In what ways are the basic rules of media economics changed by the Essay

In what ways are the basic rules of media economics changed by the 'digital revolution' and in what ways do they remain the same - Essay Example Digital revolution has effected cost reduction by replacing analog into binary representation of ones and zeroes, felicitating multiple generations of copies similar to the original. Digital revolution goes far beyond multimedia applications of storing all information in a binary digital format. The horizon of digital revolution has expanded to the extent of putting an end to privacy, to quote the example of Walmart labeling all its products with RFID tags, causing worry to the privacy groups. Hoskins, McFadyen and Finn of University of Alberta have very appropriately and forcefully analysed links between media and communication in their book â€Å"Media Economics: Applying Economics to New and Traditional Media. They have reasoned with arguments on questions like the Internet affecting the information-rooted entertainment and cultural products; how is broadcasting generally regulated and often supported, segregating newspaper publishing from it. Media economics rules have taken different moulds as multi-faceted aspects of digital revolution unfold. On the basis of microeconomic principles and concepts, it peeps into media industries to discuss and analyse topics in the resulting media environment. In media industries, demand and supply of products is affected by their variables. When packet switching to circuit networks is employed for the Internet, the economies of scale work to give competitive advantage to US in comparison to other countries and on top of that the mergers of entertainment industry such as Disney’s acquisitions of Miramax and ABC, AT&T’s acquisition of the cable company TCI happen. Digital revolution through the medium of the Internet affects the supply of media goods and services. The time has come when possessing a commercial television-broadcasting license is â€Å"like having a license to print your own money† ï â€ºBraddon, 1965, p. 240ï   Here comes the all-important role of digital technology in affecting the demand of media