این فصل را با ذکر تمام تیترهایش (تاکید میکنم تمام تیترهایش) به انگلیسی ساده و روان خلاصه کن   International Media Management	13
	

In recent years, one could observe strong concentration and internationalization tendencies in the media markets. The Bertelsmann group is considered to be“the world’s most international media company”(Bertelsmann 2015, p. 81). In 2018, Bertelsmann obtained the following revenue distribution: 22% in the United States,
33.2% in Germany, 38.6% in Europe (without Germany), and 6.2% in other countries (Bertelsmann SE and Co. KGaA 2019). Overall the media landscape is characterized by complex international and intermediate interrelations.
For media companies thereby the challenge arises to overcome the borders with other nations and thus other societies, laws, and further environmental factors besides bridging the gap between journalism, economics, and technology.1


	Introduction

Despite its obviously high relevance, from a practical point of view, the international management in media companies garnered only little attention in scientic literature, so that the state of knowledge is thus relatively small to date.
For this reason, the following considerations serve to develop a fundamental understanding of the international management in media companies. Apart from specifying the internationalization characteristics of media companies, the emphasis
will be specically on internationalization strategies as well as selected operational subareas of international management in media companies.
The following considerations primarily serve to dene and delineate the term “international media management.”Building upon this denition, characteristics of media companies and their inuence on internationalization will be subsequently examined.

1See also for the following chapter Wirtz (2011b) and Wirtz (2019b).

 
Ⓒ The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020
B. W. Wirtz,Media Management, Springer Texts in Business and Economics, https://doi.org/10.1007/978-3-030-47913-8_13
 
215
 

	Definition and Characteristics of International Media Management

Within economic literature, the term“internationalization”is analyzed regarding two aspects. The institutional approach, which has been pursued since the 1960s, links the phenomenon of internationalization to the respective company. In one of therst denitions of multinational companies, Lilienthal names“corporations which have their home in one country but which operate and live under the laws and customs of other countries as well”(Lilienthal 1975, p. 119).
The procedural or functional approach, however, builds on the functional ranges
of a company when dening the term. The spectrum of possible denition approaches of internationalization ranges from certain forms of market entry and foreign markets to the operation of foreign subsidiaries and an abstract equating of
internationalization with transnational foreign activity.
Limiting international management to only specic problems of one or a few functional ranges, for example, to the marketing of the company, does not appear to be reasonable. In this context, it is ignored that almost all the functional ranges of the company are affected by a commitment to foreign markets. Thus, alsonancing,
procurement, production, or research and development can expand across
boundaries (Makhija et al. 1997). Internationalization can be regarded as a phenom- enon which encompasses the entire company. Therefore, the following considerations will be made on the basis of an international management view which on the one hand builds on the company’s functional ranges, but in doing so
also regards the company as a whole, on the other hand. Thus, the denition also
contains aspects of an institutional perspective on the term.



	Specifics of International Media Management

Media companies always act in international markets and intercultural environments. Thus, supplying completely international products and services does not always have to represent the best strategy option, since consumers as well as other internal and external stakeholders differ in their values, mindset, and behavior.
The“cultural discount theory”offers one approach to explaining the effects of cultural predispositions on media companies. According to this theory, the value that
a customer attributes to cultural products decreases in relationship to the distance of their origin. Due to this, reduced international usability of locally dominated
 

contents can be deducted. This also corresponds to the results from research efforts concerning advantages of a stronger globalization or localization in different sectors. Here, a high potential in localization advantages together with a low potential in globalization advantages could be found for traditional publishing houses as a
specic group of media companies. However, integrated media companies were classied due to their high globalization and localization advantage, corresponding to the increasing convergence of hardware, software, entertainment electronics,
telecommunications, and content industry (Meffert 1989).
The companies have to succeed in gaining advantages from the globalization of business processes as well as the local differentiation of products and services. Against this background, media companies would not be successful by selling culturally limited content. Media companies would rather be successful if they can offer locally adequate products, which are oriented to the cultures of the respective target groups.
The continuously increasing tendencies of internationalization in the media sector during the last years can be attributed to a number of reasons. Deregulation tendencies play a special role as well as a change of economic parameters. Thus,
within the last years, there has been a strong rise in supply in the media area, leading to an intensication of competition. Media companies counter this competition pressure often with considerable investments into the quality of their supply, which increases production costs. With distribution possibilities remaining consis-
tent, however, this would mean a reduction of prots. For this reason, media companies strive to extend their distribution capabilities.
Therefore, media companies usually have two complementary possibilities. One possibility is to create an integrated media enterprise. Besides this, another option is to access additional (international) sales markets. This strategy is supported by extensive deregulation tendencies in numerous national media markets, which allow the entry of international suppliers into local markets. The possibility to realize scale and synergy effects is especially addressed here.
Due to the discovery of additional sales markets and an additional application of already created content companies, unit costs per sold media unit can be lowered and scale effects realized. Economies of scope arise from the possession ofexibly usable potentials, especially as a result from an internationally active media enterprise’s ability to reactexibly to changes in the market surroundings of a
specic national market, which is made possible by international presence.


