The media industry and the digital revolution: What are the consequences of the digital revolution over traditional media business models in the United States and in India?

Abstract

The word “media” is the latin plural for “medium” which means “intervening agency,” “means” or “industry” (Randomhouse Inc., 2009). It is a vehicle that allows one to spread information, ideas and content, whichever its nature: text, audio, video, or all at once. Media is evolving in different ways: some are disappearing, other kinds are emerging by following the trends of culture, mobility and foremost, technology. As technology evolves, the reach of media is greater and its access becomes easier. We live in an age where channels of communication are changing faster and far more significantly than before. The newspapers, radio, television (and film to an extent) are platforms for information and entertainment which have been clearly differentiated for more than fifty years. They had distinguishable uses thanks to their singularities. These medias are well spread and democratized throughout the world but their uniqueness, which has been left untouched until recently, is being threatened; The United States? has always been in public imagery the giant of entertainment, the consumerism monster that leads the world into globalization. We thought it was unthinkable to conduct an analysis of the media industry without putting the U.S in the center of the picture. On the other hand, it seemed essential to present the case of a developing country, far from globalized models, a country that does not always follow the American way of life and is subject to its own specific rituals and behaviors. India is a particular media market that has not yet turned the corner to the widespread Internet access. The Indian entertainment industry is estimated to reach 562 Billion Indian rupees (12.09 USD billions) for the year 2008 and it is expected to grow to 837 billion Rs (18,32 USD billions) in 2010. The 19% potential growth of the market and its evolution towards the digitalized industry is interesting to analyze as a process in creation. The comparison between an already established digital revolution in the United States and a potential market for it in India which has more than 500 TV channels and produces annually more than 900 movies, has the objective of thinking the future of the media industry. Finding relevant new media business models is at the core of this study: how can cash flows be insured when traditional TV advertising is on the verge of its end? What new sources of finance will be available to producers?. Is the U.S model of numeric revolution applicable to other realities?. What can the Americans learn from the developing world? -A current overlook on the Indian and American entertainment industry will be the first part of the analysis. This will allow to imagine potential evolutions that the digital revolution has bought to the U.S and how these evolutions are to happen in India. The emergence of new business models and behavioral habits are to derive from these changes.