1. Who Pays for Journalism?
Principles of News
Professor Neil Foote
Chapter 4, Principles of American Journalism
2. What is the “business of
journalism”?
• Uphold our democracy?
• Protect the First Amendment?
• News?
• Advertising?
• Distribution?
• Technology?
• Access?
2
5. New York Times Front Page: 1982
USA Today – First Edition 1982
“The Nation’s Newspaper”
5
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. 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. 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
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. Radio “Goes Commercial”
Westinghouse,
Pittsburgh, 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 halfa-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. 60 Years of TV News
NBC News
• http://www.youtube.com/watch?v=mFvTr
GDTCYU
12
13. CBS / Walter Cronkite
Sept. 2, 1963 – Half-Hour News
https://www.youtube.com/watch?v=UYR8w
7Xzxxs
13
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
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. What is ‘media’?
•Mass Media:
• Sending and receiving messages on a
massive scale
• NEWS Media
• Sending and receiving NEWS
19
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. 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. 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. 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. 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. 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. Contrasts to consider
• Ownership
• Commercial versus Noncommercial
• Orientation
• Market versus Public
• Primary Goal
• Profit versus Service
27
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. 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. 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
34. Market structures
characterized by:
• Number of owners
• Product diversity
• Barriers to entry
• Vertical and horizontal integration
• Concentration of ownership
34
35. How does it offer those
advantages?
• Economies of scale
• Horizontal integration
• Vertical integration
35
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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
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
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
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. Media Ownership: The Trilogy
• Competition
• Localism
• Diversity (of voices, ownership)
53
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. 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. The Media Who Owns What
56
Source: http://www.pbs.org/wgbh/pages/frontline/shows/cool/giants/
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.