Mac301 Global Media and New Media 2009-10

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Lecture slides used in the Level 3 MAC301 module. Starts by framing common attitudes to global media ownership by drawing on political economy (globalisation, Americanisation, McDomination, etc). Goes on to consider the emergence of disruptive media organisations threatening the established hegemony. Sets this against the background of creativity and creative uses of media forms in order to question how valid the certainties of globalisation are.

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Mac301 Global Media and New Media 2009-10

  1. 1. Global Media vs New MediaMAC301<br />globalisation | imperialism | new media | business<br />1<br />
  2. 2. Overview<br />2<br />Global media ownership and questions of imperialism/McDomination<br />Standardisation of product/services vs creativity of media sector<br />Case studies: YouTube and Twitter<br />
  3. 3. Typical attitude<br /><ul><li>“The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force.”</li></ul>Marx & Engels,The German Ideology (1845)<br />3<br />
  4. 4. Typical attitude<br /><ul><li>Globalisation of media
  5. 5. Globalisation of ideas
  6. 6. Power
  7. 7. New World Order
  8. 8. Media ownership
  9. 9. Cultural imperialism
  10. 10. Bias/self-serving interests</li></ul>4<br />
  11. 11. Typical attitude<br /><ul><li>“The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions [sic] everywhere”</li></ul>Marx & Engels,The Communist Manifesto (1847)<br />5<br />
  12. 12. Globalisation<br />The rapid increase in cross-border economic, social, political, cultural, and technological exchange under conditions of capitalism.<br />6<br />
  13. 13. Historical dimensions<br />7<br />19th– 20th centuries<br />Mass<br />Urbanisation<br />Industrialisation<br />Production<br />Consumerism<br />Economies of scale<br />Fordist production techniques<br />
  14. 14. 8<br />
  15. 15. Mid-20th century onwards<br />The role of multinational communication conglomerates as key players<br />The impact of new technologies<br />The uneven flow of products in the global system<br />9<br />
  16. 16. 4 structural trends in the media<br />10<br />Growth<br />Integration<br />Globalization<br />Concentration of ownership<br /><ul><li>(Crocteau & Hoynes, 2005: 77)</li></li></ul><li>Framing global media issues<br />Transnational business interests as driving force in the ‘global village’ (McLuhan, 1967) <br />Global communication networks as central<br />‘McDomination’ of the corporations <br />(see McChesney, 2003; Schiller, 1979; Ritzer, 1996, 2004; Rothkop, 1997) <br />11<br />
  17. 17. 12<br />
  18. 18. Herbert Schiller (1979) <br />US transnational companies creating US global capitalist culture <br />Polly Toynbee (2001: 206)<br />US exports 72% of the worlds TV programmes<br />UK exports 9% (2nd place)<br />US imports only 2%<br />13<br />
  19. 19. Patterns of ownership <br />14<br />‘What you are seeing is the creation of a global oligopoly. It happened to the oil and automotive industries earlier this century; now it is happening to the entertainment industry’<br />(Christopher Dixon cited in McChesney, 2003: 261)<br />
  20. 20. The big 9<br />General Electric<br />AT&T/SBC communications<br />Sony<br />Disney<br />Time Warner AOL<br />News Corporation<br />Viacom<br />Vivendi Universal<br />Bertelsmann<br />15<br />
  21. 21. 16<br />Vertical integration<br />Production<br />Distribution<br />Horizontal integration<br />Publishing<br />Radio<br />Television<br />Press<br />Consumption<br />
  22. 22. 17<br />
  23. 23. Google’s rapid emergence<br />18<br />Google’s market cap (October 2009): $174.3 billion <br />
  24. 24. Patterns of ownership <br />19<br />‘The global media system is better understood as one that advances corporate and commercial interests and values and denigrates or ignores that which cannot be incorporated into its mission’<br />(McChesney, 2003: 266).<br />
  25. 25. Patterns of ownership <br />20<br />Scale = risk = conservatism<br />
  26. 26. Commerce vs creativity<br />21<br />See the work of:<br />Mark Deuze, 2007, Media Work, Cambridge: Polity<br />David Hesmondhalgh, 2007, The Cultural Industries – 2nd Edition, London: Sage<br />
  27. 27. 22<br />
