Media, Society and Market:
Dimensions and Impact on the Financial Sector


Rana Singh
Delhi School of Professional Studies and Research (DSPSR)


The paper examines the inter-linkages between the various components of Media and their impact on the society with a special focus on the impact of media on the financial sector.

Keywords: Media, Internet, Society, Financial Sector, Online Trading

The changing interlinking patterns of Media, Society and Markets have changed the lifestyle and the various dimensions of business. The impact has been phenomenal on the financial markets apart from various other markets across the world.

Media has redefined the system, practices, culture and traditions across the globe and its impact is clearly visible in the Indian Economy as well. The Indian Economy has seen a paradigm shift in various sectors of the economy. The media has played a dominant role in giving new structure to the market and the way people do marketing. The technology and media have brought a revolutionary change in the systems and processes.

Business have gone the e-way. The electronic mode of markets have been revolutionized by the internet technologies and the internet media has given a catalytic boost to the various markets and has redefined the ways and means of markets and marketing. The markets are rapidly changing at an exponential rate. The customers are getting more and more facilities and media is playing a pre-dominant role in determining the overall choice of the customer. The media is playing an important role and determining the decision making process of the customers and the buyers.

The advent of latest technologies and gadgetries has given new dimensions to the media. The best example is the video news with both audio and video and audio signals on the new generation 3G mobile phones has radically revolutionized the media and has increased its penetration thereby adding to the overall power and strength of Media.

The internet technologies have given the latest and the most strategic dimension to the media world and the top of the mind awareness level of a brand in the market is governed by the holistic impact of the various media channels. Various media channels have together changed the lives of people.

Media has led to favorable changes in the work culture, and the quality of life at workplace.

When cable TV came up with a tremendous channel multiplication in the 1970's in the US and the 1980's in most European countries and later in other developing countries, the insight emerged that people use media in an active way. While uses and gratifications research (e.g., Rubin 2002) focused on the question why people are choosing media content, the question how media selection and reception processes occur was basically ignored. In the last years, this research area has gained a lot of attention. Current academic studies frequently analyze the exposure to specific media types (e.g. Schweiger 2001; Bilandzic 2004; Suckfull 2004).

Media which have seen a paradigm shift in the various digital economies are changing the face of the society, culture, lifestyle and has an impact on the overall society.

How the various components of Media is changing faces

Print Media: The print media has seen a revolutionary shift and change from what it was in earlier days. The major change which has brought the revolutionary change is the changing taste of the readers and the technology. The impact of technology can be seen manifold times on the print media. Most of the foreign as well as Indian Newspapers have gone online. The Times of India and The Economic Times (, Hindustan Times (, The Tribune ( and many others have become accessible internationally across the globe by leveraging the exponential growth in the internet technologies. The internet versions of these newspapers have brought a sea change in the consumption of paper and has further brought down the requirement of paper pulp and wood and has positively contributed to the management of sustainable environment across the world.

Internet Media

In earlier days, the readers came to know the prices of the various financial products, services and markets on the following day and were not able to buy or sell or leverage any arbitrage opportunities. The advent of the internet and online version of the various newspapers have facilitated the readers to study the newspapers from the comfort of their, desktop, palmtop and can download it in their laptop or palmtop as convenient. The facility of getting the news on a real time basis has further added to the convenience of the readers community. Now the readers can take immediate decisions and are in a position to leverage the arbitrage opportunities.

The readers can buy/sell products or services on various portals or vortals. This gives them the facility of purchase after making analytical decision about price, features and other facilities on various portals.

I pods

The latest revolution in the media world is seen in the form of Ipods. The advent of I pods has changed the way people used to entertain themselves. In earlier days, the listeners were habituated to listen whatever the broadcasters used to broadcast. The advent of Ipods has given the listeners a wider choice to listen to content which is of the highest relevance to them and can neglect the content which is not or irrelevant to them and can listen to the content at their own convenience and comfort at their own timings and convenience. The markets of the developed economies are flooded by the ipods and are gradually making inroads into the hearts of the teenagers in the developing economies as well.

