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UGA TELE 3010 - Media Conglomeration and the Continuation of Economics in Media
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TELE 3010 1nd Edition Lecture 6 Outline of Last Lecture I. Introduction to Media EconomicsOutline of Current Lecture I. Media Conglomerationa. Examplesb. Types of OwnershipII. Media as a Commoditya. Fickle Audiencesb. Financing Televisionc. New Media and ProfitsCurrent LectureMedia Conglomeration: disparate media properties brought under control of one corporation. One massive company owns a lot of stuff for profit. Because of this, there are more places to advertise their multiple companies.- Concentration of media ownership means that fewer corporations own the media. Media companieshave become part of much larger corporations, which own a collection of other companies that may operate in high diverse business areas (another definition for conglomerates).- Examples of some conglomerates: - Walt Disney company acquired Miramar Films, CapCities/ABC, Marvel, Pixar Studios and Lucasfilm (owner of the Star Wars franchise)- Google purchased over 125 companies between 2001 and 2013 including YouTube and others. - See page 41 in textbook - Figure 2.3 - for the Comcast Corporate Holdings- Disney, for another example, owns:- Film: studios and distribution- Radio: networks and stations- TV: production companies, networks and stations, broadcast and cable.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Home video and DVD.- Music- Book and magazine publishing- Internet/Multi-media- Sports (ESPN)- Theme Parks Types of Ownership:Vertical Integration - Owning all aspects of production, distribution, and if possible, exhibition. Highlightsthe ways in which you go from production to exhibition. Horizontal Integration - The process by which one company buys different kinds of media, concentrating ownership across DIFFERENT types of media rather than through one industry. Owning something similar but across different media properties. Owning various properties on the same level of media production or exhibition. - Example: Warner Bros. released first Harry Potter movie, and then-parent company AOL Time Warner’s online services then provided links to various Harry Potter web pages where Harry Potter merchandise could be sold. They also used all of their cable systems and networks to promote the film.So, why conglomerate?- Economies of Scale — efficiencies associated with size. - Synergy (energy that comes across from this synchronization): 1) Profits at reduced additional cost 2) Cross-promotion 3) Advances different areas of the company 4) Conglomeration builds the brand!Media As Commodity - Private good (example: a hamburger)- Public good (a public park)- Semi-public good (a media product. When you watch a film, its not gone, however you’re paying to use it).High Production Costs, Low Reproduction Costs- First copy is expensive, next copy is not. - Audience maximization- Create artificial scarcity (release windows [a movie released in theaters, then on airplanes, then on HBO, then on DVD.. allow you to say “how bad do you want this”], DRM and copyright, limited editions)Audiences are fickle (wishy-washy)HThere is no magic formula for the types of media as they evolve. Just happens.1. TV, Film, Music, Books: All of these go in an out of style. Blink 182 is not a popular band like it used to be, TRL on MTV is no longer what is cool. Failure is a part of media. (pg. 55)Conglomerates reduce the risk of failure. They do this by:- Sticking with formulas (genres). Television, for example, sticks to the genres of crime shows, cooking shows, family sitcoms, etc. - Copying successes, like spin-off shows (when a character from one show stars in another show), franchises, and genres. The Spider-man and Star Wars movies are franchises. - Going cheap. Talk and reality shows are cheap. Actors and writers aren’t having to be paid in this example.- Repurposing. Pop-up video on VH1, for examples.- Gaming the system - this is the promotion aspect. for example, when watching Sunday night football,the network will promote for new shows during commercial breaks. Critics also help promote for movies, books, and television.- Star system - this is how we create stars. People magazine creates stars by naming people “Sexiest man alive” or “Most beautiful woman”. You can reduce risk by casting one of these big stars. Who are the big media conglomerates?H Disney (ABC/Disney)H Comcast (NBCU/Universal)H Time Warner (HBO/Turner/Warner Bros Studios) - Time is the TIME magazine. H Viacom (MTV/Nick/Paramount/CC/BET)H CBS - has many independent production studios.0 News Corp (FOX/20th Century Fox)Does Conglomeration Matter?- An argument against conglomeration is that less than 10 companies (listed above) are the ones who dictate everything we see! - Another argument against, these companies control our perception of what we see and hear. It also kills any other competition. It’s hard to compete against these massive corporations.- Homogenization/Lack diversity of voices- The types of materials produced can be similar. - Types of audiences addressed - Entertainment imperative- Profit imperative - Profit imperative - Local control, local concerns. There are local broadcast stations that focus on news/weather. - The problem of monopoly.Financing Television Production (pg. 86-88 in our book)- Deficit financing: network pays license fee to studio, and they get the right to show CSI (for example).- The people producing the show don’t make money because the network is paying for everything, so they sell the show and syndicate it so that they make money that way.- Syndication (first and second run): First run syndication are shows that are viewed the first time through syndication, like Oprah, Jeopardy, Game shows, etc. The second run syndication is when The Simpsons, Sex and The City, Two and a Half Men, etc.. - Fin-Syn: TV networks prevented from owning or controlling production studios. The independent production company owns the show.Understanding how TV works- Television began when someone at the local level received a broadcast license and submitted waves tothe box and then those waves are pulled from that box. Thats the local station. Their main production is news. They are affiliated with a particular network.- ABC, CBS, etc. are the ones paying millions of dollars for an episode of sleepy hollow. The


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UGA TELE 3010 - Media Conglomeration and the Continuation of Economics in Media

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