Who Pays for Journalism?
Principles of News
Professor Neil Foote
Chapter 4, Principles of American Journalism
What is the “business of
journalism”?
• Uphold our democracy?
• Protect the First Amendment?
• News?
• Advertising?
• Dist...
Media’s Evolution
The Old Days

Web 1.0

Web 2.0

3
The
Old
Days
(circa
1946)
4
New York Times Front Page: 1982

USA Today – First Edition 1982
“The Nation’s Newspaper”

5
USA Today: The Reaction
“In 1981, when we announced it, most critics
said we were crazy. They wrote our obit before
we wer...
USA Today: The Reaction cont.
• “A national newspaper so informative and
entertaining and enjoyable that it would
grab mil...
USA Today: The Reaction cont.
• “A newspaper so differ, so advance in
design and appearance and content that it
would pull...
Today
Tampa
Tribune
WFLA-TV
&
TBO.com
9
Radio’s First Newscast

1920 – Radio staff of the Detroit News:
10
Source: http://www.wired.com/thisdayintech/2010/08/0831...
Radio “Goes Commercial”
Westinghouse, Pitts
burgh, PA: In
1922, 30 radio
stations were in
operation in the
United States, ...
60 Years of TV News
NBC News

• http://www.youtube.com/watch?v=mFvTr
GDTCYU

12
CBS / Walter Cronkite
Sept. 2, 1963 – Half-Hour News

https://www.youtube.com/watch?v=UYR8w
7Xzxxs

13
CNN’s First Broadcast
• June 1st, 1980:
http://www.youtube.com/watch?v=dqDopY5dMD8

14
Number of Years to Reach a 50 Percent
Penetration of U.S. Households
Technology / Medium

Years

Newspapers

100+

Telepho...
Internet

Time Shifting

Traditional Media

Mobility

Immediacy

16
SOURCE: http://visualeconsite.s3.amazonaws.com/wpcontent/uploads/2008/02/history-of-products.gif

17
What’s Going On?
Insatiable desire for
information

• Anytime, anywhere on any device

Changes in Lifestyles

• Time-shift...
What is ‘media’?
•Mass Media:
• Sending and receiving messages on a
massive scale

• NEWS Media
• Sending and receiving NE...
Theoretical Framework
• Characteristics of media economy
• Ownership: Who Owns What
• Structure

20
Ownership Patterns
• Publicly traded companies:
• Disney, Viacom, Comcast, Gannet, New York
Times, Belo Corporation

• Pri...
Key issues
• Contrast of market and public sphere models
• Assumptions
• Advantages of market model
• Economies of scale
•...
Market Model

Public Sphere

How are media
conceptualized?

Private companies
selling products

Public resources serving
t...
Market Model

Public Sphere

What is role of diversity Innovation can be a
and innovation?
threat to profitable,
standardi...
Structure of Media Markets
• Daniel C. Hallin and Paolo Mancini:
“Comparing Media Systems: Three Models
of media and Polit...
Structure of Media Markets
• Relative importance of newspapers and
television as sources of news
• Ratio of local, regiona...
Contrasts to consider
• Ownership
• Commercial versus Noncommercial
• Orientation
• Market versus Public
• Primary Goal
• ...
Commercial ownership
Not owned by government
• Operate as for-profit business
• Owners can be individuals, families
or sto...
Media Oligopoly
• A marketplace in which media
ownership and diversity are severely
limited and the actions of any single
...
Market Driven v. Public
Market
• Unregulated supply
and demand
• Unregulated
ownership
• Media like all other
products
• C...
Driving the Changes

ECONOMY
Declining
Profit
Margins

TECHNOLOGY

ADVERTISERS

AUDIENCE

Rise of Digital
Media

Increased...
Primary Goal
Profit

Public
Service

32
Market advantages
Promote:
•
•
•
•

Efficiency
Responsiveness
Flexibility
Innovation

Markets can deliver media like any o...
Market structures
characterized by:
• Number of owners
• Product diversity
• Barriers to entry
• Vertical and horizontal i...
How does it offer those
advantages?
• Economies of scale
• Horizontal integration
• Vertical integration

