MDSA01H3 Chapter Notes - Chapter 2: Planned Obsolescence, Horizontal Integration, Profit Maximization
May$16,$2014$
$
Chapter 2 – Marxist Analysis
! Marxist media scholars are interested in how economic contexts and imperatives impact the production and
distribution of media content
o They are concerned with how the idea of media content as product, shapes the way it looks and
circulates
! Things such as books, films, shows " created as products to be bought and sold in a greater system of
commodity exchange
! Marxism – both a social theory and a political movement rooted in the idea that “society is the history of
class struggles”; considered materialist philosophy and not idealist (idealists maintain that ideas determine
social existence)
o Karl Marx " central premise is that the mode of production in society (i.e., underlying economic
structure and practices) determines the social relations of production (i.e., class structure).
! Believed that the material world precedes human thought " the external, concrete, material
conditions of social existence determine or ground human consciousness
o Holds that social consciousness encoded in institutions like religions, politics, government, etc.
(superstructures), reflects or mirrors the materials conditions of society (base).
! Base/superstructure model:
• (Cultural) superstructure " social institutions like family structures, religion,
politics, government, law, education, arts, media, etc.
• (Economic) base " mode of production:
o Forces of production
!
natural resources, land, factories, technologies of
production, labour power
o Relations of production
!
labour practices and ownership of property,
company shares, modes of distribution
! According to Marx " a society based on a capitalist mode of production is inherently
exploitive because it creates two classes, a working or proletariat class and a ruling/bourgeois
class
• The ruling class exploits the economic value of the working class to increase surplus
or profits
o Historical materialism – the character of social life to be a reflection of the material conditions that
exist at a particular historical juncture
! Capitalism is driven by the continuous desire to increase capital (profit-motive).
! Political economists – investigate both the prevailing patterns of media ownership and how the logic of
capital or profit-motive, influences media-business practices
Patterns of Media Ownership:
! Multinational capitalism – means and relations of production under contemporary capitalism
1. Concentration
! Media and entertainment that is owned and controlled by a small group of powerful companies (i.e.,
oligopoly)
! Oligopolies reduce competition by making it all but impossible for small, independent, or start-up
companies to survive in the marketplace (either buy up the small companies or drive them out)
! At some point the few remaining companies can operate like a cartel
2. Conglomeration
! Conglomeration – the corporate practice of accumulating multiple companies and businesses through
startups, mergers, buyouts, and takeovers
o Corporate structure in which a parent company owns and controls a host of subsidiary companies
May$16,$2014$
$
3. Integration
! Integration – is an ownership pattern in which the subsidiary companies or branches within a
corporation are strategically interrelated
o Vertical integration – corporation that owns and controls various aspects of production and
distribution within a single media industry like publishing or broadcasting
! Can significantly increase profits associated with media product by allowing the parent
corporation to oversee all stages of its development " production and exhibition
! Example: a media conglomerate that owns record copyrights, record labels, sound
recording studies, record clubs, stores, and other outlets possess strong VI in the music
industry
o Horizontal integration – an ownership pattern in which a corporation dominates one stage (or
level in the value chain) of the production process.
! Cross-media ownership – own and control companies across various media industries
but typically ay the same level of production, distribution, or exhibition
4. Multinationalism
! Multinationalism – corporate presence in multiple countries, allowing for the production and
distribution of media products on a global scale
o Not to be confused with globalization
o Transnational corporations " do not simply re-distribute a static, pre-packaged product
developed in one locale to various countries around the globe " TNCs (transnational corp.)
often partner with national media companies to produce and distribute media that will be
successful in that country or region
! International markets represent potential profits
Strategies of Profit Maximization
! Distinction between strategies and tactics hinges on ownership " only those who gave a “place” to
stockpile their winnings can carry a strategy (only the weak who want to resist domination create tactics)
! Synergy
o Synergy – can also be described as the involvement of multiple subsidiary companies in the cross-
development, production, distribution of a brand for the purpose of “exploiting it all for the profit
possible”; combined effort being greater than parts
o Made possible by horizontal integration
! Planned obsolescence
o Planned obsolescence – a business strategy in which the obsolescence (the process of becoming
obsolete) of a product is planned and built into it from its conception
! Technological obsolescence – occurs when a development in technology causes the previous
generation of that technology to become obsolete
! Psychological obsolescence – when a new style or product replaces an older style or product
such as the way new music endlessly turned into hits through frequent radio play (becomes
outdated in fashion sense)
! Logic of Safety
o Based on 2 principles:
1. Belief that nothing succeeds like success
a. Incentive to replicate success of a previous product
b. Inhibits innovation and production of creative content
2. Change is financially risky
! Celebrity and spectacle
o The concept of celebrity refers to those people who are well known for their well-knownness
o Audiences will pay to consume virtually anything that features celebrity personalities
