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notes for feburary 23 and 25

by: Elizabeth Ronecker

notes for feburary 23 and 25 JOURN 1100

Elizabeth Ronecker
GPA 3.5

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beginning of the 2nd unit focuses on the economics of Journalism
Principles of American Journalism
Joesph Moore
Class Notes
25 ?




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This 8 page Class Notes was uploaded by Elizabeth Ronecker on Sunday February 28, 2016. The Class Notes belongs to JOURN 1100 at University of Missouri - Columbia taught by Joesph Moore in Spring 2016. Since its upload, it has received 12 views. For similar materials see Principles of American Journalism in Journalism and Mass Communications at University of Missouri - Columbia.

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Date Created: 02/28/16
2/23/16   The  Economics  of  journalism     I. Overview  of  unit   a. Dual  business  model  for  media   b. Market  model  vs.  the  public  service  model   c. The  current  state  of  media  ownership   d. Potential  implication  for  content   e. Crisis  in  journalism’s  business  model   II. Key  questions   a. What  is  the  various  ways  journalism  is  paid  for?   b. How  we  arrive  at  today’s  business  models>   c. What  are  the  potential  implications  of  these  business  models  on   journalism?     d. Implications  for  content,  industry  entire  journalistic  landscape   e. Substance  and  esthetically   III. Commercial  media   a. American  media  system  is  commercial   b. Businesses  owned  by  individuals,  families  or  groups  of  people   i. Ex)  owner  of  amazon  owns  Washington  post   c. Some  media  companies  are  publicly  traded  (owned  by  lots  of   shareholder)   d. 2010,  40%  of  US  newspapers  are  owned  by  a  publically  traded   company     e. “Commercial  media  are  neither  natural  or  inevitable”     IV. Dual  market  model   a. Media  sells  content  to  consumer   b. Media  sell  the  attention  of  audiences  to  advertisers   c. Most  of  the  money  comes  from  advertisers  so  the  needs  of  advertisers   trump  the  needs  of  consumer  because  they  pay  for  a  lot  of  things   d. Price  of  newspaper  is  less  than  cost  to  make;  difference  made  from   advertising  revenue   e. This  model  is  in  decline;  desperate  to  find  new  models  to  replace  it     V. US  radio  in  the  1920s   a. Early  1920s,  radio  is  dominated  by  educational  institution   b. Considered  public  good  and  is  limited   c. Lot  of  debate  about  how  limited  radio  should  be  regulated  or  if  it   should  be  limited   d. Airwaves  dominated  by  education  institutions-­‐>  public  service  where   universities  would  share  information  with  communities   e. Radio  act  of  1927  est.  Federal  Radio  Commission  (FRC)   f. In  1928,  FRC  reallocated  frequencies  to  for-­‐profit  commercial   broadcasters   i. Told  commercial  that  they  could  broadcast  at  any  time  and  the   non  profit  ones  could  only  broadcast  at  certain  times  so  lost   listeners   g. Radio  advertising  expenditures  reached  $100  million  in  1929   i. Some  people  were  disturbed  that  their  children  were  getting   advertised  to   ii. Some  groups  were  really  against  this  and  protested  wanted  to   be  able  to  bring  culture  to  masses   iii. Opposed  groups  lost  because  commercial  radio  had  a  lot  of   money  to  influence     iv. Dewey-­‐  in  favor  that  the  “radio  is  the  most  powerful   instrument  of  social  education”…  social  public  interest   VI. Market  vs.  public  sphere  models   a. Market   i. Private  companies   ii. Generates  profits   iii. Audiences  are  consumer  and  a  product   iv. Entertainment  orientated     v. Media  accountable  to  owners  and  shareholders     b. Public  sphere  model   i. Public  resources  serve  particular  area   ii. Promotes  citizenship  and  education   iii. Audiences  are  citizens,  political  actors  in  democracy     iv. Education  orientated   v. Media  accountable  to  public  and  government  reps.   c. Most  news  have  private  but  NPR  and  PBS  is  public  sphere  model   d. Can  coexist  but  one  model  is  