35
Horizontal Integration
• When a single large media
corporation owns a number of
different kinds of media products
or outle...
Vertical Integration
• When a media corporation owns
companies involved in different
phases of the media production
proces...
Examples: Economies of Scale
• Hearst Corporation
• Horizontal Integration
• 15 newspapers, 20 magazines (300 int’l
editio...
Examples: Economies of Scale
• Comcast
• Vertical integration:
TV, Cable, Internet, Programming
• 22.0 million video custo...
Examples: Economies of Scale
• Disney Corporation
• Horizontal and vertical integration
• ABC, ESPN, Disney
World, Disneyl...
Examples: Economies of Scale
• Gannett Corporation
• Concentration of ownership
• 82 daily newspapers, including USA Today...
Examples: Economies of Scale
• Clear Channel
• Concentration of ownership
• Reaches 243 million monthly listeners via
radi...
Competition
• Without it, no incentive to…
• improve product
• keep prices attractive
• Innovate
• Consolidation has thwar...
Media consolidation
• What’s its impact?
• Let’s listen to Sen. Maria Cantrell ask
questions of Thomas Wheeler, nominee
fo...
Government regulation
• Government intervention (regulation) can
serve the market where competition is
lacking.
• Fueled g...
Public sphere model
• News media a social space for public
dialogue, which needs:
• Free-flowing, public interest informat...
47
Why is the market limited?
• Markets can be undemocratic
• $1 = 1 vote

• Unequal access to marketplace
• Amoral
• Bad con...
People
treated as
consumers
not citizens

Produce
economic, n
ot
civic, benefit
s

“Toaster
with
pictures”

Market logic: ...
From the public perspective:
• Market OK for media consumers, not so
much for media citizens
• Media are resources for cit...
Dual-product model
Media content

Audience

Advertisers

Media:
• “Selling” programming to your viewers
• “Selling” viewer...
Summary: Conflicting logics
•

•
•

•

Market
Private companies selling
products
Purpose is to generate
profits
The public...
Media Ownership: The Trilogy
• Competition
• Localism
• Diversity (of voices, ownership)

53
Adapt or Die
Old School
• Display ads
• Classified ads
• Auto
• Real Estate
• Jobs

•
•
•
•
•
•

Subscriptions
Suburban se...
YOUR QUESTION OF THE DAY:
• Some say profits and good journalism are
constantly in conflict. Given the economic
problems o...
The Media Who Owns What

56
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
57
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
58
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
59
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
60
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
61
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
62
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
63
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
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  • Going to the websites of media conglomerates helps illustrate this. You could use screenshots of Gannett Corp and Clear Channel (economies of scale and concentration of ownership), Comcast (vertical integration), Hearst (horizontal integration), Disney (both horizontal and vertical) etc. A complete listing of “who owns what” can be found on the Columbia Journalism Review website, cjr.org.
  • The “toaster with pictures” is a reference to a famous quote by former FCC Chairman Mark Fowler who was arguing that, because television is no more than an appliance, a “toaster with pictures,” it didn’t need to be regulated. The idea is that media are like any other product. This is in direct contrast to the public sphere approach.
  • Who paysforjournalism chapter4(5)

