Lecture 3: Political Economy of the net

(How to make good money and do good journalism)

  • “An agency of information and debate which facilitate the functioning of a democracy.” (Curran, 2002 p225)
  • Voice of the people- representing their concerns and views to those in power.

The Liberal pluralist argument:

  • Media must exist in a free market.
  • In order to have independence and maintain a safe distance from the threat of any government intervention or regulation and licensing.
  • The debate can only happen in a free market where a wider range of opinion can be published or aired; ‘a free marketplace of ideas’

However:

“Journalism as a practice cannot realistically be separated from the organisations in which it is institutionalised. In turn, those organisations cannot be separated from the social structures in which they are situated- in much of the world today, these structures are usually particularly democratic and partially capitalist.” (Jones and Saller, 2012:16)

The Political economy argument:

  • Growth levels of concentration and conglomeration of the ownership of the news media leads to certain types of Journalistic content.
  • Alternative voices are marginalised if they threaten the market or elite interest.
  • News is merely a commodity to be bought and sold.
  • Corporate priority to make money leads to trivialization and sensationalized coverage.

Big old media:     (legacy media)

  • Start up costs
  • Advertising
  • News can be depressing
  • The more news, the more it costs.
  • Good journalism is expensive.

Problems:

  • Advertising
  • Aggregators
  • Free content

Positive:

  • New kind of producers

On the Web:

  • Big companies can ride the online storm: huge resources
  • Diversification and conglomeration
  • Shovelware: big companies have lots of products they can put online.
  • Cross media promotion
  • Internationalisation

Where do people get their news?

  • TV Broadcaster websites or apps (65%)
  • Aggregators (33%)
  • Newspaper websites or Apps (29%)
  • Social Media (23%)

(Ofcom, 2012)

Making online pay:

Model 1: ‘Free online product’ 

  • Supported by display advertising

Problems:

  • Display didn’t really work online
  • Once you gave it away for free no one will want to pay for it.
  • Online views not as valuable as print readers.

Model 2: ‘Paywalls’

  • Some success (soft and hard walls)

Problems:

  • Online customers still could not finance product.
  • Isolate product from passing traffic.
  • Shift from ‘content economy’ to ‘link economy’

New Models:

  • Freemium e.g. Wired
  • Niche markets e.g. Economist
  • Multiplatform and e-commerce e.g. Telegraph
  • Blogging e.g. Huffington Post

New ways of doing journalism:

  • Crowdsourcing (1) Civic of public journalism
  • Crowdsourcing (2) The audience as the journalist.

Problems:

  • Finding ‘good’ journalism
  • Getting heard.

Are people prepared to pay for it?

  • Small scale or ‘hyperlocal’ or community media has so far failed to financially sustain themselves.
  • Yet are often seen as a vital civic function in a community.
  • Reliant on volunteers.
  • Not necessarily producing different content.

Lecture 2: A short history of the Internet and online news

  • 1991: Lifted ban of commercial use of the internet:

Commercialisation- big success for Porn and Gambling.

Effects- adverts, surveillance, market domination, search result manipulation.

  • Free software movement:

e.g. Firefox launched in 2004

  • Open source movement e.g. WIki
  • Wikileaks: disseminating information.

Curran’s 7 constraints:

“The impact of the internet does not follow a single direction dictated by its technology. Instead the influence of the internet is filtered through the structures of processes of society. These constrains in at least 7 different ways the role of the internet in promoting global understanding.”

(Curran, 2011)

  • The world is not equal:

The internet is not bringing the world closer together- it is allowing the affluent to communicate with each other.

  • The World is divided by language:

Between 500 million and 1.2 billion (depending on who’s counting) 8-18% speak English as a first or second language.

  • Language is power
  • People fight over beliefs and values:

Criticism for both the Daily Mail and Huffington Post for Plagiarism, discrepancies with fact checking and poor grammar/spelling through social media (Twitter, Facebook etc.) and in the comments on the sites, where other readers can rate high or low depending on if they agree with what the person has said. High and Low rated are both options so can see what has been liked the most, the same with dislikes.

