief stay there). She teaches a course called Entrepreneurship in the Information Age. She recently presented a paper, “Media Entrepreneurship: Definition, Theory and Context,”at Babson College's entrepreneurship conference.

Hoag found that “media entrepreneurship appears to be relatively dynamic and healthy compared to all U.S. industries – on average the media industry was more turbulent during the 1990s and had more nascent entrepreneurship at the turn of the 21st century.” Turbulence is considered healthy in the entrepreneurship literature, as it suggest vibrancy—new entrants coming in, others closing down. This stands in contrast to the 1950s through the early 1990s, when trends in organizations per capita showed that media entrepreneurship overall was rather stable.

Her research did not find that media entrepreneurship was equal in all segments. As might be expected, the older, mature publishing sector showed the least activity. Activities associated with visual productions—theatrical film, television production and the like -- were the most active.

Prof. Hoag’s paper opens with a general observation:

Recent scholarship has shown that new and small firm growth and a corresponding decline in conglomeration and concentration starting in the 1970s has shifted the source of economic growth and innovation toward the entrepreneurship and small business sector. In fact, new firms have been shown as the main source of net job growth.

Then she asks:

Does the evidence support such a claim when applied to media industries? In particular, does it hold up when the term “innovation” is translated into media industry performance concepts like diversity (in content and voices), access (to the media and communication networks for the public), quality (in both content and access technologies) and new processes with democratizing effects.

This line of inquiry is important because it can add empirical data to the work that already shows the ferment in the media industry. The headlines announcing any big media merger sticks in the minds of viewers and readers, seeming to support the perspective of big media getting more powerful. The reality is just the opposite, as can be seen in articles and research here, here and here.

Hoag has opened a useful line of inquiry. You can follow her reserach at her new blog.

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