Media Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The media is a significant industrial sector in its own right and it is also part of the infrastructure of the global economy. Its dual function as a site of important business transactions and as a market creator has increased materially since World War II in conjunction with the emergence of computer technology, particularly the internet, and the return of globalization. Determining the boundaries of the global media industry and assessing its role in the international economy remain problematic. Media is a relatively porous term that encompasses the means of mass communication, which include the internet, newspapers, radio, and television. It is difficult to monitor accurately the global trade of media content and products or to measure their impact on the economy.

The word media, like other metonymies, elides important distinctions by aggregating disparate mediums under a single name. It remains a useful term because the variety of communication and content that falls within its wide remit share certain characteristics. These features are best observed in relation to technology and trade. The tripartite relationship, or nexus, of media, technology, and trade is not linear, but circular. New technology influences the media and the media may influence the structure of technology. Trade affects the media and the media may affect trade. Likewise, the media may act as a catalyst in the interaction between technology and trade.

Media And Telecommunications

The development of communication technology often gives rise to new media. The advent of telegraphy during the 19th century enabled the creation of news agencies, such as the Associated Press and Reuters, which permitted the rapid collection and distribution of news. An abundance of news matter, in conjunction with the availability of cheaper newsprint and improved printing presses, was a necessary precondition for the rapid increase of daily newspaper publication during the 1870s. Improved access to information facilitated publication of evening newspapers. The issuing of newspapers in the early afternoon and subsequent editions throughout the evening had hitherto been curtailed because morning newspapers containing the latest news circulated to suburban areas via train, forestalling publication of papers later in the day.

Subsequent advancements in telecommunications had similar effects. Radio gave rise to broadcasting and television to video. Satellites permitted companies such as CNN to provide round-the-clock televised news. This new medium operated on the same principle as telegraphy; namely, information collected was transmitted and then distributed to a variety of users before being translated into a secondary medium, such as stereos, television sets, etc., and relayed to the wider public. The internet has altered this order of operations by removing the intervening step between transmission and reception. Users may now directly access and contribute to the creation of information.

This development has led to the creation of “new media” and altered the structure and course of the industry. New media include platforms and tools for information gathering (internet search engines), production and editing (audio, publishing, and Web development), digital storage and retrieval, distribution (digital subscriber lines [DSL]), access, design, and display (GPS, voice recognition software, etc.). Changes in technology have generated potential economies of scale and scope that have led to concentration and conglomeration. The press barons of the late 19th and early 20th centuries—Beaverbrook, Hearst, Northcliffe, Pulitzer—controlled horizontally integrated businesses, such as films and magazines, and vertically integrated concerns, such as paper mills and publishing houses. These companies were behind a series of mergers, particularly during the interwar period, which led to industry concentration, especially in newspaper publishing. The economies permitted by the confluence of new and old media technologies, often referred to as synergy, have enabled the rise of global media conglomerates on an unprecedented scale.

These companies, among which AOL Time Warner, Bertelsmann AG, News Corporation, Viacom, and Walt Disney are the largest, may strategically employ one company product, such as television, to promote another, such as newspapers. By virtue of their ownership positions in a multitude of different sectors, these leviathans control a large percentage of media production and output. Scholars and critics of the mass media have perceived in the development of these conglomerates a threat to the public sphere, the civic utility of the press, and the marketplace of ideas. Conversely, others have seen in their emergence the rise of professionalism, improvement in content, and greater access to information. The internet has materially reduced the costs of production and thus the number of content providers has increased dramatically. Entrenched media interests are attempting to influence the structure of the internet and to control access to information in the face of competition from such independent organizations.

Established media concerns have historically attempted to shape, if not control, the development of telecommunications. The way in which these technologies are structured has depended upon policy decisions that are subject to influence. In England during the 19th century, publishers in the provinces and in London attempted to prevent legislative changes to the Stamp Taxes, which placed an onerous levy on newspaper publication, to prevent the establishment of competitors. In 1870, British newspapers successfully influenced telegram tariffs charged to the press by the General Post Office after telegraph nationalization. In the United States, newspaper publishers affected congressional debates about the ownership of telegraphy. In both countries, newspapers attempted to block and then to control the development of broadcasting. These conflicts, which were in part generated by the development of new technology, consistently turn on questions concerning access to information.