dominated  over  other   e. Market  is  dominated  over  public  in  the  US   f. BBC  in  GB  is  public-­‐  license  fee  to  pay  for  it;  4  cents  per  person  per   hour  to  watch     i. A  lot  of  people  think  its  run  by  government  but  it  is   independent;  in  exchange  for  public  finance  promotes  public   education   VII. Public  investment  in  news  media   a. Government  provide  financial  support  to  news  media  in  3  general   ways   i. Public  service  media  (licensing  fees)   ii. Indirect  press  subsides  (tax  breaks)   iii. Direct  press  subsidies  (direct  investment)  (rare  and  not  a  lot  of   money)     VIII. NPR  model   a. Get  revenue  from  corporate  underwriting  (mention  of  companies   name)  and  individuals     IX. Origins  of  the  market  model  in  the  US   a. Strong  libertarian  ideology     i. Idea  that  individuals  free  from  influence  from  the  state     b. Historical  mistrust  of  centralized  government   i. US  fought  against  this  in  American  Revolution   ii. Countries  that  use  sphere,  they  didn’t  have  revolutions;  they   slowly  moved  to  more  democratic  government     c. Concentrations  of  economic  power   i. Corporations  had  vested  interest  that  things  public   commodities  (RR)  were  kept  to  a  minimum  so  others  could   own  and  taxes  were  kept  low   X. Advantages  and  disadvantages   a. Market   i. Advantage:  lower  cost  to  get  the  paper,  less  reliance  on   government,  companies  can  better  connect  to  consumers   ii. Disadvantage:  consumer  comes  second  to  the  advertiser,  more   entertainment  focus,  monopolistic,     iii. The  advantages  and  disadvantage  can  be  interchanged   b. Public  sphere   i. Advantage:  educational,  profit  is  stable,     ii. Disadvantage:  not  as  entertaining,  journalists  watchdog  when   rely  on  government,  limit  amount  of  money     XI. What  does  US  commercial  media  landscape  look  like  today?   a. Media  ownership   i. Highly  concentrated   ii. More  than  have  ever  been  in  history   iii. 90%  of  media  is  owned  by  6  major  corporations   1. Comcast,  Newscorp,  Disney,  Viacom,  Time  warner,  CBS   iv. Google  dominates  online  (advertising)  but  is  not  considered   one  of  big  6   b. Time  warner   i. TV:  CNN,  HBO,  TBS,  TNT,  Cartoon  Network,  CW  (co-­‐own  with   CBS)   ii. Entertainment:  Warner  Bros,  New  Line  Cinema,  DC  comics   iii. Print:  people,  time,  sports  illustrated,  real  simple,   entertainment  weekly   iv. Online:  TMZ   c. Newscorp   i. TV:  FOX,  Fox  news,  Fox  sports,  Nat  geo,  big  ten  network   ii. Entertainment:  20  century  fox   iii. Books:  harper  Collins   iv. Online:  Hulu  (32%)   d. Disney   i. TV:  ABC,  ESPN,  A&E,  LIFETIME,  Disney  channel,  history   channel   ii. Entertainment:  marvel,  Lucas  film     e. Viacom   i. TV:  Nickelodeon,  MTV,  CMT,  BET,  VH1   f. CBS   i. TV:  CBS,  ShowTime   ii. Entertainment:  CBS  films   g. Comcast   i. TV:  NBC,  MSNBC,  bravo,  Oxygen,  USA,  E!,  the  weather  channel   ii. Entertainment:  universal  studies   iii. Online:  Hulu  (32%),  fandango   iv. Other:  universal  studies   h. Other  international   i. Sony(japan)   1. Sony  pictures  and  music  entertainment   ii. Bertelsnam  (Germany)   iii. Vivendi  (France)   i. US  print  media   i. Hearst,  tribune,  Gannett,  Lee  enterprises  (STL  post  dispatch)     XII. Media  ownership   a. Horizontal  integration   i. Owning  companies  that  expand  the  reach  of  your  products  or   services     ii. Ex)  Disney  owning  ABC,  ESPN,  Disney  Pictures   iii. 30  rock  and  product  integration     b. vertical  integration   i. owning  companies  that  streamline  the  production  of  your   products  or  services   ii. ex)  a  magazine  publishing  company  owning  companies  that   produce  glossy  paper   iii. ex)  time  warner  owning  Warner  Bros.  pictures  and  Warner   Bros.  