How Can There Be Different Guiding Principles?

Disclaimer: No claim to completeness is made for any of the statements and assumptions contained herein. This wiki, like the project as a whole, is a "work in progress". We warmly welcome constructive criticism and content-related information or additions in order to continuously improve our work and thus the COMPPRESS project. We are happy to receive your feedback via info@comppress.org or via Github.

Media production is described as "dual institutionalisation", since media products simultaneously represent both a cultural and an economic asset. Whereas media products as cultural assets are (or should be) designed, produced and distributed with the aim of fulfilling the idealistic missions of social information, opinion formation, governance and entertainment, media products as economic goods must above all be able to be sold profitably on the free market. This means they have to be produced with the aim of good marketability. These two "institutionalisations" result in two different value systems with different goals in the same market. ¹

The fact that media products also represent economic goods means that their production and marketing are at least partially subject to the laws of the market. However, media products are characterised, among other things, by non-rivalry in consumption and failure of the market exclusion principle: "The non-excludability of market participants as an argument on the supply side and non-rivalry in consumption as a problem on the demand side make it fundamentally difficult to cover the costs of such media in terms of the market." ¹

Advertising as an additional source of income

Since the advent of the mass media during the first half of the 20th Century, advertising revenue—alongside revenue from direct sales—has become the most important source of funding for private media producers. In Noam Chomsky's and Edward S. Herman's "Propaganda Model" it is argued that media producers are structurally financially dependent on advertisers due to historical market developments.

At the beginning of the corporate publishing of mass media, advertising income brought a clear resource advantage over those media producers who did not use advertising income as an additional source of income. Increased sales led to a higher potential circulation. This in turn increased turnover through sales and secured market advantages for the companies involved. Such developments made it necessary for all companies to likewise increase their income through advertising in order to achieve a higher circulation and continue to be marketable. The result was a financial equilibrium of the media producers in which none of the parties involved could remain competitive without accepting advertising. ²

Noam Chomsky's analysis of the North American media market of the 80s and 90s show clear indications that indirect dependencies on advertisers existed or exist and that the model is "applicable" to other democratic systems with privately organised mass media markets – including Germany.³ Chomsky and Herman emphasise that they do not assume a direct conspiracy or direct influence of individual actors, but a product of economic and political constraints.²

The decisive factor is precisely this compulsion – the structural: purely potentially, advertisers have the opportunity to exert economic pressure on a media company by withdrawing their orders.

Even in more contemporary analyses, the indirect influence of advertising on media content is assessed as strong. The concrete content of a media product is in principle of little interest to the advertising industry as long as the content does not have a negative impact on the advertising effect. In addition, advertising has an effect on the media content in that the client is supposed to reach special target groups for advertising. The media companies can therefore be exposed to the demand that they should convey content which attracts and keeps the attention of the desired target group. If the medium is dependent on advertising funding, this can theoretically be enforced through willingness to pay as a means of pressure. Here, too, it should be noted that this is not a thesis of direct and concrete (political) influence on media content. The influence is less intentional and direct, but takes place indirectly, structurally and in the long term via the economic goals of the advertising market. ⁴

Market participants and their influence

The large proportion of funding from advertising revenue also weakens the position of media consumers in the media market. As economic actors, consumers are fundamentally dependent on how much market power they have or to what extent their preferences are "heard" on the market. In the case of media financed by advertising, however, the media consumers are no longer the sole market partner for the producer, nor are they the only ones whose preferences are relevant to the market. The content and diversity of the offer or the time horizon of a discourse on certain topics can also be created in a market with proportional advertising funding based on the criteria of certain advertising-relevant target groups or with a sole focus on large reach. In this case, media consumers who are not interested in advertising have no way of enforcing their preferences, as their market power is limited.⁴

Goods of trust

However, the market position of media consumers is fundamentally very limited, especially in the case of media that manage without advertising funding, compared to consumers in classical economic theory. Media consumers are fundamentally ignorant of the quality of the specific product they are buying. There are no objective quality standards for media in the way there are for most other products, allowing one to make selections based on specific criteria. In addition, the constant pressure to innovate in informative media content also leads to uncertainty. After all, the media producers neither know to what extent new information will be available, nor do the media consumers know whether it is news that is of interest to them. Media consumers find it difficult to choose or distance themselves from something they do not yet know about. The consumer can only determine its usefulness or quality by purchasing and using a media product. These are so-called trust goods.⁴ The market partnership with a producer on which only trust or experience goods are traded contains an information asymmetry to the detriment of the media consumers vis-à-vis the producers.¹

Special feature of online journalism

The fact that consumers cannot assess media products before consuming them is heightened in the online marketplace. In contrast to the analog media products, the financial remuneration for advertisements is measured online based on the number of visits per page (page views). This means that an online newspaper article, for example, is financially rewarded by the consumer when the page is called up. Before visiting the site, only the title of an article can be viewed; whilst in the classic print business newspapers, for example, and the content can at least be assessed before purchase. In the online market, every click is usually a purchase. This further weakens the market position of media consumers.

Consequences

In summary, it can be said that media as cultural goods (ideally) correspond to their ideal mission, while other motives or values play a decisive role in the conception and production of media as economic goods.

If the economic mechanisms of action are of great and growing importance, the term "economisation" is also used. This is accompanied by the fear that the social functions of the cultural asset can no longer be fulfilled.¹

As assets that are highly dependent on the income from advertisements, "refinancing through the "sale" of the attention streams generated is [striven for]" when marketing media products.⁵This can mean, especially in the online market, that more and more media products are generated that are designed to attract lots of attention—in order to sell as much as possible—in contrast to a media product as a cultural asset. Consequences of this can be, for example:

– Media products are brought onto the market with falsely sensational titles and provided with little following content in order to generate web traffic (clickbait).

– There may be fewer reports of grievances that could be associated with advertisers.

 – Topics that are intended to please certain target groups are reported instead of, for example, topics of social relevance.

– The length and thus the depth of the analysis of newspaper articles, for example, is reduced overall, since a longer, more detailed article would not generate any new web traffic.

– The quality of the content in terms of the actual tasks of the media is reduced.                         

Sources:

1. Haselwander, Peter (2015): Alternative Medienfinanzierung über Crowdfunding. Magisterarbeit, Universität Wien. Fakultät für Sozialwissenschaften. Abgerufen unter http://othes.univie.ac.at/39046/
2. Noam Chomsky’s Manufacturing consent: the political economy of the mass media. (2002)
3. Pedro-Carañana, Joan, et al., editors. “Front Matter.” THE PROPAGANDA MODEL TODAY: Filtering Perception and Awareness, vol. 8, University of Westminster Press, London, 2018, pp. i-vi. JSTOR, www.jstor.org/stable/j.ctv7h0ts6.1. Accessed 14 Aug. 2021.
4. Kiefer, Marie Luise und Steininger, Christian (2013): Medienökonomik, München: Oldenbourg Wissenschaftsverlag. Abgerufen über https://doi.org/10.1524/9783486859263
5. Rau, Harald (2014): Digitale Dämmerung: die Entmaterialisierung der Medienwirtschaft. 1. Aufl. Baden-Baden: Nomos: In Haselwander 2015.