Revista Electrónica de Investigación Educativa

Vol. 10, Num. 1, 2008

Media and Cultural Industries:
a Socioeconomic Approach

Bernard Miège
bernard.miege@u-grenoble3.fr

Institut de la Communication et des Médias
Université Stendhal Grenoble3

BP 337, 11 avenue du 8 mai 1945
F-38 434 Echirolles, France

Abstract

This article reviews the discussion that initiated in the 70’s about the relationship between communication and information phenomena, and decisions in the economic field. This discussion, according to Miège, has been undertaken from different perspectives that have placed economy and technology at the core of the analysis. The author proposes to study these phenomena through an interdisciplinary methodology, based on the theories of cultural industries and the political economy of communication. Miège argues that with industrialization of media contents, consumer product access is no longer direct and products may be available without any cost to the consumer, since the cost of informational and cultural products is paid through advertising. However, this new environment creates certain problems, such as regulating the sale of these products, turning them and their symbolic content as marketable goods or hiring intellectual and artistic workers under an unregulated framework. He also discusses a double economic operation: the sale of products to publicists, and the sale of the same products by the publicists according to the market demand. The last part of the article is an analysis made by the author on the consequences that economic changes might have on cultural industries, because of their current need to keep cooperation relationships with technological industries, as well as connections with large financial groups.

Key words: Cultural industries, political economy of communication, economic models.

Introduction

Communication and information phenomena are nowadays strongly dependent on, the economic sector strategies and decisions. Few people deny this dependence, which frequently is referred to as an unfortunate event, or an accident. The relationship between communication and economy is still challenging and it is even more surprising to find out that this thought not only derives from the common opinion but also from scientific opinion.

It was not until recently that the Center for Information and Communication Research (CIC) accepted research related to economic sciences. It was in the late 70s, when the economic analysis made clear the conditions under which the world informational flow was spread and exchanged. This happened with reluctance and uncertainty, together with the political economy critical trend of communication related to the debates organized by the New World Information and Communication Order (NWICO or NWIO) held by UNESCO. The analysis also highlighted the structural inequality of these exchanges among the three worlds known at that time: the developed capitalist world, the “real socialist” world, and the Third World. The idea that the reorganization of production, after the first oil crisis of 1973-1974, was related to information and communication was also emerging. Some authors were already announcing the future development of information and communication technologies. These technologies were not only destined to form a new productive area, full of potential (diversification of employment, etc.), but also and above all to provide the foundations of the new economy (transnational, delocalized and focused on the service sector).

Consequently, starting in the 1990s, other theoretical trends became part of economic sciences (classic, neoclassic, neoliberal, Keynesian, radicals, etc.) and slowly started to take control of the information and communication issues which generally were integrated into their own conceptions and activities, rather than renewed. Most economists were more cautious than other social science specialists were, when they faced the new, alleged radical era of the information economy. This does not prevent their position from being extremely diverse and elaborated, to the extent that it resembles a mosaic. It would take time to elaborate the complete framework. This is the reason why, this article will limit to mention some of the main scopes in the following order:

The global theories: Information Economy (G.J. Stigler, F. Machlup, C. Shapiro & H.R. Varian; M.U. Porat) or Knowledge Economy (F. Von Hayek, C. Foray).

Specific Theories: Collective/private assets, protected assets, transaction costs, convention economics, and microeconomy of the organizations.

The approaches based on a component that is considered essential or determinant: network or telecommunication economics, new technology economics or the economics of the new economy, changing technology economics, economics of (new) services, economics of intellectual production or human capital economics, and institutional economics, among others.

Sector Economics: Live performance economics, economics of the culture, media economics, television economics, economics of documentation or specialized information.

In most cases, these approaches do not give particular importance to the information-communication issue. They take into consideration certain aspects of the processes involved in order to complete their own approach; however, not only do they handle incomplete knowledge, sometimes even plain, but also they turn it “part of” their distinctions.

That is explained since the majority of those theories are based on the idea that economic and technological aspects are focuses of analysis, and they are considered determinants of change. Other dimensions (political, sociological, cultural, symbolical, social interactions, etc.) are also allegedly dependent of these factors. The idea represents an obstacle when referring to the development of information-communication, in spite of the fact that it is widely accepted (even when, it first tried to justify the appearance and then the rapid decadence of the new economy due to the century changes,). However, the CIC cannot deepen on these theories. As far as this research is concerned, it is based on the contributions of the political economy of communication, because it suits better the integration of other procedures from an interdisciplinary perspective.