Home  entertainment     c. interlocking  directories   i. Members  of  the  board  of  one  company  sit  on  the  board  of   another  company   ii. newscorp,  Disney,  Viacom,  and  time  warner  have  45   interlocking  directorates   iii. Make  is  so  profit  is  high   d. Media  content  (broadly  speaking)   i. Potential  decrease  in  diverse  speaking   ii. Potential  decrease  in  risk-­‐taking,  increase  in  duplicative   content  (same  Disney  plots,  different  characters)   iii. Desire  to  maximize  certainty   iv. Cradle  to  grave  loyalty  (Disney)     e. Journalistic  content   i. Greater  reliance  on  syndicated  and  wire  content  (cheaper)   1. Potential  decrease  of  local  voices   2. Potential  homogenization  of  wire  content  (STL   postdispatch  story  can  show  up  in  other  LEE  enterprise   paper)   ii. Lack  of  local  print  competition  (2  paper  cities)   1. 1920:  43%  of  cities  had  multiple  newspapers   2. 2000:  1%  did   iii. potential  decrease  in  risk-­‐taking,  covering  of  underrepresented   voices   1. desire  to  maximize  certainty  in  dual  market   iv. potential  desire  to  attract  affluent  audiences   v. tension  between  public  sphere  and  product  models  of   journalism   vi. concern  that  streamlining  of  business  operations  lead  to  cost-­‐ cutting  of  valuable  assets  (experienced  journalists)   vii. devoting  resources  to  more  profitable  content   1. unrealistic  conceptions  of  nominal  annual  growth   a. 1970-­‐80  annual  average  growth  among  Gannett   papers:  30-­‐50%   b. 1990  annual  average  growth  across  the  entire   industry  about  29%   2/25/2016   I. graphs   a. newspaper  graph  from  NY  times  showing  that  there  is  a  circulation   decline  for  paper   II. factors  contributing  to  crisis  in  business  model   a. newspaper  chains  carries  loads  of  debt     b. borrowed  money  to  own  more  papers  to  get  horizontal     c. high  expectations  for  annual  growth  not  being  met   d. 2008,  financial  crisis   e. monopoly  on  news  challenges  with  the  rise  of  blogging,  citizen   journalism   f. change  in  consumption  patterns  among  young  people   g. high  operating  costs  for  print  media     h. decline  in  classified  revenue  (craigslist  effect)   i. online  ads  not  worth  as  much  as  print  ass  (dollars  to  dimes)   j. online  delivery  seen  as  complementing  print  media     III. dollar  to  dimes     a. prints  advertising   1. publishers  set  rates   2. rates  based  on  size,  color,  location   3. maximum  exposure  potential  is  publication  circulation   4. print  had  monopoly  on  information,  audience   b. online  advertising   1. advertisers  have  more  power  over  setting  rates   2. rates  based  on  impact  (interact  with  ad)   3. exposure  and  impact  are  highly  trackable   4. print  has  lost  monopoly  over  information,  audience     c. newspapers  went  to  rise  of  60  billion  in  2000  to  40  billion  in  2010   d. as  news  print  ads  decline  as  online  ads  are  rising     e. money  is  going  to  big  corporations  to  GOOGLE,  YAHOO   f. in  10  years,  went  to  50  billion  in  ads   g. online  ad  revenue  market  is  highly  concentrated-­‐Google,  yahoo,   Microsoft,  AOL,  Facebook  and  then  just  everybody  else  is  only  23b   IV. change  in  consumption  patterns   a. declined  after  2008,  but  rebounded  a  little  after   b. newspaper  sale  has  decreased  overall  since  2003  by  5%   c. where  people  get  their  news-­‐traditional  news  (paper,  TV,  and  radio)   has  declined  but  print  has  a  steeper  decline   d. 2005,  people  get  more  online  goes  up  about  12%   e. internet  has  contributed  but  traditional  was  declining  even  before   internet  became  more  accessible   f. people  have  been  consuming  less  news  over  all   g. young  people  consuming  less  news  than  any  age  group     V. the  craigslist  effect   VI. role  of  2008  financial  crisis  and  great  recession   a. ads  for  jobs  went  down  the  most;  steep  decline   VII. loads  of  debt   a. the  internet  and  financial  crisis  of  2008  had  major  impact  but  other   factors  as  well   b. chains  took  debt  in  90s  to  acquire  more  papers-­‐>  high  rates  of  returns     c. trend  today:  debt  5-­‐20  ties  greater  than  annual  revenue   d. consequence:  newspapers  have  had  to  cut  newsroom  aspects  which   has  made  journalism  decline  in  quality  and  thus  people  have  seen  that     