Updated:  03 September, 2002

Primary Source:  Andersen and Meyer, Chapter 2,  Available on reserve at the Collier Library.

Andersen and Meyer approach the electronic media industry in a significantly different way than DeFleur and Ball-Rokeach do.  Andersen and Meyer look at is as a business: how the the business aspects of the industry influence what is on?  I recommend that each of you read the Andersen and Meyer chapter, and for that reason, I'm only putting limited key concepts in these notes:

Remember:  Television exists to make money.  All media exist to make money.  That "bottom line" must be considered if anything else the rest of the semester is to be understood.

Whenever they are challenged about  media content, the common answer provided by media practitioners is "we don't affect society, we merely reflect society,." and we merely "give people what they want."  That argument is called the Mirror Theory, and it sounds pretty good on the surface.  However, when you look at the market impact on media content, you may find it's not so good as it initially appears to be.

The Characteristics of the Marketplace

• Structural characteristics

• Industry conduct

• Measures of Performance

• Characteristics of Industry Product

[When you read the Meyer and Anderson book on this topic, be sure to pay close attention to the boxes and highlighted terms.]

1.   Market Structure:  Business conditions or organization. It is made up of three types of structure.  The structure of the organizations/institutions, the structure of content and the structure of the industry as a whole.

• Organizational/Institutional Structure:

One of the key concepts here is the concept of 

        Institutionalization:

• (def)  "An element of society with clear roles and relationships within the society. More than a mere organization." 
• Examples: Hospitals, universities, police departments, public schools, churches, etc.

                Three Consequences of Institutionalization:

• Institutions exchange privilege for independence when they establish reciprocal relationships 

  •    give and take relationship; I believe I'm giving up less than what I'm getting, so it's worth my while.
  • Television must operate in "public interest, convenience, and necessity' and therefore, may not have full freedom to do anything or everything on the air; but in exchange they get
  • Key benefits:
    • access to government
    • the means of making lots of money
    • prestige
    • control of information
  • Such freedom should not be taken for granted; Children's Television Act of 1993, Telecommunications Act of 1996 and concerns over violence after Columbine and 9/11 have brought restrictions and limitations.

   

• Stakeholders want to protect their institution

Everybody has an inherent stake in keeping things the way they are, especially if they are in an advantageous position. Broadcasters have are good examples of this. 

• Technologically: Some refused TV licenses because they believed no one would sit in a room and watch a picture in a little black box.  The industry as a whole fought UHF, Cable, DBS and High Definition Television.
• Programming Content:  What works is what there is more of.  Who Wants to Be A Millionaire was successful, and immediately there was Millionaire on nearly every night and clones on other channels.  Survivor  was successful and reality shows popped up everywhere overnight.  It's been that way throughout television's history.
• Legally:  Broadcasters always want less regulation -- unless it regulates someone else (like cable or dbs) out of their way.  

 

• Stakeholders want to protect HOW they do things: 
  • Don't rock the boat!
  • Everyone knows Nielsen ratings have serious problems, but that's the system we've always used, and it's the one we'll continue to use.
  • Digital television offered enormous challenges to the "way things are done"
  • IF there is a big financial gain to made with change, it is embraced; if not, it's not 

• Content-Based Structures:
  • Creative Structures: Content not based on fact; it might be sitcom, drama, cartoon. This category of content includes music, sound effects, and special effects, as well.
  • Informative Structures:  These types of content are supposed to be based in fact.  They are what Meyer calls "It did happen, will happen, might happen, should happen" stuff. It includes news, talk, documentaries, docudramas, magazines, newspapers, textbooks, some internet sites.
  • Canonical Structure:  This content is unique because it is selected by the cultural elites because it is "ideal, appropriate or desirable."  Mass appeal is not the goal, so content on PBS, Discovery, A&E, and C-Span would be examples. 

   

•  Industry Structure    

            This is concerned with inter-relationships among members of the media industry as a whole.  When television was introduced, radio, motion-pictures and the weekly photo magazines (Life, Look) suffered.  MTV is introduced, and fewer younger teens are listening to radio.  HBO and SHOWTIME brought R-rated movies into the home, and the broadcast networks re-thought their standards and practices concerning program content.  People who spend more time on the Internet, spend less time watching television.  Internet proliferation means television has to do things differently to compete....

An important aspect of structure refers to what companies own, and how much of it.  There are two important concepts:

• vertical integration:   Here the corporation owns or controls all or nearly all of the steps and processes in the production/distribution  system.  AOL-Time Warner owns production companies that produce shows and movies, television stations, a television network, numerous cable systems, numerous cable networks (including CNN), and distribution companies that handle syndication, video distribution, merchandizing, etc.

          ABC-Disney is another good example, as CBS-Viacom.  Go to the Columbia Journalism Review site and click on WHO OWNS WHAT ( http://www.cjr.org/owners/ ) for a list of media companies and what they own.  Check out Disney, Time Warner, CBS, and several others for examples of vertical and horizontal integration.  

