gE Blog Series: Globalization of the Media Industry Part 4 - The New Model

While we at globalEDGE have been talking about how the globalization of the media industry has difficulties for many involved in the industry, there is another way that this new trend impacts the industry: it is changing the business model of these companies forever.

Since many of these companies work with the internet and are focused primarily on providing their services that way, they are much smaller, more nimble, and entrepreneurial than their traditional counterparts. One simple way to confirm this is to look at the employees used by each firm.  Pandora and Netflix have around 500 and 2,000 employees respectively. That is far less than 126,000 employees that Comcast uses. To prove this isn’t a size issue, Google only has around 50,000 employees!

So this means that countries must adapt to the changing of the times. As companies become smaller and hire less, it will likely create more of a gap between skilled and unskilled workers. This presents unique problems for governments who would like to see everyone in their territories taken care of. However, there is a way to do this while still fostering entrepreneurship. It has been done for the last several years by the countries in the Nordic region and has been hailed by the Financial Times as the future of capitalism. There are a few features that separate this model from other, more normal ones which are listed here.  However, this way of governing a country allows for countries to ensure that everyone is secure and to allow successful Nordic companies like Rovio and Spotify to start and thrive.

What does globalEDGE think about this model? Does it have staying power or is it just a short-term success story? Personally, I think that it has the ability to stay around for a long time and it is the way that most countries will need to govern whether they like it or not due to the changing industrial dynamics.