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The Media and Economic Pressures Ryan Brundrett/Cody Graham/Christopher Renner/Jennifer Wells/Mary Werick.

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Presentation on theme: "The Media and Economic Pressures Ryan Brundrett/Cody Graham/Christopher Renner/Jennifer Wells/Mary Werick."— Presentation transcript:

1 The Media and Economic Pressures Ryan Brundrett/Cody Graham/Christopher Renner/Jennifer Wells/Mary Werick

2 QUOTEWORTHY media buzz

3 FCC Commissioner Jonathan S. Adelstein, in Lane, Terry. "Copps Flirts With Releasing Media Ownership Draft to Public." Communications Daily, May 12, 2003

4 Former CBS News anchorman Walter Cronkite, in Yang, Catherine. "The FCC's Loner is No Longer So Lonely." BusinessWeek, March 24, 2003.

5 --Lachlan Murdoch, son of media mogul Rupert Murdoch.

6 ETHICS by Louis Alvin Day

7 The profit motive and competition are the economic mainstays of western democracies. When economic considerations become the motivating agent for why one does something, then ethical questions arise, especially when the commercial interests are allowed to dominate the social obligations of the media. The issues then is how to balance economic pressures against individual or institutional duties to others.

8 PRESSURES in the economy

9 Financial Supporters investors, advertisers, clients, subscribers and customers. the competition The the public

10 OVERVIEW for today

11 We will look at economic pressures from the following points of view. Concentration of media ownership Mass media and marketing The role of advertising Product Placement Group discussions Conclusion Report on findings Challenges of cyberspace

12 MEDIA consolidation

13 HISTORY In 1953, 50 corporations controlled a vast majority of all news media in the US Ben Bagdikian was called an alarmist for pointing this out in his book, The Media Monopoly In his 4th edition published in 1992, he wrote In the US, fewer than two dozen of these extraordinary creatures own and operate 90% of the mass media- controlling almost all of Americas newspapers, magazines, TV and radio stations, books, records, movies, videos, wire services and photo agencies.

14 Bagdikian predicted then that eventually this number would fall to about half a dozen companies. This was greeted with great skepticism at the time. When the 6th edition of The Media Monopoly was published in 2000, the number had fallen to six. Since then, there have been more mergers and the scope has expanded to include new media like the internet market.

15 WHO OWNS THE MEDIA The job of medias new corporate bosses is to maximize profit for shareholders, not to provide greater choice and diversity for consumers. democracy-researching.html democracy-researching.html Congress overturned the FCCs 2007 media consolidation ruling.

16 In 2004, Bagdikian's revised and expanded book, The New Media Monopoly, shows that only 5 huge corporations -- Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom (formerly CBS) -- now control most of the media industry in the U.S. General Electric's NBC is a close sixth.

17 F.A.I.R. Media Consolidation Taken from: Outfoxed: Rupert Murdoch's War on Journalism. Media analyst for FAIR Peter Hart discusses the effect of media consolidation on journalism. Taken from: Outfoxed: Rupert Murdoch's War on Journalism. Media analyst for FAIR Peter Hart discusses the effect of media consolidation on journalism. Fairness and Accuracy in Reporting Fairness and Accuracy in Reporting Publishes Extra - magazine Publishes Extra - magazine Produces CounterSpin (30-minute weekly podcast) Produces CounterSpin (30-minute weekly podcast)

18 WHO IS LEFT OUT The state of female and minority ownership in the broadcast sector is even more shocking compared to other industries. While female and minority ownership has advanced in other sectors since the late 1990s, it has gotten worse in the broadcast industry. Women owned 28% of all non farm businesses in 2002, but currently owns less than 6% of commercial broadcast TV stations. Minorities owned 18% of all non farm business in 2002, but currently own approximately 3% of commercial broadcast television stations.

19 Source: Out of the Picture 2007: Minority & Female TV Station Ownership in the United States There has been no improvement in the level of minority broadcast TV ownership since 1998, even as the total universe of stations has increased by approximately 13% At the same time, there has been a marked decrease in the total number of black or African American owned stations- dropping nearly 70% since 1998. In numbers, in 2007 only 14 of the 45 African American owned stations in 1998 remained.

20 1998 FCC Cross Ownership Promethus Radio Project v. FCC Was heard and adjudicated by the US Third Circuit Court of Appeals in 2003 and 2004 The majority ruled 2-1 to throw out the FCCs attempt to raise the limits of cross- ownership of media The court ruled that a diversity index used by the FCC to weigh cross-ownership (of radio, TV, and newspapers) employed several irrational assumptions and inconsistencies

21 TV Newspaper Cross Ownership Mark Cooper (2007) in reference to the Promethus Radio Project Concludes: TV and newspapers are the two most important sources of local news and information by far The ban on such mergers was the longest standing of the rules that the FCC is considering Source: The Case Against Media Consolidation: Evidence on concentration, localism and diversity. Mark Cooper, Ed. (2007). Donald McGannon Center for Communicaiton Research, Fordham University.

22 The FCC proposed the most radical change in this rule- allowing newspaper- TV combinations in virtually every city in America In rejecting the FCCs cross-media limits, the Court devoted a great deal of attention to the FCCs faulty reasoning and flawed analysis of media markets Cooper shows that mergers between newspapers and TV stations in the same market pose a grave threat to democratic discourse

23 In antitrust terms, these mergers result in increases in market concentration that raise significant competitive concerns and are likely to create or enhance market power. In terms of the Communications Act and First Amendment jurisprudence, the newspaper-TV combinations that result dominate the local market raising concerns about undue economic concentration and inordinate influence over public opinion.

