This document outlines topics and questions to be addressed in a portfolio analyzing the political economy of mass communication aspects of various media corporations and products. The portfolio is to include 12 entries, each summarizing an article about the iPad in 100 words and analyzing it in 2 pages. The analysis should relate the article to concepts like business models, industry trends, and the global media system from class. Questions provided can help guide the analysis.
Hierarchy of management that covers different levels of management
Media Corporation Product PortfolioThis is a portfolio, devel.docx
1. Media Corporation / Product Portfolio:
This is a portfolio, developed over the course of the semester,
of any media corporation or series of media products, whether
programs, movies, newspapers, magazines, video-games,
receiver devices (e.g. iPod, Blackberry, Notebook), artists
(musical groups) that exemplify aspects of corporate practice
and the political-economy of mass communication. The
completed portfolio could address the following questions,
among others:
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Topic: iPad
Instruction:
* There are total of 12 entries, each entry includes an article
and 2 pages analysis.
* For each entry, we need to summarize the article in about 100
words, then analysis the article on the remaining session.
* The analysis has to show how this article related of political-
economy of mass communication.
* The component examples of your portfolio may focus on the
relationship between your chosen products and their wider
corporate and
political parentage, and/or on the economics of media
operations in the market.
* Your analysis should be driven by your discovery of
particular news items or other sources of information about your
2. products and you
should aim to add at least one example or discovery AND
your corresponding analysis for each week of the course.
* You are strongly advised not to just enter the first items that
you encounter in your searches, but to think carefully about the
value of each
entry in terms of its weight and potential for insight into key
aspects of the political economy of mass communication.
* please also related it to our class material if it’s possible. We
learned about business model, major trends in communication
industries, rise of
global media system.
*****PLEASE READ THE POWERPOINT I UPLOADED,
it’s based on my textbook (market model, business model and
trends*****
* REMEMBER, the article has to deal with the relationship
between iPad and political-economy of mass communication
Here are some of the questions that you can discuss in the
analysis:
1) Which is the principal corporation(s) involved in the
production and distribution of these products? How do the
products relate to and exemplify the business strategies of the
parent corporation(s)?
2) In the case of a corporation: what are the key features of its
history; what kind of ownership structure does it have and what
other companies does it own? What are its main activities and
how important are these to the entity’s overall revenues?
3) How do these corporations and/or their products exemplify
strategic alliances and partnerships between different
corporations?
4) What evidence is there of market success or failure, on the
basis of what criteria, at national and international levels?
3. 5) To what market(s) are these corporations/products directed;
how are these markets defined?
6) To what extent do these corporations/products exemplify the
impact of regulatory structures?
7) What evidence is there that these corporations/products serve
a general public good, whether local, national,
international, global; do they also perform notably harms
to the public good, and why?
8) Define the labor conditions and dimensions of these
products: what categories of labor do they involve, at what
rates of expropriate and remuneration?
9) To what extent do these products articulate ideological
positions?
TRENDS IN COMMUNICATIONS
An Introductory Overview
Sources various; include Croteau and Hoynes (2006) The
Business of Media. Thousand Oaks, CA.: Pine Forge Press; and
various contributions to Alexander, Owers, Carveth et al. (Eds)
(2003) Media Economics. New York: Routledge.
14 Trends: What Storyline?
4. 1. Digitization 8. Convergence
2. Deregulation 9. Branding
3. Privatization 10. Synergy
4. Globalization 11. Mergers &
Acq
5. Commercialization 12. Concentration
6. Specialization 13. Innovation and
Competitivization
7. Growth 14. Connectivity
(1) Growth in MediaVariety of consumption technologies:
Proliferation of technologies: cd's, computers, vcrs, dvds,
MP3s, mobiles, 3G/4G mobiles
Growing portable, on-demand consumption opportunities
Financial growth: media advertising up $733m to $3.63bn to
$150bn (1919-1950-2007), constant prices
(As % of GDP: 2.5% - 1.9% - 2.0%)
5. Media Growth (2)
Time Spent
Time spent with media: 7hrs 35mins a day in 2009 for 3-18
years old (10hrs 45mins incl. multi-task time)
http://news.cnet.com/8301-1023_3-10297935-93.html
http://www.mediainfocenter.org/television/competitive/time_rea
ch.asp
http://www.kff.org/entmedia/upload/8010.pdf
Share of Time Spent Per Day with Major Media
Growth (ctd): Print (
WAN, 2009)
1.9 billion people choose to read a newspaper every day, or 34
percent of the world population, while 24 percent use the
internet.
Biggest newspaper market is India, with 107 million daily sales.
