Hanson, Mass Communication 8e
SAGE Publishing, 2022
Lecture Notes
Chapter 3: The Media Business: Consolidation, Globalization, and the
Long Tail
Learning Objectives
1-1 Describe how the media developed as a private industry in the United States from the
colonial period to the invention of the internet
1-2 Identify who the major legacy media conglomerates are
1-4 Identify the reasons behind the argument that the era of mass culture is over, and we are
entering an individualistic, less mass-oriented culture
Annotated Chapter Outline
I. The U.S. Media Industry
A. Almost entirely privately owned and operated for profit
B. Most other governments tightly control the broadcasting industry
C. History of U.S. private ownership of the media industry
i. First printing press in 1638
ii. Newspapers: commentary and gossip
a. Benjamin Franklin and the Pennsylvania Gazette
iii. Development of the penny press newspapers in the 1930s
D. The Growth of National News
i. Growing popularity of television networks in the 1950s caused the first true
national media culture in the U.S.
ii. Start of NPR, C-SPAN, and CNN
iii. The absolute number of independent news sources has declined but Americans
have increased access to a wide range of competing news sources
II. Big Media: The Legacy Conglomerates
A. Massive changes in the media industry during the past forty years
B. Companies and consolidation
i. Synergy: a combination of effects that is greater than the sum of individual
effects; in the media, refers to how a combined company can offer more value,
cost savings, or strength than two companies separately
C. Disney: The Mouse That Grew and Grew
i. Famous media company and the largest of the legacy conglomerates
a. Increasing in size due to recent acquisitions
ii. History
a. Production of Mickey Mouse cartoons in 1928
iii. From Mickey Mouse to Media Giant
a. Loss of direction after Walt Disney’s death in 1966
b. 1984: new leadership from Michael Eisner
c. Developing presence throughout Europe and Asia
iv. The Twenty-First Century at Disney
a. Transformation from children’s programming, theme parks, cruise ships,
and ABC and ESPN
D. News Corporation and Fox: A Worldwide Giant Downsizes
i. 2019: selling of half of Fox’s movie and television business to Disney
ii. Current holdings of Fox Corporation: Fox Broadcasting Network, Fox News, and
local Fox affiliate television stations
iii. Murdoch family holdings: newspaper, publishing, and information services
iv. From Australia to the World
a. Rupert Murdoch’s News Corporation empire grew out of the Adelaide
News
v. The Twenty-First Century at News Corporation and Fox
a. Adaptability of Rupert Murdoch’s leadership
E. WarnerMedia: Back to Basics
i. AT&T’s purchase of Time Warner in 2018
ii. Time Warner has been split off into several divisions
iii. Time, Warner Bros., and Turner Broadcasting
a. Began as publisher of Time magazine in 1922
a. Addition of other magazines, book publishers, cable companies,
and HBO
a. Large number of local cable television systems
c. 1996: acquisition of Ted Turner’s group of channels
a. Included CNN networks, WTBS, TNT, Turner Classic Movies, and
Cartoon Networks
b. Turner became a vice president and the Turner networks were
now controlled by a publicly owned company
iv. The Twenty-First Century at Time Warner
F. ViacomCBS: Together Again
i. Ownership of CBS, Paramount, basic and premium cable networks, and Simon &
Schuster
ii. The Child Buys/Sells the Parent
a. CBS Inc. in 1997
b. Viacom began as a small film production unit in CBS and was sold in
1971
a. Became a major producer of cable television programming
c. Viacom bought CBS in 1999
d. Viacom and CBS split into two separate corporations in 2005
iii. The Twenty-First Century at ViacomCBS
a. Major objective of the merger: better position to compete in the
G. Bertelsmann: The World’s Largest Publisher
i. Major presence in book and music publishing, management business, magazines,
newspapers, and internet and broadcast properties
ii. World’s largest publisher and the largest publisher of English-language books
iii. Books Still Matter
a. Began as publisher of Christian music and prayers in 1835
b. Original publisher of Brothers Grimm fairytales in the 1800s
iv. The Twenty-First Century at Bertelsmann
a. Uses the following methods:
a. Returning to core strengths
b. Broadcasting in Europe
III. Big Media: The New Players
A. Comcast/NBCUniversal: Cable Buys Broadcaster
Hanson, Mass Communication 8e
SAGE Publishing, 2022
i. NBCU: one of the oldest broadcasters founded in 1926 by the RCA
ii. Purchase of both NBC and RCA by General Electric in 1985
iii. Purchase of NBCU by Comcast in 2013
a. Made Comcast the nation’s most valuable pure-media company
iv. Comcast revenue: results from selling cable television, internet, and phone
services
B. Alphabet: Google and Company
i. Search engines as a part of mass communication
a. Influence of algorithms presenting news results
ii. Range of Alphabet products
a. Google
b. Android
c. Chrome
d. Nest
iii. Most profitable of the media companies, with the vast majority coming from
advertising sales
iv. Founded in 1998 by two engineers
v. 2002: Google leadership understood that money needed to be made through
advertising
a. AdWords system
b. AdSense product
vi. Criticisms and investigations
a. YouTube’s violation of children’s privacy
C. Apple: Reinventing the Media
i. Incredible levels of growth
ii. Sources of revenue: iPhone products, iPad tablets, conventional computers,
wearable devices, software and media, and services
iii. Founded by Steve Jobs and Steve Wozniak in 1976
Hanson, Mass Communication 8e
SAGE Publishing, 2022
IV. Media Economics and the Long Tail
A. Equally large audience for independent artists, writers, and videographers
B. Strange phenomenon: plummeting sales for consolidated media while people seem to
be consuming more media content than ever
C. Chris Anderson and The Long Tail
i. Believes that we are leaving the era of mass culture and entering a more
D. Long tail: the distribution curve for a large number of products by a limited number of
people
i. Possible because of no marginal cost for trying out new products and no cost for
E. Short head: the distribution curve for a limited number of products that sell the most
copies
i. Important for Big Media companies and in-store purchases
F. Characteristics of the Long Tail
i. Biggest players in the long tail: Apple, Netflix, and Amazon
ii. Six principles driving the success of the long-tail portion of the media
marketplace
a. High number of goods
b. Low cost of reaching markets
G. Consequences of the Long Tail
i. Democratization of the means of production
H. Big Players in the Long Tail
i. Big Media for distribution of content that appeals to a large group of people
ii. Hybrid retailers without brick-and-mortar retail stores that send out a physical
product