Lecture 8: The media from a business perspective

Newspapers used to be family-owned and reflected a certain point of view on every page. Even small towns had several papers.

20th century brought consolidation and corporatization of the media.

Now, most of America's newspapers are owned by huge conglomerates: eg. AOL-Time-Warner, Microsoft.

Biggest ethical challenge of modern media: conflicts of interest with the parent company's shareholders, advertisers and public. Their concerns differ:

• Shareholders: bottom line
• Advertisers: ad placement, avoidance of controversy
• Public: news, trends, titillation.

Newspapers transformed from subscriber support to advertiser support in the 1880s, beginning with the New York Sun

Outmoded economic models:

• libertarian theory of the press. assumes people are rational and curious about the world, capable of absorbing news and making informed decisions.

objection to this theory: most people aren't that motivated any more

• social responsibility theory: media provides truthful account of days events, is forum for exchange of comment and criticism, provides representative picture of society's constituent groups, presents and clarifies goals and values of society.

objection to this theory: should media try to shape public opinion?

Telecommunications Act of 1996 allowed fewer corporations to control more of the media market

Current ethical problem: can media be effective watchdog of a government that has allowed it to grow prosperous? Can corporate media be trusted to covern the corporate world fairly?

Recent changes in media's economic philosophy:

- Customer, not advertiser, is the key to long-term financial health. Result: more media philanthropy, other efforts to improve media's image with the community.

- Make subscriber base smaller but more reliable and loyal. Result: more attractive and easily defined market for advertisers.

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