	Internationalization Strategies of Media Companies

The internationalization of a company is a complex task which requires the creation of a conceptual framework of action. From this framework of action, concrete action goals can be derived regarding the subordinate ranges. The development of an action framework includes an internationalization strategy. This is built on competition advantages that are relevant to a successful planning of foreign activities.
 

The denition of an internationalization strategy covers a variety of aspects (Oviatt and McDougall 2005). The aspect probably most frequently discussed in
the literature is the way in which the international commitment of the company is carried out. In the following this aspect will be called market entry and market cultivation strategy. Another aspect is the target market strategy. This refers to the decisions of the company for presence in, selection of, and segmenting of a national market. In addition, a successful entry into relevant target markets requires a precise
timing of the commitment. This can be summarized by the term“timing strategy.”In the following, different partial strategies of the internationalization strategy are
presented.



	Market Entry and Market Cultivation Strategies

In the following section, an overview of the market entry and market cultivation strategies is given. Therst entry into a new (international) market is called market entry. However, market cultivation also covers the cultivation of markets that a company has already entered. In this context, the form of market cultivation and the form of market entry do not necessarily have to correspond to each other.
Companies have fundamentally different possibilities for market entry and mar- ket cultivation, as far as the commitment in international markets is concerned. Accordingly, also a variety of systematization approaches of market entry and market processing strategies exist. Here, the systematization by Meissner and Gerber (1980) will serve as the basis to differentiate the essential market entry and market cultivation strategies, which is based on the rendered capital and management performances and thus the transfer of resources within the home country and the host country (Meissner and Gerber 1980). This systematization form of market entry and market cultivation strategies is depicted in Fig. 13.1. In the following, franchis- ing is not regarded, due to its small relevance for media companies.

Export
Export, as a form of market entry and market cultivation, provides that all capital and management performances are completely generated within the home country. One can distinguish between indirect and direct export. Indirect export is characterized by the domestic engagement of trade intermediaries. Trade intermediaries are usually external trade companies or export houses. In contrast to indirect export, direct export does not contain domestically engaged trade intermediaries. Therefore, direct contact between the exporting enterprise and the foreign business partner is established.
Depending on the kind of foreign business partner, two forms of direct export can be distinguished: direct export without engaging an intermediary in the host country and direct export with engagement of an intermediary in the host country, for example, trade representatives who are independent and not bound by instructions, commissionaires, trade brokers, or general importers.

Compared to indirect export, the employment of resources for market entry is very high for direct export. This can be especially attributed to the creation of the required network of relationships to customers and business partners. Additionally, indirect export only poses a limited risk for the exporting company because the trade intermediaries market the acquired products and services at their own risk. Even though indirect export only causes low resource consumption at market entry, it is comparatively rather cost-intensive in the course of a longer-term market cultivation,
since the trade intermediaries usually demand a signicant margin between purchase and sales price. Moreover, a company does not build up any experience or
relationships with the foreign market when choosing indirect export.
A substantial advantage of direct export over indirect export refers to the possi- bility to more strongly regulate and control sales as well as the possibility to directly intervene in the foreign business. Beyond this, the costs which arise from long-term market cultivation are usually lower with regard to direct export than to indirect export. A fundamental disadvantage of a market entry and market cultivation strategy in the form of exports is the missing presence abroad. This may lead to acceptance problems in the relevant foreign market. Additionally, due to the physical distance, it can lead to a delayed reaction to changed demands of the foreign markets. For media companies direct and indirect export represent potential strategy
alternatives for market entry and market cultivation. However, the specic kinds of media are suited for export to different degrees. For example, the export of print
media products is fairly common. Direct export especially pertains to foreign subscriptions. Here, the respective print media products are usually directly sent
 

by the publishing house via mail or other distribution services to the respective recipient. Even foreign retailers can be supplied with the product by way of direct export. Finally, the involvement of domestic trade intermediaries and thus an indirect export for print products can also be considered.
A similar picture pertains to book publishing houses. Here, the export to geo- graphical regions which are frequently visited by domestic travelers is a reasonable strategy alternative. Book publishers essentially have access to the same export channels as press publishers. A direct export without engaging trade intermediaries is usually the exception. Since time sensibility is less of an issue for book products than for press products, export over larger distances can also be a reasonable strategy alternative.
In the music industry, export represents a reasonable strategy, especially for smaller labels which do not have access to the resources necessary for direct investment. Here, direct and indirect export channels are open to the company. However, export as a market entry and market cultivation strategy for international markets is rather suited for small labels with a low foreign volume, because of the high variable transport costs or the payment for potential trade intermediaries.

