UNIT 3

Unit objectives:

 Discuss what mass media convergence means and why it is important

 Understand different integration strategies
 Distinguish between types of convergence

CONVERGENCE, CONCENTRATION AND OTHER CURRENT TRENDS

Media convergence:

 Takes place when products typically linked to one medium show up on many
media. Until recently, this was not a common activity: people associated every
medium with a particular kind of product.
- telephone -> voice conversations
- television -> audiovisual programmes
- music -> plastic discs or tapes played on dedicated devices
 Convergence did happen but involved negotiation between companies in
different industries (music recording to radio, cinema movies to televisions).
 Actually, moving products from one medium to another could take a lot of work,
especially due to differences in technology.
 Nowadays, media companies try to get their products (the content) to wherever
their audiences are: everything has a website, probably a Facebook page or
Twitter feed, an application for the mobile phone…
 Examples:
- Newspaper
 Website
 App
- Books
 Paper
 eBook
 Audiobook
- Music
 Radio
 Phone
 Computer
- Tv shows
 TV set
  Phone / Tablet
 Computer
 The three C’s of mass media convergence:
- Content: refers to the messages themselves
- Corporation: refers to the companies that interact to create and distribute the
content
- Computers: are what bring convergence into the picture
 Analog vs digital:
- Analog: electronic transmission accomplished by adding signals of varying
frequency of amplitude to carrier waves of a given frequency of alternating
electromagnetic current. Broadcast and phone transmissions conventionally
have used analog technology.
- Digital: electronic technology that generates, stores, processes, and transmits
data in the form of strings of 0s and 1s; each of these digits is referred to as a
bit (and a string of 8 bits that a computer can address individually as a group
is a byte)
 Convergence is the ability of different media to easily interact with each other
because they all deal with information in the same form: digitally
 As a result of convergence, different media end up carrying out similar functions
because they all are able to handle digital information
 Digital content also means that anyone can rather easily get the technical
capability to alter mass media materials BUT consider licenses and permissions
to modify.
 Audience members are increasingly becoming part of the production process
(memes, viral videos, and contents)

GROWTH OF MEDIA COMPANIES:

 Media companies can grow in two different ways internally or externally:

- Internal growth happens when companies develop new capabilities
themselves by investing in their own resources.
 Responds to the need to innovate and adapt to changes
 Increases diversity in the market
 Slower growth rate
- External growth is due to acquisitions of ownership or control means of the
production capacity of preexisting units (=other companies).
 Reduced cost and risk
 Produces immediate expenses but also immediate income
 Accelerate the pace of growth

Can happen in two modalities: mergers and acquisition, and agreements,

associations, and alliances.
  Mergers and acquisitions
- A merger is an agreement that unites two existing companies into one new
company. Mergers and acquisitions are commonly done to expand a
company’s reach, expand into new segment, or gain market share. All of
these are done to increase shareholder value
 Allow rapid growth
 Involve changes in ownership and management
 Reduce the level of media diversity
 Allow for survival of media in crisis
- Example of Cuatro and telecinco:

 In December 2009, Telecinco and Prisa (manager of Cuatro) agree to the

manager of their broadcast television networks and create a new
company to manage it: Gestevisón Telecinco. Prisa owns 18.3% of the
new broadcast television network and Telecinco ove 40%. In April 2011,
Gestevisión Telecinco is renamed Mediaset España Comunicación.

 Agreements, associations, and alliances

- Do not affect media ownership
- Do not imply a reduction in diversity of media sources
- Sometimes might enable the creation of new media companies
- Technical agreements imply that media companies hare the same resources
such as distribution companies. For example, two or more newspapers using
the same printing press.
- Editorial agreements enable media companies to share contents or products
to distribute by their own means. For example, many newspapers including
the same weekend supplemets.
- Example:

 In January 2010, CMVocento and Publipress Media, the companies that

commercialize advertising spaces in Vocento and Grupo Godó, signed
and agreement jointly sell advertising spaces of Sunday supplements of
both groups: XLSemanal (Vocento) and Magazine (Grupo Godó). They
are distributed with 50 different newspapers that distribute 1.8 million
copies, with a joint audience of 4.7 million readers.
 Be it through internal or external growth, the trend towards concentration and
convergence is strong in today’s media landscape

Elements of mass media convergence:

