A Broad Lens on Mass Media Economics

The following collaborative post was created by Will Gaddis, Parker Havis, Caroline Masters, Sally Smith, and Austin Sprague.

Throughout our time spent researching mass media, we have discovered the inevitable truth: technology has thrown economic structures and media systems into forced evolution. While we discussed many different incarnations of media, the media’s roles as entertainers, revenue-generating organizations, and informers served as the primary themes across all posts.

A visual portrayal of the relationship between the media and advertisers and the media and its audience; all of which explain why the study of media economics is imperative today (SOURCE:// Slideshare).

For entertainment, Austin’s posts about Youtube and celebrity Casey Neistat helped provide a case study of exactly how technology has afforded a regular-guy the opportunity to become a social commentator and even gatekeeper. While vlogging his life, Neistat frames social issues and draws attention to problems within the world, but not necessarily denying any other perspectives. Furthermore, Sally’s posts concerning economics behind streaming and publicity services (of audio & film) have helped to clarify exactly what stimulus compels the entertainment giant, Netflix, to affect the economy in pursuit of reaching a broader audience. By pursuing streaming, Netflix has created one of the most accessible and, therefore, dominant tools of socialization within a society that places high value on content streaming, despite subscription fees.

However, Youtube and Netflix both care about their bottom line, making a profit. In order to explore this in more detail, Caroline’s discussion of advertisers, a huge source of revenue for producers, explains how these now-readily available audiences are brought to advertisers. With over a billion consumers accessing Youtube daily, many advertisers have created a symbiotic relationship in order to finance the generally accessible service in exchange for access to their large audience with quick ~20 second ads. However, Parker’s discussion of print media’s emergency in the digital economy helps to highlight the dramatic shifts within the economy. While digital media is often lauded for its success in being accessible, one would assume print to completely die. Newspapers are having trouble finding the role of advertisers in their digital content; yet magazines have proved print can survive. By creating varying experimental economic structures, magazines have proved the exclusive-quality content can still attract a readership to print if content is also available online to a degree.

However the media is also said to be informers, or more formally “The Fourth Estate.” Regardless of the lofty goals of informing the electorate, media often serves more practical and relaxed goals. Will’s research found that “The Fourth Estate” had found a role within the economy and as a socializing agent. For example, social media sites like Twitter have shown how consumers are twice as likely to purchase a product if they “like” the product. This dramatic technological leap has afforded companies as well an avenue to have a dialogue with their consumers with feedback. By creating this connection, social media sites have facilitated companies becoming socializing forces that can commentate on world events or concerns. However, a danger lies within companies gaining the power to frame events and become gatekeepers to a certain extent.

A representation of how the growth and amount of media content relies on the economy and vice versa. It is a symbiotic relationship (SOURCE//: Gigaom).

Throughout our researching of the media and its relation to the economy, technological change and the media’s relationship with people serve as a variable within mass communication that warrant further investigation in order to pass meaningful legislation and target issues effectively.

Can The Movie & Music Industries Survive?

Blog post by Sally Smith

This is an image of Netflix, the most popular streaming service available today (SOURCE:// Tube Filter).

We’ve looked into how the traditional movie and music industries have been rocked by the streaming revolution of film and music. Now, we are left with a major question that is subject to controversy and differing opinions: Can the move and music industries survive the digital age? And if so, how? This is something musicians, music labels, film makers, and movie theater companies have been wrestling with ever since the widespread growth and use of streaming services. According to SelectUSA, The Media & Entertainment (M&E) Industry in the U.S., which are the businesses that produce and distribute films, television programs and commercials, music, radio, games, and publishing, is worth a third of the global industry and is the greatest M&E market worldwide. It is no wonder that this industry effects the economics of our country and therefore, it is a major concern for the traditional film and music companies today. We cannot stop the continuing inevitable use of streaming, as it is an attractive service for people wanting to listen or watch all types of music and movies, at any time, and for a reasonable, monthly price. Netflix, Hulu Plus, Spotify, Pandora, Apple Music: you’ve heard of each of these streaming companies and that’s because they are a part of the daily routines of millions today. Despite the great economic growth of these streaming services, they’ve undoubtedly threatened the potential profits of traditional music and film industries.

Can the Movie Industry Survive in Our Digital Revolution? 