  28. 28. 23<br />“Whatever we do with our media – what we read, watch, listen to, participate in, create, or use – is much more than the tightly corporate controlled substance offered through cable television, dot-com websites, or frequency modulation (FM) radio…”<br />Deuze, 2007: 50<br />
  29. 29. 24<br />“…It is also the bewildering array of community and ‘alternative’ media, pirate radio, our use of office photocopier as ‘the people’s printing press’, letters we write, Short Message Service (SMS) texts we send to participate in a TV show or to ask someone for a date, pictures taken with the built-in digital camera of our cell phones and uploaded to photosharing social networking sites like Flickr; postings we make to our own or someone else’s weblog … and so on” <br />Deuze, 2007: 50<br />
  30. 30. 25<br />
  31. 31. 26<br />Commerce vs creativity<br />“management’s plot against the endemic freedom of culture is a perpetual casus belli [‘case of war’]. On the other hand, cultural creators need managersif they wish […] to be seen, heard, and listened to, and to stand a chance of seeing their task/project through to completion”<br />Bauman, 2005: p55<br />
  32. 32. More of the same, please?<br />27<br />
  33. 33. Problems of political economy approach <br />28<br />‘Such an approach all too often limits one to instrumental explanations of media production, focussing on the complicity of media industries in the commodification and mainstreaming of culture, or on the resistance by increasingly savvy audiences to the inscribed and preferred meanings of media messages.’ <br />Deuze, 2007: p52<br />
  34. 34. 2 effects of commercial mass media<br />Berlusconi Effect:<br />‘the disproportional political power that ownership over mass media outlets gives its owners or those who can pay them’ <br />Baywatch Effect:<br />‘displacement of public discourse by the distribution of commodifiable entertainment products’<br />YochaiBenkler (2003: p8) <br />29<br />
  35. 35. So, er, what about the internet?<br />More McDomination?<br />More conservatism?<br />More concentration of power?<br />More of the same?<br />30<br />
  36. 36. Recent new media success stories<br />31<br />
  37. 37. Recent new media success stories<br />Craigslist (eBay paid around $30m for 25% share Aug 2004)<br />Flickr (Yahoo – March 2005 $35m)<br />MySpace (News Corp $580 July 2005)<br />Skype (eBay $2.6b Sept 2005)<br />XFire (MTV Networks/Viacom $102m April 2006)<br />YouTube (Google $1.65bn Oct 2006) <br />Last.FM (CBS $240m May 2007)<br />Facebook (Microsoft pay $246m for 1.6% share Oct 2007)<br />CNET (CBS $1.8b – May 2008)<br />32<br />
  38. 38. 33<br />
  39. 39. 34<br />
  40. 40. Does the internet offer more of the same?<br />35<br />Internet is a ‘disruptive technology’ (Bower & Clayton, 1995)<br />Global brands beginning to emerge<br />Old media players want in<br />Lobby for change and conditions that suit them<br />BPI + Digital Economy Bill<br />Dilution of content and creativity?<br />
  41. 41. Business Model<br />Idea<br />Implementation<br />Intellectual property (IP)<br />Venture capital (VC)<br />Exit strategy<br />36<br />
  42. 42. Venture capital<br />37<br />Private equity capital typically provided to immature, high-potential companies<br />Return generated through eventual ‘realization’ such as an IPO (initial public offering) <br />Exchanged for shares in the invested company<br />Managerial and technical advice<br />
  43. 43. 38<br />Angel investors?<br />
  44. 44. Exit Strategy?<br />39<br />Monetising the IP<br />Typically via a merger or sale<br />Current problem?<br />Economic downturn<br />
  45. 45. To scale or not to scale?<br />40<br />Scale first<br />Rapid growth, huge ‘reach’, potentially large user-base<br />Convert them to paying later?<br />
  46. 46. To scale or not to scale?<br />41<br />Monetise first<br />Develop unique service, keeps costs low<br />Out-flanked by free competitor?<br />
  47. 47. Case study 1: YouTube<br />2005: VC Sequoia Capital invest $3.5 million<br />2006: Sequoia Capital invest further $8 million<br />Revenue? What revenue?<br />Scale first<br />Google buys in Oct 2006 for $1.65 billion<br />Losing $500 million a year?<br />42<br />