Now the added features and functionalities of these ipods are giving the strategic tool of the readers and the investors community. The readers and investors can now tarde comfortable even when they are on the move. The wap (wireless access protocol) and GPRS enabled phones and Ipods are likely to be a very usual kind of electronic gadget in the hands of rich and poor together in the various economies. The rapid rate of growth and advancement in internet technologies blended with the rapid growth rate of manufacturing of GPRS, Wap-enabled, Mobile Phones, Ipods and other similar gadgetries has given a new definition to the operations in the various financial market operations as well as other operations in the day to day life.

Now an investor can have a pulse of the various financial markets and their operations on a real-time basis and can operate in various exchanges of the world even when he is on the move. The integration of ICT Technologies and Various other advancements in different domains have now given the investors a unique kind of liberty to enjoy the freedom to buy and sell shares, bonds, debentures and various other financial market instruments both from the primary markets, secondary markets, derivatives market and various other markets thereby giving new definition and dimension to the market, marketing strategies and the standard operating procedures.

This has added to the freedom of the customers, increased speed of transaction, higher degree of transparency in the various deals and extensive expansion of the markets.

Banking and Stock Markets redefined: Mobile banking and Online Trading

Now the advent of mobile banking, online trading and dematerialization of financial securities has redefined the framework of financial markets. Now the markets have actually become global in its true sense. Sitting back in the remotest corner of the world, an individual can trade in various financial products across the world in different exchanges of different economies without any hassles or problem and can manage his account with the help of his mobile phone or laptop or palmtop.

Thus we can comfortably conclude that the internet media has redefined the financial markets and other markets as well. The e-commerce portals have become a big facilitator in generating US Dollars for the domestic economy and contributing to the GDP in a different way.

The cash has seen a shift to e-cash. Many portal across the world are dependent on various banks and other financial intermediaries for their payments through online banking accounts. Now the financial intermediaries act as a bridge between the customers and the sellers of products and/or services across the world.

Internet Media and Financial Markets

The Financial Institutions are also leveraging the internet technologies and have developed interactive and dynamic portals to provide world class services and facilities for the customers and the investors. The technology driven business has been touching new height and the old time business organizations and companies are finding a tough time to compete with the new breed technology driven companies. The advent of latest developments has also led to higher degrees of efficiency and productivity by least number of people. Thus, it is needless to mention that internet technologies and media have given a major boost and freedom to the companies to operate in the globally local (glocal economy) by providing a unique platform to both the company, customers and acts as a great intermediary by providing a service provider of highest degrees of efficiency and productivity.

Competing Media Channels

The various media channels are competing with one another to prove the supremacy above one another. A gradual transition of most of the professional across the world is happening from the electronic media. Now the most advantageous fact about the internet media above all channels is that it provides the customers or users the freedom to choose the content, area, domain and the relative quality based on key-words, and also on the taste, likings and other psychological variables. This advantage of the internet media has given it the strategic edge above all the media channels. The dynamic websites, with interactive options, the integration of audio and video and news has in fact made it the grandfather of all other media channels.

Competing Market Shares of the Media Channels

The various media channels have been competing with one another since a long time and have been leaving behind one another in the race. But now the changing times has seen a gradual shift of market share from the print media to the electronic media and these days there is slow but steady and gradual shift and transition of various media channels to the internet media. The users, readers and customers have gradually become more and more  choosy, and in such a scenario, the biggest challenge in front of the media houses is in the area of content delivery of specialized and super specialized nature.

Impact of Media

The research across the world have been trying their best to establish correlation between the impact of media on people. The major research findings in case of research has proved that there is statistically significant impact of newspaper coverage on the citizens knowledge and politicians' actions. (Snyder et. al 2004). Media has a big role to play in the entire buyers' decision making process. The Media plays the crucial role in establishing a space in the heart and minds of the customers. And thereby differentiate one product and brand from the others. And then it helps in building the top of the mind awareness level in the minds of the prospective buyers, customers, readers, viewers, etc.

