CH3028 Media Processes & Influences INTERNATIONAL BACHELOR COMMUNICATION AND MEDIA CH3028 Media Processes & Influences Media Production Rhythma Kapoor Seminar 2 1

CONTENTS Production perspective to media Media concentration and conglomeration Profit-driven logics of media production Effects of advertising Political factors Media Regulation Debate Regulation of Ownership Regulation of Content and Distribution Informal Pressure

A Production Perspective on Media Economic Perspective Study of media production within the economic constraints Media products are a result of social and economic processes

Economic factors - Trends in Ownership Concentration of ownership What does it mean? How was it possible? Which are the ‘big four’? What are effects and consequences? 2. Integration vertical and horizontal

Concentration of ownership

Changing Patterns of Ownership Concentration of Ownership Today, only a handful of firms dominate the mass media industry Magazines Newspapers Movies Book publishing Music Online services

Number of Firms that Dominated the US Mass Media In the last 50 years the number of corporations that control majority of US media has declined drastically

Media Ownership- USA 2012

Changing Patterns of Ownership The BIG FOUR (USA): Time Warner / The Walt Disney Company / Viacom / News Corporation / Europe: Bertelsmann AG So, what does this imply? “This gives each of the five corporations and their leaders more communication power than was exercised by any despot or dictatorship in history” (Bagdikian 2004: 3)

Bertelsmann (TV/radio stations) 53 TV channels and 29 Radio stations in 10 (European) countries   Its TV channels reach around 170 million viewers in Europe Each day, more than 170 million viewers in Europe watch TV channels operated by RTL Group: RTL Television, Super RTL, Vox or N-TV in Germany; M6 in France; Antena 3 in Spain, RTL 4 in the Netherlands; RTL TVI in Belgium; and RTL Klub in Hungary to name only a few. The programs are undeniably compelling, offering up-to-date information and gripping entertainment for all ages and interest groups.

Bertelsmann (TV content production) produces and sells 9,200 hours of TV programming per year across 58 countries more than 300 programmes on air or in production worldwide Each day, more than 170 million viewers in Europe watch TV channels operated by RTL Group: RTL Television, Super RTL, Vox or N-TV in Germany; M6 in France; Antena 3 in Spain, RTL 4 in the Netherlands; RTL TVI in Belgium; and RTL Klub in Hungary to name only a few. The programs are undeniably compelling, offering up-to-date information and gripping entertainment for all ages and interest groups.

How does ownership take place? through regulation/legislation through mergers, acquisitions through conglomeration & integration

Media Conglomeration & Integration Media companies have become part of much larger businesses. -multinational -diverse business areas Integration: -horizontal -vertical

Conglomeration Firms become involved in a variety of diverse business activities.

Vertical Integration Cross-industry ownership, or the degree a single firm owns its upstream suppliers and its downstream buyers. Here one firm engages in different aspects of the process,from production to distribution. Example: a firm hires an artist, records them, distributes them on stations they own and features them in clubs they own.

Paper Mill and printers Vertical Integration Newspaper Business Journalists Editors Paper Mill and printers Distributors Integrate all aspects of media production and distribution. Top-down control

Horizontal Integration Consolidation of many firms that handle the same part of a production process. When a firm buys out other firms doing the same thing, it is seeking horizontal integration. It seeks to increase its share of the market. Most anti-trust laws are aimed at horizontal monopoly. Example: When MTV’s Viacom buys other cable channels, magazines, and other distributing means it is seeking horizontal integration in distributing.

Horizontal Integration across the media Time Warner Time, People, Enter. Weekly Warner Bros Pictures Warner Music Group Online Services Example of Harry Potter Cable Networks Moviefone

Consequences of Conglomeration and Integration Integration and Self-Promotion increase of products suitable for cross-promotion, self-promotion difficult for small companies to compete Synergy Cost minimization Profit maximization Impact of Conglomeration “Hollywoodization” of news

Consequences (contd.) Media Control and Political Power Concentrated media ownership often leads to political power Media outlets may promote specific political agenda of the owner Media barons can easily become influential politicians Media Owners’ Influences on Media Contents FOX TV & political coverage

Consequences (In)direct political consequences promoting a political agenda political resource excluding certain ideas to avoid controversy corporate voice Example 1: GE refused to let NBC report on GE corruption in the nuclear industry. Example 2: Big Media has yet to cover the Iraq invasion from anything but a moderate or a right- wing perspective. IN the old days all profits were stacked up over each other in large books for accounting; and at the bottom of the stack was a line to denote the separation of the additions and the final count. The bottom line refers to the total of monies added up for the day or the week, for the month or the quarterly report or the fiscal year. Synergy refers to the dynamic where components of a company work together to produce benefits that would be impossible for a single, separately operated unit of the company. If the company has a loss the bottom line is written in red ink. If the company has made profits then underneath the bottom line it is written in black. Hence the reason for the old saying " the company is in the red" or " they're in the black". So .. this sentence "bottom line pressure" means that they will do whatever it takes to make the bottom line black! And if cheap news and glitzy nonsense will sell better than the truth then the quality of news coverage is going to go down.

Consequences (contd.) Media Ownership and Content Diversity The Homogenization Hypothesis Media owned by a few lead to products that lack diversity.