  48. 48. Case study 2: Twitter<br />2006 launch<br />2007: small but rapid growth<br />Raised about $15 million in VC (Union Square Ventures)<br />2008: SMS updates disabled in some regions<br />2009: $35 million in VC (Institutional Venture Partners)<br />Revenue of $4 million<br />Resisted rumoured £500 million takeover (by Facebook)<br />2010: 100 million users?<br />2013: 1 billion users?<br />43<br />
  49. 49. In summary<br />44<br />Global media is constantly in need of growth potential <br />Anxieties around taking risks lead to conservatism<br />A global oligopoly attempting to colonise the world?<br />In order for innovation to occur, a symbiotic relationship is needed between big media and little media. <br />
  50. 50. In summary<br />45<br />In a climate where global financial turmoil is hindering potential investment in small businesses, the future may be hostile to innovation, and this can have implication for new businesses and users of new media tools and services<br />
  51. 51. Questions<br />46<br />Is the relationship between managed global risk (by BIG media) and uncertain business propositions by new media start-ups a tenable one for future investments?<br />Is there a future for innovation within an era of uncertain financial investment (credit crunch)?<br />Is it best to scale or monetise first?<br />How successful are companies like Facebook or MySpace at realising their assets? <br />
  52. 52. Questions<br />47<br />Recently we’ve seen significant investment in web 2.0 technologies (eg News Corp buying MySpace) by BIG media. What are the barriers to further investment in music related services?<br />Consider how sites/services like Last.FM or Spotify work. How do they make money and what kind of expenses do they have? What strategies must they employ in order to grow? <br />
  53. 53. Selected sources<br />48<br />Zygmunt Bauman, 2005, Liquid Life, Cambridge: Polity<br />YochaiBenkler, 2003, ‘The political economy of commons’, Upgrade, 4 (3), pp. 6-9, http://www.benkler.org/Upgrade-Novatica%20Commons.pdf<br />Joseph L Bower &Joseph M Christensen, 1995, "Disruptive Technologies: Catching the Wave" Harvard Business Review, January-February<br />David Crocteau and William Hoynes, 2005, The Business of Media Corporate Media and the Public Interest - Chapter 3 ‘The New Media Giants - changing industry structure’, London: Sage.<br />Mark Deuze, 2007, Media Work, Cambridge: Polity<br />Nicholas Garnham, 2000, Emancipation, the media, and modernity, Oxford: Oxford University Press<br />David Hesmondhalgh, 2007, The Cultural Industries – 2nd Edition, London: Sage<br />Robert McChesney, 2003, ‘The New Global Media’ in David Held & Anthony McGrew (eds), Global Transformations Reader¸ Cambridge: Polity Press<br />Herbert Schiller, 1979, ‘Transnational Media and National Development’ in K. Nordenstreng and H. Schiller (eds.), National Sovereignty and International Communication, New Jersey: Ablex.<br />Polly Toynbee, 2001, ‘Who’s Afraid of Global Culture?’ in W. Hutton and A. Giddens (eds.), On The Edge: living with global capitalism, London: Vintage.<br />
  54. 54. Images used (slide #)<br />2, 27-8: miskan, 2005, http://www.flickr.com/photos/miskan/4467937/<br />3: leralle, 2008, ‘Karl-Mark-Monument’ http://www.flickr.com/photos/leralle/2502099031/<br />4: adobemac, 2006, ‘Marx-Engels-Forum’ http://www.flickr.com/photos/adobemac/244170074/<br />5: svenwerk, 2006, ‘Marx and Engels’ http://www.flickr.com/photos/svenwerk/286219227/<br />6: 10 Ninjas Steve, 2006, http://www.flickr.com/photos/steverideout/135270019/<br />7: Lock, stock and 2 smoking barrels!!, 2008, http://www.flickr.com/photos/vivek-mukherjee/2959224072/<br />9, 11-13: anjan58, 2007, http://www.flickr.com/photos/anjan58/1281306048/<br />10: carlos_seo, 2009, http://www.flickr.com/photos/carlos_seo/3248928935/<br />14, 19-21: HarshLight, 2009, http://www.flickr.com/photos/harshlight/3235469361/<br />22-6: iCampbell, 2008 http://www.flickr.com/photos/icampbellzoom/2189881602/<br />29: Alessio85, 2008, http://www.flickr.com/photos/spiritolibero85/2401071702/<br />30: Andreas Solberg, 2007, http://www.flickr.com/photos/andreassolberg/433734311/<br />35: robjewitt, 2010, http://www.flickr.com/photos/robjewitt/4438101296/<br />37: Amanda Hayler, 2009, http://www.flickr.com/photos/minhay/3320928908/<br />39-41: psd, 2008, http://www.flickr.com/photos/psd/2423289669/<br />44-7: Oberazzi, 2006, http://www.flickr.com/photos/oberazzi/318947873/<br />49<br />

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