Media Reach and Impact on the markets

The Media reach has a phenomenal impact on the markets as well as the  market size. Higher the media reach, higher is the impact on the markets. The parameters of media reach has been changing gradually with the changing times. Earlier the media reach of the newspapers was done based on the readership, gradually the rating of the various satellite channels was done on the basis of TRP ratings. Finally in the digital era, the websites are ranked on the basis of the rankings of the websites based on the user traffic. The one and the only most reliable website provides the international ratings of all the websites and portals of the world. The Alexa ranking gives the updated ranking of the various websites across the world on a daily, weekly and quarterly basis. This provides the users a fair idea about the performance of a particular website or portal and its rank in the world which gives a true and realistic picture of the relative performance with respect to the rest of the world. Moreover Alexa provides up-to date information to the customers regarding the relative performance of the websites.

Impact of Information on financial markets: Role of media in information sharing

As per the research findings in conventional economics, markets are assumed to be efficient if all available information is reflected in current market prices (Fama, 1970; Fama, 1991). Economists have embarked on weak, semi-strong and strong-form efficiency tests. The weak-form tests investigate whether market prices actually reflect all available information. The semi-strong tests are based on so-called event studies, where the degree of market reaction to "news announcements" is analyzed. The strong-form tests, finally, analyze whether specific investors or groups have private information to take advantage of. By and large, most studies conclude that the major financial markets are efficient and that all information is reflected in current prices. The various media channels are facilitating the financial markets in traveling toward the market efficiency path.. The various stock exchanges and the finance portal are now becoming the biggest repositories of financial information available to the end users at the click of a mouse from any part of the world without any hassles. Thus the media channels and the internet media in particular has played an important role in facilitating the investors' community across the world in making informed investment decisions.

Though a large part of published business information is available in printed form, databases are becoming increasingly important (Siriginidi, 1996). In the current era of information technology, also known as the Digital Information Age, it is almost the norm that information is stored and disseminated electronically. Traditionally financial information/data were disseminated through traditional media or channels.

Efficient Market Theory redefined by the internet media

From the Efficient Market Hypothesis (EMH), a market is deemed efficient if security prices at all times fully and correctly reflect all available information that is relevant for the stock's pricing. This requires a medium of information dissemination and transaction ordering that delivers information speedily and accurately. Undoubtedly, such vital medium is currently the internet. With the internet, information is promptly disseminated and incorporated into prices and has spurred people to reconsider the EMH. Before the advent of the internet, stocks prices on different markets would respond to information with lags of days' length, yet now it is only a matter of minutes, if not seconds. The internet has also enabled the transmission and archiving of bulky information/data required in technical analysis of stocks in a ready-to-use format. This has made it easier to observe when a stock's price deviates from its intrinsic value and thus arbitraging away any abnormal returns. The research findings of  (Biekpe and  Mlambo (2003)) chronologically presents arguments in favour of the internet as a vehicle for transporting information in financial markets. Using correlation analysis, they found a positive relationship between internet accessibility and stock market development. They concluded that the internet plays a significant role in improving stock market efficiency and liquidity.

Impact of Media -Decrease in Arbitrage Opportunities

Arbitrage opportunity in the financial markets was a scenario when an investor had the opportunity to buy the share/security from one stock exchange and sell it at a higher price in another stock exchange or vice-versa in case if there was a price differential in the prices of a particular security. But the real time tickers of various stock exchanges have gradually decreased the arbitrage opportunities to the investors as well as speculators in the financial markets. Thus now the customers have relatively fewer arbitrage opportunities to make money in the financial markets.