Licensing
In the context of licensing abroad, there is a larger transfer of resources created than in the context of export. The term“licensing”refers to contractual agreements in which domestic licensers make intangible assets available to foreign licensees under specic conditions. Here, especially patents, registered designs, trademarks, design patents, technical know-how, commercial know-how, and copyrights are viable for
licensing.
Licenses to foreign business partners are usually constrained by certain restrictions that limit their use. In this context, temporal and physical restrictions as well as restrictions regarding the number of license partners are addressed. Spatial restrictions refer to the fact that licenses are usually not given worldwide but rather are restricted to certain geographical regions. In the framework of temporal restric- tion, the maximum duration of a licensing contract usually coincides with the term of protection of the licensed object.
Physical restrictions pertain to the fact that licenses are usually not given for all forms of usage. Finally, restrictions regarding the number of license partners refer to licenses that are often not given exclusively but rather may be available to multiple foreign license partners. Licensing fees can be distinguished as overall licensing fees (lump sums), these being one-time or recurrent payments, and running licensing fees
(royalties) as variations of acquisition-, sales-, turnover-, or prot-oriented amounts. A special advantage of licensing is thatnancial and human resources are only needed to a small extent. Expenditure arises solely in connection with choosing the
licensees, the elaboration of the license contract, and the compliance supervision of the license contract.
Another advantage of the granting of licenses is the possibility to multiply utilized intangible assets, both spatially and temporally. Spatial license agreements allow to utilize intangible assets in foreign countries simultaneously without a lot of
 

additional effort. However, also a sequential utilization of the respective assets may take place if those are already domestically at the end of their life cycle and licensing to a foreign partner is possible to ensure further utilization.
Disadvantages of licensing are the limited possibilities to control and inuence the activities of the licensee. This can lead to quality and image problems with
foreign customers, which in the worst case could also have repercussions on the domestic market in the form of a negative image transfer. Closely connected to this is the problem that in spite of secrecy clauses, a transfer of sensitive know-how by the licensee to third companies can occur.
Licensing is one of the most important market entry and market cultivation strategies on international markets within the media sector. In the print sector, licensing is especially used by book publishers. They sell licenses to local enterprises, which allow them to translate the respective works into the appropriate language. Occasionally these are manufacturing and distribution licenses.
Here, the licenses can be valid for individual countries or also for a language area. In the movie sector, licensing is also one of the crucial internationalization forms. Regarding this, the producer sends out so-called master copies of the movies to (foreign) movie distributors. These obtain the license to copy the master and lend the copy to the cinemas. These licenses are usually restricted to certain movies and geographical regions.
In the television sector, licenses are also a relevant market entry and market cultivation strategy on international markets. In television, there is a difference between program licenses and format licenses. Program licenses cover the right to synchronize and air a show. Examples are the broadcasting of American TV shows
like“How I Met Your Mother”or“Two and a Half Men”on non-American television. Format licenses, however, cover the right for local adaptation of program
formats.

Joint Ventures and Strategic Alliances
In recent years, cooperative market entry and market cultivation forms have gained considerably in importance. Thereby, a cooperation means the collaboration of two or more legally and usually also economically independent companies. The cooperating companies presume that they can reach their goals more easily together than they could alone. In the following, joint ventures and strategic alliances will be considered as cooperations in a narrower context.
Joint ventures refer to joint companies involving two or more partners. This means that a new and jointly supported company with an own legal personality is created. If a joint venture is used as a market entry and market cultivation strategy in international markets, the newly created company will be respectively settled abroad. The cooperative alignment of a joint venture can be horizontal as well as vertical or diagonal. Regarding the temporal horizon of the cooperation, limited and unlimited joint ventures may be distinguished. Moreover, equally led joint ventures, in which all partners participate in equal part, can be distinguished from joint ventures with unequal partner participation.
 

The advantages are a reduced need for capital for the respective activities and risk allocation. Beyond that, joint ventures often allow to realize economies of scale and economies of scope. Economies of scale can be specically realized with horizontal joint ventures. Economies of scope result from the bundling of complementary
resources, abilities, and competencies.
Disadvantages of joint ventures can be particularly found in a high coordination effort, which especially results from the large geographical distances. This is addi- tionally increased through the opportunistic behaviors by the partners, which have to be taken into account. Moreover, cultural differences also add to the increased coordination effort. An additional, closely connected problem is that it is hard for joint ventures to pursue a consistent strategy across national markets, since the demands of the respective partners have to be considered in the respective countries. A strategic alliance refers to a strategic cooperation of two or more companies in
precisely dened areas. The substantial distinction criterion of a joint venture is that within the framework of strategic alliances, the creation of a legally autonomous
company is disclaimed. Advantages and disadvantages of strategic alliances corre- spond widely to those already described for joint ventures. However, strategic alliances allow for a far greaterexibility in comparison to joint ventures, since no new company is created and thus decisions can be more easily reversed.
Strategic alliances and joint ventures create an equally suited market entry and market cultivation strategy for all types of media in the international markets. Thus, in the print area, the forming of alliances and joint ventures is possible in both the editorial and the printing sectors. In the editorial sector, creating locally specic content in the respective national language needs to be considered within the
framework of an alliance or joint venture, together with the respective foreign partners.
In the movie sector, international co-productions are also common. A joint production of a movie with foreign partners is performed and the movie is designed for international cinema utilization. The reasons for international co-productions of movies are mainly the high production costs of internationally marketable movies. Similar to the movie sector, the TV sector also creates formats in international co-productions. This is especially common for TV movies or TV shows.
For suppliers within the music sector, cooperative arrangements in the framework of internationalization are most benecial in the area of physical creation of audio media. In this context, foreign pressing plants can be set up within the scope of a joint venture. In this regard, development and production alliances as a market entry and market cultivation strategy on international markets are also suited for the
manufacturers of video and computer games. Here, especially the high development costs of new games promote cooperation.

