The Media and Economic PressuresEconomic Pressures and Social

RESPONSIBILIT Y

Ryan Brundrett/Cody Graham/Christopher Renner/Jennifer Wells/Mary Werick

QUOTEWORTHYmedia buzz

I wonder if the media is incapable of covering itself. Theykeep Americans in the dark on this issue.FCC Commissioner Jonathan S. Adelstein, in Lane, Terry. "Copps Flirts With Releasing Media Ownership Draft to Public." Communications Daily, May 12, 2003

The gathering of more and more outlets under

clearly can be an impediment to a fr ee and independent press. Former CBS News anchorman Walter Cronkite, in Yang, Catherine. "The FCC's Loner is No Longer

So Lonely." BusinessWeek, March 24, 2003.

The profit motive is not only fundamental to our ability to reward

shareholders and pay employees; it’s fundamental to excellent journalism. Far from corrupting the craft, profits

enhance it. Expansion drives diversity and diversity protects and strengthens our craft. --Lachlan Murdoch, son of media mogul Rupert Murdoch.

ETHICSby Louis Alvin Day

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.

PRESSURESin the economy

Financial Supportersinvestors,

advertisers, clients, subscribers and customers.

the competitionThe

the public

OVERVIEWfor today

We will look at economic pressures from the following points of view.

Concentration of media ownershipMass media and marketingThe role of advertising

Product PlacementGroup discussions

Conclusion

Report on findings

Challenges of cyberspace

MEDIAconsolidation

HISTORYIn 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 America’s newspapers, magazines, TV and radio stations,books, records, movies, videos, wire services and photoagencies.

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.

WHO OWNS THE MEDIA

http://www.youtube.com/watch?v=MfRXaORNSK8

The job of media’s new corporate bosses is to maximize The job of media’s new corporate bosses is to maximize profit for shareholders, not to provide greater choice and profit for shareholders, not to provide greater choice and diversity for consumers.diversity for consumers.

http://www.freepress.net/ownership/chart/main

http://dialogic.blogspot.com/2009/01/rich-media-poor-democracy-researching.html

Congress overturned the FCC’s 2007 media consolidation Congress overturned the FCC’s 2007 media consolidation ruling.ruling.

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

F.A.I.R. Media Consolidationhttp://www.youtube.com/watch?v=OFqKCRl0Un0

Taken from: Outfoxed: Rupert Murdoch's War on Journalism. Media analyst for FAIR Peter Hart discusses the effect of media consolidation on journalism. http://www.outfoxed.org/

Fairness and Accuracy in Reporting www.fair.org

Publishes Extra - magazine

Produces CounterSpin CounterSpin (30-minute weekly podcast)(30-minute weekly podcast)

WHO IS LEFT OUTThe 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.

Source: Source: Out of the Picture 2007: Minority & Female TV Station Ownership in the United StatesOut 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.

1998 FCC Cross OwnershipPromethus 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 FCC’s 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

TV Newspaper Cross OwnershipMark 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: Source: The Case Against Media Consolidation: Evidence on concentration, localism and diversity. The Case Against Media Consolidation: Evidence on concentration, localism and diversity. Mark Cooper, Ed. (2007). Donald McGannon Center for Communicaiton Research, Fordham Mark Cooper, Ed. (2007). Donald McGannon Center for Communicaiton Research, Fordham University.University.

The FCC proposed the most radical change in this rule-

allowing newspaper- TV combinations in virtually every city in America

In rejecting the FCC’s cross-media limits, the Court devoted a great deal of attention to the FCC’s 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

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.

THE ALLIANCE OFmass media

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.

One Major fundamental objective of any newspaper, magazine, broadcast station, movie studio, or cable system is profit.

TODAYDue 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.

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

Is It All About Ratings?Day’s 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…?

Day’s 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

The alliance of Marketing and Media Seems inevitable today….

Doesn’t the newsroom and business side of journalism depend on each other for success? Good journalism and Good business simply are not mutually exclusive todayTo 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.

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 decisionsAdvertorials- news, features paid for by advertisers but cloaked in editorial contentInfomercial- program length commercials—HUGE profit makers for media…referred to as “Editorial Pollution” blurring the line b/w advertising, entertainment, and editorial content

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

THE ROLE OFadvertising

[Advertising] in it’s impact on the economy, is

outranked only by militarism. In all other aspects

of social existence, it’s all pervasive influence is second to none. -- American economists Paul Baran and Paul Sweezy

Source: http://www.suite101.com/article.cfm/advertising/40264

Advertising is the economic support for the mass media and directly effects the quality of media content

Advertising’s economic influence covers at least 4 areas:

Advertising space v. non ad content space

Advertisers financing

Content control

Advertorials

Advertising’s Economic InfluenceAdvertising 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

Advertiser’s 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

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

Advertorials

Advertorials are advertisements presented as an objective opinion editorial piece

Conglomerate synergy v. conflict of interest

ABCNEWS.com 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

http://www.youtube.com/watch?v=tJrq-ZwBehA

Sources: http://www.ojr.org/ojr/ethics/1017957293.php, http://www.usatoday.com/money/advertising/adtrack/2007-10-14-movie-ads_N.htm

CHALLENGESof cyberspace

Privacy ConcernsNew media not fully understoodNo successful way to advertise, yet

Study done by John Boyd of Yahoo and Christian Rohrer of Ebay

http://www.useit.com/alertbox/20041206.html

What’s good?

Advertising Online

Online video as opposed to paid search

- http://www.youtube.com/watch?v=5rtiHiGmoxk

OPPORTUNITIES

WEB 2.0

http://www.youtube.com/watch?v=b4IwvzkiFCw

Facebook and other social networking sites

YouTube

The Internet v. Other Media

Milenials (ages 14-25)

http://faculty.jmc.ksu.edu/gould/academic/classes/campaigns/days-new/05_use_chart.jpg

PRODUCTplacement

After E.T. was famously coaxed out of the closest with Reese’s Pieces, sales of the loveable candy

jumped 65%

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

Fuller! Go easy on the Pepsi!

Contract or no, I will not bow to any sponsor.

Somebody get the kid a Happy Meal!

BUT! Despite being lucrative, there is much

controversy surrounding this practice…

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!