Internet Media –Impact on Financial Markets

The internet media has a manifold impact on the financial market across the world

1. Speed – The transaction speed in banking sector, primary markets, secondary markets, forex markets, treasury markets, commodity markets, metal markets, bond markets and various other markets including all derivatives market has increased and now millions of transactions are happening in fractions of seconds leading to highest degree of comforts to all who are involved in the process both at the front end as well as the back end thereby adding to the overall maximization of customer satisfaction. The compulsion of the physical process and signatures have been done away with by substitution of digital signatures and online transaction by login and password authentication.

2. Accuracy : The IT infrastructure blended with internet technologies has added to the overall accuracy in the financial transactions through verisign certified servers and authentication of digital signatures. The customers have a check on the real time transaction process and have a control on the overall accuracy of the facts and the figures as they can always cross check their information online from any of the internet enabled computer.

3. Cost of transaction: The technology enabled offices powered by online portals has gradually brought down the cost of transaction as the cost of software development is a one time cost and it updation / maintenance requires very low cost in comparision to the huge number of employees required earlier to cater to the customers/investors.

4. Overcoming Geographical barriers: The advent of internet media and state of the portals of various Financial Institutions from India and abroad has facilitated them in overcoming the geographical barriers as the compulsion of having an office in every city has been done away with.

5. Information: Information dissemination is central to the workings of financial markets. According to financial market theorists (e.g., Fama, 1970, Malkiel, 1985) information accuracy and accessibility are fundamental requirements of an efficient market.

Pros and Cons of the Online Media in Financial Markets
(Biekpe, N and C. Mlambo 2003)


There are several qualities of the online media that have made it more relevant in financial markets compared to other communication and information media. Financial analysts deal with bulky qualitative and quantitative information in their daily trading activities and decision-making. Timeliness of the information provided is of the essence. The following is a brief illustration aimed at highlighting the desirable qualities of the Internet in the dissemination of financial information and transaction-ordering in comparison to the telephone media.

Providing timely relevant information to investors that enables them to make informed decisions is a challenge. Even though the telephone, when compared to the print media, is a fast communication tool, it is less desirable in comparison to the Internet when it comes to the dissemination of financial information. The weaknesses of the telephone as an information dissemination medium, inversely portrays the strengths of the Internet. What then are the weaknesses of the telephone?

a) It cannot be used for bulky information, yet such are what characterise information in financial markets.

b) It is not time and cost efficient. One cannot simultaneously reach all the investors over the phone by a single call. To reach a million investors, one has to dial a million plus times.

c) Not all investors will have accurate information at a particular point in time. Some investors will get information through rumours as it leaks from those who already have it. The word "leak" means that such information will only be a certain percentage of the full information. This "leaked" information, upon which some investors will act, will not be full and accurate as required by market efficiency.

d) It will result in overreaction and/or under-reaction. Those who would have acted upon rumours would tend to readjust their actions. At first they tend to overreact or underreact through speculation, causing irrational adjustments in prices, as rumours are likely to give incomplete and/or inaccurate information. The second reaction would occur when accurate information is received (that is, from a reliable source) at which time these investors correct their positions and in so doing influence the prices. Assuming that the only dissemination media are the telephone and print media, each investor will only have accurate information through either of the two. Even if investors would want to confirm the rumours with the source before they act, call congestion would result in many investors eventually giving up, out of frustration. Instead of waiting to confirm the rumours or to receive accurate information, most investors will act on the rumours as if it were information with the intention of readjusting if and when the rumours proved to be incomplete or inaccurate. Can the stock market be efficient in such an environment?

e) It gives room for insider trading and monopoly over information. The information disseminated over the phone comes into the market with a lag, that is, not all investors would have accurate information at the same point in time. The first person receiving accurate information (i.e. the first person to be called) will have monopoly over that information and will tend to act upon it before the whole market does. This monopoly will dissipate from one person to the next in the chronological order in which they get the information. The stock price will only fully reflect the information when the last market participant gets the full/accurate information, at which time the participant is assumed to act. This gradual incorporation of information into prices is evidence against the strong form of market efficiency.