Data has shown that movie theater attendance has fallen dramatically over the past several years due to the rise of the streaming revolution. In order to survive in this  streaming revolution, movie theaters need to stop trying to “buy” customers for convenience but rather “buy” them for experience. If movie theaters can someone re-invent themselves and make movie-going a unique, exhilarating experience, they can potentially gain back a following. Some examples of a more exhilarating experience are already being implemented, while others could add a lot to the experience; this includes 3D Imax, smell-o-vision, kinetic seats, thematic theater designs, private screenings, food and beverage ordering service in-theater, etc. Perhaps movie theaters could implement a “free-to-watch” model and then charge for the perks (like a kinetic seat in the theater, for example)? This model may be able to work. Getting people to come watch a movie for free would not be difficult; the difficult part would be selling them on the perks. But since the movie is free, some people might actually pay for a better seat in the theater or the soundtrack to that movie that they’ll loved.

Dine-in theaters have popped up around the country. This is all part of an initiative for movie theaters to create a special experience for viewers and to gain a more frequent, popular following in this digital age (SOURCE:// AMC Theaters).

Can the Music Industry Survive in Our Digital Revolution? 

In a PBS article, the argument of whether streaming services like Spotify and Pandora are hurting musicians is discussed. While musicians, both established and aspiring, have taken both sides of the issue, it’s certain that the new model has had a major impact on the music industry and its revenue. Hari Sreenivasan makes the argument that streaming services are great for exposing young artists’ music to a mass audience. On the other hand, Roseanne Cash, the famous Johnny Cash’s daughter, makes the argument that what if she’s already created a name for herself in the public eye. Clearly, she is concerned about making her deserved profits and she has made it apparent that streaming services like Spotify are not paying her fairly. She stated, “For an 18-month period, I had 600,000 streams, and I was paid $104.” Roseanne Cash and other frustrated artists are essentially getting paid nothing for streaming their music for free. Like the film industry, the music industry ought to craft ways in which they can make their business model offer a convenient, unique service that’ll compete with streaming services.

The Plus Side to Streaming

While there are several apparent advantages to music and film streaming services, another plus is its ability to democratize music and film. Democratization is making something available to all people and thanks to streaming services today, music and film is easily accessible to all. Streaming services have taken away the control from the giant music and film moguls and traditional media outlets. As the public audience, we have the ability to discover, distribute, share, promote, watch, and listen film and music online. The hope is that our accessibility to this immense amount of content will motivate us to decide for ourselves what we like to see and hear, instead of the traditional media moguls deciding what we should want. We, as the audience, get to decide what we like and that agency we receive from streaming services is something we should not take for granted.

Why do we share so publicly? And How It’s Beneficial

According to Danah Boyd in her book, It’s Complicated: The Social Lives of Networked Teen, she tackles the idea of teen’s and their willingness to share so publicly online. It is evident that streaming is our future and that teens are our future as well. Teens’ presence online and their willingness to share their lives, including their music and movies choices, will continue to occur. Boyd states that the sharing and spreading of content willingly on the Internet is a part of teens’ social interactions today. Furthermore, she doesn’t spite them for this, rather she encourages them to continue to be social, to experiment with establishing their online identity’s and to spread their interests in music, movies, and other areas. Sharing content online and connecting through shared interests creates a sense of unity in our diverse world today.

Sources:

Danah Boyd’s It’s Complicated- Chapter 2 on Privacy

Make Use Of

PBS

Select USA

 

The Streaming Revolution Competing With The Music Industry

Blog post by Sally Smith

Thanks to our digital devices, we are able to easily record and copy live music in order to be played back or shared with others. However, this has presented a major challenge for the music industry to compete with nowadays (SOURCE:// The Verge).

Music is all around us. It’s playing in the background at your local grocery store and in your earbuds at the gym. Sometimes you may not even register that music is playing and that’s because it is very much an integral, routine part of our days. So what is the appeal of music? Our favorite tunes can inspire and unite us. Music can bring out the positive side to us. It’s a form of communication that can peak our curiosity and evoke certain emotions and or thoughts. The first takeaway here is that music is powerful and because people enjoy it so much, they will do whatever it takes to listen to it in the easiest, quickest, and cheapest way possible.

Long gone are the days where CDs were the primary way of listening to music. Even, iPods are not as popular as they once were. And the telegraph, made by genius Thomas Edison, and the record-playing days seem ancient compared to the music-streaming services and digital devices we have today. Chances are you’ve heard of music streaming services such as, Pandora or Spotify. These Internet, music streaming services allow thousands of songs to be played anytime and anywhere there’s Wifi. There is a price to pay if you want commercial-free music and unlimited song skips; however, the small, monthly price is worth every penny for most.

