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Global Media vs New MediaMAC301

globalisation | imperialism | new media | business

Overview

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Global media ownership and questions of imperialism/McDomination

Standardisation of product/services vs creativity of media sector

Case studies: YouTube and Twitter

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Typical attitude

• “The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force.”

Marx & Engels,The German Ideology (1845)

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Typical attitude

• Globalisation of media• Globalisation of ideas• Power• New World Order• Media ownership• Cultural imperialism• Bias/self-serving

interests

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Typical attitude

• “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions [sic] everywhere”Marx & Engels,The Communist Manifesto (1847)

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Globalisation

The rapid increase in cross-border economic, social, political, cultural, and technological exchange under conditions of capitalism.

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Historical dimensions

19th – 20th centuries Mass

Urbanisation Industrialisation Production Consumerism

Economies of scale Fordist production

techniques

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Mid-20th century onwards

1. The role of multinational communication conglomerates as key players

2. The impact of new technologies

3. The uneven flow of products in the global system

4 structural trends in the media

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1. Growth

2. Integration

3. Globalization

4. Concentration of ownership• (Crocteau & Hoynes, 2005: 77)

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Framing global media issues

Transnational business interests as driving force in the ‘global village’ (McLuhan, 1967)

Global communication networks as central

‘McDomination’ of the corporations (see McChesney, 2003; Schiller, 1979; Ritzer, 1996, 2004;

Rothkop, 1997)

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Herbert Schiller (1979) US transnational companies creating US

global capitalist culture Polly Toynbee (2001: 206)

US exports 72% of the worlds TV programmes

UK exports 9% (2nd place) US imports only 2%

Patterns of ownership

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‘What you are seeing is the creation of a global oligopoly. It happened to the oil and automotive industries earlier this century; now it is happening to the entertainment industry’ (Christopher Dixon cited in McChesney, 2003: 261)

The big 9

General Electric AT&T/SBC communications Sony Disney Time Warner AOL News Corporation Viacom Vivendi Universal Bertelsmann

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Production

Distribution

Consumption

Publishing Radio Television Press

Vertical integration

Horizontal integration

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Google’s rapid emergence

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Google’s market cap (October 2009): $174.3 billion

Patterns of ownership

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‘The global media system is better understood as one that advances corporate and commercial interests and values and denigrates or ignores that which cannot be incorporated into its mission’ (McChesney, 2003: 266).

Patterns of ownership

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Scale = risk = conservatism

Commerce vs creativity

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See the work of: Mark Deuze, 2007, Media Work, Cambridge:

Polity David Hesmondhalgh, 2007, The Cultural

Industries – 2nd Edition, London: Sage

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“Whatever we do with our media – what we read, watch, listen to, participate in, create, or use – is much more than the tightly corporate controlled substance offered through cable television, dot-com websites, or frequency modulation (FM) radio…” Deuze, 2007: 50

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“…It is also the bewildering array of community and ‘alternative’ media, pirate radio, our use of office photocopier as ‘the people’s printing press’, letters we write, Short Message Service (SMS) texts we send to participate in a TV show or to ask someone for a date, pictures taken with the built-in digital camera of our cell phones and uploaded to photosharing social networking sites like Flickr; postings we make to our own or someone else’s weblog … and so on” Deuze, 2007: 50

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“management’s plot against the endemic freedom of culture is a perpetual casus belli [‘case of war’]. On the other hand, cultural creators need managers if they wish […] to be seen, heard, and listened to, and to stand a chance of seeing their task/project through to completion” Bauman, 2005: p55

Commerce vs creativity

More of the same, please?

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Problems of political economy approach

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‘Such an approach all too often limits one to instrumental explanations of media production, focussing on the complicity of media industries in the commodification and mainstreaming of culture, or on the resistance by increasingly savvy audiences to the inscribed and preferred meanings of media messages.’ Deuze, 2007: p52

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2 effects of commercial mass media Berlusconi Effect: ‘the disproportional political power that

ownership over mass media outlets gives its owners or those who can pay them’

Baywatch Effect: ‘displacement of public discourse by the

distribution of commodifiable entertainment products’ Yochai Benkler (2003: p8)

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So, er, what about the internet?

More McDomination? More conservatism? More concentration of

power? More of the same?

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Recent new media success stories

Click icon to add picture

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Recent new media success stories

Craigslist (eBay paid around $30m for 25% share Aug 2004)Flickr (Yahoo – March 2005 $35m)MySpace (News Corp $580 July 2005)Skype (eBay $2.6b Sept 2005)XFire (MTV Networks/Viacom $102m April 2006)YouTube (Google $1.65bn Oct 2006) Last.FM (CBS $240m May 2007)Facebook (Microsoft pay $246m for 1.6% share Oct 2007)CNET (CBS $1.8b – May 2008)

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Does the internet offer more of the same? Internet is a ‘disruptive technology’ (Bower &

Clayton, 1995) Global brands beginning to emerge Old media players want in

Lobby for change and conditions that suit them

BPI + Digital Economy Bill Dilution of content and creativity?

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Business Model Idea Implementation Intellectual property

(IP) Venture capital (VC) Exit strategy

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Venture capital Private equity capital typically provided to

immature, high-potential companies

Return generated through eventual ‘realization’ such as an IPO (initial public offering)

Exchanged for shares in the invested company

Managerial and technical advice

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Angel investors?