Direct Investment-Related Solo Efforts
As a last alternative for international market entry and market cultivation strategy, a company can pursue a direct investment-related solo effort. Here, different possibilities of direct investments arise, which will be explained in the following section. Basically, minority participation and the establishment of lawfully
 

dependent foreign commitments, as well as the establishment of subsidiaries, may be distinguished.
In the context of minority participation, a domestic company acquires shares of a foreign company, without being able to exercise control (maximumnancial partic- ipation of 49.9%). A maximum share of 25% is dened as a simple or genuine minority participation. In the case of a share between 25 and 50%, the term block
minority participation applies. However, other limits may be relevant depending on the respective national law.
Legally dependent foreign commitments are associated with a set of problems. Thus, the occurrence of commitments within the international legal systems is not hassle-free since the commitments do not consist of an individual legal personality. Additionally, acceptance problems with (potential) business partners arise under legally dependent commitments, due to liability issues. For this reason, the better alternative for many companies is to establish legally independent entities, which are subsidiaries. Subsidiaries can exhibit a majority participation (between 50.1 and 99.9% capital participation) or testify a fully controlled subsidiary (100% capital participation).
Advantages of establishing subsidiaries are especially seen in the direct and independent presence in the host country. This presence not only ensures a high degree of independence and thus the implementation of its own strategies, but it also contributes to the acceptance by the customers.
The substantial disadvantage of the establishment of subsidiaries can be seen in the associated high expenditure of resources. The risk connected with the investment has to be carried by the company alone and cannot, as, for instance, with joint ventures, be distributed among partners.
The establishment of subsidiaries as an internationalization strategy basically forms a way that is feasible for all types of media. However, the distribution strongly varies between the individual media. Thus, foreign corporations are often found in the print media sector. Within the book sector, the establishment of subsidiaries is also relevant. Especially here, it is reasonable to establish independent proofreading and printing companies abroad.
In the movie industry, for example, companies can establish independent produc- tion corporations. Within the TV and radio sector, the founding of subsidiaries is not a common strategy. In particular, this is because of the high investment volume that is needed in these sectors. However, in the music sector as well as in the video and computer games production, the establishment of legally independent pressing plants abroad may be an option.
Furthermore, independent international recording studios are a strategic alterna- tive for music companies. However, for big integrated media corporations, the establishment of subsidiaries is of greatest importance, especially concerning acquisition.

Mergers
A last strategy alternative for market entry and market cultivation in international markets which needs to be presented is the merger. As described above, the
 

distinction between a merger and an acquisition is usually blurred. Strictly differentiated, a merger is the combination of previously legally and economically independent companies under one common roof. Thereby, the distribution of power among the partners should be fairly equal.
If, however, there is a distinct unequal power distribution in favor of one partner, the term acquisition would be more appropriate from an economic point of view. In the international context, in which a domestic and a foreign company merge, the term“cross-border merger”is applied. Due to the similarity between mergers and acquisitions, both have equal advantages and disadvantages.


	Target Market Strategies

Beside the decision for a suitable strategy for market entry and market cultivation, a business has to make a decision regarding its target markets in the course of internationalization. This is accomplished within the context of formulating strategies for the target market, which may be divided into market presence strategies, market selection strategies, as well as market segmentation strategies.
Detailed information on the relevant foreign markets serves as an essential prerequisite for the formulation of the respective strategy. Therefore, therst step in formulating a target market strategy is the acquisition of information. The acquisition of information aims at supporting the business in its decision to formu-
late a target market strategy. Based on the acquisition of information, the target market strategy may be developed. In the following, an overview of the major target market strategies and their implementation in the media sector is provided.

Market Presence Strategies
Market presence strategies determine the number and selection of the markets to be targeted. Basal, geographical, appeal-oriented, and balance-oriented market pres- ence strategies may be distinguished (Ayal and Zif 1979). Basal market strategies are
divided into two fundamental alternatives of market presence: the concentration strategy and the diversication strategy. The concentration strategy promotes a sequential market entry or market cultivation, in a few, strictly selected foreign markets. This allows to concentrate resources on a restricted number of national markets.
In contrast, the diversication strategy promotes market entry or market cultiva- tion in a multitude of national markets within a relatively short period of time. For reasons of risk diversication, resources are, inter alia, dispensed on various national markets. Discussing basal strategies, Ayal and Zif (1979) take the view that there is
an ideal number of processed national markets. From this assumption they conclude that, in the long run, both within the concentration strategy and the diversication strategy, the number of markets to be processed converges against the ideal number of national markets to be processed.
The geographical market presence strategy determines the geographical markets on which a company will operate. A single market strategy, a multiple single market
strategy, a regional market strategy, a multiregional market strategy, and a global market strategy may be distinguished. A single market strategy aims at only one additional market besides the domestic market, whereas a multiple single market strategy aims at a commitment to multiple single national markets.
In contrast, a regional market strategy aims at running companies in all countries of a region. The division of regions mainly follows geographical criteria. The decision of a company to be present in multiple regions is called a multiregional market strategy. Finally, a global market strategy is a commitment in all countries worldwide. This can be characterized as an ideal typical market presence strategy.
The economic calculus of the market presence develops along with the appeal- oriented market presence strategies. Here, companies try to rate national markets according to their current and future appeal. Emphasis markets, presence markets, opportunity markets, and abstinence markets may be distinguished. Beyond that, foreign markets are also rated according to the interactions of the national markets. Here, especially compensation-oriented criteria are applied. Risk compensation can be named in this context; this means a combination of national markets with more
and fewer risks. Furthermore, already established and protable markets can offer compensation for new markets that have not yet been established and do not yet offer prots. The different variants of market presence strategies are summarized in Fig. 13.2.
The use of market presence strategies on media markets can be claried particu- larly by the example of the music TV station MTV. This station, which only acted on
 

