Wednesday, October 21, 2009

Media & Economics

Media: Tools of communication
Economics: Concerns production, distribution, and consumption of resources

Media & Economics concerns the direction of resources to funding, advertising and ownership of media.


Network, 1976


Just as American media dealt with television & politics before Europe, it should also be noted that America media dealt with commercial funding issues and subscription television before Europe. America was already dealing with "selling out" in the 1970's when the film Network appeared while Europe was still most state funded at the time.



In Papathanassopoulos' The Funding of Television in the Age of Digitalization, he describes that after deregulation in the 80’s and early 90’s, digital television was the next phase of socio-economic development. The result was more diversification and a more competitive market. While you see a delay in Europe behind the US in commercialization, due to the increasing globalization of technology, digitalization happens by a closer margin at comparable times.


European television advertising resulted in $30 billion in revenue in 1996. The Nordic countries have historically attracted advertising to print, as with Germany. Other countries emphasize TV advertising over print. Researchers speculate that advertising will play an increasingly small role in funding television. The increase seen in Europe simply corresponds to economic growth in general.


Italy and Spain ban alcohol ads on television and the Evin law of 1991 bans alcohol advertising in France on television and now the internet. Under the law, alcohol adverts are only allowed in the print media, on the radio and in sales outlets.



Television networks also make money through sponsorship, which is increasingly attractive to brands who want to associate with events. Barter is common for game shows, meaning backing the show with products and content direction.


The author suggests that pay TV will increase. The types include traditional, subscription to premium, and versions of video-on-demand. Spain and Italy were new in the scene but France was established with Canal +. France is the second largest pay TV in Europe.


With digital television is the fragmentation of audiences. This means advertisers must be more selective and can target groups. The economic climate effects both digital and pay TV which reduce in recessions. The author concludes with a long list of strategies to advance digital television, including packages and added value such as sports tickets.Finally he states that though digital television is a bigger market, there is more competition than ever.



Case Study: Canal+
•Canal+ started in 1984, earning 1 million subscribers by 1986
Canal Satellite started in 1996
Has supported film production, including David Lynch’s last 3 films
Began broadcasting in digital in 2005
Has Canal+ is a brand that has also been extended to other countries and is part owned by the French network including Spain, Netherlands, Poland and others
Carries American shows like The Daily Show and South Park
Is owned by Vivendi, a French media conglomerate. Vivendi has had financial ups and downs but claimed earnings of $30 billion in 2008.
Vivendi owns the American school publisher Houghton Mifflin
Vivendi Universal is owned in majority stake by GE/NBC Universal but Vivendi owns 20% of NBC Universal

Advertising Case Study: Louis Vuitton
Estimated at least 200 million annually
Most advertising budgets do not include internal means of marketing such as websites which have flash videos and commercials, as well as the sponsorship of events which is growing
Important new client as in 2008 they were convinced to finally create both television and cinema spots http://www.livemint.com/2008/01/30235004/Louis-Vuitton-plans-first-TV-a.htm
Over the past year the company has been promoting a global “journey” print and commercial campaign using celebrities to represent life journeys, including Gorbachev.

Print Advertisements in Europe
Importantly the general category of print ads can mean magazines, newspapers and also public space such as billboards. Some campaigns are also used on the internet. Importantly print ads provide materials for cultural semiotics and understanding the regional value systems.

What makes an advertisement seem European versus Global?

Service Plan, Germany above and Nike by DDB Paris, both 2009

Media Ownership
In Marc Hayward's article "Vernacular Geopolitics and Media Economies in an Enlarged Europe," in Media in the Enlarged Europe he addresses the relationship between Italian media and the Middle East. He identifies two specific incidents in 2001. The first is Silvio Berlusconi, politician and media magnet’s deal with Saudi Prince Al Waleed to sell a shares of his energy company in order to prevent a conflict of interest as Prime Minster.


Al Waleed is an entrepreneur and international investor, but does not have real political power within the House of Saud or in Saudi Arabia, he has amassed a fortune through investments in real estate, the stock market and businesses. He has never held political office. He has 17 honorary degrees and is an honorary citizen of Cannes and received the president’s medal of honor from Sarkozy.


At the approximate time that Al Waleed worked with Burlesconi, RAI was also backed by Al Waleed and Al Baraka bank for global distribution.

•Radio Televisione Italiana (originally Radio Audizioni Italiane)

•Founded in 1945

•State owned like the BBC, and dominates the market like the BBC against Berlusconi’s Mediaset and Sky Italia

•Funded by a TV license fee similar to the BBC

•Diversified like the BBC to include radio, terrestrial, digital, theme channels and reaching near by countries

•Averages 3 billion annually in revenue



The greater question that the author has is what is meant by the combined Italian-Arab expansion of media? Arab Radio Television is an Arab backed channel funded in Rome for distribution. Italian media is being supported by Arabs for global distribution and Arabic Media is being supported by Italians for global distribution. The result is transnational, geopolitical alliances that transcend traditional political systems like the UN. However the author notes that the countries were supporting distribution, not influencing content. Importantly understanding the relationship between Italy and the Middle East is part of understanding an enlarged Europe.

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