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Mass Communication. Living in a Media World. Ralph Hanson West Virginia University – Morgantown. Slide 1. Chapter 2. The Media Business: Consolidation, Globalization, and Synergy. Profile: Robert Johnson Development of the Media Business in the USA The Six Big Media Companies

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  1. Mass Communication Living in a Media World Ralph Hanson West Virginia University – Morgantown Slide 1

  2. Chapter 2 The Media Business: Consolidation, Globalization, and Synergy Profile: Robert Johnson Development of the Media Business in the USA The Six Big Media Companies The Media Business and Society ChapterOutline

  3. Profile: Robert Johnson • BET – Black Entertainment Television • Founded by Robert Johnson in 1979 • Initial investment of $0.5M sold for $3B in 2000 to Viacom • Run by Johnson as a profitable business, not a community resource: “maximum viewing interest with … maximum revenue return.”

  4. Development of the Media Businessin the United States • Tradition of Private Ownership • Cambridge Press, 1638, Bay Psalm Book • Benjamin Harris, 1690, Publick Occurrences both Foreign and Domestic • Benjamin Franklin, 1729, Pennsylvania Gazzette • 1830s, penny press newspapers • 1844, Wash-Balt telegraph line

  5. Development of the Media Businessin the United States • Growth of National News • Advent of TV networks and satellite communications • Half-hour evening news initiated in 1963 • Other news-related programs developed gradually, such as Nightline • C-Span on cable television began in 1979 • CNN on cable in 1980 • USA Today distributed electronically and printed locally

  6. The Six Big Media Companies • Media choices and complexity have increased dramatically in past 30 years • Examples: VCR, CD, PC • Number of companies providing service has decreased substantially • Example: number of companies controlling 50% of USA media output has decreased from 50 to 6 from 1983 to 2000

  7. The Six Big Media Companies Vertical Integration is controlling every aspect of a media product from production through delivery to consumers.

  8. The Six Big Media Companies • AOL Time Warner: Media in the Internet Age • Time (1922) →Time Warner (1989) → AOL Time Warner (2001) • Largest media company in USA • Includes HBO, CNN, TNT, TCM cable • Includes Time Life Books, People Magazine, Sports Illustrated, AOL, and New Line Cinema

  9. The Six Big Media Companies • Synergy at AOL Time Warner • Newsroom support • Audience access • Repackaging content • One-stop advertising

  10. The Six Big Media Companies • Disney: The Mouse that Grew • Mickey Mouse cartoons (1928) → Full-length animation (1937) → Live-action films (1950s) → ABC and international expansion (1990s) • History of merchandise licensing • Includes: ABC, ESPN, A&E, Lifetime, Touchstone, Miramax, broadcast television, theme parks and cruise lines

  11. The Six Big Media Companies • Synergy at Disney • Executive boot camp • Michael Eisner: “There is not a single part of Disney where the left hand can’t wash the right.” • Example: Ice Bound by Dr. Jerri Nielson

  12. The Six Big Media Companies • Viacom: Bringing together Cable and Broadcasting • United Independent Broadcasters (1927) → CBS-Paley (1929) → CBS-Tisch (1980s) → CBS-Westinghouse (1995) → CBS-Viacom (1999) • Viacom began as a unit within CBS but was forced to split off in 1971 • Includes: CBS, Infinity, TNN, MTV, VH-1, Nickelodeon, Showtime, Comedy Central, Paramount, Simon & Schuster, Blockbuster

  13. The Six Big Media Companies • Synergy at Viacom • Sharing programming • Nickelodeon replaced CBS’s old cartoon programming on Saturday mornings • Expanding a franchise • WWF Raw is War→ WWF movies, television drama, publishing venture with Simon & Schuster, and WWF attraction at Paramount theme parks

  14. The Six Big Media Companies • Bertelsmann: The World’s Largest Publisher • Publisher of music and prayers (1835) → original publisher of Grimm Brothers → run by Mohn (post WWII) → purchased Random House (1998) • Privately-held; largest English-language publisher • Includes: Bantam Doubleday Dell, Random House, BPG, Family Circle, RTL, European television stations and production companies, Arista/RCA/BMG/Windham Hill Records

  15. The Six Big Media Companies • Synergy at Bertelsmann • Book clubs • Music clubs • BMG Music Service • Produces Fox show American Idol; BMG promotes winners’ albums

  16. The Six Big Media Companies • News Corporation: A Worldwide Giant • Murdoch’s Adelaide News (1950s) → newspaper chain and The Australian (1964) → News of the World in Britain (1969) → New York Post (1977) → Fox (1980s-today) • Working on interactive television – Example of soccer match • Includes: New York Post, Times of London, TV Guide, HarperCollins, Fox broadcast and cable, television stations in 25 cities, 20th Century Fox

  17. The Six Big Media Companies • Synergy at News Corporation • Direct broadcast TV over the globe • Strong emphasis on vertical integration • Local approach to content

  18. The Six Big Media Companies • General Electric / NBC: A Broadcasting Pioneer Returns • RCA → NBC radio (1926) → sells Blue network (1940s) → TV technology and regular TV broadcasts (1940s-today) → GE purchase (1985) • Only one of Big 4 broadcast networks that is not a media conglomerate with TV studios and production houses • Includes: NBC, Telemundo, 28 TV stations, CNBC, MSNBC, AMC/A&E/History channels

  19. The Six Big Media Companies • Synergy at GE/NBC • Internet and E-commerce • Internet communications tools • Online sales of GE financial services • Cable television • Content repackaging from NBC broadcast to cable channels MSNBC and CNBC

  20. The Media Business and Society • A complex reality governs the product that media companies sell • Consumers choose between many channels of media today, including broadband networks • “…we can’t afford to be tied to any production process…” Arthur Sulzberger, Chairman, The New York Times Corporation

  21. The Media Business and Society • Owners • Buyouts by the Rockefellers • NBC covering GE • Central issue: Credibility • Advertisers • Tobacco punishing magazines • Mutual placement of ads and programs Who controls the Media?

  22. The Media Business and Society • Government • Review of mergers by regulating bodies • Murdoch’s loss of BBC in China • Special Interest Groups • Picketing of Basic Instinct by gay and lesbian rights groups • Boycott of Disney by Southern Baptists Who controls the Media?

  23. The Media Business and Society • News Sources • Primary news sources negotiate with the media and control information they provide • Less influential sources are often ignored by the media – example of Zoe Baird • Interdependence of celebrities and media leads to loss of credibility Who controls the Media?

  24. The Media Business and Society • Audiences • Audience interest = success/failure • Major media companies assess audience interest continually • Focus groups (National Geographic Traveler) • Surveys (Sports Illustrated, Teen People) • Test screenings (Harry Potter) Who controls the Media?

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