the US-American market in the beginning, started its internationalization originally restricted to the English-speaking area. This was especially achieved by the estab- lishment of MTV Europe with its head ofce in London.
After a dissemination phase of the English-language program, produced in
London, to further European countries, MTV is now active on the major European media markets with respective specic supplies. MTV pursues a concentration strategy which calls for a sequential expansion of the business activities to interna- tional markets.
A regional market strategy wasrst selected according to geographical criteria, in which the regions were dened by linguistic areas. In the meantime, a multiregional market strategy can be observed, in which markets from different regions, divided
into language areas, are processed.

Market Selection Strategies
According to the market presence strategy described above, after which the number of markets in which a company wants to become active is determined, subsequently the relevant foreign markets need to be selected. This happens within the framework of the denition of the market selection strategy. The selection of relevant national markets is achieved on the basis of multiple criteria. In this context, the national
market attractiveness, the national market risks, as well as the national market entry barriers play a focal role.
The national market attractiveness describes the utilization potential available for the company. This, however, is dependent on different sub-criteria, such as market structure, volume, and growth as well as price and cost structure or infrastructure. The potential dangers of the respective national markets which are present for the
company are dened as national market risks.
Among these are, for example, currency risks, safety risks, legal risks, political risks, or ination risks. Finally, national market entry barriers are designated as barriers which a company has to overcome to enter a certain national market. Regarding this, institutional, market-behavior-specic, and company-behavior-spe- cic market entry barriers may be distinguished. Institutional barriers are all tariff and non-tariff barriers in a specic country. Therein, all institutional market entry barriers originate in state regulations (e.g., customs).
From a market perspective, there might be behavior-specic entry barriers, for example, in a competitive situation, a consumer behavior that signicantly deviates from the domestic market, language and cultural differences, or a problematic entry to distribution systems and resources. Company-behavior-specic market entry barriers are mostly of cognitive nature and are based on inadequate information
about foreign markets.
Building on the mentioned criteria, different procedures of market selection can be utilized, which are mainly distinguishable into single- or multi-step sequential procedures. Especially checklist procedures, score rating procedures, aspect elimi- nation procedures, investment calculation procedures, and portfolio procedures are prime examples of the single-step procedure. Multi-step procedures consist of a combination of multiple single-step procedures.
 

Apart from general national market risks and national market entry barriers that are also valid for other industries, media companies encounter multiple special,
media-specic market entry barriers, as in some countries the dissemination of specic content is prohibited. These special national market entry barriers can be of an institutional as well as of a behavior-specic nature.
Among the institutional market entry barriers are especially censorship
regulations. In this context, an appropriate example is the political censorship in China prohibiting the dissemination of certain political contents. Behavior-specic market entry barriers in the media sector are caused from a market perspective especially by language and cultural differences.

Market Segmentation Strategies
A last step in the context of the target market strategies is the segmentation of the national markets that were identied in terms of the aforementioned steps. Therein, a market segment should be as homogenous as possible but at the same time differen- tiate itself distinctively from other market segments according to the traditional denition of market segments.
In the context of international market cultivation, there are two basic possibilities
of market segmentation: intranational market segmentation as well as integral market segmentation. In the framework of an intranational market segmentation, market segments are identied within a specic national market, while integral
market segmentation provides an identication of segments which transgress the
individual national markets.
Intranational market segmentation is nearly always necessary for media companies. Only this allows to consider the existing national market-specic characteristics and cultural and language differences. If the market segmentation is achieved by observing the characteristics of the media utilization behavior, an intranational market segmentation has to be done in any case since a culture-specic
media utilization behavior can be assumed.
Therefore, it can be expected that segments created like this are, to a large degree, national-market-specic and the segmentation cannot be applied to other national markets. The same is valid for the case of segmentation by purchase-, behavior-, or communication-specic characteristics, as those are also mainly determined by language and cultural conditions.


