Final Exam Study Guide (ch. 9-14)
Final Exam Study Guide (ch. 9-14) Comm 130
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Chapter 9: The Magazine Industry 5/2/16 5:33 PM The Modern Magazine Industry *Because of convergence, it is difficult to define what a magazine is today Five types of Magazines 1. Business-to-business magazine, or trade magazine: a magazine that focuses on topics related to a particular occupation, profession or industry • Standard Rate and Data Service (SDRS) collects information about magazine audiences and ad rates, then sells it to advertisers and ad agencies • Trade magazines often have elaborate websites • Reversed traditional model: instead of focus ing on paper magazines and using the website as secondary, they concentrate their resources on the web and digital versions; often allow some free access and charge for deeper use of the site 2. Consumer magazines : aimed at the general public • Sold by subscription, newsstands, and magazine racks at stores • Almost always have websites, many have apps • Readers buy and consume products/services that are sold through retail outlets and may be advertised in those magazines • Ex. Men’s Health, Time, People, Essence, Cosm opolitan 3. Literary reviews and academic journals • Generally nonprofit, sold by subscription to individuals and libraries through the mail • Small circulation figures • Literary reviews: periodicals about literature and related topics • Academic journals: periodicals about scholarly topics, with articles typically edited and written by professor and/or other university - affiliated researchers 4. Newsletters: a small-circulation periodical, typically four to eight pages long, that is composed and printed in a simple styl e • Simple in order to convey the needed information in a straightforward way • Often center on specific areas of an industry and published frequently • Mostly circulated through web, email or both —quicker and less expensive 5. Comic book: a periodical that tells a story through pictures as well as words • Graphic novel: an illustrated story that aims to be longer and more developed than a comic book • Its characters flow across the media, like T -shirts, lunchboxes, games, movies, and more • Marvel Comics Groups and DC Comics—dominate circulation Financing Magazine Publishing *From 2007-2010, huge ad revenue decrease and circulation reduction Controlled Circulation Magazines • Trade publishers offer free trade magazines because advertisers are so interested in paying to reach people in certain industries, that they can support the cost of production and distribution • Controlled circulation magazine : a magazine whose production and mailing is supported by charging readers, but typically through ad revenues; the publisher, rather than the reader, decide who gets the magazine o Ex: Medical Economics , a magazine for doctors about the business of medicine, creates a list of doctors whom advertisers would likely consider useful targets and mail issues to those people only • Custom magazines often have controlled circulation: typically created for a company with the goal of reaching out to a specific audience that the company wants to impress o Ex: Kraft Foods sends Food & Family free to 12 million homes by Totem Communications Paid Circulation Magazines: a magazine that supports its production and mailing by charging readers money, either for a subscription or for a single copy • Intense competition for advertising among consumer magazines; therefore, magazines can’t raise their ad rates to cover its production so they rely on both advertisers and readers • Advertisers look at circulation to determine whether or not they buy space in the magazine • Publishers invest in media kits to attract advertisers Market Segmentation • Many consumers and tr ade magazines offer advertisers the possibility of paying for certain segments of readership • Certain ads or articles are bound into copies that go to certain segments of people; common with large circulation magazines because of the cost • Ex: Reader’s Digest allows advertisers to purchase ads that run in only half the copies and allows targeting to one of three types of readers: families, matures and people with poor eyesight Magzine Production *Has 5 goals 1. Drawing an Attractive Audience • Typically publishers want to reach upscale readers: upper-middle/upper class people with substantial disposable income but • Magazine must be distinctive enough to draw particular upscale readers that fit the mag’s profile enough to support it; turns to syn dicated and custom research to do so • Ex: Reader’s Digest makes the case that its older readers have a higher median household income than the older audiences for its competition 2. Drawing a Loyal Audience • Magazine’s business executives must make alluring cla ims that the magazine is edited to effectively that the people who receive and read it consistently, read it so thoroughly that they pay attention to the ads • Ex: AutoWeek asserts that its subscribers “spend an average of 83 minutes reading each issue; 93% of them read 4 out of 4 issues” 3. Creating a Conducive Environment • Advertisers want to convince audiences that certain products and services are worth buying; they particularly like magazines with articles and photos that create a conducive environment for t heir products or services 4. Setting an Efficient Price • CPM is the primary indicator; CPM may be higher the more specific your audience is • Media kits detail the acceptable formats of ads on the magazine’s digital properties 5. Producing the Magazine as a Branded Event • Major magazine companies position every title as a personality • Brand properties of Forbes: o The main magazine o Several international editions o A separate Forbes Asia magazine o A travel website aimed at upper -level executives o Forbes on Fox o Forbes online Magazine Distribution: the channel through which a magazine reaches it exhibition point • Print materials o Trade magazines: typically sent to subscribers through the mail o Comic books: distributed by themselves or through wholesalers to special stores that stock them o Consumer magazines: through subscription or independent distribution companies deliver the to retail stores where single-copy sales take place o USPS is a useful distributor because it is unbiased, but small publishers are angered because USPS has raised rates for magazines that are not sent out in bulk § Small publishers must rely on rented lists to contact new potential readers or direct -mail subscription firms § Large circulation firms can do a lot on their own to increase circulation • Websites and d igital activities o Sending content through internet service providers, which act as exhibitors o App marketplaces (iTunes, Google Play) act as wholesale distributors between