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Mass Communication. The Globalization of the Music Industry. roberto avant-mier. Brief Overview. TERMS : Global Entertainment Industry; Transnationals;Concentration; Integration; Diversification; Synergy. QUESTIONS (p. 5):

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Mass communication

Mass Communication

The Globalization of the

Music Industry

roberto avant-mier

Brief overview
Brief Overview

  • TERMS: Global Entertainment Industry; Transnationals;Concentration; Integration; Diversification; Synergy.

  • QUESTIONS (p. 5):

    1. What are the driving forces behind media expansion and concentration?

    2. What does media concentration mean for diversity and innovation of media content?

    3. Can there be room for cultural and musical diversity in these times of instant access digital technologies dedicated to pumping the same sounds and images across the entire Western popular culture market?

Global entertainment industry
Global Entertainment Industry

The inter-organizational creation and release of performances (narrative or non-narrative, recorded or live) to attract audiences for financial profit rather than for explicitly educational, journalistic, political or advertising goals (Turrow in Burnett, 1996).

Global entertainment industry1
Global Entertainment Industry

  • In 1993 the industry generated $300 billion worth of entertainment products (films, cds, videos, books, records, video games, magazines and T.V. programs).

  • In 1994, more than 90% of the gross sales of recorded music worldwide came from products distributed by the BIG SIX multinational corporations.

  • By the year 2000 - these figures will surely increase

  • Assumption: Global = “Internationalization”

Transnational s corporations
Transnational(s) Corporations

  • Multi-national conglomerates in the entertainment industry.

  • Products of transnational/global mergers.

  • a.k.a. “The Big Six.”

Transnational companies the big six
Transnational Companies: “The Big Six”

  • Sony (Japan)

  • Warner (U.S.)

  • Polygram (Netherlands)

  • EMI (UK)

  • BMG (Germany)

  • MCA (Japan)

Transnational companies the big six1
Transnational Companies: “The Big Six”

The “Big Six” now account for over 90% of U.S. sales and an estimated 70-80% of world wide sales.

Transnational companies the big six2
Transnational Companies: “The Big Six”

  • The emergence of trans-nationals makes it no longer fruitful to speak of American “cultural imperialism.”

  • European and Japanese companies have become at least as imperialistic as their American counterparts.

  • It is now necessary to discuss the transnationals that dominate the world market.

Transnational companies the big six3
Transnational Companies: “The Big Six”

  • The trend in the 90’s is for industry to target international markets.

  • American companies derive at least 50% of their revenue from foreign markets.

General agreement on tariffs and trade gatt
General Agreement on Tariffs and Trade - (GATT)

  • International trade negotiations held in Geneva, 1993.

  • Americans insisted on unrestricted flow of cultural goods from U.S. to other countries. The EC rejected it.

  • The thing at stake is money and culture.

  • However, Internationalization and entertainment industry trade are not just American anymore.


  • Concentration = a measure of the degree to which the largest companies control production, employment, or other indicators of size in an industry or market.

  • The production and distribution of phonograms has rapidly become concentrated in the hands of a small number of large transnationals with increasing control over their market sector.


  • Vertical Integration = company partly or completely controls the channels of production and distribution of particular media market. (Ex. Movie theaters).

  • Horizontal Integration = growth across markets, same product/different media. (Ex. ESPN).


  • Diversification = extending commercial interests and hence, profit potential by producing new products.

  • Manifests itself as “spin-offs.”

  • “Audiences who have seen the film, may buy the book, the magazine with the star on the cover, the music soundtrack, and maybe a T-shirt.”

  • a.k.a. “The total package” - p. 23


  • Synergy = the coordination of parts of a company so that the whole actually turns out to be worth more than the sum of its parts acting alone, without helping one another.

  • Advantages: power and prestige for owners and managers; influence over public opinion; dominance of markets; sharing of skills; economies of scale; diversification of risks; major possibilities of innovation; career opportunities for many employees.

Artists megadeals
Artists & Megadeals

  • The industry has found that the average investment in a recording by a new and non-established artist (including artist advance, recording cost, manufacturing and distribution costs, and costs for advertising and promotion) can approach half a million dollars for each recording.

  • Only 2 out of 10 releases generate enough income to cover their own production costs.

  • Record Companies spend money on the big stars - the familiar, tried and tested talent.

Other facts
Other Facts

  • In 1980s, less than one record out of five released sold enough copies to recoup its recording costs.

  • For a major phonogram company, the break even point for sales for a CD is approximately 250,000 copies.

Summary of trends a
Summary of Trends - A

  • A CD can be manufactured for less than a dollar, wholesaled at $11, and sold to the consumer for a list price of between $14 and $15. Where is the money going?

    (Promotion, advertising, etc.)

  • Radio “playlists” - What about MTV?

  • By 1993, most record labels were finally acknowledging their use of promotion firms to promote their records, but insisted it is not “payola.”

Summary of trends b
Summary of Trends - B

  • Argument (p. 61): “The power and control of the music industries...better understood in terms of the co-optation and absorption of new music than in terms of a model that suggests the direct control and manipulations of public tastes” (Shore in Burnett, 1996).

  • COUNTERPOINT: The transnationals, despite competition among them, collectively evolve strategies to eliminate or absorb threatening independents (p.111).

So what so what does this mean to me
So What? - So What does this mean to me?

1. Radio Playlists - MTV does the same!

2. BackStreet Boys/’N Sync/98 Degrees? (Boy Bands)

  • Racism?

  • Pre-fabricated bands (Brittany Spears)

    3. Only in Pop Music? - What about “Rock-Rap” or “Hip -Rock?” 311-Korn-Sugar Ray-Limp Bizkit-Kid Rock.

    4. What about “pure” Rock - Metallica as an example

Advantages disadvantages
Advantages & Disadvantages

Advantage: White kids exposed to black music - future harmony?

Advantage: Transculturation (white kids adopting the “Other’s” forms of music)

Disadvantage: Perpetuation of racial stereotypes?

Advantage: p. 115 - 116 (variety and diversity?)

Disadvantage: “false-variety” and “pseudo-diversity”

Examples: Ricky Martin, Enrique Iglesias, Mark Anthony, Lou Bega and Mambo #5?

So what now
So What Now?

  • The questions that will follow this presentation are surely:

    • So what do we do now?

    • How can we change the industry? Can we change the industry?

    • Is it possible to change the industry anymore?

  • The truth is that I don’t have the answers.

    • I would be a famous and rich man if I did, but that’s not the point of this lecture.

    • You might have the answers: you are the future teachers, lawyers, politicians and businesspeople of the future. Maybe you have the answers.

    • The point of this lecture is to open your eyes about how the industry works and how it works as mass communication.

    • The point here is that you will think about this things in the future.

    • Think about the media more critically! - then make up your own mind about whether the system is good or bad.

In closing

  • We have discussed:

    - The Music industry and various Media as the vehicles through which music as Mass Communication takes place.

    - (Terms): Concentration, Diversification, etc.

    - The implications of it all, and how it affects you and me.

    - The advantages and disadvantages.

  • In conclusion: “La radio y la television se hicieron para tu entretenimiento. Es tu derecho pedir tu cancion o video favoritos hasta que los pongan. En tus manos esta el futuro de la comunicacion” - MOLOTOV. (...Translation)