Exit Strategy?

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Monetising the IP Typically via a merger or

sale

Current problem? Economic downturn

To scale or not to scale?

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Scale first Rapid growth, huge ‘reach’,

potentially large user-base Convert them to paying

later?

To scale or not to scale?

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Monetise first Develop unique service,

keeps costs low Out-flanked by free

competitor?

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Case study 1: YouTube 2005: VC Sequoia Capital invest

$3.5 million 2006: Sequoia Capital invest

further $8 million Revenue? What revenue? Scale first Google buys in Oct 2006 for

$1.65 billion Losing $500 million a year?

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Case study 2: Twitter 2006 launch 2007: small but rapid growth Raised about $15 million in VC (Union

Square Ventures) 2008: SMS updates disabled in some

regions 2009: $35 million in VC (Institutional

Venture Partners) Revenue of $4 million Resisted rumoured £500 million

takeover (by Facebook) 2010: 100 million users? 2013: 1 billion users?

In summary

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Global media is constantly in need of growth potential

Anxieties around taking risks lead to conservatism

A global oligopoly attempting to colonise the world?

In order for innovation to occur, a symbiotic relationship is needed between big media and little media.

In summary

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In a climate where global financial turmoil is hindering potential investment in small businesses, the future may be hostile to innovation, and this can have implication for new businesses and users of new media tools and services

Questions

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Is the relationship between managed global risk (by BIG media) and uncertain business propositions by new media start-ups a tenable one for future investments?

Is there a future for innovation within an era of uncertain financial investment (credit crunch)?

Is it best to scale or monetise first?

How successful are companies like Facebook or MySpace at realising their assets?

Questions

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Recently we’ve seen significant investment in web 2.0 technologies (eg News Corp buying MySpace) by BIG media. What are the barriers to further investment in music related services? Consider how sites/services like Last.FM or Spotify

work. How do they make money and what kind of expenses do they have? What strategies must they employ in order to grow?

Selected sources

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Zygmunt Bauman, 2005, Liquid Life, Cambridge: Polity Yochai Benkler, 2003, ‘The political economy of commons’, Upgrade, 4 (3), pp. 6-9,

http://www.benkler.org/Upgrade-Novatica%20Commons.pdf Joseph L Bower & Joseph M Christensen, 1995, "Disruptive Technologies: Catching the

Wave" Harvard Business Review, January-February David Crocteau and William Hoynes, 2005, The Business of Media Corporate Media

and the Public Interest - Chapter 3 ‘The New Media Giants - changing industry structure’, London: Sage.

Mark Deuze, 2007, Media Work, Cambridge: Polity Nicholas Garnham, 2000, Emancipation, the media, and modernity, Oxford: Oxford

University Press David Hesmondhalgh, 2007, The Cultural Industries – 2nd Edition, London: Sage Robert McChesney, 2003, ‘The New Global Media’ in David Held & Anthony McGrew

(eds), Global Transformations Reader¸ Cambridge: Polity Press Herbert Schiller, 1979, ‘Transnational Media and National Development’ in K.

Nordenstreng and H. Schiller (eds.), National Sovereignty and International Communication, New Jersey: Ablex.

Polly Toynbee, 2001, ‘Who’s Afraid of Global Culture?’ in W. Hutton and A. Giddens (eds.), On The Edge: living with global capitalism, London: Vintage.

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Images used (slide #) 2, 27-8: miskan, 2005, http://www.flickr.com/photos/miskan/4467937/ 3: leralle, 2008, ‘Karl-Mark-Monument’ http://www.flickr.com/photos/leralle/2502099031/ 4: adobemac, 2006, ‘Marx-Engels-Forum’

http://www.flickr.com/photos/adobemac/244170074/ 5: svenwerk, 2006, ‘Marx and Engels’ http://www.flickr.com/photos/svenwerk/286219227/ 6: 10 Ninjas Steve, 2006, http://www.flickr.com/photos/steverideout/135270019/ 7: Lock, stock and 2 smoking barrels!!, 2008,

http://www.flickr.com/photos/vivek-mukherjee/2959224072/ 9, 11-13: anjan58, 2007, http://www.flickr.com/photos/anjan58/1281306048/ 10: carlos_seo, 2009, http://www.flickr.com/photos/carlos_seo/3248928935/ 14, 19-21: HarshLight, 2009, http://www.flickr.com/photos/harshlight/3235469361/ 22-6: iCampbell, 2008 http://www.flickr.com/photos/icampbellzoom/2189881602/ 29: Alessio85, 2008, http://www.flickr.com/photos/spiritolibero85/2401071702/ 30: Andreas Solberg, 2007, http://www.flickr.com/photos/andreassolberg/433734311/ 35: robjewitt, 2010, http://www.flickr.com/photos/robjewitt/4438101296/ 37: Amanda Hayler, 2009, http://www.flickr.com/photos/minhay/3320928908/ 39-41: psd, 2008, http://www.flickr.com/photos/psd/2423289669/ 44-7: Oberazzi, 2006, http://www.flickr.com/photos/oberazzi/318947873/