	Timing Strategies

One last important part of internationalization strategies is represented by the so-called timing strategies. These are strategies for selecting the right point in time to enter a particular national market, as well as several national markets. In line with the determination of national market-specic timing strategies, two varieties may be
distinguished:rst mover strategies, respectively, pioneer strategies and follower
strategies. In the literature, there are sometimes additional distinctions that rene this dichotomy.
A major advantage of therst mover strategy is that market entry barriers can be built for potential competitors. Among the disadvantages of therst mover strategy are potential free rider effects because of the fact that competitors who enter the market later benet from certain investments of the pioneer. Furthermore, high costs of market development as well as possibly difcult assessment of the market potential, which increases the risk of failure, promote the free ride intention.
In the case of the follower strategy, in contrast to therst mover strategy, a company makes the decision to enter a certain national market only after it has already been processed by competitors. Hence, when entering the relevant national
market, generally both local and international competitors are already active. A major advantage of the follower strategy is that the follower often has the opportu- nity to learn from the pioneer’s mistakes and therefore can avoid some common pitfalls. In addition, the follower often acts in a much more stable environment.
Opposite to this is the major disadvantage that the follower has to overcome possible market entry barriers that have been built by the pioneer. Advantages and disadvantages of each alternative strategy are summarized in Fig. 13.3.
Beside the selection of the point in time to enter a certain national market, the internationalizing company also must dene the temporal coordination of the market entry into the different national markets. This is done in line with the denition of a transnational timing strategy. It can be discerned between three ideal types of
strategies: the waterfall strategy, the sprinkler strategy, and the combination of both strategy types.
 

The waterfall strategy pursues a successive entry into the single national markets. This means that initially only one single national market is processed. Subsequently, the step-by-step entry into further foreign markets is carried out. An obvious advantage of this successive approach within the waterfall strategy can be seen in the fact that consequently a time-shifted demand of resources is created. A further advantage of the waterfall strategy is that the life cycles of certain technologies and products can be prolonged. Technologies and products can be utilized time shifted in the different national markets.
Finally, the waterfall strategy also enables a generally country-specic appear- ance of the company. Due to the successive entry into the single national markets,
particularly good response to the individual national characteristics is possible. On the other hand, there are some important disadvantages contrasting with the described advantages of the waterfall strategy. In this context, the danger of a delayed market entry must be mentioned. This danger is especially imminent in the case of short product life cycles, similar need, and demand patterns in the foreign markets, as well as cross-border transparency. Another disadvantage of the waterfall strategy is an early warning of competitors who themselves occupy foreign markets which the company intended to enter later on.
An alternative to the waterfall strategy is the sprinkler strategy. Here, all or several of the intended target markets are processed simultaneously or within a short period of time. The possibility of a rapid market entry into the single markets and thus the realization ofrst mover advantages are seen as considerable advantages of this alternative strategy. In such a manner, global network effects
can be realized by simultaneous market entries.
The sprinkler strategynally also leads to a fast amortization ofxed costs in areas such as development and production by generating cashows in several national markets. Disadvantages of the sprinkler strategy are found especially within
the high resources expense if entering several national markets simultaneously. A further disadvantage exists in a far-reaching waiver of compensation options in terms ofnancial aspects as well as risk.
In applying the sprinkler strategy, there is no possibility to draw consequences
from the mistakes or insufciencies in one national market for the market entry into other national markets. In extreme cases, this can lead to a failure in all the processed national markets. Eventually, within the sprinkler strategy, national market-specic conditions usually cannot be considered to the necessary extent because of the high
speed of market entry, resulting in a maladjusted performance in the individual national markets. Criteria, advantages, and disadvantages of the two strategy alternatives are shown in Fig. 13.4.
In addition to a pure application of the waterfall or sprinkler strategy, elements of both strategy forms can be combined. Thus, companies could, for example, start to proceed accordingly to the waterfall strategy, then switch to the sprinkler strategy, andnally return to the waterfall strategy. Such an approach is particularly appro- priate if some of the national markets are perceived as similar and if the market entry
into these national clusters is to be implemented at the same time, while the entry into other national markets with different characteristics is to be made at different times.
In the context of the internationalization of media companies, a combined waterfall-sprinkler strategy is usually used. Starting from the domestic market, a single national market or a very small number of markets, which are similar to it in
terms of language and culture, are processed atrst. In the course of further internationalization, media companies often switch to the sprinkler strategy and
thereby enter into several media markets perceived as being similar.


	Sections of International Media Management

After presenting the main strategy alternatives in the context of internationalization of media companies in the previous sections, in the following, the impact of internationalization on the management within the functional areas of media companies will be analyzed. This section addresses the functional areas of procure-
ment as well as production and marketing, since signicant changes from interna- tionalization are to be expected especially in these areas.
 
	Procurement Management of International Media Companies

In the course of procurement management of international businesses, three different alternatives may be distinguished: the procurement from the respective local markets, the purchase from third countries in which the country lacks its own production facility, and the purchase from an afliated group.
In media companies basically all of the mentioned varieties can be applied. In this
context, the procurement of content is paramount. If a media company is present with products or services in a foreign market, it will often have to rely on local content, especially due to cultural differences to the domestic market. In this case, the procurement of content is carried out at the respective local procurement markets. Besides adapting local contents to the particular market, media companies also must widely refer to contents and information from third countries in which they may possibly not be present with production facilities or their service supply. An example of this is television stations that often acquire broadcasting rights for successful foreign cinema or TV movies and shows. After all, particularly in the
case of large, integrated media groups, purchasing from the afliated group is conceivable as well. Here, contents produced at one international location are used
at another international location. In this context, foreign group-integrated news agencies may serve as example, which supply other group members such as televi- sion stations with content.
The selection of international procurement sources must meet some specic criteria in the media sector. Especially time sensitivity of many media products
plays an important role. Time sensitivity of content is particularly imminent in the news area. However, the attractiveness of other media products is also highly dependent on their timeliness. A recent movie, for instance, offers a greater attrac- tiveness to TV recipients than a rerun. Besides that, quality of procured content plays another important role for international success. Internationally procured content should preferably provide a quality that is consistent and tailored to suit a market demand.