This is a chart comparing Pandora’s versus Spotify’s features and services. So which streaming service is a better deal? (SOURCE:// The Christian Science Monitor).

This chart is illustrating that Pandora earns most of its revenue from advertising, meanwhile Spotify earns most of its revenue from subscription revenue. Overall, Spotify seems to be more robust and therefore, the better service to invest in (SOURCE:// The Street).

In Chapter 5 in John Vivian’s textbook, The Media of Mass Communication, on Sound Media, he discusses the file-swapping scandal that changed everything. Eighteen at the time, Shawn Fanning produced a audio-file swap program, which was dubbed Napster. Eventually, Napster had 25 million users who had access to 80 million songs on their hard drives for free (Vivian 124). No wonder the service was widely popular; who would want to pay $15 for a CD when you can get a plethora of songs for free? Fanning’s Napster greatly threatened the recording industry’s traditional business and economic model. Not surprisingly, the recording industry got word of Napster, sent the case to the court, and took down Fanning’s program on the conclusion that it was violating music copyrights. Then, along came Steve Jobs’ iTunes, which saved the recording industry.

How Artists Are Affected By Music Streaming

In a NY Daily News article from 2014, it was announced that country-pop star, Taylor Swift, has banned one of the music industry’s largest players, Spotify, from streaming any of her music. Swift made it clear that she believes streaming is essentially the same as piracy. Her actions have prompted other major artists to question music streaming services right to playing their music. Jimmy Buffett requested that Spotify pay him more and Radiohead’s Thom Yorke pulled his music from the company out of spite. Spotify openly admitted that “it pays its artists less than a penny per listen, compared to the 7 to 10 cents a singer will get from the purchase of a song for 99 cents on iTunes.” Artists are frustrated that they aren’t making the highest profit possible through these services; they feel as if they are being gypped. Artists aren’t pulling their music to bully the digital music services, rather they simply want to boost album sales and therefore, maximize profit. Who can blame them? Still, music listeners will continue to use music streaming services like Spotify and Pandora because of their attractive, convenient, and affordable models. In the first half of 2014, streaming increased by 42% from the year before, according to Nielsen/SoundScan. Whereas, song sales plummeted by 11% and full album sales were in a 19% free-fall in Fall 2014. Overall, we are continually moving into a streaming economy.

Taylor Swift, one of today’s most popular artists, banned Spotify from playing music from her “1989” album or any of her music, for that matter (SOURCE:// The Verge).

In an article on The Verge, there is discussion of how streaming services like Spotify and Pandora are “unbundling the record labels.” This is something streaming services are certainly interested in, as both the artist and service itself could keep much of the profit. However, record labels still provide a lot of great exposure that streaming services like Spotify could not. First, labels help artists create an image in the music world and get their songs on the terrestrial radio, where a huge amount of listening and music discovery still occurs. Additionally, they pay to make visually creative music videos and promote upcoming albums in every way possible. Still, Ben Popper, the writer of The Verge article, states of the powerful takeover of streaming companies today, “By providing a one-stop shop for distribution, monetization, audience research, marketing, and live event promotions, the streaming services are starting to stake a claim to a large part of what record labels have traditionally done.” Clearly, there is competition between the streaming services, the revolution they have produced, and the traditional music industry.

How Music Socializes

With constant, new developments in technology, there is no telling how we will be listening to music in the years to come. However, no matter the medium in which we listen to music, the final takeaway is that music socializes us and socialization is key in creating a unified society with similar values. Socialization, or learning to fit into society, through music and its messages are crucial to understanding the way in which we are expected to act in society (Vivian 346). We may forget this but music is a form of mass communication. The words in a song are written and recorded for a reason. Take the time to listen to the lyrics and see how they impact you and those around you. Music has the power to bring people together in good and bad times and no matter how we receive artists’ music, it is important to understand its role in our society.

Sources:

NY Daily News

The Verge

Vivian Chapter 5: Sound Media

 

The Domination of Video On Demand

Blog post by Sally Smith

This is an image of some of the different streaming services that dominate the media & technology world today (SOURCE:// Exstreamist).