publisher and exhibitor; gives revenue percentage to them Magazine Exhibition • Digitally: ISPs (see chapter 6) o Limit file size (gigabytes) • Print: magazine stands, supermarket checkout areas, etc. o Large companies have advantage bc they have more cash for slotting fees: payments that ensure companies’ products will be place prominently at th e front of magazine racks or at the checkout counters of supermarkets Media Ethics • Central complaint: advertising and their influence on magazine content o Church-state divide: policies that keep the business and advertising activities of its magazines away from the editorial activities; editorial=church, business=state. Ensures that the editors do not worry about offending advertisers Key Terms Circulation: the number of units of the magazine sold or distributed free to individuals in one publishing cycle. Media kits: databases compiled by magazines that tell potential advertisers attractive key facts about their readers Segments: portions of a magazine’s readership that an advertiser wants to reach Magazine publisher : the chief executive of a magazine, who is in charge of its financial health Subscription: a long-term order for a magazine that is paid for in advance, for a predetermined period of time or number of issues Single-copy sales: the number of copies of a magazine sold not by subscription, but one issue of a time Chapter 10: The Recording Industry 5/2/16 5:33 PM History of the Recording Industry 1877: Edison’s cylinder phonograph; plays “Mary Had a Little Lamb” 1887: Berliner introduces gramophone; flat disc, very agile, music on 1 side 1890s: music industry = sheet music, so it was all very simple (Waltz = sexy ;) Minstrel show’s popular until Vaudeville sakes over in the early 20century 1920s: Commercial radio begins threatening record sales 1930-40s: Shuffle along à Harlem Renaissance opened door for black performers and writers; DUKE ELLINGTON very popular The Modern Recording Industry 1. It’s ownership is international a. Four Majors: Universal Music Group (France), Sony (Japan), Warner Music Group i. Warner is the only US -owned conglomerate ii. EMI Group: UK-based, was a major global company but fell $4 billion in debt 2. It’s production is dispersed a. Independent production firms have soared in the last decade due to n ewly affordable, powerful digital recording technology i. Many circulate their products to stores, directly on web and concerts because they get to keep more o f the money than they would working with large firms ii. Epitaph Records: standout example of how independents are actually quite large operations 3. It’s distribution is concentrated a. Huge successes by independents are rare because of their limited access to distributors b. Major companies are so powerful, that they are the distributors of choice (access to radio stations, cable systems, stores and popular websites) and have a LOT of money to spend c. The Four Majors make up 88% of sales of all physical albums, independents made up the rest Features of the Recording Industry Audience • Age is one of the most important demographic to understanding the actual purchasing of music o Recording industry markets mostly to younger people than other age groups o Ages 13-25 account for 24% of spending on recordings in the US, while their population percentage is only around 15% o Purchases of recordings by older people tend to be smaller than their percentages in their population o Nostalgia changes based on demographics U.S. Sales: Singles vs. Albums Single— a product that contains only one or two individual musical recordings • The building blocks of radio formats; the airplay of these songs is normally how the public first learns about an artist • Artists don’t usually make much money of f of them in comparison to their album sales • iTunes allows consumers to buy just their favorite tracks instead of the entire album, causing executives to worry that firms will have a hard time maintaining profits Albums— a collection of a dozen or more ind ividual songs • Digital album sales have been picking up • Digital recording sales grew by 9.2% in one year, offsetting the decrease in physical recording sales • Artists and labels make their money from album sales Multiple and Changing Media Platfor ms Physical Media— CDs (95%), CD singles, music videos, vinyl records Digital platforms — vehicle for receiving digital information; a computer, mobile phone and iPad are 3 digital platforms for downloading music • Becoming preferred do to convenience and low cost • All typically involve a form of downloading: transfer of data from a server or host computer to one’s computer or digital device • Ringtones: bits of songs that people download to their mobile phones so that they play when someone calls them; popularity has been declining • Streaming: process in which an audio file is delivered to a computer -like device from a website so that it can be heard while it is coming into the device but cannot be saved or stored; on the rise o Some sites (Rhapsody, Spotify) sell subscriptions for streaming o Internet radio or online radio : pre-chosen music streams based around certain genres provided free to listeners and paid for by commercial ads much like a radio station Production in the Recording Industry Artists and Labels Label— a division of a recording firm that releases a certain type of music and reflects a certain personality • Ex: Universal has a hip hop label (Def Jam), jazz and blues (Verve), country (MCA Nashville) and classical (Mercury Records) • Similar to an imprin t in the book industry • A&R (artist and repertoire): recording firm executives who screen news acts for a firm and determine whether or not to sign those acts; point person in a recording company Music • Almost all artist record music that someone else wrote • Music publishing companies maintain catalogs of songs and receive royalties if an artists uses a song Royalties: the share of money paid to a songwriter or music composer out of the money that the production firm receives from the sale or exhibition of a w ork • It is difficult for an owner to keep track of where and how the song is performed • Performance royalties : paid to composers, their publishers, and their record labels when their material is used in front of audiences via stage acts, jukeboxes, radio, te levision or online radio o Performers or organizations must obtain a “performance rights license” from music societies (ASCAP and BMI • Mechanical royalties : collected as a result of the sale of physical media (e.g. CD’s) and the sale or download of digital re cordings, including albums, individual tracks and ringtones o In the US, any artist has a right to record a musical work as long as the creators have already given permission to someone to make a public recording of that work