Once the object has been determined, which is cultural and media industries, it is necessary to define it from three different points of view:

They are frequently known as “content industries”, they are network and communication programs (micro-informatics, improved 2G and 3G mobile communications, affordable audio visual services with multiple supports). These content industries are representative of neo-industrial services, which are the core of contemporary economic reorganization or the core of some social transformations (education, health, etc).
Even when social-symbolic differences exist between culture and information, there are common traits that bring them together, especially those related to production, distribution and exploitation conditions.
The industrialization process, which has impacted them deeply since three decades ago, should not be mistaken for commercialization (included, but excluded, as well), nor should it be considered in a metaphorical sense (such is the the case of artistic professions), nor as an expression concerning only the use of new media technology (particularly, information and communication technologies, such as ICT). The foundation of their structure is the phenomenon of its reproducibility starting from an original creation (the final print). Although, it is no longer necessary to have a hard copy (in paper, vinyl, plastic, etc.) to reproduce it, now it may be virtual or digital copy (this did not begin with digitalization, but rather with the exploitation of the movie theaters at the beginning of the 20th century). This is why public institutions (public service media contents and cultural organisms private organizations, which produce and broadcast live performances, and alternative media must be excluded from the analysis. When speaking of culture and information, it becomes hard to draw the boundaries of what should be considered within the industry world and what should be left aside since there are numerous small and large companies operating like handcraft business, which in fact are subcontracted, by industrial companies, and sometimes they turn very profitable or they seek an industrial development. However, this does not exclude the relevance of the reproducibility criteria that has been left aside by some experts and professionals, and which has lead to a series of unfortunate confusions.

Being that mentioned, this article will focus in five main characteristics that define media and cultural industries:

Continuous originality

At first glance, the mode diversity can be seen, and for at least a century and a half, culture and information have been the means of industrial production and distribution. Thus, what are the common features found in book publishing (industrialized within a specific context since the mid 19th century), commercial daily newspapers (since the late 19th century), the supply of recorded music or the distribution of movies at movie theaters (since or about 1900), and the radio with a great audience (since the 1920’s)? And what about all the subsequent supply, which does not stop multiplying, and above all, spreading since the 20th century.

The theory of cultural industries establishes a series of discussed answers for that question. This theory went through several modifications, additions, and corrections for more than 25 years. It did not succeed, and as it usually happens, there are still some debates on it among the authors who still recognize its explanatory potential. In order to have an overall view, and to better understand the challenges and details of the debate, the reader must refer to the work Les industries du contenu face à l’ordre informationnel (Miège, 2000), which includes a complete bibliography. Consequently, only some key aspects will be highlighted here:

Though informational products are not excluded, especially cultural products which are distributed in the form of goods or by the media face a main difficulty: to have a highly quoted exchange value in the market (a highly symbolic one; popular music, information media, as well as entertainment are included). This value should be constantly revised for a considerable number of products, because commercial success can never be guaranteed, proof of it are the numerous failures and unsold products out there. A great number of cultural and information products are known very little or are not known at all (in other words, they are not accessible to consumers-users). For this kind of products, advertising is more important than for other industrialized products of common use.

Certainly, in order to stop or at least manage the effects of that situation related to the unpredictability (or randomness) of the product value, industries use a number of strategies: cost calculations, not by product, but by a series of products or through catalog sales; determination of sale price with significant margins, beyond the usual standards; elimination of salaries of the human resource involved in the innovation of the product; distribution of economic risks among small companies destined to take artistic and innovation risks; special handling of stock (which sometimes is advertiser’s responsibility); constant pursuit for different public funds, justified by the specificity of production; product containment within linguistic contexts and national protected areas ; restatement of objectives based on research; among others. To certain extent, these original features are structural and they justify the separate treatment of information and cultural industries within the different industrial sectors, and they should not be regarded as archaic sectors (as it has been indented), but as complex ones, at least for now. A challenge that comes with ICT emerging: Will the submission of norms of advanced capital production lead to the abandonment of these specific practices or to a marginalization on a second level? This question is the current issue.

It is also important to emphasize recurrent features of remuneration for the majority involved in the creation of products: artists (authors or interpreters), freelance or temporary professional journalists, technicians who contribute to the preparation of the final print of literary works destined to be reproduced, among others. Remuneration for most of them is excluded from the common salary system (This occurs to most employees under capitalism). They are forced to accept payments according to systems such as author’s rights, copyright and so on.