24 THE ALLIANCE OF mass media

25 According to Day… [As applied to the media, the marketing concept holds that all departments, including news, must contribute to the financial well-being of the organization.] Naturally, New stations want to maximize their profits and using the news avenue is a the way to do it. One Major fundamental objective of any newspaper, magazine, broadcast station, movie studio, or cable system is profit.

26 TODAY Due to the mass decline in circulation and profits of newspapers, they have been driven to marketing for aid… to reclaim their audience appeal The wall that once separated editorial from advertising has crumbled Editors are sitting down with marketing and advertisers to strategize for revenue. Among the editors responsibilities is the development of ad- driven special sections No Longer is the news produced merely as a public service. It must be sold to the consumer and must contribute its share to the success of the marketing plan of the overall operation.

27 There is now a high use of graphic violence, tragedies, and sensationalism in pursuit of higher ratings for higher profits In a recent survey… 75% held entertainment to be more important that education of readers So now the question is… Give people what they want… or… what they need as citizens. Entertain… vs.… educate and inform? Public interest seems to have subordinated to economic interest When commercial pressures jeopardize journalistic standards, then serious ethical questions must be addressed

28 Is It All About Ratings? Days CNN Example: CNN and Time magazine featured a story accusing the US Military of secreting using nerve gas against defectors during Vietnam. The accuracy of the story was highly questioned by many, protested by the military, and a full investigation sent underway by the Pentagon. In the end CNN retracted the story and the 2 producers responsible for it were fired. Did CNN cut corners to make a big splash with newsstand to make huge revenue increases…? Days OJ Simpson Example: The case received more intense coverage than any event since the Persian Gulf WarLive coverage of the preliminary hearings shot ratings up like crazy!This was entertainment masquerading as news, that trivialized real news. …the presidential visit to Europe at this same time got trivialized. …the news says it was justified because it was public interest

29 The alliance of Marketing and Media Seems inevitable today…. Doesnt the newsroom and business side of journalism depend on each other for success? Good journalism and Good business simply are not mutually exclusive today To compete in the business world today, one must master the principles of marketing. Without profit, any media venue will not last very long. Profit allows media to invest into making their business better, more valued, and successful.

30 ENTERTAINMENT Should news programs be used as promotional vehicles for entertainment divisions? …NBC, CBS, ABC all put a lot of time into their entertainment programs…a show is a cultural phenomenon and therefore newsworthy!…But does it compromise the integrity of the media?…Clearly, Entertainment is driving news decisions Advertorials- news, features paid for by advertisers but cloaked in editorial content Infomercial- program length commercialsHUGE profit makers for media…referred to as Editorial Pollution blurring the line b/w advertising, entertainment, and editorial content

31 MEDIA ETHICS Some media like ABC and CBS will not initiate critical stories that will negatively affect their sources of profit. So an ethical question arises … will these news organizations stand up for their obligations against such institutions? Will they choose their own self interests… or their moral duties to the welfare of society? It comes down to the SOCIAL RESPONSIBILITY of the Journalist

32 THE ROLE OF advertising

33 [Advertising] in its impact on the economy, is outranked only by militarism. In all other aspects of social existence, its all pervasive influence is second to none. -- American economists Paul Baran and Paul Sweezy Source:

34 Advertising is the economic support for the mass media and directly effects the quality of media content Advertisings economic influence covers at least 4 areas: Advertising space v. non ad content space Advertisers financing Content control Advertorials

35 Advertisings Economic Influence Advertising Space Quantity of commercial material effects amount of space available for news/entertainment content Newspaper editors arrange editorial content in remaining space after advertisements have been made. In TV, stories are slotted around advertisements, limiting the amount of time for each segment For entertainment TV, programs are built up to dramatic peaks before an advertisement break

36 Advertisers Financing Media depend on advertising as a major source of revenue Without advertising, the media would need to rely on the government or the audience to pay the necessary costs Relying on advertising also has its pitfalls: Advertiser budget cuts Advertisers switching from one medium to another

37 Content Control Advertisers have content control over media content they support Under threat of advertisers pulling support, media managers will remove or edit unflattering content Advertisers will pull support when the media show controversial content for fear of being negatively associated

38 Advertorials Advertorials are advertisements presented as an objective opinion editorial piece Conglomerate synergy v. conflict of interest mixed historical footage from Pearl Harbor, the historical event, with clips from Pearl Harbor the movie for a documentary on a Webcast about Pearl Harbor Advertainments are advertisements presented as entertainment Sources:, ads_N.htm

39 CHALLENGES of cyberspace

40 Privacy Concerns New media not fully understood No successful way to advertise, yet

41 Study done by John Boyd of Yahoo and Christian Rohrer of Ebay Whats good? Advertising Online

42 Online video as opposed to paid search - OPPORTUNITIES

43 WEB 2.0 Facebook and other social networking sites YouTube

44 The Internet v. Other Media Milenials (ages 14-25) mpaigns/days-new/05_use_chart.jpgedu/gould/academic/classes/ca mpaigns/days-new/05_use_chart

45 PRODUCT placement

46 After E.T. was famously coaxed out of the closest with Reeses Pieces, sales of the loveable candy jumped 65%

47 Companies pay millions of dollars for the exposure offered through product placement

48 Fuller! Go easy on the Pepsi! Pepsi! Contract or no, I will not bow to any sponsor. I will not Somebody get the kid a Happy Meal! Happy Meal!

49 BUT! Despite being lucrative, there is much controversy surrounding this practice…

50 People are concerned it [blurs the lines between entertainment and commercial] Disrupt the artistic elements of the film by focusing on products David Lynch is pissed!pissed!


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