with a mechanical license o Harry Fox Agency— dominant US organization that issues mechanical licenses and collects and disperses them. Producing a Record The role of the producer • Compensated on royalty basis • Responsible for obtaining copyright clearances, lining up session musicians, stay ing on budget and delivering high-quality master tap to the record company • 2-4% of sales Compensating artists • Side musicians often paid by the hour o Very hard because you have to be right on target since studios are paid for by the hour • Central artists receive royalties (10-15% of retail price of album) • New artists make little money from producers • Self-pressing can make more money (shows, concerts, websits); you can reach minimum wage by selling 143 copies/mo. Rather than 3,871 copies/mo. if a CD is sold by a recoring label • *MAJOR CHALLENGE: getting audience to listen even when they cannot hear it in ads Distribution in the Recording Industry Advantages and Disadvantages of Major Labels • Adv: more expensive, you don’t get to keep as much of the share • Dis: brings cross-media exposure • Real distribution power lies in the ability to generate buzz among asrtists’ potential fans that will induce brick -and-mortar and digital retailers to carry his or her records and display them properly • Powerful distributors have the benefit of big promotional teams, liaisons with radio stations and money for cooperative advertising The Importance of Convergence in Promotion Promotion: the process of scheduling publicity appearances for a recording artist, with the goal of gen erating excitement about the artist and thereby sales of his or her album • May include cooperative advertising • Very difficult in the competitive media environment • Non-digital promotion— physical stores have limited samples that consumers can listen to, but radio is the largest influencer though it is slowly diminishing due to the rise of social media • Print promotion, online versions of magazines or music blogs, radio stations’ websites that stream, uploading videos and audio files to YouTube/Facebook fan sit es while generating excitement on the local radio • VEVO, concert tours The Recording Industry and the Radio Industry • Record-industry promotion executives have a symbiotic relationship with radio program directors • Many radio stations are conservative about ad ding new music and give preference to existing artists with a good track record and familiarity • Heavy pressures to succeed in radio has led to unethical tactics o Payola: an activity in which promotion personnel pay money to radio personnel to ensure that the latter will devote airtime to artists that the former’ s recording companies represent Exhibition in the Recording Industry Digital Downloads • Over 50% of all unit sales, but are less expensive than the albums sold in the physical domain • Apple’s iTunes store— largest venue for digital record purchase • Large amount of revenue comes through subscription services (Rhapsody, Spotify, Apple Music) • Difference between online radio and subscription services — subscription firms allow you to choose individual trac ks or albums to hear while online radio allows you a limited selection Physical Sales • Account for $3.4 billion in sales (dropped from 2007 when it was $8 bil) • Prominent chains (Sam Goody and Tower Records) went out of business • Online retailer Amazon is one of the largest sellers of physical CDs • Sold more often now in mass -merchant stores like Walmart and Target Ethical Issues in the Recording Industry Parental Concerns about Lyrics • Most complaints came about during 1980s when Tipper Gore (Al Gore’s wife) joined with other wives to create the Parents Music Resource Center (PMRC) o Aimed to lobby music industry to place warnings about lyrics on album covers o Wanted explicit albums covers kept under the counter o Demanded a records rating system o Suggested that companies reassess the contracts of those performers who engage in violence and explicit sexual behavior onstage • Walmart has refused to stock albums with controversial lyrics —> caused recording firms to distribute a censored version of the album as well • Rise of gangsta rap in 1980s = more concern about violent or sexually explicit lyrics o Depiction of women in many rap songs o Racial epithets and sexual profanities like the “n -word” and “bitch” • Rappers argue that outsiders should not impose their values on an important field of artistic endeavor and that they reflect views that many African Americans have about their surrounding s Industry Concerns about Piracy Piracy: the unauthorized duplication of copyrighted material for profit • Counterfeiting: the unauthorized duplication of copyrighted music and packaging for profit, with the goal of making the copy appear authentic o China— the center of counterfeiting o P2P (peer-to-peer) computing: a process in which people hare the resources of their computer with other peop le’s computers (BitTorrent, Pirate Bay); makes it difficult for copyright owners to blame a website or company for the downloading o Digital locker: an Internet service that allows paying and registered users to store music, videos, games and other files • Bootlegging: the unauthorized recording of a music performance and the subsequent distribution of that recording Chapter 11: The Radio Industry 5/2/16 5:33 PM The History and Rise of Radio 1895: Marconi’s wireless telegraphy through Morse code 1912: Congress passes Radio Act of 1912: federally regulated radio communication Cathedral Radio 1916: Snarnoff proposes system of consumer -oriented radio broadcasting *1917: US Navy took control of domestic radio and developed it in ways that would most benefit the military • Argued that if enemies of the U.S. got control of radio stations, they could disseminate propaganda that could be damaging to the interests of the country • As a result of the debate, Congress decreed in 1919 that broadcasting was to be a privately sponsored enterprise *1919: Radio Corporation of America (RCA)— a patent trust formed by American firms that owned major broadcast patents and General Electri c • Patent trust: a company owned by a number of firms that is formed to share their patents in order to prevent other firms from entering their industry unless the trust allows them to use the patents • Gave it the power to force anyone interested in setting up a radio station to pay for a radio patent and RCA, in turn, imposed conditions for the use of the airways • Became the most powerful force in developing the airwaves, but was soon broken up within the decade by U.S. courts • Most important consequences of t he RCA: o The development of advertising as means to support radio o The creation of networks to spread advertiser -sponsored programming around the country o The creation of