Contested conceptions of intellectual property and the juridical solutions devised to secure copyright and ownership of information may advantage particular media interests and shape the structure of the industry. For example, in 1918, the Associated Press gained a quasi-property right in news through the United States Supreme Court that enabled it to restrict the distribution and use of its news reports. More recently, media companies have filed copyright suits to prevent the sharing of music, images, and texts via the internet. Solutions to such problems have led to the creation of new platforms for the distribution of media, such as Apple’s iTunes and iPod, which take advantage of copyright restrictions by vertically integrating music-purchasing and listening platforms. These questions of access to information thus also hinge on trade and telecommunications regulation.

Media And Globalization

Trade generates information and is generated by it. Reuters, the news agency, was established in London in 1851 after the completion of a telegraph cable connecting England and France. The company provided clients in England with commercial information from continental European bourses and vice versa. Scholars have shown how similar services contributed to price convergence, the development of arbitration, and the facilitation of trade. Flows in the direction and volume of information change according to patterns of trade. During the 19th century, Reuters’ profit streams from foreign clients closely followed the ebb and flow of British foreign direct investment. This example also illustrates how the regulation of technology may affect the relationship between trade and media.

The development of an international network of telegraph cables during the 19th century contributed to the advancement of global trade by facilitating the rapid distribution of information around the world. These cables, although typically constructed and owned by private companies, were closely aligned with national and political interests. Cables often snapped and failed to function. To encourage companies to undertake the relatively risky business of laying submarine telegraph cables, governments often provided subsidies or concessions to domestic companies. Until World War II, Britain dominated international telecommunications. Its advantage lay in naval power and easy access via imperial possessions to the natural resources necessary for submarine telegraph cable insulation. In terms of miles of cable owned, France, Germany, and the United States lagged significantly far behind. Much of the world’s news and commercial information passed through London, contributing to the development of British trade and financial services.

The way in which these international cables coupled with domestic telegraph lines determined how information traveled from country to country. Different regulatory environments, such as the nationalization of domestic telegraph lines, as in much of Europe, or private ownership, as in the United States, determined whether or not information passed from one carrier to another or moved seamlessly across national boundaries. European countries formed an International Telegraph Union in 1865 to develop standards, tariffs, and regulations pertaining to the transmission of information and to facilitate easy communication among their respective government controlled telegraph and telephone networks. The United States for many years abstained from such organizations in part because it refused to restrict the movement of the private American companies that controlled domestic telecommunications.

In this environment the development of global media roughly adhered to the boundaries of imperial interest. Reuters, the news agency of the British Empire, was at the head of an international cartel consisting of numerous other national news agencies, among which the most prominent were Havas, the French agency; Wolff, the German agency; and the Associated Press, the U.S. agency. These organizations divided the international news market among them and exchanged their respective news reports, which raised barriers to entry against potential competing news organizations by controlling trade in and access to information. Although such practices restricted the distribution of information, exchange among cartel members generated a larger news report for each agency’s clientele than would have been possible had they operated independently. International syndication of news content and foreign ownership of media outlets was rare at this time.

Changes in patterns of trade during the interwar period, particularly following the Great Depression, contributed to realignment in the international movement of information and the structure of the global media industry. The advent of international broadcasting during the 1920s also contributed to this process. Radio undermined the British advantage in international telegraphy. American, French, and German concerns actively competed in territories that had been the sole preserve of British firms. American news organizations, such as the United Press and the Associated Press, quickly infiltrated areas of informal empire, such as Japan, which Reuters had dominated. These developments contributed to a rearrangement of the news agency cartel according to which each agency obtained rights to enter, but not to actively compete with, the national territory of the others. After World War II, Reuters redirected its news services away from Britain’s colonies and dominions and toward Europe and North America.

