J201 Media and Society
J201 Media and Society
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Date Created: 05/26/14
CHAPTER 15 Media Economics and the Global Marketplace Terms Monopoly arises when Cl single firm domincites production and distribution in CI pClI l39lCUlClI industryncitioncilly or locally Oligopolyz where iust ca few firms dominate on industry Limited competition chcircicterizes Cl medic mcirket that has mdny producers and sellers but only ca few products within ca particular category Direct pciyments come from consumers who buy medic products such CIS books movies and Internet or cable TV services Indirect pciyments derive from cidvertiserscompcinies thcit purchcise ads in VClI lOUS medic to attract specific consumers of those medic Economies of sccile increcising production levels to reduce the cost for ecich book printed Hegemony society s ledst powerful members are persuaded to ciccept the values defined by its most powerful members Synergy the promotion ClhCl sole of different versions of CI medic product cicross Cl medic congomercte s vdrious subsidiciries CUll39UI Cll imperidlism Cl situcition in which Cl style in fcishion and food CIS well CIS medic fdre that dominates the global market Transition to an Information Economy III Had several defining points early regulation designed to break up monopolies in manufacturingrelated industries such as oil 2 railroads and steel gave way to deregulation which ultimately catalyzed the M amp A drive that created media powerhouse infobased corporations in turn fueled new trends in the industry including a decline of unionized labor and a growing wage gap new society took shape biggest media companies defined the values that dominated culture in US and globe III How media industries are structured three common structures 1 Monopoly 2 Oligopoly 3 Limited Competition III Deregulation trumps regulation deregulation has made it easier for companies to merge diversify and industries such as airlines energy communications and financial services to form oligopolies broadcast Telecommunications Act of 1996 lifted most restrictions on how many radio and TV stations one corporation could own unleashed wave of mergers as TV radio cable telephone and internet companies fought to become biggest corporations in their business sector and acquire new subsidiaries in other media sectors regulation is increasingly becoming looser III The rise of media powerhouses there has been much more consolidation than competition in world of mass media media powerhouses Apple Google Amazon and Facebook lead the way Analyzing the Media Economy 1 How media companies operate making money bring in money from two sourcesdirectindirect payments I Formulating business strategies achieving economies of scale expectations of stakeholders shape media companies business strategies gt Meet performance criteria Profit goals introducing new technology to marketplace making media products and services available to less affluent people facilitating free expression and political discussion watching wrongdoing in government and business monitoring crisis playing and role in education maintaining quality of culture I How internet is changing the game internet has made media companies operate in same industry New opportunities for some media organizations gt Noncommercial public broadcasters bring in ad revenue gt Public radio and TV stations don t face FCC regulations from taking advertising new challenges gt Older media companies must reestablish payment models can allow media companies offerings to work on differing levels of access business trends in media industries gt Flexible markets and decline of labor unions companies seeking to increase profitability alter their products services and production processes as needed to satisfy specialized evershifting demands powerhouses can absorb losses than small businesses with limited capital and stand best chance of surviving today s flexible markets relying heavily on cheap labor and quick high volume sales downsizing and wage gap gt Many people have lost jobs as companies have downsized to become more productive competitive and flexible age of hegemony gt As media corporations have grown larger they have been able to manage public debate and dissent about their increasing powerexercise hegemony Specialization and Global Markets III NAFTA North American Free Trade Agreement in 1994 and WTO World Trade Organization in 1995 enabled the emergence of transnational media corporations and stimulated business deals across national borders III Technology helped too III Accelerated the global spread of media products and cultural message III The rise of specialization and synergy specialization synergy III Disney A postmodern media conglomerate mickey mousefirst sound cartoons 1 5 featurelength cartoon Snow White and the Seven Dwarfs driving to diversity nature documentary live action feature feature documentary distribution company embrace TV theme park III Capturing Synergies epitomizes the synergistic possibilities of media consolidation can produce an animated feature for theatrical release and DVD distribution owns ABC and can place a series based on a movie can release a book version through publishing arm Hyperion can publish stories through magazine theme parks licensed products theaters launched movies as broadway musicals 1 Expanding globally theme park in Japan markets cartoons to Chinese Television launched magazine in Chinese opened several Disney stores and theme parks in Hong Kong EuroDisney Satellite relay station in Rome introduced 24 hour cable channel to 23 countries in Middle East and North Africa III Facing Challenges and seizing opportunities 20002003 grew into 2 39 largest media conglomerate challenges included recession failed films and Internet ventures declining themepark attendance and damaged relationships with number of partners and subsidiaries focused on TV movies online initiatives made movies and TV programs available in iTunes revamped its Website as entertainment portle ioined news corp partner of Hulu purchased Marvel Steve Jobs was Disney board member international cruise line Disney Channel Russia Disney Resort China I The growth of global audiences international expansion has afforded media 2 conglomerates key advantages including access to profitable 2 d markets and opportunities to advance and leverage technological innovations media has become cheaper and more profitable viewership globally Social Issues and Media Economics 1 Limits of antitrust laws companies have avoided antitrust laws that were meant to ensure diversity of corporate ownership have diversified their holdings and formed local monopolies 1 Expanding through diversification companies outside oligopoly have hard time competing in marketplace antitrust laws aim to curb national monopolies so many media monopolies operate locallythese firms decide which channels are made available and what rates are charged 1 A vast silence equating free markets with democracymakes citizens not want to criticize because too close to criticizing democracy debating consumer choice vs consumer control gt Consumer control vs consumer choice the former requires that consumers participate in deciding what is to be offered the latter is satisfied if consumers are free to select among the options chosen for them by producers we have choice but limited control individual and alternative producers artists writers and publishers becoming more popular 1 Cultural imperialism increasing dominance of American culture around the world countries relish themes of innovation and rebellion expressed in American products global spread of access have made it harder for political leaders to secretly repress dissident groups cultural imperialism internet has distinctively American orientation proponents global village opponents many can t afford American products Meclia Marketplace in Democratic Society III Media conglomerates that own news companies have capacity to use resources to promote products and determine what news gets national coverage are we getting the full story I Politicianslobbying III companies with good financial supportbetter chance influencing regulatory clecisions III Media reform groups Quiz 1 What are three common structures of medic industries Answer 2 1 vonopoy 20igopoy 3Limi recl Competition 2 What are some media powerhouses Answer 22 Apple Google Amazon and Fclcebook lead the way 3 What are two ways that media companies bring in mone 3 2 Answer 4 What are some performance criteria that medic strives for Answer 4 Profit goals introducing new technology to marketplace making media products and services available to less affluent people facilitating free expression and political discussion watching wrong doing in government and business monitoring crisis playing and role in education maintaining quality of culture