  • National Identities:

Authoritarian control e.g. China, Russia

Inequalities within countries- economical, religion, ethnicity

“The political economy of online journalism” taken from Digital Journalism London: Sage, Jones, J. and Salter, L. (2012)

Significant constraints on the journalistic uses of new technologies: Political economy of journalism.

This chapter considers the degree to which the constraints are lessened in the digital environment.

A Political Economy of Journalism

  • John McManus (1994): The political economy of journalism at 3 levels: macro, meso and micro.

Macro: the dynamics of corporate actions, including ownership, profit-making and the relations between corporate interests.

News organisations and outlets (such as newspaper and tv programmes and stations) are regarded as nothing more than commodities to be bought or sold in the interest of profit. They are seen only seen as stock and shares with prices that rise and fall in accord with the stock market movement.

Can be seen as a historical barrier to ‘market entry’ and an explanation as to why corporate interests dominate news production.

Only organisations with significant capital, or which can convince corporate investors of good (i.e.profitable) business plan are able to enter the marketplace of ideas.

Franklin, 1997: Inequitable power relations that enable some to benefit more than others. One of the most important limits on the market is that profit rather than need drives it.scholars have argued that the ‘market’ has a tendency to priorities trivial stories.

Davies, 2008: Move journalism away from observation and investigation and towards churnalism, the recycling of press releases and campaign notes wherein the copy is provided by public relations companies for free and the journalist merely edits it.

Mesi: The internal relations of the news organisation- especially issues of resourcing and management.

Mirco: The responses of journalists to market demand for stories by consumers trained in making particular types of market decisions.

Mesco: Decisions made– Income generated by a story will be weighed against the cost of producing it.

filter down to….meso level- can help explain the news landscape.

motivation for celebrity and human-interest stories is because their production is cheap and profitable.

Quality journalism costs: the key challenge to some forums of online journalism- they need to attract resources. ( the unequal access to resources online creates ‘digital divide’)

the democratic role of journalism:

Kovach and Rosenstiel’s 2001: 17– “provide citizens with the information they need to be free and self governing”

…faces the problem considered the micro level.- Journalists have to stay constraint in what they can write “speed and direction he or she may have little or no control” (McNair, 1998:62)

Ownership and control:

Macro: owners of media corporations tend to have 2 objectives: make money and influence policy.

  • Individual proprietors like Rupert Murdoch may demand particular political stances in his publications, such institutional investors are driven by one demand- to make money.

Making money:

  • News operations usually get their money through customers purchasing access or from advertisers purchasing access to customers.
  • Liberal pluralist: journalism funding comes from customers making choices in the marketplace, research shows that in fact advertising is the most significant element of funding newspapers and television news.
  • ‘Our press is in the main a free entertainment service paid for by advertisers who want to buy readers’ (McLuhan, 1994:208)
  • NUJ reported that advertising accounts for over 80% of total newspaper revenue (2007)- figure may vary by type of paper
  • structural influence of advertising-
  • The media is ‘structurally dependant’ on advertising- acts as a form of indirect social control on context, effectivity censoring ‘viewpoints they don’t like’
  • Evidence to suggest advertising having direct influence: US- advertisers have traditionally exercised considerable influence over media content- censoring of information offensive to advertisers

“News that might damage an advertiser generally must pass a higher threshold of drama and documentation than other kinds of news” (Bagdikian,2000:164)

The internet has contributed to a crisis of profitability in Journalism:

  • “The old model (of publishing) was founded on quasi-monopolies such as classified advertising- which has been desimated by new and cheaper competitors such as Craiglist, Monster.com, Careerbuilder.com and so on” (Rupert Murdoch, 2009)
  • TV and newspapers have seen a decline in advertising revenue due to the extra advertising space online.
  • Economic terms: the increase of supply of advertising space has caused prices to fall.
  • “Newspapers now try to cope with declining circulation rates and shrinking profit margins by developing content and promotional strategies in the ‘grey area’ between news and marketing”
  • “…with advertorials, not only do advertisers get an advertisements that mimics a credible news story, but often the advertiser gets an opportunity to control the entire environment within which the message is embedded.” (Eckman and Lindof, 2003:65)

Cutting cost, cutting news:

  • Difficulties faced by traditional news platforms started long before the internet arrived.
  • News is copied, reproduced and shared across outlets e.g. five conglomerates account for 73% of newspaper circulation (NUJ, 2007)
  • “For the first time in US history, the county’s most widespread news, commentary, and daily entertainments are controlled by 6 firms that are around the world’s largest corporations, 2 of them foreign” (Bagdikian,2000:xiii)
  • The business side of journalisms seems here to conflict with the supposed democratic role of journalism:

“There is little doubt that the pursuit of higher profit margins has been elevated by newspaper publishers to a dogma above standards in journalism, the welfare of their staff and the public interest of their readers.”