The development of computer, fiber-optic, and satellite technology contributed to the rise of media conglomerates and to the deregulation, privatization, and liberalization of international telecommunications. In the 1960s, these changes precipitated the final dissolution of the international cartel of news agencies and gave rise to new competition from emergent global media companies. Changes to the regulatory regime during the 1970s and 1980s, which coincided with shifts in domestic industrial policy, most notably in Britain and the United States, facilitated a significant expansion of the global media industry and enabled corporations to enter foreign markets. Foreign ownership of news and media outlets upset nationalistic conceptions of the fourth estate, but the number of global media products has not significantly increased. Global integration has tended to take place in the financing of media products rather than in the content of the products themselves. There has, however, been a significant increase in the international export of commercial information services since the collapse of the international monetary system since the 1970s.

Critics have noticed in these developments the perpetuation of traditional colonial power relationships and have bemoaned an imbalance in the transmission of information and media products between the developed and developing worlds. Concerns about cultural imperialism have rallied activists who perceive in globalization and the standardization of media content the seeds of hegemony and homogeneity. Concerns about the corporate pursuit of profit trumping public interest have motivated the development of alternative media projects and organizations empowered by the internet that aim to provide a voice to underrepresented parties. Conversely, proponents of deregulation and privatization of telecommunications argue that a competitive regulatory environment predicated on free trade is not only the best way in which to surmount market imperfections, but that government intervention in the free flow of information and cultural artifacts is circumspect and threatens to infringe upon freedom of expression.

Conclusion

The media, because of its importance to international trade as well as the dissemination of financially and culturally valuable information, is a contested and, therefore, visible industry. Everyone has an opinion on the news and where it derives. Changes in telecommunications and trade affect the media industry and the shared characteristics of the different means of communication that it comprises. These changes in turn have a profound effect on the way in which people receive information about the world in which they live. The tripartite relationship among media, telecommunications, and trade is cyclical and so too is the relationship among the media and the public.

Commercial media outlets operate in a dual market. They sell content to viewers, readers, and other participants. The attention of these consumers is in turn sold to advertisers. Since the rise of mass circulation newspapers during the 1870s, media outlets have depended less and less for their profits upon circulation and more upon advertising. Media companies have been thus propelled to devise methods for attracting either a large or a lucrative audience. A general effect of this development has been a reduction in the cost of media products. It has also meant that media companies must alter their means of attracting audiences in accordance with technological shifts affecting the way in which the public prefers to imbibe information.

Although radio and television have diminished newspaper sales in the past, there has hitherto been no written alternative to the press. The internet has challenged the newspaper by luring away its readers, and, in so doing, depleting its sources of advertising. Companies believe they can reach a larger pool of potential consumers more directly via advertisements placed on frequently visited Web sites. This development has led to a proliferation of internet based platforms that combine the provision of information with advertising. A prime example of this phenomenon is Google, the internet search engine, which directs users to advertising Web sites based on the items for which they are searching. This sort of interactive ad placement has improved the efficacy of advertising and provided internet companies with the capital necessary to amass vast quantities of information that is then made accessible to people throughout the world. In light of this competitive threat to traditional media, pundits now speculate about the demise of the newspaper and the disappearance of the printed word.

Bibliography:

Jeremy Burke, “Primetime Spin: Media Bias and Belief Confirming Information,” Journal of Economics and Management Strategy (v.17/3, 2008);
J. Drake, “The Rise and Decline of the International Telecommunications Regime,” in Regulating the Global Information Society, C. T. Marsden (Routledge, 2000);
Lisa M. George, “The Internet and the Market for Daily Newspapers,” B E Journal of Economic Analysis and Policy (v.8/1, 2008);
R. Headrick, The Invisible Weapon: Telecommunications and International Politics 1851–1945 (Oxford University Press, 1991);
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Anu Mitra, Mary Anne Raymond, and Christopher Hopkins, “Can Consumers Recognize Misleading Advertising Content in a Media-Rich Online Environment?” Psychology & Marketing (v.25/7, 2008);
Starr, The Creation of the Media (Basic Books, 2004);
JoAnne Yates, Wanda Orlikowski, and Anne Jackson, “The Six Key Dimensions of Understanding Media,” MIT Sloan Management Review (v.49/2, 2008).

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