Video on demand companies by the names of Netflix, Hulu Plus, Amazon Prime, Vudu, among others have revolutionized the way in which people are entertained and view content today. With the invention of digital technology and small screen devices, such as Apple’s iPad and iPhone, video on demand and instant streaming have become easily accessible and therefore, very popular as well. Though there is still something special about going to the movies or sitting on the couch with your family for a movie night on television, being able to choose from a plethora of TV shows, movies, documentaries, and educational programs and watching them from anywhere, anytime is a true convenience. Due to digital technology, instant streaming has taken over as today’s premier form of entertainment and has given the television and movie industries a run for their money. While the television and movie industries have had great success, instant streaming online has caused a decline in the overall use and therefore, revenue for the two industries. In fact, neighborhood movies houses “were the heart of movie-going when US attendance peaked in 1946 at 90 million tickets a week” (Vivian 163).

The Revolution of Netflix

While there are several instant streaming companies that are dominating today, Netflix is the top-dog in the on-demand media industry. There is no doubt that Netflix consumes the lives of millions. So what’s the huge appeal? The multi-billion dollar video on demand company is a storehouse of content and allows viewers to stay in the comfort of their homes and watch TV shows and movies whenever they like. Furthermore, not only can people watch at home on their laptops, but they can also watch on their train rides to work via a tablet or mobile phone. The viewing options and locations are endless with video on demand. Thanks to Netflix, there’s no need to use gas to get to a theater, pay a hefty price for a movie ticket, and even worse, listen to teenagers snicker throughout the showing.

Despite its domination of the media industry nowadays, Netflix had humble beginnings in the late 1990’s. Originally, the platform was a by-mail DVD rental service for a monthly fee. At first, Netflix competed with people’s television entertainment time and physical movie rental businesses like Blockbluster (see info-graphic below for more details). Later, Netflix developed their model as we know it today: on-demand shows and movies. As mentioned before, the beauty of this is that people can watch what they want when they want. Additionally, the company began creating interesting original television series (Orange Is The New Black and House of Cards , for example) and uploading full seasons of shows all at once. This led to an even greater interest from the public; people began binge watching content and having Netflix “marathons.”

This is a billboard image of one of Netflix’s most popular original TV series (SOURCE:// Washington Review).

Netflix has given the television and movie industries no other reason but to rethink their business models by giving viewers the ability to consume content in the way they want. Until a couple years ago, most TV programs could only be viewed on an actual television but largely due to Netflix, consumers can now watch the same TV show and or movie on a computer, TV screen, tablet, phone, or gaming device like Ebox.

This is an info-graphic on how Netflix prompted Blockbuster’s downfall (SOURCE:// Business Insider).

Let’s Talk Numbers

• Many consumers have chosen to get rid of cable television in their homes because Netflix is 20% of the cost of most cable packages. Another perk of Netflix is that there are no useless, annoying ads (Investopedia).
• In 2012, after a year of the lowest tickets sales since 1995 ($1.28 billion), tickets sales rose back to $1.36 billion and box-office revenues to a record $10.8 billion, due to great success from film like “The Avengers.” However, movie attendance in America is not growing by any means, especially now that people have access to a plethora of media content right at home. The number of Americans who see a movie at least once a month decline from 30% in 2000 to 10% in 2011″ (The Economist). 
• The movie theatre crisis is shown in these 2010 numbers:
  • Box Office Revenue: $10.9 Billion
  • Home Entertainment Revenue: $18.8 Billion (Vivian)
• It is no surprise that electronic home video (including subscription video on demand and cable on demand services) is expected to be the primary contributor to total filmed entertainment revenue, overtaking the box office by 2017, a study finds. In five years, revenues for the sector will rise from $8.5 billion in 2014 to $17 billion by 2018 (Variety). 

Netflix and other subscription-based, video on demand companies and the various digital devices they can be accessed on is associated with the concept of media fragmentation. Media fragmentation is simply defined as all the media content out there available to be distributed on multiple devices. While media fragmentation is not favorable for those in the advertising business, people can now easily attain media content through whichever platform is most convenient for them.

The movie and television industries have been shaken by the domination of Netflix and other popular instant streaming companies; they need to somehow reconfigure their platforms in order to survive in our growing digital world. Do you think the traditional movie and television industries can save themselves? If so, what are some ways they may be able to do this?

Sources:

Vivian Chapter 6: Motion Media

Variety

The Economist

Investopedia