    1. 1. Who Pays for Journalism? Principles of News Professor Neil Foote Chapter 4, Principles of American Journalism
    2. 2. What is the “business of journalism”? • Uphold our democracy? • Protect the First Amendment? • News? • Advertising? • Distribution? • Technology? • Access? 2
    3. 3. Media’s Evolution The Old Days Web 1.0 Web 2.0 3
    4. 4. The Old Days (circa 1946) 4
    5. 5. New York Times Front Page: 1982 USA Today – First Edition 1982 “The Nation’s Newspaper” 5
    6. 6. USA Today: The Reaction “In 1981, when we announced it, most critics said we were crazy. They wrote our obit before we were born. “In 1982, after we published Vo. 1, No. 1 on September 15, 1982, many said we had aborted on the launchpad. “The whole idea was simply too big and too bold for the newspaper establishment club and the journalism critics to accept.” -- Al Neuharth, the late founder, USA Today & Gannett Corporation Chair.(p. 106, Confessions of a SOB) 6
    7. 7. USA Today: The Reaction cont. • “A national newspaper so informative and entertaining and enjoyable that it would grab millions of readers, including many of the television generation who were then nonreaders.” -- Al Neuharth, the late founder, USA Today & Gannett Corporation Chair (p. 107, Confessions of a SOB.) 7
    8. 8. USA Today: The Reaction cont. • “A newspaper so differ, so advance in design and appearance and content that it would pull the rest of the industry into the twenty-first century, albeit kicking and screaming. •“We’ll reinvent the newspaper.” -- Al Neuharth, the late founder, USA Today & Gannett Corporation Chair (p. 107, Confessions of a SOB.) 8
    9. 9. Today Tampa Tribune WFLA-TV & TBO.com 9
    10. 10. Radio’s First Newscast 1920 – Radio staff of the Detroit News: 10 Source: http://www.wired.com/thisdayintech/2010/08/0831first-radio-news-broadcast/
    11. 11. Radio “Goes Commercial” Westinghouse, Pitts burgh, PA: In 1922, 30 radio stations were in operation in the United States, and 100,000 consumer radios were sold. Just a year later, 556 stations were on the air and half-a-million receivers were sold. 1920 The Joseph Horne department store in Pittsburgh advertises ready-made radio receivers that can pick up a local broadcast station. Source: http://www.wired.com/science/discoveries/news/2008/09/dayintech_0929 11
    12. 12. 60 Years of TV News NBC News • http://www.youtube.com/watch?v=mFvTr GDTCYU 12
    13. 13. CBS / Walter Cronkite Sept. 2, 1963 – Half-Hour News https://www.youtube.com/watch?v=UYR8w 7Xzxxs 13
    14. 14. CNN’s First Broadcast • June 1st, 1980: http://www.youtube.com/watch?v=dqDopY5dMD8 14
    15. 15. Number of Years to Reach a 50 Percent Penetration of U.S. Households Technology / Medium Years Newspapers 100+ Telephone 70 Phonograph 55 Cable Television 39 Personal Computer 19 Color Television 15 Radio 9 Broadband Internet 9 Internet 7 Tablets 7 Source: Part 1, The Changing Media Landscape, p. 54, “Converging Media” 15
    16. 16. Internet Time Shifting Traditional Media Mobility Immediacy 16
    17. 17. SOURCE: http://visualeconsite.s3.amazonaws.com/wpcontent/uploads/2008/02/history-of-products.gif 17
    18. 18. What’s Going On? Insatiable desire for information • Anytime, anywhere on any device Changes in Lifestyles • Time-shifting Exponential growth in technology • Methods of distribution • Devices – Smartphones, tablets Content Creation Everywhere/Everybody • Blogs, Facebook, Twitter 18
    19. 19. What is ‘media’? •Mass Media: • Sending and receiving messages on a massive scale • NEWS Media • Sending and receiving NEWS 19
    20. 20. Theoretical Framework • Characteristics of media economy • Ownership: Who Owns What • Structure 20
    21. 21. Ownership Patterns • Publicly traded companies: • Disney, Viacom, Comcast, Gannet, New York Times, Belo Corporation • Privately held • Journal Register, New York Daily News, Boston Globe, • Public-Private • NPR, BBC • Government Owned • Voice of America 21
    22. 22. Key issues • Contrast of market and public sphere models • Assumptions • Advantages of market model • Economies of scale • Horizontal and vertical integration • Critique of market model by public sphere model • Concentration of ownership • Dual-product model 22