Financial Interest and Syndication Rules were established in the 1970s to limit vertical ownership by networks.  It was thought that if networks couldn't produce shows, independent production companies would be encouraged and flourish.  That was the case.  Then by the mid 1990s, with the advent of cable, DBS and more competition, the networks argued that FinSyn was out of date and no longer necessary.  The "big three" were no longer the only game in town, and they needed to produce and syndicate shows in order to stay in business. Finsyn went a way and the Telecommunications Act of 1996 further lifted ownership and cross-ownership restrictions, encouraging the massive vertical integration of the industry that we see today.

 

• horizontal integration:  Here the corporation owns several of the same type of company such as only radio stations, or only newspapers.  Horizontal integration is much more rare today, but it used to the be the  norm for broadcasters who were prohibited from owning other types of media or media-related companies.

The important thing to remember about all of this, is that each industry has to be responsible to the others around it.  That means...

• finding a niche and filling it (i.e. cartoon network or HGTV)
• designing your product so that it 'flows through other media."  Disney does that with their motion picture promotions -- They're always connected with McDonalds or some other fast food outlet, show up on all kinds of information shows, attached to toys, theme parks, special events,  etc.  Merchandizing further promotes the film through toys, books, magazines, clothing, and videos.  Star Trek does the same thing: network TV, syndication, movies, books, sound tracks, magazines, video sales.  

When you're trying to market your product, you have to recognize if you're part of an institution, how your content fits into the content structure, and how the various parts of your industry all fit together.  Then you have to ask some hard questions:

 

• What's the competition like?  How many? How strong?  (Why didn't Target build a SuperTarget in our market? Should they have?)
• What are the sources of revenue?  Are there enough customers to make a profit?
• What types are the sources of revenue?
  • Direct Sales: subscriptions, magazine sales
  • Access Sales: where the advertiser gets access to the potential customer through advertising on your medium
• How rational is the marketplace?
• What barriers to entry exist?
• How do you differentiate your product?
  • Branding (logos at bottom of screen)
  • Sometimes people are using one product, but think they're using something else -- that happens a lot in Radio-- but with other products as well.  Brand names become 'generic' terms -- Kleenex, Xerox, Coke, etc.  

  Q:  How do television stations "brand" themselves?  

  Q:  What niches do each of the Huntsville television stations go after?

(def)  How business is conducted; how decisions are made; what the processes are.

(example)  How do you figure a production budget? How are production schedules planned? How do you sell advertising to advertisers?   What are the rules? What is most important?

In order to figure out how to run any business, you have to ask some key questions.  The first may be the most important:

• How rational  is your market?   
  • How regular is your cash flow?  Will you have money coming in at a predictable rate so you can plan your activities and expenditures?
  • You don't know what you can spend, if you don't know what's coming in.

The electronic media industry is not particularly rational.  It's very hard to predict what viewers or media consumers will like and to what degree and for how long.   Even harder is trying to predict WHY consumers like a particular product.   Three years ago, Who Wants to Be A Millionaire was the biggest thing on TV. This season it will be gone.  Why did viewers like it then, and not now?  Why do they like E.R. and yet reject most of the other medical shows that have been offered since then? Who knows?  Nobody, really.

As a result of this irrationality, our industry is very big into research, and anybody who can figure out what audiences want on a semi-regular basis can be very successful.

An irrational marketplace obscures the relationship between decisions and their consequences. If you decide not to write a tutorial for this class, you have a pretty good idea what the consequence will be and why.  If you are a producer for E.R., you may not have a very good idea what kind of impact Anthony Edwards departure from the show will have.  A few years ago the actress on Felicity decided to cut her hair.  She didn't ask permission from her bosses, and they weren't happy when she showed up on the set with short hair. The ratings went down and there was concern that the haircut was responsible.  For the same reason, Sally Jessie Raphael was not allowed to change her glasses. Those red glasses were part of the format of the show and changing them could have untold consequences.  What is it that people like -- or don't like? Sometimes, it's hard to tell.   

The result is that people who have a good "gut" for what works get the decision-making jobs and lots and lots of money -- as long as the 'gut' holds out.

• capacity:   What can be accomplished with current technology, finances and structure.  Some films made today, could not have been made just a few years ago.  You can't do Terminator without morphing technology.  
• competence:   How well can you use the techniques and resources available.  All the special effects in the world won't make a bad script good, cover for poor direction or acting, or involve an audience where there is no real story. 

Measures of Market Performance: 

Two primary means are used for measuring performance in media-related companies:

• Income
• Audience

Even though the measurement techniques are problematic, they are still used.  See Meyer and Anderson, p. 73 for a good discussion of some of those problems.  Remember to note changing demographics:  prime demo used to be 18-34, now 24 to 54.  Still, hard-to-get demos are sought after, and males 18-34 are hard to reach.  That makes them a prized demo.  As baby-boomers continue to age and continue spending money, the prime demo may also extend upward in years.

Note: Circulation is not the same as the number of viewers and readers.  I may subscribe to The National Geographic, but that doesn't mean I get to read it every month.  Or, a doctor may subscribe to it and put the magazine in his or her waiting room and hundreds of people will read it.....  Lots of us have the TV on but we aren't really looking at it.