India, China and Japan account for more than 60 percent of the
world’s newspaper sales, with the USA taking 14 percent.
In sales per 1,000 adult population, Japan leads the world with
612, Norway with 576, Finland with 482. 91 percent of Japanese
continue to read a newspaper daily
6. Growth (ctd): TV9% of 43m US HH had TV, 1950, rising to
98.9% of 114.5m HH in 2009. Globally, 1964-2004 TV HH
increase six-fold to 1.2 billion (world pop : 6 billion)In 2006,
59% HH had cable; 25% had satellite
Internet is accessed by two billion people worldwide
Growth (ctd) Internet:
http://www.internetworldstats.com/stats.htm
Global: 361m Internet users 2000, rising to 1.7b users* in 2009,
or 25.6% of 6.77bn total pop (User = anyone currently in
capacity to use the Internet, on basis of access and
knowledge)NorthAm: 108m users 2000, rising to 253m in 2009
or 74% of 341 total pop Asia: 114m users in 2000, rising to
738m in 2009 or 19% of total pop of 3.8bn
7. 2. Mergers and Acquisitions (M&A)Bagdikian (2000):
Depending on measures, major U.S. media are owned by
between 6 and 23 media conglomeratesFor biggest 6 traditional
media companies, 2009
http://www.freepress.net/ownership/chart/main
How does M&A take place?Occurs in 3 major ways:
vertically (company buys company that supplied it, or that
it supplies: e.g. TV network buys Hollywood studio)
horizontally (company acquires second
company in same business; e.g. theater chain buys another
theater chain)
by conglomeration (a company building a portfolio of
different kinds of businesses): may be intra-media (media only)
or extra-media (media plus non-media)
What Motivates M&A?Economic gainMarket control and
predictabilitySynergyCash flowEconomies of scaleCross-
subsidization, cross-promotion,Global market
activityConvergence, Create barriers to new competitionTax
benefitsGreed and vanity.
8. What factors are favorable/unfavorable to M&A?
FavorableLow interest ratesInflationCompany valuation, Future
expectations of growthFactors affecting rates of return, and
availability of finance.
UnfavorableConvergence slow to happenHuge debt, as result of
overpaymentOrganizational conflictsFalling security prices,
falling valuations
(3) Regulation / DeregulationRegulation mainly affects “scarce
resource” media (broadcast frequencies; public rights of way in
case of cable) or “natural monopoly” markets (telephony, cable,
some newspapers).1980s-1990s, incl. 1996 Telecommunications
Act, a period of “deregulation” or of “re-regulation” away from
criteria of public interest to criteria of competition.
Deregulation stimulated by technological advance incl.
digitization (increase in broadband), desire for M&A, neoliberal
philosophies
9. (4) ConvergenceEradication of technological differences among
distribution networks Multiple applications over the same
network to different platformsContent flows through increased
number of distribution networksText+voice+video+still+data
packaged/distributed simultaneously
(5) GlobalizationInternational markets prime source of revenue
growth following saturation of domestic marketsEconomies of
scale, but pressure to produce separate/customized content for
different marketsEnhanced by policies of deregulation and
liberalization in many countriesMotivated by desire for more
revenue, leveraging of content, cross-subsidization etc.
(6) Concentration of Media Markets
Local (e.g. largest four radio owners gained 93% of revenues in
top 283 markets; one cable provider in most markets, one
dominant fixed-wire local telephony provider in most markets)
National (e.g. four major TV networks; two major satellite
providers; six largest MSOs provide service to 60% of cable
subs; 20 newspaper chains account for 70% of daily circulation;
10 largest film distributors owned by 6 conglomerates account
10. for 90% of revenues)
Special Interest (e.g. two major players, Univision and
Telemundo)
Corps controlling over 80%
How is concentration measured?
Evaluation of significance of concentration complicated by:
What constitutes a “market”
Different assessments as to when market is “dominated” by one
or few
New technologies may create entirely new markets; even if
concentrated, more customer opportunities have been created
(7) DigitizationAll forms of communication progressively more
available for translation into computer language, and delivery
over digital systems. This enhances convergence, and
conglomeration. Digitization creates significant problems of
transition and coordination between content, distribution and
receiver technologiesLong-term consequence: implosion of
11. traditional business models; creation of entirely new ones
Press Business Model Implodes
Music Bus Model Implodes
Decline of Network TV
Google Ad Revolution
3 billion searches a day
70% of online searches worldwide
90m unique YouTube visitors, March 2009 (66% of all web
video traffic)
Over $20bn ad revs 2009 (40% of all advertising online).
