Media Economics The Global Marketplace

The beginnings of Mass Media Urbanization Urbanization Mass Production Industrialization Mass Production Industrialization Education & Literacy Education & Literacy

Free Market v. Government Controls Monopoly Monopoly Oligopoly Oligopoly Limited Competition Limited Competition

Monopoly No competition No competition AT&T up through the 1980s AT&T up through the 1980s Microsoft? Microsoft?

Oligopoly Limited competition Limited competition Feature films Feature films Commercial Recording Commercial Recording

Limited Competition “Many producers and sellers but only a few differentiable products within a particular category.” “Many producers and sellers but only a few differentiable products within a particular category.” Radio Broadcasting Radio Broadcasting

Media Specialization Audience Fragmentation Audience Fragmentation Increased emphasis on audience and market research Increased emphasis on audience and market research The business of broadcasting: Selling audiences to advertisers. The business of broadcasting: Selling audiences to advertisers.

Collecting the Revenues Direct Payment: Books, Cable Television, CDs, etc. Direct Payment: Books, Cable Television, CDs, etc. Indirect Payment (Advertiser Supported): Television, Radio, Daily Newspapers, Consumer Magazines Indirect Payment (Advertiser Supported): Television, Radio, Daily Newspapers, Consumer Magazines

The Shift to Information Economy More than 50% of the U.S. economy based on creation, packaging and selling information, than on manufacturing. More than 50% of the U.S. economy based on creation, packaging and selling information, than on manufacturing.

Economies of Scale Higher production output lowers cost. Higher production output lowers cost. Except where oligopolies keep prices artificially inflated. Except where oligopolies keep prices artificially inflated. In general, economies of scale allow the U.S. to dominate the world’s media marketplace. In general, economies of scale allow the U.S. to dominate the world’s media marketplace.

De-Regulation Preceded by “RE-regulation.” Preceded by “RE-regulation.” Brought about by cuts in government spending in the late 1970s. Brought about by cuts in government spending in the late 1970s. The Free Market philosophy. The Free Market philosophy. Technological Darwinism. Technological Darwinism.

Free Market and Technological Diffusion The consumer will determine the better mousetrap. The consumer will determine the better mousetrap. The government will not impose a standard. The government will not impose a standard. The result is the “DCC,” the “Betamax,” etc. The result is the “DCC,” the “Betamax,” etc. Often this is the technology we export to the “have-nots.” Often this is the technology we export to the “have-nots.”

Two views of media consolidation Proliferation versus diversity. Proliferation versus diversity. The same dichotomy extends to views of globalization. The same dichotomy extends to views of globalization. “Our economy suffers from job loss, but we want to buy $25 DVD players.” “Our economy suffers from job loss, but we want to buy $25 DVD players.”

Synergy Cross-promotions. (e.g. Disney) Cross-promotions. (e.g. Disney) Seagrams promotes concerts for artists on Universal labels. Seagrams promotes concerts for artists on Universal labels. Product placement in television, films, video games, sports events. Product placement in television, films, video games, sports events.

What happens when the product is “news?” Viewing news as a commodity Viewing news as a commodity Defining news Defining news Packaging news Packaging news Selling news Selling news

Cultural Imperialism Viewed as the “imposition” of American culture and values on other (developing) nations. Viewed as the “imposition” of American culture and values on other (developing) nations. Global Village or Cultural Homogenization? Global Village or Cultural Homogenization? Hegemony. Hegemony.

Capitalism v Democracy Are they the same? Are they the same? What are the similarities? Differences? What are the similarities? Differences? Criticisms of capitalism. Criticisms of capitalism.