 Mass media convergence is fueled by digital media, which is interactive by

nature.
 Media companies today often encourage audiences to act as consumers and
producers of digital media
 Media industries seek convergence in order to increase profits. But what
developments are taking place in industries that make it possible to make money
through the movement of contents across traditional media boundaries?
1. The spread of digital media
- Digital media are devices with computer processors that allow access to
textual, audio, and / or visual materials in digital form.
- One key aspect of these is their link to the Internet. If content is places on the
web, it is rather easy to use it on many different devices.
- Digitalization also brings one new major challenge: increase in the amount
of competition:
 Video stores – digital streaming services (Netflix, HBO)
 Book store – online stores (Amazon, Elkar)
 Newspapers – every newspaper website
2. The importance of distribution window
- The term “window” refers to the various exhibition points distributors use to
generate revenues for a product – a movies theater, a newspaper, or a cable
network
- Specially in the case of the television and film industries, the challenge of
covering costs forces production firms to think of convergence by design.
- This approach of multiplying distribution windows in order to increase
profits assumes that people will want to consume the content across the
various windows
- In fact, making money from especially digital windows is not at all a sure
thing
3. Audience fragmentation and segmentation
- As with windows, audience fragmentation and segmentation happened
before digital media, and the process influences more than just media
convergence.
- Channel fragmentation refers to the great increase in the number of mass
media outlets that has taken place during the past two decades, even if it
started well before the web
- The rise of the internet accelerated the trend. The number of channels is not
limited to those accessible through a TV set anymore
- One consequence is audience fragmentation, a bigger issue now than ever
due to the spread of digital media: members of the audience can be reached
now in smaller aggregates than before
- Instead of trying to attract everyone, media firms tend to focus on a specific
audience: they try to define and hold an audience niche, to earn the loyalty of
specific portions of the population (which other companies would try to
attract other groups)
- This practice to as audience segmentation, where producers and distributors
try to reach different types of people with content tailored specifically for
them
- Targeting occurs when a mass media organization sets its sights on having as
its audience one or more of the social segments it has identified in the
population
- Decisions to segment and target are based on business consideration. Why
and how these are carried out differs according to whether media outlets are
supported primarily by advertising
- Id an advertiser sees that certain segments are in a better economic situation
or otherwise more likely to purchase its products, the advertisers will target
the more lucrative segments and pay less attention toothers
4. Globalization
- Refers to growth to a global or worldwide scale. In the context of mass
media, it involves the movement of media content around the world
- Media companies now look to the global marketplace as a way to solve
revenue problems. Global consumers are a way to make the audience larger:
media companies view countries around the world as part of the default
marketplace for their mass media materials
- Globalization brings both opportunities and threats to mass media
companies:
+ potential to reach audiences and advertisers across the world
- too many products fight for audience attention
- Larger companies usually do better as their own content and exhibition
windows around the world, allowing them to reach huge audiences
5. Conglomeration
- A mass media conglomerate is a company that holds several mass media
firms in different media industries under its corporate umbrella
- Before 1980s: conglomerates kept different parts to work independently.
Value laid in the ability of each business to generate profits separately
- 1980s: a greedy merger and acquisition mania swept through corporate
contexts during the decade, intensified in the 1990s
- Vertical integration describes an organization’s control of a media product
from the production of the content through its distribution and exhibition
- Today’s media conglomerates seek more of a horizontal integration, that is,
the ownership of production facilities, distribution channels, and exhibition
outlets in a number of media industries and the integration of those elements
so that each can profit from the expertise of the others.
TYPES OF CONVERGENCE:

 Vertical integration describes an organization’s control of a media product

from the production of the content through its distribution and exhibition. This
means that they have an organization that focuses on one of this three tasks:
1. Production
2. Distribution
3. Exhibition
 Horizontal integration refers to the ownership of production facilities,
distribution channels, and exhibition outlets in a number of media industries and
the integration of those elements so that each can profit from the expertise of the
others. Horizontal integration can be single or multimedia:
- Single-media horizontal integration happens when a company integrates
various outlets in the same medium (i.e., only newspapers, or TV channels,
or radio stations). Advantages:
 knowledge of the trade, specialization
 potential commercial synergies
 use of brand Prestige
- Multimedia horizontal integration refers to the control of media
companies in different mediums: any combination of newspapers, radio,
television / audiovisual, digital.
 Multi-sector integration is the integration outside one’s own sector (the media,
in this case), also referred to as extra sectoral diversification: companies from
sectors other than media having control over a media outlet, or media companies
or groups participating in companies from other sectors. Advantages:
- Media companies provide knowledge about the media industry and
communication
- Financial and industrial groups provide economic resources and
infrastructure
 International integration implies expansion to other countries by integrating
companies that operate in different geographical markets. Explained by:
- saturation of national markets
- proliferation of anti-trust laws
- elimination of legal barries for European countries

WRAP-UP SUMMARY:

Types of growth: Types of convergence:

