It is how media messages are produced, circulated and consumed, proposing a new theory of communication Hall argued that the meaning is not fixed/determined by the sender, the message is never transparent and the audience is not a passive recipient of meaning. There is a “lack of fit” between the moment of the production of the message ('encoding') and the moment of its reception ('decoding').
The meaning of the text is located between its producer and the reader. The producer (encoder) framed (or encoded) meaning in a certain way, while the reader (decoder) decodes it differently according to his/her personal background, the various different social situations and frames of interpretation. Phases in the model are referred to as “moments”.
Hall himself referred to several 'linked but distinctive moments - production, circulation, distribution/consumption, reproduction' (Hall 1980, 128) as part of the 'circuit of communication' . The message, however, must be correctly decoded by the receiver in order for meaningful exchange to take place. In other words, the message cannot be said to be understood unless it produces the intended reaction within the audience.