How Media Companies Should Create Value: Innovation Centered Business Models and Dynamic Capabilities

Globalization, deregulation, technological innovation and the convergence of previously separated industries such as media, entertainment, information, and consumer electronics industries, have changed the media landscape into a turbulent environment. As a consequence of these developments, many media firms are experiencing severe challenges, as content proliferates, audiences change behaviors, advertising revenue erodes, and new competitors emerge. Media firms operating in this rapidly changing environment have to make adequate adaptations to these fast moving changes and respond quickly to create or to sustain their competitive advantage. They are generally confronted with the fact that existing resources and capabilities are no longer sufficient to deal with the new demands and requirements (Oh, Telecommunications Policy 20(9): 713–720, 1996). In order to adjust to the new environment, the media companies need to obtain, integrate, and reconfigure resources and capabilities in order to adjust to the new environment. Creating social, ecological and financial values for stakeholders is the key to long-term survival. This requires new concepts, new idea and new managerial approaches. Two important questions that arise are what kind of business model do they need to create multiple values, and how should the company transform its old business model into a new model. In this chapter, we will attempt to contribute to the creation of multiple values by media companies. In the next section, we present the main characteristics of the old and the new business models for the media companies. In the following section, we will discuss the main corporate social responsibility (CSR) challenges that media companies face when they become a network organization. The closing section presents some conclusions that can be drawn from this contribution