a federal regulatory body (FRC and FCC) to decide which firms best serve the “public int erest” 1920’s: Rise of Networks • NBC, CBS • Making money through delivering ads to people across the country • Distribution (vehicle) • Ran on phone lines (AT&T); As a result of AT&T’s controlling what networks run on their phone lines, it was very hard for small er channels/networks to get off the ground. (ex. CBS used telegraphs instead and became successful) 1922: AT&T starts WEAF, announcing it will sell commercial time Late ‘20s: commercial system evolving, supported by ads, linked by networks All music was live because records weren’t good enough quality and artists didn’t want anything to be packaged *1930’s: Columbia University engineer Edwin Armstrong develops FM radio 1940’s: Major radio networks began building television networks, and advertisers leave network radio for television *1996: Telecommunications Act: allowed broadcast companies to snatch up several AM/FM properties in the same market • Sparked the creation of large radio conglomerates (Clear Channel Communications) The Terrestrial Radio Industry Where & When People Listen to the Radio • Listening to the terrestrial radio has shifted from an “inside the home” activity in 1986to an “away from the home” activity (cars, work, beach, park) in 2012. • “Listening” = tuning in at least once for 5 min s. during a quarter hour during a week • Decline in the time spent listening due to other technologies that carry music (internet, iPod, mobile phone, digital music players) AM vs. FM • FM (frequency modulation): a means of radio broadcasting, utilizing the band between 88 and 108 megahertz; marked by high levels of clarity but rarely travel more than 80 miles from the site of their transmission • AM (amplitude modulation): utilizes the band between 540 and 1,700 megahertz; signals are prone to frequent static i nterference, but their high-powered signals allow them to travel great distances, especially at night Commercial Radio Stations vs. Noncommercial Radio Stations • Commercial stations : radio stations that support themselves financially by selling time on their airwaves to advertisers; a majority of stations in the U.S. • Noncommercial stations : radio stations that do not receive financial support from advertisers; mostly located at very left of FM band because they’ve been reserved by the government exclusiv ely for them o Supports itself through donations, private foundations and corporations in return for billboards: the mention of a sponsor’s name or products at the start or end of an aired program, acknowledges in return for money Radio Market Size • Listeners in small cities may only have a handful of stations available to them and many rural towns can’t attract the advertising or suppoer to field a station • Major markets (huge urban areas) have a large number of stations fighting for listeners; the value of a frequency in a large city can be worth hundreds of millions of dollars • Primary reason why so many stations survive in a major urban environment: segmentation o Format and audience segmentation Production in the Radio Industry Virtually all radio stations rely on recordings for their musical repertoire Radio Formats: the personality of a station, designed to attract a particular audience segment • Profits come from breaking the audience into segments and then attracting a lucrative segment o Lucrative segment for commercial stations = one that many advertisers want to reach o Lucrative segment for noncommercial stations = a population group that has the money to help support the station or that corporate donors want to impress • Fragmentation of the radio industry spurred the creation of many different formats; help stations hone in on audiences that would be large and desirable enough • Country music is the format with the largest number of stations Determining a Station’s Format • Music style: refers strictly to the type of music the station plays • Music time period : refers to the release date of the music that the station plays (e.g. “contemporary”, “oldies”) • Music activity level : refers to the played music’s dynamic impact (e.g. “soft rock”, “smooth jazz”) • Music sophistication: refers to the simplicity or complexity of the musical structure and lyrical content of the music played; often determines the composition of a station’s audience Types of Formats • Each format holds a target demographic and audience • E.g. AC—Adult Contemporary (Women 25 -54), BG—Black Gospel (Adults 35+), OL— Oldies (Adults 25 -55) Selecting the Right Format • Format consultants: individuals hired by a radio station to analyze the competition and select a format that will attract the most lucrative audience niche possible • Narrowcasting: going after specific slices of the radio audience tat are especially attractive to advertisers Determining Listening Patterns: the habits that describe people’s use of radio 5 Propositions about listening patterns that help effective audience segmentation — • Individuals tend to only listen to three radio stations at any particular period in their lives, and the most “preferred” of those stations take up 65-70% of their listening time • In the U.S. there’s a large and widening divide between music preferences of black, white, and Hispanic people • Men and women often have separate musical interests • People 10 years part in age tend to belong to different “music generations” with differ ent tastes • Music preferences can be useful tools for identifying people with distinct styles of living and buying Working with Formats General Manager— in charge of the entire station operation • Business manager (Management Dept.) • Program director (Programming Dept.) o On-air talent (DJ): refers to radio works whose voices and personalities are broadcast over the radio’s airwaves § Keep the station from transmitting dead air: silence on the airwaves that is produced when a radio station fails to transmit sound; big taboo in radio • Chief engineer (Engineering Dept.) • Director of sales (Sales Dept.) Producing the Playlist: the roster or lineup of songs that a radio station can play on the air during a given period of time • Made up of about 600 -700 songs designated to their station’s personality that is played in rotation; 50 -100 new songs are added each week to highlight new songs • Programmers use research; directors believe listeners will tune out of a station if it plays a song they don’t want to hear Conducting Research to Compile the Playlist • Burn music test: surveying people to determine which songs will still draw interest and which have lost their popularity (“burned out”) • Focus groups: assemblages of 8-10 carefully chosen people who are asked to discuss their habits and opinions about one or more topics; designed to capture spontaneous rea ctions