Economics of the Mass Media Flashcards
What are the four media support systems?
- Audience
- Advertising
- Combination of Audience and Ads
- Subsidized
Audience
-money comes directly from users
-money is payed directly in store
Ex: going to a bookstore to buy a book
Advertising
-content delivered free to consumers and encourages people to buy the product
-advertisers are buying audiences
Ex: ad on a radio
Combination of Audience and Ads
Ex: buying a magazine with ads at a UCLA store
Ex: paying for a movie ticket that will have pre-screening ads
Subsidized
-private and public subsidies
-rich individuals may subsidize magazines because they support the opinions that are expressed
-government subsidies are public (Ex: NPR has public subsidies)
-private subsidies ex: corporate journal/magazine paid by the corporation to publish
What do advertisers want to know (2)?
- Size of audience (can be measured by how many units sold)
- Composition of audience
How does TV measure size and composition?
Measured through the Nielsen Company
How does the Nielsen Company measure?
-use people meters to develop statistics for (1)ratings and (2)shares
-people meter: a device that records each time you watch tv,by taking note of what you’re watching and minute-by-minute viewing
-draws a random sample of of 42,500 households in the US
-records demographic information
Rating
(number of tv households watching a specific show)/(total number of tv households in the US)
-gives you the absolute number of people that are watching a show
Share
(number of tv households watching a specific show)/(number of tv households with a tv on at that time)
-tells you how well a show is doing against competition
How does viewing impact ad cost?
The more people viewing a show, the more the ad will cost
Why will a late night comedy show have low ratings?
Because more people are sleeping
-it may have a high share
How frequently are ratings and shared generated?
Everyday
How are local markets measured?
Local markets are measured using a sweeps period
-sweeps months are November, February, May, and July
Network
a parent company responsible for coming up with shows, and sharing information with affiliated stations
How are sweeps measured?
By using a diary in which people record the show and time they watched tv
What is a downside of diaries used in sweeps measuring?
Inaccuracy with diaries because self recorded
-people make forget to fill them out, make rounding errors, lie about what they’re watching to seem socially involved, want a show to be more successful
How do sweeps months impact shows?
Networks will put on their best programs to generate larger audiences
-larger audience = more money
Ex: finales of reality shows appear in May
Ex: Celebrity appearances in shows
Problem with people meters
have to hit the button again when light begins to flash
-more accurate than sweeps so being moved into local markets
-Nielsen trying portable people meter, a clip that measures tv wherever you are
Compensation 3 (C3)
measures the viewing within 3 days of the broadcast
-Wednesday has highest rating
C7 and DVR Relationship
-with DVR people are delaying their viewing so networks are moving to C7
-C7 is more aggressive measuring because measure people who watched on air date and following 7 days
-ads are still watched with DVR playbacks because it is passive
-DVR is giving ratings a boost
-younger people more likely to record
What demographic Information is recorded for composition? (4)
- Geography: where are buyers/people watching the show
Ex: more frequent flyer commercials in big cities because more traveling occurs there - Age
Ex: Kellogs sold to children so more ads on kids channels - Sex
Ex: Revlon commercials won’t be shown as much on sports channels - Income
Ex: luxury car commercials common on classical music stations
Who mainly controls media?
Big corporations who are concerned with money and profit
How does media choose the content they share?
They minimize risk
Traditional genre categories
-established genres minimize risks
Ex: company wanting to make a successful teen comedy may refer to past successful films, for example, may be set in suburbs and have a character that feels out of place
Ex: band with unknown genre unlikely to get record deal
-change the packaging (genre) of a show can influence viewing
Ex: Desperate Housewives unsuccessful when framed as comedy, but successful when reframed as a primetime soap opera
How do corporations minimize risk? (7)
- Relying on traditional genre categories
- Using proven talent
- Using secondary markets
- Syndication Market
- Over production with emphasis on hits/blockbusters
- Longtail Strategy
- Exploit synergy of various parts
Proven talent
People who have been successful before
-includes proven writers, producers, and directors
-people may watch film with certain actors or directors that they like
Secondary Markets
alternative opportunities to generate profit beyond domestic sale in the original format without incurring additional production costs
Ex: secondary market for film could be DVDs, merchandise (primary is box office)
Ex: secondary music could be selling music for a movie
-something may fail in the primary market but succeed in the secondary (e.g. Shawshank Redemption)
Syndication Market
-sell a successful show to those who want to buy it
-often re-runs of old shows
-often includes procedural dramas: problems likely to be resolved by end of episode, they are not serialized so you can watch in any order and still understand
E.g. Law and Order, The Simpsons
Overproduction with Emphasis on hits/blockbusters
-most tv, books, movies, and music fail so companies may put out surplus offerings hoping that some will become popular and generate enough profit that covers the loses of everything else
-difficult to predict what will be big
Ex: movie studio will release a bunch of movies
Longtail Strategy
-making money by selling a lot of a few things or a little of a lot of things
Exploiting Synergy of Various Parts
-horizontal integration: companies have their hands in different industries and work in a synergetic way
Ex: promotion of Disney+ hawked on ABC’s Dancing with the Stars, which is owned by Disney
Concentration
-more of the media falling into fewer companies’ hands
-five media companies draw 3/4 of primetime audience
-despite concentration, media options have expanded exponentially
Ex: more the 3 billion views on Youtube daily
Sweeps Period
4 months in which local size and composition is measured to set local advertising rates
