1. Economics of the Media Industry
Chapter 2 Recap/Lecture

2. 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)

3. Profit Network Television Decline in Revenue
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)

4. 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)

5. 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: ptO6vFAaY

6. This video shows the unprofessionalism of Channel One News
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 Educators and parents need to be very concerned about the future course of Houghton Mifflin.
- Jim Metrock

7. Advertising Advertising in news media
Advertising online (e.g. social networking)
Advertising in Niche media
Ads on Lifetime vs. Speed Channel

8. Why Study Media Ownership?

9. Concentration of Ownership
Meaning?
Oftentimes unknown to consumers
Conglomeration
One corporation owns several other companies, including media
Media = attractive investment. Why?

10. Concentration and Conglomeration
Vertical Integration and Horizontal Integration
Difference? (Figure 2.4, pg. 42)
Benefits to Owners?

11. 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?

12. 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.

13. Examples of Conglomerates
Bertelsmann AG
Gannett Co.
CBS
Viacom
Time Warner
Disney
News Corp GE
Sony
Vivendi Universal

14. 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?

15. 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?

16. 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