of participants and give a feel for a true target audience Maintaining the Format and Retaining the Target Audience Stations want to play only the most appropriate songs to capture but also balance the desires of those in its core audience, using a format clock • Fringe listeners: those who fall within the target audience but rarely listen to a particular station • Core audience: listeners who spend a lot of time listening to a radio station • Format clock: a circular chart that divides one hour of a radio station’s format into different time program elements; helps the programmer maintain stability while making sure the key service elements show up at specific times o Varies during different times of the day like drive time: early weekday mornings and late afternoons —when people are driving to and from work—largest expected radio audience; program directors are more strict during this time o Distribution in the Radio Industry Network: a company that distributes programs simultaneously to radio stations that agree to carry a substantial amount of its material on an ongoing basis; typically provides a regular schedule of programming material to affiliate stations for broadcast • Largest is NPR (National Public Radio) Syndicator: a company that license programming to radio stations on a market - by-market basis • Programs are usually put on air through barter: practice in which a syndicator provides the radio program and keeps a number of minutes for the sale of commercials to advertisers ; makes most of its money by selling time to advertisers that want to reach the listeners of certain types of radio stations around the country Format Networks: programming firms that prov ide subscribing radio stations with all the programming they need to fill their airwaves 24/7; often the station needs only to insert local commercial spots into the programming • Typically circulate their material via satellite Exhibition in the Radio Industry Advertising’s Role in Radio Exhibition 3 kinds of radio advertising — • National spot advertising : airtime is purchased from a local radio station by national advertisers or their representatives • Network advertising : national advertisers or their represe ntatives purchase airtime from the network that serves the radio station rather than the local radio station; Often more efficient when buying ads across the country • Local advertising: advertising money that comes from companies within listening range of the radio station; especially critical; 81% of radio advertising in 2010 Market Research and Ratings • Arbitron: the largest firm that co nducts radio audience measurement o Diaries; most local stations and advertisers use this because they are the best data available o Portable People Meter (PPM) : Arbitron’s electronic devise for tracking radio listening both at home and on the street • Ratings are given to station employees like report cards are to students o Rating point: one rating point = 1% of the population i n a market o Stations are considered successful if they garner 4 or 5 rating points o Poor ratings = personnel changes Radio and the New Digital World Revenue of the terrestrial radio has plummeted due to digital convergence to shift toward digital sources of music Satellite Radio: technology through which a consumer can receive streaming channels of music and/or talk through a special receiver • Sirius XM: makes money from subscriptions, advertising, and joint ventures with car companies ; not considered a fundamental threat to broadcast radio o Produces live and taped programming o Programming is beamed to satellites from dishes operated by each company o Satellites broadcast the signal back to earth where it is picked up directly by receiver units and rebroadcas t by repeater stations in metro areas Online Radio AKA audio streaming: practice in which an audio file is delivered to a computer -like device from a website so that it can be heard while it is coming into the device but cannot be saved or stored (via pack et-switching); thousands of websites offer streaming and pay royalties to publishers and artists • Streaming by category or interest — offer music based around genres the listener chooses or personalization (like Pandora); supports itself through the “freemium model” (you get it free but you receive ads, otherwise you can by a subscription) • Streaming on demand — allow users to choose their own individual tracks and albums (like Spotify); Use a “freemium model” in which there is a limited version without charge o Typically allow listeners who pay for the service to receive it on a number of platforms (laptop, desktop, iPhone, tablet) Traditional Radio Responses to Digital Music • Many use terrestrial radio as a “curation” tool — using it to hear about new music (then going to buy it illegally later) • They try to keep listeners by using HD radio (a system in which digital signals of AM and FM stations are sent along with the traditional analog station sounds on the same frequencies allocated to the analog stations) to multiply the number of stations they use for the curation function o It is free, but you must have a certain receiver o Only small % say they’ve listened to HD radio • Advantage: It has retained its presence in nearly all automobiles • Clear Channel reflects a chan ging radio industry that senses it must define itself as far more broad than AM and FM Chapter 12: The Movie Industry 5/2/16 5:33 PM The History and Rise of Motion Pictures 1878: Edward Muybridge, Zoopraxiscope — captures motion using multiple cameras taking multiple photos and putting them together 1889: Edison creates Kinetoscope — took multiple photos with one camera; helped develop projector 1891: Eastman creates first film strip… eventually led to Kodak 1895: Lumiére brothers patent a combo movie camera and projector; charged people to watch projected film Armat-Jenkins projector 1908: Edison company encourages Motion Picture Patents Company 1920s: Major Hollywood production and distribution firms also own large theater chains and develop the “studio system” 1923: Kodak Motion Picture Film 1927: The Jazz Singer— revolutionized moviemaking by integrating sound 1920-40s: Silent Films and Charlie Chaplin 1950s: 90% of Americans own a television set 1970s-90s: Spread of cable television; international multi -media conglomerates **Product placement reflected what’s happening in the show and society • telegram – often associated with death and war (mostly because of MGM) • incorporated better ideas of the telegram in movies (We stern Union, Love Laughs at Andy Hardy) à associated telegrams with love The 5 Old Majors Majors (1)Metro-Goldwyn-Mayer, (2)Warner Bros., (3)Columbia, (4)Twentieth Century Fox, (5)Universal : Used two broad methods for controlling competition and creating movies efficiently • Vertical integration: the control of production, distribution and exhibition • The “studio system”— involved the star system, A and B movie units o Star system: an operation designed to find and cultivate actors under long-term contracts, with the intention of developing those actors into famous “stars” who would enhance the profitability of the studio’s film. o 1948 Consent Decr ee took a shot at the studio system ruling that studios cannot own their own movie theater chains and had to get rid of block booking: when movie distributors force exhibitors to book blocks of their films by making them buy multiple of them at one time) o A films: expensively made productions featuring glamorous, highly paid stars o B films: lower-budget films that were made quickly; where studios made most of the money (Andy Hardy); carried the big studios and A films The Modern Movie Industry Theatrical films: created to be shown in traditional movie theaters • Box office receipts have increased since 2002 : the sum of money taken in for admission at movie theaters • Ages 12-24 year olds make up 35% of frequent moviegoers • Industry executives pay most attention to Blockbusters: films that bring in more than $200 million at the U.S. box office; tend to bring in a high percentage of the money theatrical films make as a whole at the box office • Moviegoing has been encouraged by multiplexes (8-15 screen movie theater) and megaplexes (16+ screen movie theater) Production in the Movie Industry The Current Majors: six most powerful companies in Hollywood due to their distribution power; (1)Warner Bros., (2)Twentieth Century Fox, (3) Disney, (4)Sony Pictures/Columbia, (5)Paramount, (6)Universal • Considered distributors rather than producers Distinguishing between Production and Distribution • Firm production firms: companies involved in coming up with story ideas, finding scriptwriters, hiring the personnel needed to make the movie, and making sure the work is carried out on time and on budget • Firm distribution firms: companies responsible for finding the theaters in which to show the movies around the world and for promoting the films to the public o Often contribute money to toward the production firms’ costs of making the film o Ex: “a Paramount release: does not mean that the company’s studio fully financed and produced the movie; most films that it deals with as a distributor come from se parate production firms Independent Producers: production firms that are not owned by a distributor • Majors do not produce all the movies they distribute because in order for a distribution firm to maintain a strong relationship with theaters, it has to provide a strong roster of films to help fill theater seats • Most majors only produce 5 -10 films itself, then picks up the rest from independent producers The Movie Making Process • Getting the Idea o Can come from virtually anywhere, most popularly from TV shows, comics, toys, short stories, and newspaper articles o Scriptwriters: individuals who create plays for the movies, with scenes and dialogue; plot ideas often come to production firms via writers’ talent agents o Talent agents: represent various creative person nel and aim to link them with production firms in exchange for a percentage of the creators’ revenue from the finished product ; gains reputation around Hollywood and know what has been popular o The idea is pitched to a producer; pitch: initial presentation of a movie idea o If the producer likes the idea, the writer is paid to write a treatment: detailed outline of an initial pitch to executives of a production or distribution firm; if green lighted (approved), they will probably order a script to be written § Less established writers may write on spec: writing a script without a contract to do so, with the hope that when the script is passed along, it will be bid for and purchased • Getting the Talent o Executives typically have certain actors and directors in mind o Sometimes production firms will make a deal with a famous actor or director in which they take a lower base salary but get a percentage of the money that the production firm receives from the distributor (back-end deal or percentage of the gross) o Rules about actors’ minimum pay and working conditions have been established through deals between major production firms and the Screen Actors guild § Guilds: unions established by writers, directors, actors and other crew members to protect their mutual interests a nd maintain standards ; provide less highly paid workers with a collective voice which sometimes results in strike (2007 Writers Guild members’ strike) • Getting the Money o Often the hardest part of making a motion picture o Most expensive movies tend to be mega hits o Story is chosen and developed to fit the budget that the firm can manage o Genre films (movies that fit classic storytelling formulas like scifi or horror) are relatively inexpensive to make and its successes can make up for films that bring the production firm little return o Once the film and its budget are approved, both the production and distribution divisions provide the money; The distribution division is the one that has to work to make the money back through a percentage of box office receipts o Independent films have a harder time getting money; often has to use its own funds or borrow from the bank; some get long -term deals with majors like Disney and Pixar § Sell distribution rights (the rights to circulate a particular movie in different parts of the world) to get money for film projects • Actually Making the Movie o Casting directors help the director choose many of the actors o Set designers, production designers, costumer designers, makeup experts, and computer graphics personnel help create the physical shape of the space in which the actors work o Stand ins and stunt people o Editor decides which versions of different scenes should end up in it o Line producer: the individual who makes sure the equipment and personnel are there when they are needed o Completion bond companies : insurance companies that, for a large fee, pay any costs that exceed an agreed -upon amount for a film; sometimes required by moneylenders worried about spiraling costs Distribution in the Movie Industry Releasing Movies Once a distributor has set its slate of movies and they’re almost complete, they challenge is to set a release date (date on which the film will open in theaters) and pattern, by taking into account the kind of film it is, how popular its actors are, its target audience, and the other films on their slate • Typically schedule the release of potential blockbusters during the summer or between Thanksgiving and Christmas • More recently day-and-date releases (a simultaneous release dare for a movie in different countries) have become more popular; discourages pirates