Head's Broadcasting in America

A Survey of Electronic Media (1-download)

Michael McGregor, Paul D. Driscoll, Walter Mcdowell

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317347927
• Edition: 10
• Topic: Commerce
• Subtopic: Industrie des médias et des communications

This book documents the dramatic changes in the field of electronic media in the past decade and provides informed insights in the exciting, and changes yet to come. It examines the transition in broadcasting from analog to digital transmission and the changing business models of electronic media.

Introducing Electronic Media

chapter1

1.1 What It Means

1.2 The Players

1.3 Back to Basics

You already knew a great deal about American electronic mass media even before you picked up this book. You probably grew up using radio, television, cable, video cassette recorders, and computers. More recently many of you have used satellite TV and radio, picture phones, and wireless laptop computers. You routinely “share” MP3 files and store them on your computer, and then download them into a portable player such as the Rio or iPod. Increasingly, you watch video programs on those same devices or your smart phone. You send text messages, have scores of friends on MySpace or Facebook, and spend hours each week surfing the Internet.

So why, then, read a textbook about something you use daily, something that’s an integral part of your normal lifestyle? What can you possibly learn that you don’t already know?

Well, test yourself with the following questions:

▶ What did the terrorist attacks of September 11, 2001, and the destruction of Hurricane Katrina teach us about our media systems in the United States? What media policy changes did those events trigger?

▶ How can a stand-up comic on Comedy Central make racist or sexually explicit references in every other sentence and get away with it, but your favorite radio DJ got fired for using such language only once?

▶ What limitations are there on the government’s ability to protect children against pornography and chat room predators on the Internet?

▶ Shows you and all your friends like always seem to get canceled. How accurate are those TV ratings we hear about?

▶ Why do so many radio stations across the country sound so similar?

▶ What is the origin of the Internet?

▶ Why don’t advertisers like DVRs?

▶ What is digital TV? Is it the same as high-definition TV?

▶ Do people in some countries really have to pay an annual tax on each radio and TV set they own? Why would they?

▶ What’s the difference between a broadcast station and a cable network?

Studying electronic media has been exciting since the invention of the telegraph because the ability to communicate instantly over great distances has changed the world dramatically. But studying electronic media in the new century is especially exciting because the changes happening are increasingly rapid. Staying on top of what many regard as a media revolution, with all of its twists and turns, its subtleties and implications, is a challenge for any serious student of communication.

One thing that makes studying media challenging is the large number of new terms and concepts one must learn. Media professionals and scholars often simplify discussion by replacing longer terms with abbreviations and acronyms. The discussion that follows introduces many of these frequently used shortcuts. Although we have taken care to explain an acronym or abbreviation when it is introduced, it’s easy to become confused later when one pops up again. The inside rear cover of this text provides a list of the acronyms and abbreviations introduced in this book and you may find it helpful as you make your way through the alphabet soup that follows.

1.1	What It Means

No book, including this one, can be completely up to date. We envy historians who write almost exclusively about the past. While new information about the American Revolution may be discovered, the outcome of the conflict is not in doubt. We have no such insight about what may happen next year, or even next week, regarding developments in electronic media. That’s why it is important that you, as students of electronic media, remain alert to changes taking place constantly, changes that may make some of the material we present in the following pages inaccurate or, we hope more often, simply incomplete.

In spite of the media’s mind-numbing rate of change, there are a few trends worth noting before we get too far along in our explorations.

Convergence

Media scholars most often think of convergence as a technological phenomenon, and that is certainly a major component of the trend. With respect to communication, technological convergence means the coming together of, and blurring of lines between, what previously had been essentially separate ways of distributing information, for example, broadcasting, cable, telephony, computers, and mail. But convergence is not only about technologies, “hardware,” and the means of transmission and delivery—convergence also relates to the content transmitted and delivered.

An example of content convergence is provided by cable. The typical cable subscriber is unaware of the significant differences between a broadcast station carried on the system and a cable network. The programs from each source are often identical, they enter the home on the same wire, and both are seen on the same display device (a TV set). It is little wonder that consumers tend to think of them as being the same thing—television. Many people also access the Internet, with its vast array of text, data, graphics, still images, sound and video—what many people call multimedia—through the same wire that brings TV programs from broadcast stations and cable networks into their home. In many places, cable also provides telephone service over that same technological link, and telephone companies increasingly offer video programming.

Most people still split these various converged services by using separate, purpose-specific technologies such as the TV receiver, the conventional telephone handset, and the home computer. Some futurists, however, believe that the interface for using these services will converge into a single device. The computer’s ability to display video, text, and graphics, as well as reproduce sound, makes it the most likely device to serve this role. Indeed, today’s computers can be configured to perform the functions of a TV and radio receiver, a fax machine, a telephone, and a host of other duties formerly performed by separate devices.

Another important characteristic, or perhaps consequence, of convergence is interactivity. Traditional electronic media such as radio and television broadcasting are essentially unidirectional (one-way) technologies. Convergence technologies tend to make bidirectional (two-way) transmissions possible, blurring the distinction between creators of content and consumers of content. Recognizing the attraction of interactivity, especially among younger audiences, traditionally one-way media, such as broadcasting and newspapers, are struggling to find ways audience members can engage interactively with the content being provided.