Mass Media for Profits Prime-Time Profits Effects on News Media Logic of Safety and Profits Economic considerations lead to similar programs across networks Cost minimization logics lead to proliferation of a certain type of programs Effects on News Media Scaled-back international news coverage Entertainment-oriented news

Impact of Advertising Growing Advertising Influences Product placement Product integration Branded entertainment

The Impact of Advertising Advertising as a key source of revenue example: product placement

Consequences of Advertising commodification of the audience adaptation of content Corporate voice Cross/ self promotion

Media and regulation

The Public Interest and Regulation Debate Media deregulation approach Free market principle Deregulation is actually “selective” regulation Media regulation approach Public interest principle Regulations in international perspective United States is typically more “deregulation” oriented In many European countries, media are public owned

The Issue of De-Regulation Big Media claims that de-regulation brings freedom and diversity to the market. In fact, it has done the opposite. This is because de-regulation has allowed large corporations to concentrate, eliminating smaller media outlets. This brings monopoly and oligopoly, which violate the public interest.

The Telecommunications Act (1996) Milestone media regulation Easing of restrictions through deregulation Changed limits on the number of media outlets a single company can own Increased concentration of ownership Criticism: May be detrimental to free flow of ideas

Regulating Ownership of Programming oversees: TV (cabel and satelite) Radio Broadband Internet broadband, mobile networks, wireless networks. Federal Communications Commission Financial interest and syndication (“fin-syn”) rules Forcing networks to buy programming from independent producers founded in 30ies to protect the public's "interest, convenience, and necessity" in the past decade has shifted from Public Interest to Market-oriented model Structure – has 5 commissioners (mostly appointed by US president) more info : http://en.wikipedia.org/wiki/Federal_Communications_Commission It is difficult to summarize the societal impact of the Communications Act, just as it is hard to discuss briefly the broader social changes in American life since 1934. Whether the FCC has effectively pursued its responsibility to protect the public's "interest, convenience, and necessity" is a debated question. Perhaps inevitably, the FCC has adopted an essentially corporate model of regulation. The Commission, albeit with notable exceptions, has moved steadily toward a market-based interpretation of its mission. In recent years, the FCC has abandoned its fairness doctrine, which required broadcasters to present opposing viewpoints on public issues. It has weakened ownership limitations, allowing corporate media conglomerates essentially to monopolize particular markets through the acquisition of television, radio, newspaper, and cable providers.

Regulating Content: 4 Dimensions Diversity Morality National Interest Accuracy

Regulating for Diversity Regulations asking media companies to provide diverse perspectives Regulation on programming, media-access

Regulating for Morality Concerns for sex and violence in media Obscene vs. Indecent materials Obscene material is illegal Indecent material is legal, but limited Controversies in definitions 3-pronged test to determine obscenity

Regulating for Accuracy Protect the public against fraudulent or deceptive advertising Regulating ads for potentially dangerous products

Regulating Content Diversity: Morality: National Interest: Accuracy: regulation on programming, media-access Morality: self-regulation, censorship National Interest: press pool, pr Accuracy: laws on advertising time devoted to ads and infomercials Accuracy: laws on advertising: regulating tobacco and alcohol advertising but also correctness Kellogg’s had to pay 5 million, recently for misleading customers

Regulating for National Interest Government control on press coverage of war Vietnam war case The press pool system (aka Embedded journalism) Government controls and manages the flow of information Government control resulting from terrorism USA PATRIOT Act Increased the ability of law enforcement agencies to search email and telephone communications

Industry Self-Regulation Industry self-regulations to avoid external control Motion Picture Association of America (MPAA) ratings system (1968) G PG PG-13 R NC-17

Net Neutrality A recent media technology regulation issue One of the most important and controversial media policy issues Preserving open access to the Internet and a level playing field for all websites Often hard to implement the true ideal of net neutrality in reality

Regulating content on Internet AT&T the largest mobile network provider in the US, with more than 100 million users. - has blocked for its iPhone/iPad users access to video calling App FaceTime (costs of app 0,89 €) - to still use the App, users first have to subscribe for the expensive service (having unlimited minute bundle, costs annually extra 1000$ annually) THIS IS CURRENT ONE, so I did this instead of ACTA At & T violetes net neutrality and open internet principle Activists group are calling FCC to stop AT&T. more info on this http://www.savetheinternet.com/sites/default/files/att-factsheet-fp.pdf

Companies that lobbied for SOPA For: The Walt Disney Company, SOPA (a bill against online piracy that was lobbied by entertainment industry leader companies as well as other big corporations like procter and gambels) which was giving US right to block sites if they included links to copyrighted material. So actually even Youtube and Facebook could have been subject of pressure. What helped reject the Bill was a huge online protest as well as support of internet companies, who themselves whould have been victims of this bill. (e.g. YouTube could have been shut down because somebody uploaded cartoon of Waltdisney, so not users, but sites itself) After what came to be called the first online protest on 18 january 2012, 26 senators refused to support the SOPA bill! One of the most well known episode was a day when around 1800 website went blank, among them Wikipedia, Magazine Wired Companies that lobbied for SOPA For: The Walt Disney Company, Time Warner Company, Sony Pictures Entertainment, Against: Mozilla, Google, Facebook, Twitter, Wikipedia,  Reporters Without Borders, Human Rights Watch Currently there are another Bills being proposed, similar to SOPA.

Freedom of Press

Influence from Nongovernment Sources Political role played by other actors Directly influencing the media Prompting government to act on media Players in the debates over the media Media critics and think tanks Citizen activists Media advocacy organizations

Conclusion Economic and Political factors are (partly) interdependent have an impact on form and content differ per medium

Next Week Seminar 3 –Media Ideology Readings: Croteau& Hoynes Chapter 5 (pp.153-184) Hirschorn,M. (2007)