The Internet has opened doors to rapid and abundant releases of information. According to Yuen et al (2001), huge amounts of financial data and information are generated daily and the number of websites providing such information on the Internet has increased very rapidly creating the problem of information overload. This overload of information on the Internet has been further exacerbated by the quality of such information. This has caused the Internet to be termed an 'information jungle' by some circles of people. It, therefore, requires skill to sift through this jungle for the relevant information. The reduced quality of information has made it difficult for users, especially the inexperienced investors, to determine and interpret the relevance and reliability of the information. Searching, retrieving and utilising financial data has become a major challenge to both users and researchers.

In a survey by Yuen et al (2001) on the usage of financial information on the Internet, the respondents indicated that financial information on the Internet is time consuming to gather; volatile to "catch"; poorly distributed and fragmented in nature; bulky to store; too fast to collect; easily perishable; not unique; varying in content representation and format; and difficult to be processed by humans. Availability of information has now ceased to be the major problem but the ability of the market to interpret such information has become a major concern. Yuen et al (2001) indicated, however, that different countries have developed different electronic financial filing systems to make it more web-accessible to investors. An ideal electronic filing system is one that allows the submission of documents via the Internet to increase the speed of transmission as well as to lower transmission costs, among other things. Such an electronic financial filing system, according to Yuen et al (2001), would increase the transparency and efficiency of markets and would foster a sound environment for financial investment.

Due to the information overload on the Internet, it has become extremely critical, especially for the individual investors to know who and how credible the information provider is (Unsal and Movassaghi, 2001). As observed by Unsal and Movassaghi (2001) some firms may promote certain stocks online to boost their prices without disclosing their relationships to the companies they are pushing. While market efficiency requires that the information is accurate and complete, induced boosting of prices is surely against market efficiency. Investors who lack knowledge about securities trading would be better off with full-service brick and mortar brokers. Investment and research reports on some online broker dealers' web sites can be mistaken by investors as recommendations to buy or sell certain stocks (Higgins, 2002). It has also been questionable if traders get the best possible execution in terms of the best price from their online brokers. Some online brokers also do not provide all the necessary information on risks and returns of different products to investors to enable them to make informed decisions. For example, some of the complaints lodged with the SEC in the US are in connection with broker dealers not disclosing adequate information about when they would sell securities in a margin account, misuse of personal information and allowance of unauthorised access to trading accounts (Higgins, 2002).

Online investors also tend to trade more frequently than do the full-service clients and many tend to trade relying on human emotions. Online trading has thus encouraged short-term and noise trading in the form of what has become known as "online day rapid-fire trading" designed to capture tiny price differentials in stocks, instead of long-term profits from buying and holding securities (Unsal and Movassaghi, 2001). Supporters of short-term traders argue that these traders make a key contribution to the efficiency of financial markets by constantly scouring the markets for arbitrage opportunities, while the critics contend that these traders engage in speculation, leading to excessive and sapping volatility in market prices. Kadapakkam (2000), however, found evidence supporting the argument that removing constraints on short-term trading improves financial markets' pricing efficiency.

Online investing is also known to suffer from the problem of delays and outages. According to Unsal and Movassaghi (2001) and Higgins (2002), there was an outage in America in January and February of 1999. Many of the largest online brokerage firms in America are said to have failed to handle the torrent of trades unleashed by the heady stock market resulting in their systems breaking down (Unsal and Movassaghi, 2001). Online investors could not execute their trades resulting in the loss of financial opportunities.


To conclude, we can say the exponential rate of growth of in technology has positively contributed to the various facets of life of people in the society and the financial sector in particular. The critical analysis of the pros and cons of the online media in the financial markets is favourably skewed in favour of the fact that the advent of online trading has decreased the problems of the investors' community and has favourably contributed to the efficient market hypothesis. The problems of information has decreased by the rapid strides of development in various media channels, but simulaneously it has added to the problems by the increased security risks.

Rana Singh
Delhi School of Professional Studies and Research (DSPSR)

Source: E-mail September 26, 2006


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