As a consequence of this

“The direct relationship between cost-cutting including loss of jobs and poor pay and conditions and the reduction in editorial standards and loss of quality is now self-evident.” (NUJ,2007)

  • Motivation to cut back on news and current affairs programming is intensifying- commercial channels have dropped much of their public service programming (e.g.current affairs) to such a degree that recent reports have stated that, ‘commercial television has effectively vacated political and economic current affairs, which is now covered almost exclusively by the BBC’ (Barnett and Seymour, 1999) and that generally peak time current affairs programming declined by 35% between 1993 and 2004 (Jury, 2005)

A political economy of online journalism:

  • Strong argument that news exec lay at the feet of the internet- their own reluctance to respond to the potential of the internet for improving and enhancing news production that caused the problems for journalists.

“Mr. Murdoch-net natives. You’ve had all that time to reinvent your products, services, and organisations for this new world, to take advantage of new opportunities and efficiencies, to retrain not only your staff but your readers and advertisers, to use the power of your megaphones while you still had it to built what would come next. But you didn’t. You blew it. And now you’re angry.” Jeff Jarvis (2009b)

  • New industry has become complacent, depending on business models and revenue sources that were regarded as inexhaustible. Attitude set up to defend set up costs.
  • Murdoch and Associated Press represent significant and powerful interests who have served through decades of privatization and commodification of information.
  • Online Journalism- Elisia Cohen (Cohen, 2002: 544) applied McManus’ (1994) analysis to online journalism:

“Internet itself does little to alter the macro- and micro-level constraints on journalists presented by media firms and their desired audiences: media firms largely control what is seen and left unseen on Web Sites.”

“News firms and journalists, in turn, draw advertisers and investors to support online journalism efforts.”

“Micro Level market pressures are not eliminated on the internet, where audience patterns and rationales for news consumption choices appear less certain that with older media.”

  • Why the internet won’t sink the media giants’ by McChesney (2002):

Large media corporations are willing to take losses on the internet. ‘loses appear to be the key to the future’ especially when those losses protect much bigger multi-billion dollar investments. Largest corporations have the resources to ride out the bad times.

Large media corporations have existing digital programming from their other ventures. They can transfer to new media at a minimal cost. ‘Shovelware’ is a very clear example of this strategy. Multimedia news has seen an escalation of multi-platform reproduction, thereby reducing the unit cost. Shovelware:”A derogatory computer jargon term that refers to software bundles noted more for the quantity of what is included than for the quality or usefulness”( PC Magazine Encyclopedia. PC Magazine, July 2014)

The strategy of cross media promotion whereby a corporation might promote a product through a variety of media holdings from promotions in newspapers to the web addresses advertised within TV programmes. Bigger the firm- the easier and cheaper it is to publicise and market products. Bigger firms have greater advertising and marketing budgets. Deals made by media corporations with software and web portal companies. Vertical integration of media corporations (as content producers and distributors), internet service providers, and software and hardware manufacturers, which has enabled them to steer web users to certain content and certain types of ‘interaction’.

Much of the venture capital for internet content start-up companies comes from established media firms. In addition to their own holdings and investments in new ventures, the biggest corporations can simply buy out potential competitors and other successful ventures.