	Production Management of International Media Companies

Within the scope of the following description of production management of interna- tional media companies, the production of content will take priority, as this is the central task of media companies. Furthermore, the production of content is connected to a number of industry-specic characteristics. However, the technical
production is inuenced to a much lesser degree by industry-specic characteristics.
Decisions by   the   international   production   management   especially   concern
internal vs. external procurement, as well as the choice of the international produc- tion location.
As criteria for the systematization of the types of production location allocation, the respective literature in many cases refers to the international allocation of production stages, as well as to the number of international locations included in

the production process. As it comes to the allocation of production stages, it can be distinguished between a split-up of the production stages to different locations and a split-up of integrated production facilities to different locations. From this results the systematization matrix of international location congurations, shown in Fig. 13.5. From a classical viewpoint, particularly potential experience curve effects and
synergetic effects support a substantial centralization of the production. In contrast, there is an improved spread of risk in decentralized productions and a lower transport effort (Root 1998). In the context of media production, these arguments may only be transferred to the technical part of production. However, because of the special characteristics of media production, a similar transfer to the content production is not possible.
With regard to the production content component of media products, there are other criteria determining the selection of a location. These have to be particularly sought in linguistic and cultural dimensions and therefore ultimately in the interfaces to the relevant markets. In this context, it should be mentioned that local content production in the respective host countries enables an improved consideration of linguistic and cultural conditions. Another argument for the production allocation to several international locations is the time sensitivity of many media products. Local production allows to avoid potentially necessary protracted adjustment processes,
which would endanger the content’s timeliness.
So-called country-of-origin effects in the media sector as well as in industrial
sectors can disfavor local production. This means that having its origin in a particular country may positively impact a customer’s judgment of product quality. Such an effect, for instance, can be observed in the media sector for movies. Especially US-American movies are assessed a priori particularly positively by their recipients.
 
	Marketing Management of International Media Companies

In the following section, essential marketing management action parameters of international media companies are described. Analogous to the procedure in the previous sector-specic chapters, marketing management, or rather its parameters of
action, is presented according to the classication of marketing into the four“p’s”
(product, price, place, and promotion).

Product Policy of International Media Companies
Concerning the product policy of international media companies, therst aspect to be discussed is the product selection. This starts with identifying its internationaliza-
tion potential for the corresponding media products. Here, especially aspects such as language and culture are crucial. It has to be checked whether transferring each media product into another language and cultural area is generally possible and which expenses are associated with this. Language barriers tend to be easier to overcome than cultural barriers. Overcoming cultural barriers often requires a
reconguration of content and/or formats and is thus associated with signicantly higher expenditures.
If a sufciently high internationalization potential is present, in a further step the following questions should be answered with the help of international market research (Root 1998):

•	Who are the buyers/users of the products abroad?
•	What does the usage of these products abroad look like?
•	Where, how, why, and when are the products to be bought abroad?

Based on the answers to these questions, the international media company can decide whether a standardized or a differentiated product policy should be pursued abroad. In this context, the optimum degree of standardization or differentiation arises as the maximum yield response to the effects of demand and supplier-related feedback. First of all, in terms of demand-related feedback, a rather low degree of standardization is to be considered reasonable.
Consequently, this may prevent or reduce arbitrage. In this way, country-specic market requirements of customers for the relevant media products can additionally
be taken into account, whereas in the case of a supplier-related feedback a rather high degree of standardization appears advantageous. Thus, by realizing economies of scale and experience curve effects, cost effects can be achieved, which as a rule reach far beyond the single national markets and concern the whole company.
Fundamentally, there are different basic types that can be distinguished by means of the degree of product standardization: differentiated products manifest a high degree of country-specic adjustment. In this case, for nearly every national market,
a specic version of the respective product is offered. Such a type of product policy
is particularly required by companies in the print media sector. Here, the products
usually must be adapted to the requirements of the respective national markets, both linguistically and with regard to the content.
 

A modular product design is applied when customers in different countries generally have the same demands on a product and only certain components must be specically modied for the countries. In this case, an already existing core product on other markets can be relatively easily adapted by altering the respective
components to meet the requirements of the newly to be developed national markets. This version of international product policy is quite popular in media manage- ment. For instance, book publishers basically provide the same product in every developed national market by merely varying the language in accordance with the
requirements of each national market.
The same applies to movies, which are also subject to linguistic adaption via dubbing or subtitling and are utilized internationally afterwards. Also in the area of computer and video games, usually only a linguistic adaption is applied. This often includes only the game instructions for a certain game. In some cases, the language of the game itself is adapted in addition.
Finally, there is a complete standardization when the whole product, in all the different national markets, is utilized in the exactly identical version. There is no adaption realized to country-specic requirements. Such a product policy implies
that the specic media products will be accepted in the different language and
cultural areas in the same way. This is more often the case with products of the
music sector. Especially songs in English are accepted worldwide and therefore can be marketed globally in a standardized form.