Matched combined ad revenues of 5 largest TV networks
Google News: aggregates 25,000 news sites
(8) PrivatizationProcess of removing media from government
ownership / control and placing (selling) them into private
12. hands; OR of requiring government owned media to become
semi-commercial.In U.S. privatization has affected broadcasting
structure, attitudes to PBS funding, satellite systems, Internet
development. Privatization enhances globalization
(9) Commercialization: InfotainmentThe process whereby
increasingly, over time, more and more aspects of media
activity, including news and information, are determined by
“bottom-line” mentality on behalf of owners and shareholders.
Examples include “dumbing down” of television news; product
placement in Hollywood movies; intensification of sex and
violence; reduction in political coverage on television news;
increase in number of advertisements per hour of entertainment.
(10) BrandingStrategies to increase extent to which corporate
identities acquire household or consumer recognition. Branding
aids marketing, stimulates M&A activity to extend brand name
over wider range of products or services.
13. (11) Synergy
Combining resources, talents, archives etc., in ways that create
a “whole that is richer than the sum of individual parts”.
Quest for synergy drives much M&A activity and accounts for
many strategic alliances
Examples: iPhone use of AT&T as carrier
(12) Specialization“Narrowcasting,” “customization,”
“localization.” Targeting small, specialized audiences.Often
based on advertising economics.Specialist media typically
owned by larger conglomerates.Opportunities facilitated by new
technologies (cable channels, websites)
Ad Advantages of SpecailizationIf advertiser can reach 100
people for $100 and every one of those 100 people buys his $10
product, that is better than spending $100 to reach 10,000
people of whom only 50 end up buying the product. In the first
case he earns $900; in the second case he earns $400.
Examples: a cigar manufacturer who advertises in cigar
magazine rather than LA Times.
14. (13) “Competitivazation:”Process typically triggered by (a) new
regulations that reduce restrictions on ownership or (b) new
technologies that create entirely new markets (e.g. cell
phones).These attract new entrants into given markets, creating
(the appearance of) great competition.But, almost immediately,
competition is followed by M&A activity until one or a small
number of companies dominate the market
(14) Connectivity/CompatibilityGrowing pressure on media
producers to determine proprietary or universality strategies,
relating to connectivity between:
(1) distribution and reception technologies
(2) different reception technologies
(3) software formats, content, and reception technologies
Business Models
15. In Media Industries
Definitions (1)
A business model is an action methodology for the
systematic and routine generation of money or equivalent
resource
Definitions (2)“Business models are created and understood by
stepping back from the business activity itself to look at its
bases and the underlying characteristics that make commerce in
the product or service possible”(Picard, 2002, pp. 25-26)
Definitions (3)“A business model…is the mechanism by which a
business intends to generate revenue and profits“It’s what a
company does and how it makes money doing it” (Malone, MIT)
Components of a Business Model (1)How the business will
select customersHow it defines and differentiates its product
offeringsHow it creates utility for its customers
Components (2)How it acquires and keeps customersHow it
goes to the market (promotion strategy and distribution
strategy)How it defines the tasks to be performedHow it
configures its resourcesHow it captures profit
16. MAJOR BUSINESS INCENTIVESThe attraction of moneyThe
fear of losing moneyThe attraction of risk-free moneyThe
attraction of continuous risk-money
Leading to…A process of constant process of adaptation and
change to protect and to grow business in the face of challenges
that are internal to the business or external to it.
Internal Challenges IncludeInsufficient or aging
plantInsufficiency of human resource relating to numbers,
skills, turnover, demographicsInsufficiency of capital
External Challenges IncludeChanges in regulatory
structureChanges in client demandChanges in available
technologies of production, distribution or receptionChanges in
industry structure relating to competition, conglomeration etc
Tracking Media
ChangeTechnologyProductionDistributionReceptionAudienceRe
gulation
In the Case of RecordingTechnology
From Telephone and Radio, through Vinyl to Cassette and
Compact Disc to Digital Downloads
Symbiotic relationship with (1) Radio technology, from being a
17. means of promoting the sale of radio sets, through to being a
means of attracting audiences to radio stations, to being a means
of promotion the sale of music and records, of attracting payola
revenue from the industry, and attracting advertising (2)
Movies, Music Video, Cable and Satellite Television
Tracking Change in Recording (2) Production
Conglomeration of labels down to four majors (Sony/BMG,
EMI, Universal and Warner), accounting for 75% of worldwide
sales and 85% of US sales by mid-decade.