The size and traffic to the websites of media giants- they stand to attract the lion’s share of advertising and other revenue. Whereas an internet start-up may take years to develop a significant audience. Big corporations can use their power to make a much more rapid impact, and to generate (direct and indirect) revenue much more quickly. ‘Advertising has a strong influence on audience construction for online journalism. Advertisers still desire a national audience, even to the point at which news websites may hide geographical distribution of readership’. (Thurman, 2007)

But good journalism costs money:

  • Large corporations no longer needed to organise journalism- Clay Shirky (expert in economics and culture)
  • ^ Costs of communication failing- possible to coordinate the output of a group from outside the walls of an institution.
  • ^ Traditional organisations are inherently exclusionary and an unnecessary professional class in manufactured as a byproduct of this exclusion.
  • Underlying principle governing new social structures (social media) is that corporations no longer ‘plan’ work for employees, instead they ‘coordinate’ activities and contributions from prod-users.
  • Issue with resourcing- introduce further social exclusion, another digital divide, as those who have the finances, education, expertise and time to contribute free labour do so, leaving those without those resources excluded.
  • Many news organizations have surpassed the function of attracting investment to support journalism, and tend instead to use journalism to support investor profits. ESSAY
  • Journalists need resources, even as more and more technologies become more readily available.
  • New media technologies (apps?) tend to simulate new hopes as well as new fears.
  • Internet and other digital technologies have enormous potential being exploited to improve journalism. ESSAY
  • Simplest website can be set up and run with little financial cost compare to the costs of production of broadcast and newspaper news.
  • Internet tends to be less complex and less bulky forms of organisation that other media forms as it is built on a distributed network- designed so that the ‘load’ can be distributed over many sites.
  • Cheaper, more responsive, time and labour-saving technologies, the amount of time and resources journalists can dedicate to a story may increase dramatically. ESSAY
  • Counter argument: media control is not solely a function of the technologies used, rather a result of the economic forces (explained above)
  • The potential of the online environment is not always regarded in terms of how to improve journalism, but from the management p.o.v, how to increase revenue and decrease cost. ESSAY
  • When new technologies of production are deployed in media organisations, the general trend is for their deployment to be controlled by managers with the intention of increasing ‘efficiency’ and cutting costs.
  • Rather than allowing journalists to do more journalism or engage the public more effectively, the tendency has been for the deployment of new technology to be dependent on cuts in funding.
  • New technologies often result in journalists being made redundant, re-skilled and spending time that might otherwise be spent engaging the public carrying out technical tasks such as editing.- time is reduced in the field as journalists have to undertake tasks on a rota.
  • Because of managerial control over the deployment of digital technologies as a means to increase the workload and decrease costs.
  • Changing technical practices have actually resulted not in greater diversity but in greater homogenisation. ( in Argentinian newsrooms)
  • Adaptation only takes place if a part of cost cutting exercises.
  • Journalists that had been trained: felt they had greater creative and journalistic autonomy, felt a good sense of motivation and be more in touch with the news, compared to a traditional news crew.
  • “The impact of new technology on quality of journalism is affected by a complex relationship of professional and commercial imperatives.” rather than new technologies having a deterministic effect on the quality of journalism (Wallace, 2009)
  • “New technologies can have either detrimental or beneficial influence on journalism standards, depending on applications.” Wallace, 2009: 698-9)
  • “Technology is not an independent factor influencing journalistic work from outside…journalistic concerns over a declining commitment to professionalism must also be put in a wider context, taking into consideration broader socio-economic processed such as the ‘deregulation’ of labour markets, proliferation of short-term contracts and other forms of flexible employment, technolisation of the workplace, concerns over deskilling of parts of the workforce, etc.” Deuze, 2007:153
  • The role of economics in managing the availability and use of new technologies.
  • ESSAY: Online versions of paper magazines have much poorer editorial standards.

speed is the name of the game, websites are interested in maximising traffic on the theory that that’s the way to attract advertisers, and the quantity often trumps quality when it comes to that.

  • Technologies can allow journalism to flourish outside of the media giants corporations. Certain forms of use of internet technologies may enable journalism outside of commercial operations and perhaps escape the constraints of political economy. Rather than assuming that investigative journalism is no longer possible because of economic constraints, a number of journalists look to deploy technologies in investigative projects (drones?)

Citizens as news workers?