e. stock  drop  of  big  companies  like  lee   VIII. response  from  newspapers   a. layoffs,  buyouts,  redundancies   b. concessions,  furloughs   c. closures,  online-­‐only  publication  (2011:  152  papers  closed  down)-­‐>   rocky  mountain  news,  Seattle  post  both  closed  and  those  cities   became  one  paper  towns     d. reduced  circulation;  went  to  3  times  a  week   e. step  decline  in  news  room  cuts  from  03-­‐06-­‐>9,000   f. photographers  have  had  the  hardest  cuts   IX. impact  on  content   a. 35%  reduction  in  newspaper  reporters  covering  state  legislatures   (2003-­‐2014)   b. major  reductions  of  regional  newspapers  have  DC  bureaus   st c. major  reductions  in  foreign  bureaus  (most  expensive;  1  to  get  cut)   d. movement  away  from  beat  reporting   e. layoffs  of  most  experienced  (expensive)  reporters     f. major  decrease  in  professional  photography  jobs  (Chicago  sun  times   cut  its  entire  28  person  photo  staff  in2013)   g. copyediting  and  page  design  took  major  hits   h. in  2013,  31%  of  Americans  left  a  new  outlet  because  it  stopped   covering  news  they  were  use  to   X. closer  look  at  the  impact  of  the  crisis  on  reporting  on  local  government   a. reporters  spread  too  thin  (do  more  with  less)   b. loss  of  “institutional  memory”   c. tendency  toward  “pack  journalism”  –wait  for  something  sensational   to  happen   d. rise  of  click-­‐driven  journalism  (reporting  in  extreme/outrageous  bills   rather  than  weighty  yet  boring  matters)   e. local  government  reporting  seen  as  a  “stepping  stone”  journalism   f. state/local  politician  bypassing  traditional  gatekeepers,  fact-­‐checkers   (not  as  heavily  scrutinized)   XI. social  factors   a. 75%  of  young  people  that  of  local  paper  were  gone  then  would  have   no  impact  on  how  to  get  their  information   b. people  respond  that  news  stories  are  less  complete  and  turning  away;   not  quantity  but  quality   c. irony;  most  people  no  nothing  about  the  news  financial  debt   1. don’t  know  why  the  quantity  is  bad  so  Americans  don’t   understand;  since  the  newspapers  aren’t  really  explaining   the  debt   XII. impact  on  society?   a. NOLA  people  are  more  likely  to  click  on  private  schools  then  public   where  most  kids  in  NOLA  go  to  school   b. Kentucky;  changes  in  municipal  politics  after  paper  closed-­‐>  voter   turn  out  decreased  and  people  said  they  had  doubts  about  what  they   could  change   1. Revealing  because  reporters  are  suppose  to  give  civic   function  of  what  the  policies  could  change   XIII. Silver  linings   a. Rural  newspapers  have  not  suffered  as  bad  as  papers  in  metro  areas   (and  some  have  thrived);  more  secure  advertising  base   b. However,  any  buts  to  the  USPS  disproportionately  affect  rural   newspaper  delivery   c. Newspapers  with  really  high  circulations  and  those  with  really  low   circulations  have  increased  hiring   d. Ad  revenues  is  going  up  online  so  some  has  been  going  to  online  news   e. TV  and  print  newspaper  have  more  ad  spending  share  then  time  spent   share   f. Classified  ad  spending  is  recovering;  as  consumer  spending  is  going   up   g. Broadcast  local  is  increasing  audience     h. Since  2012,  morning  news  and  early  evening  news  have  had  slight   increase  in  viewership  and  slight  increase  in  ad  revenue   i. Mobile  ad  revenue  is  taking  off,  in  4  yrs.  increased  18b   j. Magazine  and  newspaper  digital  ad  is  increasing  but  magazine  is   increasing  more     k. Stocks  are  recovering  for  big  companies,  not  a  lot  but  some,  2013   XIV. What  so  the  stocks  say?   a. Increase  cannot  fix  debt  that  has  been  taken  in     b. Stock  alone  is  not  able  to  measure  “responsible  growth”   c.  “Business  as  usual”  behavior   XV. key  takeaways   a. crisis  in  the  traditional  business  models  of  news  media   b. crisis  mostly  in  newspaper   c. multiple  factors  to  crisis   1. economic   2. structural   3. social    


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