Foreign Direct Investment Inflows Into the South East European Media Market

The study dissects and presents advanced, wide-ranging, and varied methodological viewpoints/trajectories of competing, empirical, comparative, exploratory, and longitudinal research agendas/practices/findings—on one hand, offering a coherent conceptual and empirical analysis of contemporary business model frameworks, flow dynamics, and platforms and, on the other hand, providing the insightful critical debate, framework, and platform for discussing crucial issues in the globalized FDI media business. Moreover, it posits transnational media research as reflective of advanced globalization processes, and explores its roles and responsibilities, articulating key themes in a dynamic digital media field. In other words, the volume offers a wide-ranging micro-/macroeconomic examination on the contemporary South-East Europe FDI media environment providing an empirical and methodological reflection and background knowledge on key aspects and important areas of research of the hybrid FDI business models, paradigms, as well as establishing the direction and a crucial foundation for the next phases of research in this growing arena of study; stimulating new scholarship; and resetting, proposing, and explicating new paradigmatic directions and perspectives in the domain of FDI business models. Relatedly, this contextually nuanced study also offers new material on the current, prospective, and future evolutionary/progressive/ developmental structure of multinational media corporations’ FDI as well as current and future media markets in SEECs. The book concludes by discussing the necessity for a profoundly detailed, rigorous, and stringent attitude toward the hybrid FDI business model to increase corporations’ competitive advantage and added value network configurations in the dynamic digital field/ecosystem of transnational media and communications.

The concept of the BM first appeared over half a century ago in an article investigating the construction of business game revenue source model for training purposes (Bellman et al. 1957; Desmarteau and Saives 2008). The term is mentioned just once: “And many more problems arise to plague us in the construction of these business models than ever confronted an engineer” (Bellman et al. 1957: 474). The term did not see widespread use for decades. Until its reappearance in 1970s in computer science journals. Among the first who used the term business models in the context of data and process modeling were Konczal (1975) and Dottore (1977). In information management, business models were used to model a firm with all its processes, tasks, data, and communication links to build an IT system to supporting the firm in its daily work.

Research on business model innovation (BMI) is in its infancy and the cradle is mainly located in the fields of strategy and innovation (Zott et al. 2011). Despite the various attempts to classify the growing literature on BMI (for a review, see, for example, Spieth et al. 2014), the phenomenon is still fuzzy.

Importantly, separate business model innovation processes can even be harmful, if they are not linked to other efforts, since this can disrupt the business model logic. As a result of its complex structure, business model innovation challenges different types of innovation, high risk and uncertainty, and individual and team models/cognitive maps.

In this modern digital world as opposed to the traditional one, translating business strategy into business processes has become much more of a challenge. Business processes are now mainly digitized and ICT enabled. Consequently, today's ICT-based businesses' environment and management are more dynamic, characterized by ongoing fast changes and severe stakeholders' pressure. Therefore, the dynamic BM has risen to prominence as a conceptual and contextual tool of “alignment” to fill the gap between corporate strategy and business processes including their web, Internet, and digital infrastructure, providing crucial harmonization among these organizational layers. A successful business should treat the business strategy, BM, and business processes along with their IS, as a harmonized package. Furthermore, the author argues that the BM is an essential conceptual tool of alignment in digital business. More specifically, it represents an intermediate layer between business strategy and ICT-enabled business processes, fulfilling the missing link created by the complex and digitized environment.

FDI flows come in at least four separate forms: (a) FDI in extractive industries, (b) FDI in infrastructure, (c) FDI in manufacturing, and (d) the under-researched field of FDI in Services. Foreign direct investment in media industry belongs to the category of FDI in the sector of Services. Each form of FDI flows presents such distinctive economic challenges and generates such diverse impacts for MNCs as well as for developingcountry host authorities/economy, undermining the usefulness of any research that does not simultaneously aggregate and disaggregate the FDI flows.

Host countries are evaluated by MNEs on the basis of a broader set of policies than before. The number of policies constituting a favorable investment climate increases, in particular with regard to the creation of location-specific assets sought by MNEs.

The relative importance of FDI determinants changes. Even though traditional determinants and the types of FDI associated with them have not disappeared with globalization, their importance is said to be on the decline. More specifically, “one of the most important traditional FDI determinants, the size of national markets, has decreased in importance. At the same time, cost differences between locations, the quality of infrastructure, the ease of doing business, and the availability of skills have become more important” UNCTAD. (1996a). World investment report 1996. New York: United Nations; UNCTAD. (1996b). Incentives and foreign direct investment. Current studies, series A, no. 30. NewYork: United Nations.

Understanding the channels and moderating factors of firms’ adoption of foreign technology has important policy implications, as a clearer understanding of the exact mechanisms of learning via foreign investment will allow policymakers to better target appropriate forms of FDI. Multinational media corporations investing in foreign developing countries are believed to possess advantages that enable them to compete with better informed domestic firms. These advantages include intangible productive assets such as technology know-how, management skills, and reputation.

This chapter explores the factors for a successful FDI inflows into the SEECs media markets for multinational corporations. More specifically, the author extrapolates the main strategic directions for foreign direct investment (FDI) inflow to SEECs media markets with specific interest in answering the question to which media industry and where to invest the foreign capital. The research data sample includes 16 SEECs: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Serbia, Montenegro, FYR Macedonia, Cyprus, Malta, Romania, Slovenia, Turkey, Kosovo, Greece, Hungary, and Moldova. In addition, this chapter surveys and reviews the literature and research on FDI in SEECs media industry and business markets.

The purpose is to present the main findings from previous research and, from this, identify missing contextual aspects/links in existing studies that should be included in future studies. Moreover, the multiple-case study analysis in the monograph is particularly useful in illuminating the likely direction of FDI research in the developing/transition economies of SEECs media markets.

In order to meet a complex and highly competitive media business demands, the author identifies and proposes an application and implementation of new business model—the FDI hybrid media business model consisting of seven key synthetic, composite, underlying, unique, and multidisciplinary factors/indicators/propositions/dimensions/variables/indices/drivers and building blocks: (1) Media market concentration (Number of daily newspapers, radio stations, and TV stations per million); (2) ICT Competitiveness—The WEF Networked Readiness Index; (3) WIPO, Cornell University, and INSEAD Global Innovation Index; (4) The WEF Global Competitiveness Index; (5) Forecasted GDP per capita (PPP) Index, 2015–2025; (6) Forecasted Market Size via UN Medium variant Forecasted population prospects (%), 2015–2025; and (7) Average annual HDI growth (%), 2000–2013.

Additionally, the most profitable SEECs markets for FDI inflows in daily newspapers industry include Turkey, Slovenia, FYR Macedonia, and Cyprus. The FDI inflows in TV media is highly recommended to Turkey, Malta, Cyprus, and Romania. FDI in radio industry is the least profitable business because of the low consumption of this media as well as high market competition in SEECs markets. Nevertheless, SEECs markets recommended for FDI inflows in radio industry include Turkey, Romania, Slovenia, and FYR Macedonia. Conversely, the least profitable SEECs markets in daily newspapers industry include Greece, Kosovo, Serbia, and Albania. FDI inflows in TV media is least recommended to Serbia, Albania, Kosovo, and Bosnia and Herzegovina. The least profitable SEECs markets for FDI in radio industry include Kosovo, Serbia, Bosnia and Herzegovina, and Greece. Overall, the most profitable SEECs media markets for FDI in daily newspapers, TV, and Radio industry include Turkey, Slovenia, Romania, and FYR Macedonia. In contrast, the least profitable SEECs media markets for FDI include Kosovo, Serbia, Greece, and Bosnia and Herzegovina.