  • One of the key projects is to use internet technologies to facilitate citizen journalism in commercial organisations was developed in 2006 by Gannett, one of the USA biggest newspaper publishers.
  • Gannett: newsrooms into information centres and introduction of crowdsourcing news production.
  • Crowdsourcing essentially enables an editor or journalist to utilise internet technologies to draw upon information held by a produced by citizens.
  • Internet technologies have enhanced an already used form of public involvement. Enabling a far wider range of participation and ever more innovative techniques of collecting and displaying information.
  • Help me investigate- largely a news gathering project where journalists work alongside citizens.

“isn’t necessarily intended to be a replacement (for traditional investigative journalism). It’s so that journalists who have a lead that they don’t have time to explore or they don’t think is strong enough to justify spending time on, put on the site and others who may be passionate about it, or might owe that journalist something from other investigations, might do a bit of digging and help them out.” Bradshaw (Bad Idea Magazine, 2010)

  • ‘citizen journalism cannot replace professionals. But professionals and amateurs can form powerful partnerships to create important journalism.’  Michele McLellan, 2009
  • citizen journalism- supplementing and improving professional journalism by virtue of a deeper engagements with citizens.

 

  • Indymedia: worldwide activist news site.

positioned itself against the corporate media and abhors many of the traits associated with corporate media, deciding instead that an open access platform would prevent the forms of organisational and ideological control that constrain corporate media reporting protest and social justice.

  • Good argument for various forms of crowdsourcing and participatory journalism, but the concerns of many journalists is amplified by their associations.
  • ESSAY: True that crowdsourcing and UGC can contribute to richer journalism but usually exploited by corporate media in the context of economic calculations- seen as cheap or free content.
  • Research by Vujnovic et al. 2010: Regardless of actual profit generation, user engagement and participatory journalism is seen primarily in economic terms; audiences participate as ‘economic labourers’

“Branding, particularly as a means of generating newspaper consumer loyalty”

“building traffic, involving strategies to boost the usage numbers.”

“Keeping up with or beating the competition”

In some markets, as part of ‘cost-cutting rationales’

  • Considered that economic explanations for participation were accompanied by ideological explanations. Among some journalists there is a genuine democratic concern to improve engagement with audiences but that this engagement lacked substance. ‘sense of engagement, democratic activity and contribution…without real democratic action’ (Vujnovic, 2010:295)
  • McLellan and Bradshaw: participation is merely supplementary, it stands to economic logic that appeal of free ‘international’ labor, producing free and low-cost content will be welcomed by executives in terms of its contribution to cost-cutting. These forms of participation are unlikely to go away.

The perseverance of inequality:

  • Better-resourced journalism has the potential to be better journalism.
  • Money may allow a journalist to persue a story rigorously and over a long period of time, perhaps even years.
  • Participatory projects represent an important addition to this, few of those have become part of the staple news diet for citizens.
  • One of the main forms of distribution of news online is via search engines.

developed in a way that tends to increase the presence of corporate news sites; news and journalism from corporate sources is prioritised on portals.

Promoted by internet service providers and software and hardware manufactures, which impose the home page that the user’s web browser points to by default.

(Dahlberg 2005:165) : the homepage is changed by fewer than half of those who sign up to an ISP. Range of content that users have access to through the home page will be specially selected, as will the search engines they can use, and the categories of website that they ‘recommend’.

Search engines they can use and what categories: often done in conjunction with search engine companies through sponsorship or commercial use deals.

  • The importance of the role of portals as access points can be seen in the fact that in 2009 accounted for 13% of traffic heading to news and media websites.

Heather Dougherty: a ‘major source [of traffic to news websites] is the front pages of portals such as Yahoo and MSN, including the personalised versions like My Yahoo and My MSN (Hitwise, 2009a)

  • Search engines are most people’s primary form of navigations around the web and produce 22% of traffic to news and media websites (Hitwise, 2009a)
  • Image search engine companies like to create: search engines are technically neutral; tools in relation to content
  • Many ways to manipulate search engines and companies that specialise in assisting in this process.
  • SE use a variety of methods to look for websites: counting the number of links to and from a website, the popularity (not just quality or relevance) of the sites that these links come from, and a ‘location matrix’, which refers to the URL of the website.