    23. 23. Market Model Public Sphere How are media conceptualized? Private companies selling products Public resources serving the public What is the primary purpose of the media? Generate profits for owners and stockholders Promote active citizenship via information, education and social integration How are audiences addressed? As consumer As citizens What are the media encouraging people to do? Enjoy themselves, vie ads and buy products Learn about their world and be active citizens What is the public interest? Whatever is popular Diverse, substantive and innovative content, even if not always popular 23
    24. 24. Market Model Public Sphere What is role of diversity Innovation can be a and innovation? threat to profitable, standardized formulas. Diversity can be a strategy for reaching niche markets. Innovation is central to engaging citizens. Diversity is central to media’s mission of representing the range of the public’s views and tastes. How is regulation perceived? Useful tool in protecting the public interest Mostly seen as interfering with market processes. To whom are media Owners and ultimately accountable? shareholders The public and government representatives How is success measured? Serving the public interest Profits Source: David Croteau and William Hoynes, The Business of Media: Corporate and the Public Interest, Pine Forge Press, 2001, p. 37. 24
    25. 25. Structure of Media Markets • Daniel C. Hallin and Paolo Mancini: “Comparing Media Systems: Three Models of media and Politics” • Development of the “mass press” • The rate of newspaper circulation. How much is the circulation the newspaper. • Newspaper-readership relationship. It defines what the ratio of mass or elite audience is. 25
    26. 26. Structure of Media Markets • Relative importance of newspapers and television as sources of news • Ratio of local, regional, and national newspapers • Regional or linguistic segmentation of media markets 26
    27. 27. Contrasts to consider • Ownership • Commercial versus Noncommercial • Orientation • Market versus Public • Primary Goal • Profit versus Service 27
    28. 28. Commercial ownership Not owned by government • Operate as for-profit business • Owners can be individuals, families or stockholders • Media monopolies evolve to media oligopoly • 28
    29. 29. Media Oligopoly • A marketplace in which media ownership and diversity are severely limited and the actions of any single media group substantially affect its competitors, including determining the content and price of media products for both consumers and advertisers. Source: Chapter 2, Media Literacy in the Digital Age, p. 51, Converging Media 29
    30. 30. Market Driven v. Public Market • Unregulated supply and demand • Unregulated ownership • Media like all other products • Consumer is key Public • Supply and demand can’t meet all needs • Government has a role • Media not like all other products • Citizen is key 30
    31. 31. Driving the Changes ECONOMY Declining Profit Margins TECHNOLOGY ADVERTISERS AUDIENCE Rise of Digital Media Increased Options Changing Behaviors 31
    32. 32. Primary Goal Profit Public Service 32
    33. 33. Market advantages Promote: • • • • Efficiency Responsiveness Flexibility Innovation Markets can deliver media like any other product 33
    34. 34. Market structures characterized by: • Number of owners • Product diversity • Barriers to entry • Vertical and horizontal integration • Concentration of ownership 34
    35. 35. How does it offer those advantages? • Economies of scale • Horizontal integration • Vertical integration 35
    36. 36. Horizontal Integration • When a single large media corporation owns a number of different kinds of media products or outlets. • E.g. The Hearst Corporation 36
    37. 37. Vertical Integration • When a media corporation owns companies involved in different phases of the media production process – creating media products, distributing them, showing them. • E.g Comcast 37
    38. 38. Examples: Economies of Scale • Hearst Corporation • Horizontal Integration • 15 newspapers, 20 magazines (300 int’l editions, including Cosmo, ELLE, Seventeen, Car and Driver), 29 television stations http://www.cjr.org/resources/?c=hearst 38
    39. 39. Examples: Economies of Scale • Comcast • Vertical integration: TV, Cable, Internet, Programming • 22.0 million video customers, 19.4 million high-speed Internet customers, and 10.0 million voice customers • NBC Universal, Telemundo • Weather Channel, Bravo, SyFy, USA, Golf Channel, NBC Sports, E! Online • http://www.cjr.org/resources/?c=comcast 39
