How Media Coverage Affects Employer Reputation, How Negative Cover Stories Increase Magazine Sales, and How Bandwagon Effects Drive Audience Selection of Foreign Movies

Abstract

This issue offers three articles with important new insights about effects from media coverage and the economics of magazines and movies. The first article uses mass communication theories and econometric analysis to examine how media coverage affects the reputation of German companies. The study explores links between media coverage and a company’s reputation as a good place to work. The second article is a rare empirical examination of the link between negative news and media sales. This study of German magazines finds negative cover stories do increase single-copy sales. The third article asks if foreign movie audiences use box office revenues from the United States to help determine which movies are popular and therefore worth seeing. The study finds evidence of a bandwagon effect, and the effect gets stronger when the number of Hollywood movies in a foreign market increases. The first article is “The Effect of Media Coverage on Employer Reputation,” by Martina Panico, Sascha Raithel, and Elena Michel. This article extends a line of research examining how media coverage affects a company’s reputation as a good place to work. Previous research studies effects of coverage on fictitious companies. This study uses media coverage of actual German firms to examine effects on those firms’ reputations. The study uses three related mass communication theories. Agenda-setting studies how media coverage of specific issues alerts the audience to the importance of those issues. Priming occurs when media coverage highlighting some aspects of an issue influences how audiences judge the issue. Media framing occurs when coverage highlights familiar values and facts about an issue that become reference points for audience understanding of the issue. This study also classifies two types of media coverage. The first is functional coverage of companies that reports on how the companies are “producing products and/or delivering services” (p. 184). The second is social coverage of companies which reports on the “social component of corporate behavior” (p. 184), including what it’s like to work for the company.