URL of website: site with its own domain name, and those with fewer subdomains come higher in the search results- means that media giants continue to dominate

  • Example of the difficulties in searching the internet can be seen in Google:

April 2009- accounted for 73% of searches on the internet

To order and filter its search- Google uses PageRank: interprets searches so that the more ‘popular’ and ‘important’ a web page is, as long as its text includes one’s search terms imputed by location matrix and the number and ‘importance’ of links to that page from other websites, then delivers the results in accord with these factors.

Result of this- websites with greater market power are more likely to be viewed.

  • Hitwise (2009b) analysis of Google New UK shows that 68% of its traffic is generated by searched for ‘celebrity’ (24%), ‘sport’ (18%), ‘film and television’ (15%) and ‘music’ (11%). Traffic from ‘UK news’ and ‘world news’ accounted for just 5.6% of overall visits.
  • Social networking site FB has become the ‘largest news reader’, sending even more traffic to news and media sites than Google News did.
  • Top 10 websites visited from FB and GN were all mainstream news sites. (Hitwise, 2010)
  • Dahlberg, 2005: battle for online attention means that ‘although it is relatively straightforward to get views published on the internet, having them noticed is another matter’ (2005:163)
  • McChesney, 2002: as early as 1998 more than three-quarters of the 31 most visited news and entertainment sites were affiliated with large media firms, and most of the rest were connected to companies such as AOL or Microsoft.
  • Project for Excellence in Journalism, 2005:

60% of the most popular news sites were owned by just 20 media companies

‘In short, despite the attention paid to blogs and the openness of the internet, when it comes to sheer numbers, online news appears dominated by a handful of traditional big media sites, and for now that domination appears to be increasing.’

  • Corporate domination of online journalism has prioritised the quality of journalism in order to create more economic opportunity for themselves.

 

 

 

Notes: Huffington Post

Using “The Rise of Online News” taken from Online News Bucks: OUP, Allan, S (2006)

  • ‘Broadcast is no longer the only medium for breaking news.’: twenty four hours a day, constant stream of user-generated content around the world.
  • No limit to what you can publish online- don’t have to rely on a journalist’s interpretive summary: the use of free-lance (and free of charge) bloggers to create a large percentage of user-generated content.

Notes: Daily Mail

Using “The Rise of Online News” taken from Online News Bucks: OUP, Allan, S (2006)

  • ‘Broadcast is no longer the only medium for breaking news.’: Twenty four hours a day, global news, constantly updated articles as the events are happening.
  • No limit to what you can publish online- don’t have to rely on a journalists interpretive summary: Comments and online community can give a wide range of opinions and feelings towards an event. Can sometimes provide more information first hand.
  • ‘The internet is often viewed by its users as an unfiltered, primary source of information and not to be distrusted like the tradition news media. There is also immediate acceptance of information on the internet.’ ( Maggie Cannon, 1997) Lacking in fact checking

Notes: Daily Mail

Using “Reinterpreting the internet” taken from Misunderstanding the Internet, James Curran (2012)

The renaissance of Journalism:

  • News organisations set up satellite news sites.
  • The rise of the internet has not undermined leading news organisations, it has enabled them to extend their hegemony across technologies: Apps, live feeds, easy access to internet (Almost 70% of its traffic comes from outside the UK, mostly from the United States)
  • Internet advertising took 25% of advertising expenditure in 2010 than the newspaper press of 18% (Nielsen 2011).
  • Dominant news organisations gained a commanding position in both the offline and online production and consumption of news.
  • “Create a community of informed, interacting, and tolerant world citizens.” (Vern Ehlers, 1995): allows anyone to express anonymous approval or disapproval of comments made.

Notes: Huffington Post

Using “Reinterpreting the internet” taken from Misunderstanding the Internet, James Curran (2012)

The renaissance of Journalism:

  • Bystanders have become a great source of news twenty four hours a day: user generated content, 2006: Investment from SoftBank Capital included hiring more staff to update the site twenty four hours a day.
  • Huffington Post is an example of how social media has enabled independent online publications to thrive: Another boosting profit is heavily reliant on unpaid bloggers to generate content for the site.
  • The rise of the internet as an advertising medium has led to budget cuts, increased time pressure on journalists and, sometimes, declining quality in mainstream journalism: the site is known for blurring the lines between journalism and public relations. Its “sponsor generated content”pages are very thinly veiled advertisements dressed up as news articles.