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Lecture 5

Lecture Five: Mass Media and the Economy

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David Young

Mass Media and the Economy: Profit and Media Organizations Under Private Ownership September 12, 2013 – September 24, 2013 Capitalism and Profit • Imperatives of the Capitalist Economy o As a result of these imperatives, these private media organizations do have to focus on earning a private financial profit o Provides us with an understanding of what media owners and media executives within these organizations are deciding o Leads to the structural constraints being applied to the private organizations o Media executives have to do what they have to do in order to make money  Keep costs down  Producing cheaper content Keeping Costs Down • Capitalist Organizations will reduce costs by: o Exploiting workers o Replacing workers with technology o Reducing production costs in other ways • Private Media Organizations (Privately Owned) o Capitalist organizations o Particular strategies for reducing costs o Importing content  It is less expensive for private media organizations to import media content than to produce their own media content  Example: CTV and Global are privately owned; to import an American television series, it costs about one tenth of the cost of producing a Canadian television series o Producing cheaper content  American television, but the trend has also occurred in Canadian television  Decreasing Audience Share: the percentage of television sets tuned in to a particular television network or station during a given period • 1970s, three American networks (ABC, CBS, NBC) o Those three networks had approx. 90% audience share, collectively, during primetime o During the 1970s, about 90% of the television sets that were turned on in the evening primetime, were tuned in to one of the three American networks • 2000s, four American networks (ABC, CBS, NBC, FOX) o Those four networks had approx. 25% audience share, collectively, during primetime o There was a tremendous growth of cable television – new services, such as HBO and Showtime  Decreasing Audience Share in Canadian context • 1970s, main networks/stations (CTV, Global) were privately owned • Major competitor was CBC, which was publicly owned • Cable offered specialty services, such as Much Music (MUCH)  Decreasing Advertising Revenue • The major networks suffered decreasing advertising revenue because of the decreasing audience share • Private media organizations get their revenue under a combination of private capital and advertising revenues • Advertising revenues are crucial to the prof
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