from distributing the film illegally online and allows more efficient promotion of the movie across the world at the same time** Release Patterns • Wide release: the opening of a film in more than 600 theaters simultaneously, usually accompanied by a large publicity campaign to incite people to see the film; most common release pattern in the U.S. o Saturation release: the initial release of a film in mor e than 2,000 theaters simultaneously • Platform release: the initial release of the movie in far fewer theaters in a relatively small number of areas with the plan to release the film in more theaters as the film garners positive publicity and discussion • Exclusive releases: the release of a film to only a handful of carefully selected theaters around the country ; not set up with the intentions of “going wide”; usually specialty or foreign films Marketing Movies To reduce risk of failure, distributors often co nduct two types of research before a film is released • Title testing: conducting interviews with filmgoers in shopping malls and other public places to determine the most alluring name for an upcoming picture • Previewing: takes place after a film is complete d but before it is formally released; viewers see a rough cut (preliminary) version of the movie Publicity: the process of creating and maintaining favorable “buzz” about a movie among its target audiences • May take place in the form of lavish cast parties, interviews with the film’s actors on TV programs and previews on YouTube and Facebook • Word of mouth (the discussions that people see the movie have with their friends in person and on social media) usually determines whether more people will go to see it Tracking studies: research on the public’s awareness of and interest in a film, beginning two weeks before the film’s release and continuing through the film’s first month of release • National Research Group surveys random samples of Americans by phone three times during each of those weeks • Marketing usually costs around half of the films negative cost: the total cost of making and editing the movie Exhibition in the Movie Industry The largest 3% of movie chains control 60% of the screens on which the films are shown Relationship between Distributors and Theater Chains • Chains with the largest numbers of screens are Regal, AMC, Cinemark, Carmike, Cineplex Entertainment, and Rave. • A theater chain often has booking divisions in different areas of the U.S., depending on where it concentrates its screens; each division has a number of bookers: people who license movies from distributors for theaters o E.g. Movie distributors inform the b ookers months in advance of what films they intend to release and when; booker makes an estimate of how well they believe the film will do at the box office compared to others • Movie distributor has an interest in getting the movie into theaters that fit its sense of audience interest in the film o E.g. executives may try to place a movie aimed at African American moviegoers in areas where many African Americans live Financial Agreements between Distributors and Theater Chains • Distributors and exhibition execu tives negotiate an exhibition license: specifies the date on which the distributor will make the film available to the exhibition firm’s theaters, the number of weeks the theaters agree to run the film, and when and where competing theaters can show the sa me film; sets the financial agreements between the two regarding the distributor’s expenditure on a film and the exhibitor’s need to cover its costs to make a profit • Common for the distributor to take a certain percentage of the ticket revenues from the film, with the exhibitor keeping the rest • Percentage-above-the-nut approach: an agreement in which the executives of the exhibition firm agree on the costs of operating each theater (“the nut”), then film by film, the distributor and exhibition firm negotiate what percentage of revenues “above the nut” the exhibition firm will pay to the distribution firm o In the end, distributors usually get back about half the box office receipts Convergence, Nontheatrical Distribution, & Exhibition Non theatrical window s/platforms are crucial when it comes to deriving profits from motion pictures , such as through circulating movies through television outlets, broadcast networks, local stations and cable television, VCR/DVD • Sell-through outlets: stores in which consumer b uy the videos rather than just renting them (Target, Walmart) • Rental outlets: companies that purchase releases from movie distributors and then rent them to individual customers on a pay -per-day basis (Blockbuster) • Recently, the rental business has seen th e growth of subscription services like Netflix, Redbox The Shift to Digital Marketing • Exhibition outlets like Fandango or Moviefone use short movie segments to start conversations among visitors about the film and whether or not someone should go; a double -edged sword • Hope that people will share and repost videos and that this will get target audiences engaged in and excited by the release • Video games represent another growth area for digital segments of theatrical films The Shift to Online and Mobile Downl oads • Sales and rentals of movie DVDs and cassettes have plummeted due to new technology and online/mobile downloads • Key challenge— keeping post-theatrical sales high; movie industry must convince people to pay more for its products because digital downloads are often less expensive Piracy Problems Film piracy: the unauthorized duplication of copyrighted films for profit; threaten the profits of the movie industry • Often found on data lockers: a website that rents secure password - protected areas to store files MPAA has sued for copyright infringement and are trying to crack down, but it is so difficult to keep track of Media Ethics The Narrowing of Cultural Diversity Critics of the mainstream movie industry argue that movie execs are sending a narrow range of stories into American homes and theaters • Many contemporary Hollywood films are made using formulas of sex and violence, exposing it to 14 -24 year olds • Exhibitors work against cultural diversity; few theaters in the U.S. show art films: movies created on small budgets that often do not fit into Hollywood stereotypes and standard genres • Hollywood movies are keeping Americans isolated from important aspects of world culture Cultural Colonialism Strong criticism lodges against industry as it represents a leading edge of American cultural colonialism (the process by which in the media content of a dominating society surrounds people of another society with values and beliefs that are not those of their own society; tend to support the interest s of the dominating society) • American-based companies are harming other cultures