    40. 40. Examples: Economies of Scale • Disney Corporation • Horizontal and vertical integration • ABC, ESPN, Disney World, Disneyland, Disney Cruise Buena Vista Pictures, Lucas Film, Radio Disney, Local radio stations • http://www.cjr.org/resources/?c=disney 40
    41. 41. Examples: Economies of Scale • Gannett Corporation • Concentration of ownership • 82 daily newspapers, including USA Today • 200 weekly publications • 23 Television stations • Numerous websites • http://www.cjr.org/resources/?c=gannett 41
    42. 42. Examples: Economies of Scale • Clear Channel • Concentration of ownership • Reaches 243 million monthly listeners via radio • 150 cities through 850 owned radio stations in the U.S., as well as more than 140 stations in New Zealand and Australia • http://www.cjr.org/resources/?c=clearcha nnel 42
    43. 43. Competition • Without it, no incentive to… • improve product • keep prices attractive • Innovate • Consolidation has thwarted innovation, fueled complacency • Allowed more noble, agile smaller players into the marketplace 43
    44. 44. Media consolidation • What’s its impact? • Let’s listen to Sen. Maria Cantrell ask questions of Thomas Wheeler, nominee for chair, Federal Communications Commission • https://www.youtube.com/watch?v=p8Af KrGgcLs 44
    45. 45. Government regulation • Government intervention (regulation) can serve the market where competition is lacking. • Fueled growth, standardization; • All digital signals in 2009, fueling HD TV • FCC: Federal Communications Commission • FTC: Federal Trade Commission 45
    46. 46. Public sphere model • News media a social space for public dialogue, which needs: • Free-flowing, public interest information • Citizen participation • Diversity of ideas and voices Markets are limited in their ability to provide those things. 46
    47. 47. 47
    48. 48. Why is the market limited? • Markets can be undemocratic • $1 = 1 vote • Unequal access to marketplace • Amoral • Bad content often cheap as well as popular • Markets don’t necessarily meet social needs • Market success may or may not = political or cultural success 48
    49. 49. People treated as consumers not citizens Produce economic, n ot civic, benefit s “Toaster with pictures” Market logic: Media as Product 49
    50. 50. From the public perspective: • Market OK for media consumers, not so much for media citizens • Media are resources for citizenship, not just entertainment • Media have unique role in democracy, recognized in US legal protections 50
    51. 51. Dual-product model Media content Audience Advertisers Media: • “Selling” programming to your viewers • “Selling” viewers’ attention to advertisers 51
    52. 52. Summary: Conflicting logics • • • • Market Private companies selling products Purpose is to generate profits The public interest is whatever is popular Accountable to owners • • • • Public Public resources serving the public Purpose is to promote citizenship The public interest is good content, even if unpopular Accountable to the public 52
    53. 53. Media Ownership: The Trilogy • Competition • Localism • Diversity (of voices, ownership) 53
    54. 54. Adapt or Die Old School • Display ads • Classified ads • Auto • Real Estate • Jobs • • • • • • Subscriptions Suburban sections Inserts Coupons Direct mail Special Sections New School • • • • • • • • • • • Paywalls Nonprofit Hyperlocal Banner ads Cost Per Click Cost Per Action Search Events E-books Mobile Tablet 54
    55. 55. YOUR QUESTION OF THE DAY: • Some say profits and good journalism are constantly in conflict. Given the economic problems of traditional media today, consolidation has become a solution for survival. • Is consolidation of media good or bad for media? • What impact does advertising you see in today’s news coverage? Programming? 55
    56. 56. The Media Who Owns What 56 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    57. 57. 57 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    58. 58. 58 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    59. 59. 59 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    60. 60. 60 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    61. 61. 61 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    62. 62. 62 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
    63. 63. 63 Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
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