Psychographics:  life-style and attitude information about viewers; values, priorities, likes, dislikes.

Demographics:  key statistics about viewers, age, income, education, marital status, etc.

Some key measurement terms you should know about television/cable:

Rating: % of homes WITH television watching your programs. (TVHH)

Share: % of total homes USING television watching your program.    (Which of these will be a smaller number?)

Diary:  Handwritten log of what you watch; booklet/questionnaire provided by Nielsen Media Research or Arbitron (radio ratings)

Autometer:  The old device used by Nielsen Media Research which measured whether the set was on and to what channel it was tuned.

Peoplemeter: A newer device used by Nielsen Media Research which measures what channel the set is tuned to and who is watching (if they enter a four-digit code when they enter the room).

Programming decisions are not made based on sheer numbers alone.  In some cases, the type of demographic is important. St Elsewhere was an NBC drama which ran for more than 8 years and never broke into the to 40 television programs.  However, it pulled an upscale, loyal audience and advertisers loves it.  

The bottom line affects programming decisions as well.  Not only does it matter if advertisers want the show because viewers watch it, the production company has to make money as well.  Costs can escalate to the point where that doesn't happen. 

• St. Elsewhere was cancelled not by the network which wanted it to continue, but by the production company.  MTM determined that there was no "aftermarket" for the show in syndication, and if one existed, there would be no more money to be made if there were a 9th season.  However, a 9th season would still have production costs, which would not be recouped in syndication, especially since the actors were all up for new contracts. So MTM pulled the plug.
• E.R.  Star salaries are so high on the show right now, that it costs more than 14 million dollars per episode to produce. If Edward's departure affects ratings, or the Thursday night rating slips as a whole, NBC may not be willing to pay the license fee currently demanded for the show.  If that happens, it won't take long for the show to be gone, because the production company can go in the hole really fast with those kinds of costs each week.

Remember, what we know about audiences is really pretty small.  We don't know why they like what they like, if they're paying attention or doing something else while they're watching.  We don't know if they're telling the truth when we ask them.

Media managers don't seem to care that much; as long as advertisers still use the data available, media will still provide it.

The result:  Ratings Sell a Commodity Audience, not real people.

Other means of measurement:

Regulatory:  Media have to meet certain standards set up by the FCC and other government bodies, including Congress: Children's Television Act, ownership limits, indecency and obscenity standards are examples.

Consumer Criteria: (other than price) These relate to whether the consumers like the format, the controversy, and to what degree?  "Dating" reality shows were chilled after the Fox fiasco Who Wants to Marry a Millionaire because the public had such a negative reaction to the show.   It took several months before a format similar reappeared.  Product differentiation is also important here, so branding is important. 

Industry Practices: Various codes of ethics and also impose standards on media content. MPAA ratings, TV Ratings, NAB Code, etc.

Stakeholders in the Society:  Citizen's groups can make significant impact, and some have even worked "deals" with content providers to "clear" content before it goes to production or air.

Elizabeth Montgomery wrote an excellent book in 1990 called  Target Prime Time.  It examined the role of advocacy groups in television programming.  On page 217, she wrote:

"In the spring of 1986, NBC held a private conference in Tarpon Springs, a scenic resort town on the coast of Florida. The guests for this all-expense paid event -- entitled "The Public Interest and an Interested Public" -- had been carefully chosen.  Leaders of over 20 organizations were there, including the National Gay and Lesbian Task Force, the PTA, the Southern Baptist Convention, and the American Arab Anti-Discrimination Committee.  NBC had organized five of these meetings since 1979....participants heard lectures from academics and network executives on the social impact of media, the role of stereotypes, and the whys and hows of TV programming.'  In a role reversal discussion, advocacy group leaders were given a chance to 'play standards and practices' editors' by reviewing and discussing clips from sensitive programs...At the end of the meeting, conferees were invited to 'develop a relationship with NBC' and encouraged to 'sing out on the phone, let us know your feelings.'"  

Montgomery went on to explain that the most successful group are those who understand industry practices and who communicated regularly and effectively.

Another measure of performance has to do with

style: the difference in form and content between USA TODAY and The New York Times

All of these elements demonstrate how the Mirror Theory does not work.

The impacts of media a results of the system rather than an accurate reflection of our culture.  That system affects content as well as impact.

As a result of it, television content is:

• disposable: here today and gone tomorrow; vast amounts are needed.
• plastic: mass appeal and superficial in nature, because it has to please a lot of people  (even on the specialty networks, there is still some degree of mass appeal)
• limited in access: lots of good material never gets on.  Only a few people get to share their ideas, creativity, viewpoint. Who decides?

So how does all of this negate the Mirror Theory?

Resources:

Anderson, James A. and Timothy P. Meyer.  Mediated Communication.  Sage, 1988

Montgomery, Katheryn.  Target Prime Time.  Oxford, 1990.

Copyright, 2002

Dr. Janet McMullen

jmcmulle@unanov.una.edu