Price Policy of International Media Companies
As part of an international price policy, media companies must make decisions concerning charges for service offers, possible discounts, as well as delivery and payment conditions for their foreign activities. Here, one can distinguish between a strategy of international pricing standardization and a strategy of international pricing differentiation. Complete international pricing standardization is rather unusual in the media sector. In fact, international pricing differentiation is predomi- nant. Within the frame of such a strategy, the company adapts itself in terms of pricing to the local market conditions.
Pricing differentiation in international settings is mostly realized based on local criteria. For example, print media products are usually offered at higher prices in foreign markets than in the native market. This can be explained by the higher costs necessary for distribution of the print media products, which are passed on to the customer, so that eventually a cost-oriented international price policy can be sup- posed. In the area of TV providers, price policies particularly play a role in the context of granting format and program licenses as well as in the sale of productions.
In such cases it is also common to apply pricing differentiation. The same applies to the movie sector. A geographical pricing differentiation occurs likewise in the music sector as well as in the case of video and computer game producers. In these media sectors, the international price policy particularly orients itself to the different levels of purchasing power of the individual target countries.
 

Distribution Policy of International Media Companies
Distribution policy in the context of international media companies is especially concerned with the selection of distribution channels and trade intermediaries in the host country. Regarding the distribution channels in the host country, there are three basic approaches available to international media companies: adaption to already
existing distribution channels of the respective foreign market (adaption), modica- tion of existing distribution channels (modication), and creation of proper distribu- tion channels (innovation). For media companies, different direct and indirect
international distribution channels are imaginable depending on the precise product to be marketed.
In most cases, book publishers subscribe to the usage of already existing indirect distribution channels. Therefore, the local book trade system is used, which essen- tially has two stages and consists of book wholesale and retail. Besides that, a direct distribution channel to foreign countries is in principle available to the publishing companies. One may especially think of the foreign shipping of books. However, this version of international distribution policy plays a very minor role within the book sector. Newspaper and magazine publishers use both direct and indirect channels for the international distribution of their products.
Particularly foreign subscription is considered a direct channel. However, distri- bution is mostly carried out by mail. The employment of self-owned suppliers abroad is usually not found due to often rather low sales volumes. More important, by contrast, is the indirect international distribution of print media products. Here, one usually resorts to already existing distribution channels in the host country, whereas again a two-stage system is predominant, consisting of print media whole- sale and retail. 
Beside the traditional paths of international distribution of print media products, digital distribution is increasingly gaining in importance. Digital distribution allows print media content to be internationally distributed almost independent of time and place. The content is received by the users by means of an online PC or mobile devices, such as the Apple iPad.
In the context of internationalization, especially the distribution of their broad- casting service via satellite is of interest to radio and television companies. Such a distribution ensures a cross-national propagation of the specic program range, though it should be noted that renting a satellite position is a serious cost factor. In addition to satellite distribution, the access to a cable network in the host country is a
further possibility of international distribution for radio and television companies.
However, the limited capacity of cable networks is a problem provoking acute competition for the scarce channels. Furthermore, these are usually already occupied by local radio and television providers, which is why there is a market entry barrier for foreign suppliers.
The international distribution of movies is mostly carried out by local movie distributors abroad. Consequently, indirect international distribution is predominant. A direct alternative is to establish foreign distributors as subsidiaries or joint ventures. After being utilized in the cinemas, the movies can be marketed
 

internationally as video or DVD versions as well. Again, both direct and indirect distribution channels lend themselves to this.
The use of indirect distribution channels is usually based on the utilization of already existing structures in the host country, such as video stores and tradingrms. Besides that, with an increasing prevalence of broadband Internet access, also an increase of movie distribution via online channels is to be expected, making the respective services available worldwide.
For providers of music products, the usage of already existing distribution channels in the host country is suitable. Furthermore, indirect distribution channels are predominant within the sales sector of audio media, especially via commerce. In the course of internationalization of companies in the music industry, online distri- bution of music is also being increasingly established.
One example to be named is the iTunes service of Apple. After a very successful launch in the United States, this digital music distributor has been gradually introduced into several countries worldwide. With regard to the international distri- bution of computer and video games, basically the same explanations as for producers of audio media apply.

Communication Policy of International Media Companies
The communication policy of international media companies also faces the question whether communication policies should be designed uniformly worldwide or if they should be adapted to the requirements of each country. Particularly cost savings due to lower costs for conception, design, product, and dissemination therefore support standardization.
Additionally, a more efcient use of the advertisement budget and improved allocation of the available advertising media in the different countries can be
achieved. Finally, in doing so, a consistent product and company image is made available. In opposition to this, a communication policy that is so standardized cannot consider regionally different demand patterns. In the context of media products, it is important to observe that a standardized product policy requires
identical expected benets with regard to the product. It must be a so-called culture-free product.
Especially with media products, however, the cultural disposition is often of prime importance. Thus, for the majority of media products or companies, a world- wide standardized communication policy is not desirable. Rather a communication policy is required that is differentiated according to countries or cultural areas.
An exception to this is media products that are offered internationally with generally the same design and which are also identically adopted. Especially music products as well as computer and video games are to be mentioned here.