THE MEDIA OF MASS COMMUNICATION

ECONOMICS OF MASS MEDIA

Most mass media are privately owned and must turn a profit to stay in business.

Except for books, sound recordings and movies, most media income is from advertising, with lesser amounts from media consumers.

These economic realities are potent shapers of media content.

ECONOMIC FOUNDATION

The Mass media are expensive to set up and operate.

The equipment and facilities require major investment. Meeting the payroll requires a bankroll.

To meet their expenses, the mass media sell their product in two ways:

1. They derive their income from the selling their product directly to mass audiences, as do the movie, record and book industries.

2.They derive their revenue from advertisers who pay for the access to mass audiences that the media provide, such as newspapers, magazines, radio and television.

ADVERTISING REVENUE

Advertisers pay the mass media for access to potential customers.

From print media, advertisers buy space.
From broadcasters, they buy time.

NBC had 40 million viewers for the 1994 Super Bowl. It charged $900,000 for a 30 second commercial. (Example: See Chart page 13.)

Book publishers once relied solely on readers for revenue. Today book publishers' charge for film rights whenever a book is turned into a movie or television program.

CIRCULATION REVENUE

Direct audience payments have emerged in recent years in broadcasting.

Cable subscribers pay a monthly fee. Audience support is the basis of subscription television like the movie channel. Noncommercial broadcasting, including TV Ontario or the Friends of Seven rely heavily on viewer and listener contributions.

GOVERNMENT SUBSIDIES

While the idea of government support for the mass media might seem to some a waste of time and money, both the U.S. and Canadian governments support some form of public broadcasting.

The U.S. Congress gives about $90 million a year to the Corporation for Public Broadcasting.

Here, in Canada, the Canadian Broadcasting Corporation (CBC) receives about $950 million augmented by about $350 million a year in advertising revenue.

The CBC was formed in 1936 by an Act of Parliament. It provides programming in both official languages.

English and French Television
English and French Radio- both AM and FM
CBC North - Broadcasts in English and French AND 8 Native languages
RDI-(Le Reseau de l'information) and Newsworld, a 24-hour-a-day all-news channels in French and English which are solely funded by cable subscribers and advertising revenue.

ECONOMIC IMPERATIVE

To realize their profit potential, the media that seek large audiences choose to deal with subjects of a wide appeal and to present them in ways that attract great numbers of people. (Example: CTV drops programs that do not do well in the television ratings).

UPSIDE AND DOWNSIDE

The drive to attract advertising can affect media messages in a sinister way (Example: ITV news department and West Edmonton Mall)

MASS MEDIA TRENDS

Giant corporations with diverse interests have purchased most North American mass media. This trend toward conglomeration is accelerating on a global scale.

Two other trends, contradictory in some ways, are the moves to seek both Larger and narrower audiences.

Also, technological advances, mostly electronic, are blurring old distinctions among the media.

CONGLOMERATIONS

The trend toward conglomeration involves a process of mergers, acquisitions and buyouts that consolidates the ownership of the media into fewer and fewer companies.

The deep pockets of a wealthy corporate parent can see a financially troubled media unit, such as a radio station, trough a rough period, but there is a price.

Management experts, not media people, end up running the radio station or newspaper, and the quality of the media content suffers. (Example: The Q&D news story.)

The actions of both Conrad Black and Ted Rogers have recently raised concerns in Canadian media circles about who owns how much of the media. Similarly J.R. Shaw of Calgary owns several cable and radio stations in Calgary and throughout the country.

How extensive is conglomeration? 1989 statistics remain the same today.

  • Six publishing houses have most of North American's book sales.
  • Six companies have most of the magazine revenues.
  • Three companies have most of the television revenues.
  • Three major studios have most of the movie business.

The aim is to control the entire process. A magazine article owned by the company becomes a book owned by the company, that becomes a television program owned by the company, that becomes a movie owned by the company, which is shown in theatres owned by the company. The movie sound track is issued on a record label owned by the company, featuring the vocalist on the cover of one of the company magazines.

The bottom line is that the company will be less enthusiastic about outside ideas and production that it does not own. This creates more and more closed circuits to control access to most of the public. (Example: The Blair Witch Project.)

Ted Rogers owns Maclean Hunter, the majority of the cable systems in Canada, The Rogers video store chain, Maclean's magazine and the Sun newspapers. (In 1996 the CRTC forced Rogers to sell off the Sun publishing chain, including the Financial Post. The chain sold for $400 million. Quebecor bought the Sun chain?

TOPIC FOR MID TERM PAPER: CONGLOMERATION AND RECENT MERGERS, ACQUISITIONS AND BUYOUTS OF CONRAD BLACK, ROGERS, SOUTHAM, SHAW OR HOLLINGER. DEMASSIFICIATION

Another contemporary economic phenomenon is demassification.

The mass media are capable of reaching tremendous numbers of people, but most media today no longer try to reach the largest possible audience. They are demassifying, going after narrower and narrower segments of the mass audience.

The effects of demassification are only beginning to emerge. At first, advertisers welcomed demassification because they could target their pitches to groups of their likeliest customers.

Now the revenue base of magazines, newspapers, radio and television have begun to decline. (Example: New Alternative Media. See page 17.)

Melding

The seven primary mass media as we know them today are in a technological transition that is blurring old distinctions that once separated them. (Example: On-line newspapers.)

MASS COMMUNICATION PROCESS

FOUR BASIC COMPONENTS

Mass Messages

Mass media

Mass Communication

Mass Audiences

COMMUNICATION TYPES

Intrapersonal Communication

Interpersonal Communication is the spelling

Communication

Mass Communication

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One aspect of mass communication that should not be a mystery is spelling the often misused word 'communication'.

The word takes no "s" if you are using it to describe a process.

If you are referring to a communication thing, such as a movie, television program, the word is 'communication" in singular form and "communications" in plural form.

The term "mass communication" refers to a process, so it is spelled without the "s".

MASS COMMUNICATION MODELS; THE PROCESS SCHOOL

Information Theory by Claude Shannon and Warren Weaver pages 20-26 1974

Concentric Circle Model by Ray Hiebert, Donald Ungurait, and Thomas Bohn Pages 26-29.

SOURCE: Abridged version of Chapter one from: Vivian, John and Maurin, Peter. (1997). The Media of Mass Communication. Allyn and Bacon Canada. Scarborough, Ontario.