Monday, March 8, 2010

Media, Economics & Advertising

by Sarah Fox

In Papathanassopoulos’ chapter on “The Funding of Television in the Age of Digitalization,” he looks at the changing sources of funding for television. These include advertising, sponsorship, barter and teleshopping, and subscriptions for pay-TV.

Advertising played a major role in the funding of television in the 1990s, but its role is becoming overshadowed by other sources. It is regulated more extensively in Europe than in other countries, and these regulations very considerably within the EU. Such regulations include the banning of consumption and promotion of alcohol (Mediterranean states are more liberal), as well as comparative advertising.

The role of sponsorship has increased in the European television market because many advertisers see it as a more effective way to capture audiences by associating their brands with popular programs. Like advertising, rules on sponsorship vary widely within the EU—many countries are placing bans on major commercial sponsors.

Barter is the exchange of programs for commercial airtime, and this gives the advertisers the opportunity to influence the program content. Game shows in Europe are known to be particularly successful at bartering. Teleshopping is another source of funding, but they can’t exceed more than eight per day and they can’t last more than three hours per day.

Pay-television is rapidly growing in popularity, and it is believed that the reasons for this growth are that consumers are willing to pay more to get more options in their viewing, as well as higher program quality and picture resolution. The different types of pay-TV include: subscription or pay-per-view, an extra monthly cost for premium channels (usually sports), near-video-on-demand (“where a film can be watched from staggered start times”), and video-on-demand (the subscriber chooses “from a menu or library of programming”) (96).

•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

The largest pay-per-view market in Europe is the UK, followed by France, Spain and Italy. The main pay-TV network in France is Canal Plus, which is “the most successful pay-TV terrestrial channel in Europe” (97). The size of the market is important in determining the popularity or success of pay-TV in a country; larger economies benefit from spreading production costs by turning popular TV shows into videos or books. The wealth of the market is also important, as subscribers need to have a relatively high income to be able to afford pay-TV. The author concludes by stating that television will become more expensive for both viewers and operators.

Television Advertisements in Europe
In 2008 they were convinced to finally create both television and cinema spots. 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

Marc Hayward, "Vernacular Geopolitics and Media Economies in an Enlarged Europe," in Media in the Enlarged Europe

Berlusconi & Al Waleed

In Mark Hayward’s article on “Vernacular Geopolitics and Media Economies in an Enlarged Europe,” he looks at the media coverage on the relationship between RAI International and Al Baraka Investments. He uses this case study to discuss the importance of looking at the relationship between geography and politics in media, as well as the relationship between “cultural identity and economic activity” (129).

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.

Radio Televisione Italiana (originally Radio Audizioni Italiane / RAI)

•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 author gives many instances in which the media highlights certain scandals dealing with RAI, Italy’s public broadcaster, and Dalla Al Baraka Investment Bank. Saudi Prince Al Waleed (who owned 30% of Dalla Al Baraka) was under investigation for his involvement in helping to finance the Al Qaeda attacks on 9/11. Italian Prime Minister Berlusconi was known to have a relationship with Al Waleed, as well as Ben Ammar, with whom the media became quickly intrigued. Hayward continues by looking at the ways in which various broadcasters developed their international services. An example is the Saudi-based company Arab Media Corporation that is the main distributor of Italian media content internationally. The media coverage of these relationships and events were framed by “the cultural and political contexts that emerged in the aftermath of the attacks on the World Trade Center” (128).

The author defines “enlarged Europe” as not just including the geographical expansion of Europe, but the ways in which it operates globally, it’s global “footprint.” He says, “It is part of the legacy of colonialism, imperialism, and globalization to posit that Europe more than many other places on the planet has always been enlarged” (130).

About the author: Mark Hayward is an Assistant Professor of Global Communications at the American University of Paris. His research focuses on three areas: Cultural Policy and Transnational Governance, Economic Discourse in Popular Culture/Economics of Popular Culture, and Technology and Medium Theory.

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