Wednesday, 20 November 2019
The Economics of the Media Industry
MIA - Notes Ch. 3
- Disney/Fox merging
• In 2018 Disney and Fox merge
• Second-largest media merger in history
- Sociological perspective: social structure shapes human behaviour while human
behaviour also shapes social structure
- Suggests that media products cannot be observed in a vacuum but as a social
process of production that occurs within an institutional framework —>
production perspective
- Production perspective highlights that most media products are face a
complex production process that is shaped by a variety of social structural
forces
Media Companies in the Internet Era
- Tasks of contemporary media companies
- Products —> produces media content that audiences can watch, read, listen to
such as movies, original journalism and music recordings
- Platforms —> the sites and services that host, display and find media content
such as facebook, youtube, google, netflix, Spotify
- Pipes —> the conduits by which we access media contents and platforms
such as wireless, cable, fibre optics that are the arena of telephone
Products
- Content produced by traditional mass media companies is now being accessed
online due to the emergence of the internet
- Even though most content is viewed on the internet, it is the traditional media
companies that are responsible for the production, promotion and distribution of
media content
Platforms
- Companies that provide media platforms are usually not content creators but they
deliver people to advertisers. Users create content that attracts family and
friends, thus platforms like Facebook are selling you and your friends to
advertisers.
- “Owned activity” social media content generated by official accounts associated
with a program or network and “Organic activity” content generated by the
viewing audience
- Two-thirds of social media content related to television is organic activity
1
, Wednesday, 20 November 2019
Pipes
- The pipe metaphor alerts us to the power of the companies that own the systems
that provide media access and their influence over media producers and users.
- Owning these pipes is thus very valuable
- “Net neutrality” regulations —> rules designed to prevent unequal treatment of
content delivery
Changing Patterns of Ownership
- Question: Who owns the media?
Concentration of Ownership
- the media is operated by a small number of large firms
- Five global firms dominated the U.S. media industry
- The Warner
- The Walt Disney Company
- Viacom
- News Corporation
- Bertelsmann
- The media landscape changed leaving only Disney and Bertelsmann intact
- Viacom split into 2 separate companies; Viacom Inc., which owns a major
movie studio (Paramount) and CBS Corp., who owns in the CBS network
- Rupert Murdoch’s News Corporation —> News Corp., and 21st Century Fox
(which was later bought by Disney)
- Time Warner —> Purchased by AT&T
- Meanwhile, there was a parallel growth in the tech giants, Google and Facebook
(2004)
- In the late 2010s older media giants compete with the new media landscape
Products
- The major media companies own vast portfolios of products ranging in media
formats and delivery systems
- Products carry distinct names so media users are unaware that a large number
of media outlets are actually owned by a single corporation
Movies
- Global motion picture industry consists of seven companies that account for 90%
of box office receipts
- Comcast’s Universal Pictures
2
The Economics of the Media Industry
MIA - Notes Ch. 3
- Disney/Fox merging
• In 2018 Disney and Fox merge
• Second-largest media merger in history
- Sociological perspective: social structure shapes human behaviour while human
behaviour also shapes social structure
- Suggests that media products cannot be observed in a vacuum but as a social
process of production that occurs within an institutional framework —>
production perspective
- Production perspective highlights that most media products are face a
complex production process that is shaped by a variety of social structural
forces
Media Companies in the Internet Era
- Tasks of contemporary media companies
- Products —> produces media content that audiences can watch, read, listen to
such as movies, original journalism and music recordings
- Platforms —> the sites and services that host, display and find media content
such as facebook, youtube, google, netflix, Spotify
- Pipes —> the conduits by which we access media contents and platforms
such as wireless, cable, fibre optics that are the arena of telephone
Products
- Content produced by traditional mass media companies is now being accessed
online due to the emergence of the internet
- Even though most content is viewed on the internet, it is the traditional media
companies that are responsible for the production, promotion and distribution of
media content
Platforms
- Companies that provide media platforms are usually not content creators but they
deliver people to advertisers. Users create content that attracts family and
friends, thus platforms like Facebook are selling you and your friends to
advertisers.
- “Owned activity” social media content generated by official accounts associated
with a program or network and “Organic activity” content generated by the
viewing audience
- Two-thirds of social media content related to television is organic activity
1
, Wednesday, 20 November 2019
Pipes
- The pipe metaphor alerts us to the power of the companies that own the systems
that provide media access and their influence over media producers and users.
- Owning these pipes is thus very valuable
- “Net neutrality” regulations —> rules designed to prevent unequal treatment of
content delivery
Changing Patterns of Ownership
- Question: Who owns the media?
Concentration of Ownership
- the media is operated by a small number of large firms
- Five global firms dominated the U.S. media industry
- The Warner
- The Walt Disney Company
- Viacom
- News Corporation
- Bertelsmann
- The media landscape changed leaving only Disney and Bertelsmann intact
- Viacom split into 2 separate companies; Viacom Inc., which owns a major
movie studio (Paramount) and CBS Corp., who owns in the CBS network
- Rupert Murdoch’s News Corporation —> News Corp., and 21st Century Fox
(which was later bought by Disney)
- Time Warner —> Purchased by AT&T
- Meanwhile, there was a parallel growth in the tech giants, Google and Facebook
(2004)
- In the late 2010s older media giants compete with the new media landscape
Products
- The major media companies own vast portfolios of products ranging in media
formats and delivery systems
- Products carry distinct names so media users are unaware that a large number
of media outlets are actually owned by a single corporation
Movies
- Global motion picture industry consists of seven companies that account for 90%
of box office receipts
- Comcast’s Universal Pictures
2
