publishing; a few major publishers put out most best-selling books, and relatively few companies control many of the nation’s highest-circulating magazines. Television is much the same way, as the major broadcast networks—Comcast and GE’s NBC, Disney’s ABC, National Amusements’s CBS, and News Corporation’s Fox—own nearly all broadcast and cable outlets. Finally, monopolistic competitionThe control of a product or service by numerous companies offering relatively limited products and services. takes place when multiple companies offer essentially the same product or service. For example, Ticketmaster and Live Nation were longtime competitors until they merged in 2010, with both providing basically the same set of event-management services for music and other live entertainment industries.
The last few decades have seen increasing conglomeration of media ownership, allowing for economies of scale that previously could not be achieved. Instead of individual local radio stations competing for advertising revenue among a range of local companies, for example, large corporations can now buy wholesale advertising for any or all of their brands on a dozen different radio stations in a single media market all owned by a conglomerate such as Clear Channel. The economics of mass media has become a matter of macroeconomic proportions: GE now makes everything from jet engines to cable news. The implications of this go beyond advertising. Because major corporations now own nearly every media outlet, ongoing fears of corporate control of media messaging have intensified.
However, these fears are often channeled into productive enterprises. In many media industries, an ongoing countercurrent exists to provide diversity not found in many corporate-owned models. Independent radio stations such as those affiliated with nonprofit organizations and colleges provide news and in-depth analysis as well as a variety of musical and entertainment programs that are not found on corporate stations. Likewise, small music labels have had recent success promoting and distributing music through online CD sales or digital distribution services such as iTunes appliance program. YouTube makes it easier for videographers to reach a surprisingly large market, often surpassing even professional sites such as Hulu.
Companies employ many different ways to raise revenue for their services, but all boil down to two fundamental ideas: The money comes either from consumers or from advertising. In practice, many outlets combine the two to give themselves a flexible stream of income. Equally, consumers may be willing to pay slightly more for fewer ads, or to sit through more advertising in exchange for free content.
Traditional book publishers, which make practically all of their money by selling their products directly to consumers, lie on one extreme end of the spectrum. In some respects, cable companies use a related model under which they directly sell consumers the delivery and subscription of a bundled package of programming channels. However, cable channels primarily rely on a mix of media revenue models, receiving funding from advertising along with subscription fees. Magazines and newspapers may fall into this middle-ground category as well, although online classified advertising has caused print publications to lose this important revenue stream in recent years. Broadcast television is the clearest example of advertising-driven income, as there are no subscription fees for these channels. Because this lack of direct fees increases the potential audience for the network, networks can sell their advertising time at a premium, as opposed to a cable channel with a more limited and likely more narrow viewership.
Print media fall into three basic categories: books, newspapers, and magazines. The book publishing industry is basically an oligopoly; the top 10 trade publishers made up 72 percent of the total market in 2009, with the top five alone comprising 58 percent of this.Michael Hyatt, “Top Ten U.S. Book Publishers for 2009,” January 15, 2010, http://michaelhy