Many observers argue that another consequence of technological and content convergence is the effect they are having on patterns of media ownership. Although some may argue that convergence is more accurately described as an excuse for, rather than a cause of, the dramatic changes in media ownership in the last two decades, it must be acknowledged that convergence is at least a factor. In a world of converging technologies and content, some say consolidation, diversification, vertical integration, and synergy are necessary if media companies are to prosper, or even survive.

Consolidation (combining two similar organizations into one) can theoretically result in a stronger entity than either organization standing alone. While it may not be true that “two can live as cheaply as one,” there are potential cost savings. Two small-market radio stations in adjacent towns may be unable to survive independently but, if allowed to consolidate and share resources (office space, sales staff, and engineers), they may both prosper.

Diversification (providing more than one product or service) can also theoretically make a company stronger. A company that can sell advertising for distribution through both its broadcast stations and its newspapers is probably in a stronger position than one that can sell only newspaper advertising. Similarly, a company that can bundle video, Internet access, and telephone services may be a more effective competitor than the company that can only offer one of these services.

As typically applied to media industries, vertical integration refers to the control of the production and distribution of content by one company. A media company, such as the Walt Disney Company, benefits financially from the fact that it can both produce programs (through its Disney studios) and also distribute the programs it produces (through its ABC television network). A company that can only produce programs or only distribute them is in a theoretically weaker competitive position.

Synergy refers to the idea that the action of two or more companies working together may produce a benefit greater than the combined effect of the same companies operating separately. Synergy is often presented as an argument to support consolidation. For example, the owners of the small-market radio stations mentioned before might argue that not only will consolidation save the two stations, the consolidated entity will have enough resources to improve the programming broadcast by both. Likewise, the company that can provide multiple services will be able to use its increased revenues to upgrade its technical facilities.

Volatile Markets

In the second half of the twentieth century Americans had filled their homes, their cars, and even their pockets with electronic devices. By the turn of the century more than 98 percent of American homes had a television set, and many homes had three or more sets. About 58 percent of those homes were connected to cable and another 20 percent subscribed to satellite TV services. Cell phones were so commonplace they were already considered hazards to public safety, if not sanity, in some towns and cities. Many young people had cars filled with electronic entertainment hardware worth more than the car itself.

Perhaps most dramatically, use of the Internet in the second half of the 1990s had mushroomed. The National Telecommunications and Information Administration (NTIA) reported in 1999 that the number of homes with computers connected to the Internet had increased rapidly. Harris Interactive surveys suggested more than 50 percent of U.S. adults were using computers at home, and almost half of them were accessing the Internet. The U.S. Education Department’s National Center for Educational Statistics (NCES) estimated that more than 95 percent of the nation’s public schools had Internet access, ensuring that future consumers would grow up considering Internet access a basic right of citizenship.

American entrepreneurs, seeing an opportunity to make huge profits through telecommunications technologies, formed start-up companies promising to capitalize on the “information economy.” The stock price of an Internet-based company would often double, triple, or quadruple on the day of its initial public offering (IPO). It seemed to many people that any company with a name ending in “dot-com” (.com) was destined for success. Some observers argued that electronic commerce (e-commerce) was a new paradigm representing a radical break with the rules governing traditional brick-and-mortar businesses. Cautionary words from seasoned investors were ignored. Warnings, coming as early as 1996 from then-Federal Reserve Chairman Alan Greenspan about the “irrational exuberance” of investors, had little effect.

A measure of that “irrational exuberance” is the National Association of Securities Dealers Automatic Quotation System (NASDAQ) index that tracks the price of stocks sold “over-the-counter,” as most dot-com companies are. During a period of only a few months in late 1999 and early 2000, the NASDAQ soared past 3,000 and then 4,000, and finally, in mid-March 2000, the index screamed past 5,000.

The decline was even more rapid. Less than a year after hitting 5,000 the NASDAQ index was barely hanging on to 2,000. “New economy” companies such as Furniture.com, Pets.com, Mortgage.com, Quepasa.com, MotherNature.com, and Garden.com were history.

Perhaps the demise of such small start-up companies should come as no surprise, since under-capitalized new companies often fail. But the carnage was not limited to fledgling entrepreneurs. In January 2000 one of the “new media” giants, America Online (AOL), announced plans to acquire Time Warner, an “old media” company in a merger that would give AOL controlling interest in the new firm. Time Warner owned magazines such as Fortune, Time, and Sports Illustrated, plus popular cable networks HBO, CNN, TCM, and others. It also owned a major movie studio, cable companies serving many cities, and other media-related properties. The idea that any “new media” company formed in the mid-1980s could take over such a huge mass media conglomerate with a history dating to the 1920s was staggering to many observers. But, at the time, AOL was the nation’s largest online company, with more than 20 million Internet subscribers and, of even more importance, a market value of more than $160 billion, dwarfing that of Time Warner by billions of dollars.

AOL co-founder, Steve Case, made it clear that the merger was largely about convergence:

“We’re at the cusp of what we think will be a new era as the television and the PC and the telephone start blurring together and the promise of the Internet..… Consumers love the fact they have new ways to get information, new ways to communicate, new ways to buy products, new ways to learn things, new ways to be entertained. And they want to figure out how to take what’s happening on the PC, what’s happening on the television, what’s happening on the telephone and have it a little more integrated so it’s more convenient.” (The NewsHour with Jim Lehrer, January 12, 200...