by drowning out the presentation of local and cultural experiences in the media with Hollywood-based formulas Cultural colonialism helps American business by creating markets for their consumer goods and erodes local cultures because they can’t c ompete with U.S. marketing glitz Chapter 13: The Television Industry 5/2/16 5:33 PM “MVPDs are now linking with OTT SVOD services… that allow them to sell these services directly to their broadband and pay -TV customers.” The History and Rise of Television 1885: Nipkow Disk: created a mechanical version of a TV camera 1935-1938: Nazi government in Germany operated world’s first regular television service; RCA (Radio Corporation of America) 1939: FDR became first president to appear on TV 1940s: WWII interrupted TV; 1946: Started commercial life in the US 1950s: “Golden Age of Television”: marked by the proliferation of original and classic dramas produced for live television; most had at least 1 TV set in their home and rise of Nielsen company 1951: Live TV and I Love Lucy shot on film in front of an audience ; executives realized they could put filmed episodes into syndication: licensing of mass media material to outlets on a market -by-market basis (reruns) 1960s-‘70s: advertisers rushing to the new medium, rise of participating sponsorship (purchased slots within or between shows as opposed to full sponsorship), rise of color TV (NBC peacock) 1970s: FCC started assigning a large number of new TV licenses and caused the rise of “independent” broadcasters ; fin-syn rules— prevented the major TV networks from owning their own syndication companies and primetime access 1970s: ABC, NBC, CBS flying high; rise of cable took away some of their dominance; coaxial cable allowed national marketing 1980s: start of a raft of new satellite -delivered TV 1990s: Hollywood = creator/leader of popular pro gramming 1994: DirecTV begins direct-to-home satellite services, followed by Dish 1996: Telecommunications Act of 1996: got rid of fin -syn rules The Contemporary TV Industry TV Broadcasting: scanning a visual image and transmitting it, generally with accompanying sound, in the form of electromagnetic waves that when received can be reconverted into visual images • Historically the most popular of the three domains • Signals are transmitted from towers owned by local stations on frequencies allocated to them by the FCC • Commercial stations: support themselves financially by selling time on their airwaves to advertisers • Noncommercial stations : receive support through donations from listeners, private foundations and commercial firms in return for billboards o Billboards: mentions of a sponsor’s name or products at the start or end of programs airing on the station o Underwriting: when a company pays to sponsor a program on a noncommercial station • Television network: an organization that distributes TV programs (u sually by satellite and microwave relay) to its affiliated stations, or stations that agree to carry a substantial amount of the network’s material on an ongoing basis, so that the programs can be broadcast by all the stations at the same time o Big Four commercial networks— ABC, CBS, NBC, Fox — the giants of broadcast TV because of their role in coordinating distribution § Vertically integrated operations (circumstance in which an organization has control over a media product from production through distribu tion to exhibition) § Each owns its own broadcast outlets: stations, organizations that transmit broadcasting signals; locally called O&O’s (owned and operated) o Network affiliates : local broadcast TV stations that are not owned by broadcast networks, yet tra nsmit signals and programs on a daily basis; in return, the network promises to compensate the affiliate with a portion of the revenues received from advertisers that have bought time on the network § Transmit the network’s program feed: the succession of shows sent from a network to is network affiliates § Many are a part of station groups: collections of broadcast television stations owned by a single company o Independent broadcast station : a station not affiliated with one of the Big Four networks • Almost all money that broadcast stations and networks receive comes from commercials: short audiovisual pieces that call attention to advertisers’ products or service • Local stations more recently make about $1 billion/yr on transmission fees: the money TV networks and local stations charge cable and satellite firms for the right to carry their material Subscription Cable and Satellite Services Cable TV: provided by subscribers by signals sent through a wire (usually a coaxial cable, but increasingly via fiber optic lines) • Cable TV system: the cable television retailer that physically installs the cable and markets the program service to consumers in a particular geographic area • Multiple system owner (MSO) : a cable TV firm that owns two or more cable systems • Subscription networks: nonbroadcast program channels for which people pay a monthly subscription fee to receive them via cable or satellite Telcos Telephone companies that offer television and internet services ; could pose a formidable threat to providers of televi sion services (Verizon and AT&T Satellite TV Programming that comes directly to the home from a satellite orbiting the earth • Most backyard receivers have been replaced by direct broadcast satellite (DBS) technology: allows a household to receive hundreds o f channels, from signals that are delivered digitally from satellites operating in orbit to a small dish installed on the side of a dwelling; a set -top box decodes digital signals so that they appear on the TV set Online and Mobile Platforms • Major Key = convergence • Place a lot of episodes online to try and sell advertisers on the idea of sponsoring both the broadcast and online feeds • Activity is NOT nearly as profitable in comparison to broadcast and subscription domains Linear v. Nonlinear Linear: watching the lineup provided by the channels in real time Nonlinear: SVOD, VOD, DVR Production in the TV Industry • Local systems is produce lineups: the menu of channels that a cable television system offers to potential subscribers • Networks produce formats: a collection of elements that constitutes a channel’s recognizable personality, created through a set of rules that guide the way the elements are stitched together with a particular audience-attracting goal in mind Producing Cable and Satellite Lineup Channels The choice of networks is based on three considerations: • Technological limitations: HDTV signals use more bandwidth than standard TV signals, which is easier for satellite firms than for cable companies to add capacity • Covering costs o Licensing fees: the costs that particular networks
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