- Internal - vertical integration

- External - horizontal integration
(single or multimedia)
- multi-sector integration
- international integration
GLOBALIZATION OF MEDIA CONTENT PRODUCTION:

 News products
- Worldwide information architecture is centralized around Northern/Western
countries
- 80% of the information disseminated worldwide comes from global
agencies:
 AP (Associated Press), USA
 UPI (United Press International), USA
 AFP (Agence France Presse), France
 Reuters, UK
- Information agencies are a news collection and creation system that
regularly distributes information services to the media subscribed to them
Events > (Agencies) > Mass media outlets
- Media correspondents are on-the-scene news reporter that are usually
accredited and stable in a geographic area. Whenever anything newsworthy
occurs in the world, the news agency sends the closest correspondent in the
area to cover what is taking place and report back. They contribute news to
newspaper, radio stations, television networks. Most correspondents work
from remote areas in foreign countries.
- Special correspondents or special envoys are journalists from the media
outlet sent specifically to a specific location to cover a specific event
- Special services are varied by people external to the media outlet hired for a
specific event
- Other international agencies: KOPIATU
 Europe:
o DPA (Deutsche Presse-Agentur), Germany
o ANSA (Agenzia Nazionale Stampa Associata), Italy
o LUSA (Agencia de noticias), Portugal
o EFE, Spain
 Latin America:
o DYN (Diarios y Noticias), Argentina
o Notimex, Mexico
o Agência Brasil, Brazil
 Asia-Pacific:
o Xinhua, China
o Kyodo News, Japan
o TASS (Russian News Agency), Russia
o ANI (Asian News International), India
 Middle East and Africa:
o National Iraqi News Agency, Iraq
o APO (African Press Organization)
 o PanaPress (Panafrican News Agency), Senegal
o Afrol News, South Africa
- Consequences of the centralization of international news in a few sources:
 News and information are biased and interested, in response to economic
and strategic interests of the source countries.
 Hegemony and unidirectional approach in the interpretation of reality
o Difficulties to access contrasted views to worldwide news
o The image of the world that is spread is created through cultural
patterns of the largest agencies and countries
o Stereotyped views about events that take place outside the
“closest” environments to the agency
 Emphasis on issues that interest to the public opinion in
Northern/Western countries
- Additional to the hegemony exerted by global agencies in news production,
the influence of the biggest television networks is also a powerful force.

BBC, UK
AP (Associated Press), USA
AFP (Agence France Presse), France
Reuters, UK
+ CBS, USA
CNN, USA

 Audiovisual entertainment products

- In the production of non-news audiovisual contents, three zones can be
identified with an uneven share of exchange:
 USA is a great exporter
 Europe is a great importer, UK being its largest importer and exporter
 In Asia-Pacific: Japan, Australia and India are the main exporters
- Some reasons for the hegemony of the USA
 A very dynamic internal market
 Single language, unification
 Production was industrialized early
 Distribution adopts a transnational structure from the beginning
 An important degree of know-how
 Design of “global products” that respond to an international standard
 Innovation in content creation and design
- Characteristics of the European audiovisual production
 Highly fragmented market by diversity of languages
 Weak media industry structure within each country
 Lack of distribution dynamics and mechanisms
 Production generally intended for internal markets
 Absence of a shared standard
- International distribution through VOD (video-on-demand) platforms
  On-demand video platforms (such as Netflix, Amazon Prime, HBOMax,
Disney+…) are present in increasingly more countries, and enable an
easy and quick internationalization of entertainment audiovisual
products.
 The great success of streaming platforms is making television networks
and Spanish and European production and distribution firms mobilize in
search of competitive strategies against the streaming giants from the
USA:
o Netflix
o Prime Video
o HBO Max
 Advertising as a transnational branch
- Beginning in the 80s, advertising has been transnational both in terms of
contents and also in ownership of advertising firms.
 The advertising industrial sector was also becoming international
 Competition between ad agencies pushes them to concentrate in order to
gain strength
- Transnational content in advertising
 Single campaign = global advertising (the international
standard established by the hegemony of production from the USA
contributes to this);
 single strategy and programming, with only local adaptations; or
 independent campaigns per-country.
The trend is to conduct global market research to treat advertising campaigns
as homogeneous pan-European products.
- Transnational ownership in advertising
 Large international advertising groups are formed that operate
internationally and in very diverse fields.
o marketing services, public relations (PR), sponsorship activities,
market research…
 They often have central headquarters that coordinate international
campaigns along with local offices that define the final shape for the
local market.

LARGE MEDIA CONGLOMERATES WORLDWIDE

 Today, a majority of online content we consume on the Internet is controlled by

Comcast, ATT, Verizon.