Economics of the Media IndustryChapter 2 Recap/Lecture

A Production Perspective

Social process of production institutional framework = media products

Emphasis on process of producing media

Consider context in which media products are created Consider influence of social structural forces

Consider conditions in broader society (e.g. social, political, technological)

Profit Network Television

Large audiences advertising dollars

Small amount of successes large dollars

Considered most effective medium by advertisers (more than cable TV)

“profit-driven logic of safety”

Consequences?

Decline in Revenue Declining audience (cable, other viewing platforms, Internet)

Increased cost of production

Result: cheap programs for smaller audiences

News magazine programs; followed by game shows, talent contest; followed by increased reality programs

Increase in Viewing Options Impact on profit?

Goal of controlling content and distribution (Examples: Comcast, Netflix)

Profit News media

Cutting costs of producing and gathering news

Problematic?

Increasing revenue by making the news ‘fun and exciting’ (media sensationalism, Hollywoodization of news)

Problematic?

Advertising Advertisers interested in audiences; media

product is the bait

Technological advances make it harder to keep attention of audience Solutions to new challenges?

Product placement

Ads in once ad-free media

Brand integration

Identifying and targeting more captive audiences

The case of Channel One: https://www.youtube.com/watch?v=G-ptO6vFAaY

This video shows the unprofessionalism of Channel One News. They were the company that saturated American classrooms with advertising. That was what the company was known for, yet in 2014, the reporter Shelby Holliday fails to tell students about Channel One's major role in bringing ads into schools. This wasn't a simple slip-up. This was intentional. Notice the "opposition" to ads in schools (one female student) is almost convinced herself by the end of the story that ads may not be so bad in school. This was a self-serving story by Channel One News. The message: Don't be upset with Channel One News because of our advertising, look schools "across the country" are embracing ads. This type of skewed storytelling is now part of Houghton Mifflin Harcourt. This publisher acquired Channel One in May 2014. Educators and parents need to be very concerned about the future course of Houghton Mifflin.

- Jim Metrock

Advertising Advertising in news media

Advertising online (e.g. social networking)

Advertising in Niche media Ads on Lifetime vs. Speed Channel

Why Study Media Ownership?

Concentration of Ownership

Meaning?

Oftentimes unknown to consumers

Conglomeration One corporation owns several other

companies, including media

Media = attractive investment. Why?

Concentration and Conglomeration

Vertical Integration and Horizontal Integration Difference? (Figure 2.4, pg. 42)

Benefits to Owners?

Impact of Conglomeration and

Integration Conglomerates favor specific products; what

fits with what we own? Increase in cross-media promotion

Impact on smaller media firms?

HCA #2 Begin in class today; continue as homework

Presentations on Thursday

In sets of 3, select a media conglomerate Sign up sheet on my door (no duplicates allowed)

Research the conglomerate’s ownership (consider their “ranking”)

Any controversies? Examples of media sensationalism? Examples of “the Hollywoodziation of the news” found?

Examples of vertical and/or horizontal integration? (hypothetical or real)

What are the pros and cons associated with the conglomerate’s ownership?

What are the bigger implications considering the consequences of integration, conglomeration, and concentration of ownership?

No write up required; prepare a PowerPoint presentation. Submit slides and will present in class.

Examples of Conglomerates

Bertelsmann AG

Gannett Co.

CBS

Viacom

Time Warner

Disney

News Corp

GE

Sony

Vivendi Universal

Impact of Conglomeration on

News Media Impact on content

Increased pressure to make profit

“the Hollywoodization of the news” – Dan Rather

Sensationalism

Multimedia platform news = content considering the “fit” of the information

Is this problematic? Why or why not?

Effects of Concentration

Potential political influence? Private media ownership = political asset

Problematic?

Some media outlets – ‘vow for for objectivity, evenhandedness…watchdogs over politicians’ (p. 48)

Some owners use of media to promote political agenda

What is include? What is excluded?

“The Corporate Voice” – Herbert Schiller (p. 49)

Impact on citizens ability to monitor the government? (e.g. war-making powers)

Social Issues Controversial topics that impact bottom line – little to no

coverage

If issues become more acceptable more appealing to audiences and advertisers more coverage

Alternative media voices?

Effects of Concentration

Content Diversity

Media Pluralism Variety in media? Different views, voices,

representations, etc.

Media concentration = Uniform information? The Homogenization Hypothesis (Bangdikian, 2004)

Audience’s expectations; sometimes more suspicious of monopolies than economic competitors

No single effect