Changing relationships between independents and the majors
Tracking Change in Recording (3)
Distribution
(from Label to Wholesale and Retail Outlet)
Symbiotic relationship with (1) Radio broadcasting first to
promote sale of radio sets, then to attract audiences, to promote
sale of sheet music and records, attract payola, and advertising
(2) Movies, Music Video, Cable and Satellite Television
Symbiotic relationship with (1) Retailers (owned by labels,
independent), and sales tracking methodologies (2) Music clubs,
dependent on mail and digital download (3) Peer-to-peer digital
file swapping (4) Digital music store, with exclusive
relationships to reception technologies (such as iPod)
Tracking Change in Recording (4)
ReceptionFrom gramophone to cassette player, walkman,
computer, iPod and mobile phoneSymbiotic relationship
between changes in hardware of reception technology and
18. physical character of the product, so that each major change of
reception technology (e.g. cassette player) required users to
repurchase their music portfolios
Tracking Change in Recording (5)
Audience
- Audience behavior changes towards:
Great mobility of listening opportunity
Greater access to available music
Greater control over what to listen to, and when to listen to it
Greater opportunity to produce and distribute as well as to
listen
Greater choice over spending strategies (e.g. reflecting rise of
the vinyl single, displaced by rise of the album, in turn
displaced by rise of the digital single)
Tracking Change in Recording (6)
RegulationControls over payola1996 Telecommunications Act,
and increased concentration in radio
Example: The Changing Business Models of Online Content
Services(1) The Videotext Model
Used TV screens to convey text (1970s)
Allowed publishers to easily update
Used existing content, and existing distribution infrastructure
Gave added value to high end TV sets
Content download fairly slow
Limited words per page; limited readability
Customers insufficiently impressed
19. Online Content Services (2) (2) Paid Internet Model (1980s)
Used pre-existing Internet infrastructure
Involved charging a fee for web access
Complicated processes to get access
Customers didn’t like to pay
Online Content Services (3)Free Web Model (1990s)
Enabled by widespread distribution of browsers in standard
software packages on new computers
Content generally free, serving as promotional tool or special
interest service
Traditional media could re-use existing material
But insufficient revenue possibilities
Online Content Services (4)The Internet/Web Ad Push Model
Used lists of subscribers and subscriber details to attract adverts
Or found adverts related to the content
Similar to direct mail
Audiences did not like intrusiveness of ads
Online Content Services (5)The Portal and Personal Portal
Model
Users of web browsers are brought to an organizing interface
and to adverts
Readers are brought into contact with click-through ads (often
only one a page) while making other uses of the page. Lowers
reader resistance to ads
20. Portal organizes content in a way that is attractive/useful for
readers; acquires brand image.
Still not producing profits for most portal operators
Online Content Services (6)The Digital Portal Model
Development of multipurpose digital portals, allowing
combination of current content portals with streaming video and
audio, including pay-per-view services, and chat facilities
Revenue from ads, from pay-per-view, premium service
subscriptions
Market Model, Public Sphere Model
Two approaches to the analysis of media
MARKET MODEL
Basic principles:
Society’s needs best met through unregulated supply and
demand
Media like all goods and services
Private, unregulated ownership is best
Consumers, not regulators, call the tune
Advantages of markets
Promote:
efficiency
responsiveness
21. flexibility
Innovation
Markets can deliver media like any other product
Market structures
Market structure encompasses:
Level of ownership concentration
Number of firms supplying a product
Amount of product differentiation
Types of entry barriers facing new competitors
Extent of vertical and horizontal integration
Four Kinds of Market1. Homogenized monopolies:
Uncompetitive, least choice of product2. Diverse
monopolies:One/two corporations; wide variety product3.
Homogenized competition:Many corporations, similar product4.
Diverse competition:Many competitions, wide variety of
product
Public Sphere Model
Basic principles:
Society’s needs not met entirely through market system;
Consumer power is not democracy;
Media are not like other products;
Profitability not sole determinant of health
Government has necessary role.
22. Vision of public sphere modelMedia as primary information
sources and storytellers;Media are forums for social
dialogue;Need open mass media system that is fully
accessible;Ownership/control should be diverse;People citizens
first, then consumers.
Vision ctd.
Citizens need from media: information about personal
rightsabout public political choicesto voice criticism, register
alternativesto recognize themselves in media representations
The Limits of Markets
Markets:are undemocratic: one dollar one votereproduce
inequalityare amoraldo not meet all social needsdo not meet all
democratic needs
“Toasters with pictures?”Market OK for media consumers, not
for media citizens;Advertising inserts itself between product
and consumer;Media are resources for citizenship;Media have
unique role in democracy, recognized in US legal protections