It is a fact that there are permanent salaried employees (with the “statutory” wage) at press, publishing or film production companies, and more commonly at mass media companies. Nonetheless, each of these organizations use the services of workers who are not hired by-laws as well as temporary employees who double work hours. This characteristic should not be lightly considered since it is a well-defined and established structural feature that helps to manage with flexibility the artistic and intellectual workforce that may adapt, at anytime, to new and multiple demands: modes, forms, standards, among others. This system generates lack of permanency, but it is accepted by a minority that needs an extra income, due to the proportionality of incomes and effective sales.

Initially, these modes emerged to manage the relation between book writers and editors. The first authors took their manuscripts to editors, who where responsible for post activities (particularly printing, promotion and commercialization). Nowadays, the presence of collective work is more important and specialized. Authors rights management has turned to be a highly complex activity, and in the case of audiovisual products, especially multimedia, it needs sometimes the collaboration of a law firm. Ironically, the initial simplicity of the process (finding collaborators as well as remunerating them) brought a more complex operation system and even sometimes an impenetrable one. Hence, the tendency to substitute author’s rights for copyrights, the latter do not acknowledge the patrimonial rights of the literary work. That also brought interest for principles that are close to intellectual property rights (for example, as practiced in information societies).
Finally, it is important to mention the ongoing search for rationalization and even for industrialization of the initial phase, which is more evident every day. Editors and producers constantly worry about it but it always finds its limits, though methods are improved: mass production, structuralization of distribution (for example, by specialized commercial areas), multi-mediatization of products and commercialization techniques to promote the creation of new products.

Two important models: the publishing model and flow model

There is a great diversity in the universe of cultural and informational products. Therefore, there’s no surprise, on the fact that producers and consumers; artistists, intellectual workers and technicians; readers, audience, and Internet users, come across through different ways. Historically, bookstores were the place for their encounter. Then, newspaper editors had to establish specific distribution services which caused trouble before the settlement of mail services. Also, Film previewing at movie theaters was set progressively; for example, by the Lumiere brothers, Melies and others. It was not until after the World War I, with the appearance of radio broadcasting, when a new formula emerged: plays (especially musicals) and radio news were offered on a time table, if not fixed, at least within a time frame or as they were announced. Since then, consumers had no longer to pay for the right to access to newspapers, music records, or movie theater tickets. In the United States, where the model initiated, consumers had product access without any cost, since operating costs of audiovisual media were covered by advertising (this was the beginning of soap operas).

These considerations, among others, lead researchers to suggest a main distinction between the publishing model, which involves book, record, and even film edition) and the flow model, which involves radio and television). Nevertheless, it is necessary to add at least three essential facts, in order to avoid a superficial or even mistaken perspective:

The model involves every stage of the production-distribution chain. From the creation of the product by artists and intellectual workers, to its consumption. It produces different “results” (for example, a movie at a movie theater, television channel or DVD is different). In the example, the main roles differ depending on the situation: the editor or producer let the audiovisual media programmer take the lead. For this reason, it can be concluded that the description on the functioning of media and culture industries within these models should not be considered in a narrow sense. It is socio-economic as well as socio-symbolic.
A distinctive criterion is not materiality (in other words, the use of a material support), or the immateriality of the product, as it may be thought. For instance, exploitation at movie theaters, since about 100 years, is included in the publishing model. The difference lies in multicriteria. The main criterion refers to the exploitation method. When referring to individual consumers who pay for the right to possess or access goods and services in the market, methods are not as important as they are when compared to the exploitation methods of large productions aimed for big audiences where the choices of one program or the other are free because media have a public service mission or because they are sponsored by advertising resources.
The perception of models is close to the ideal type. The situations are very different and cannot be assigned to any model that is in a certain way in its “pure state”. This will be less frequent. The hypothesis of the emergence of a new model is totally possible, but still premature. It is preferable to consider the exploitation of certain product categories, once again using elements from different models, or that closely relate to one that gives a clear view of the of difficulties that in this article will be listed:

Print press that currently offers an almost complete range of situations that can be placed between the edition and flow models (starting with opinion press, which receives few advertising resources, to the free everyday press).
Documental products via online, that combines a subscription to a defined resource category with a service payment.
Club logic, that allows subscribers of a club to access a determined level of services during their time of subscription (in France, an excellent example is Canal Plus).

Brokerage2

Currently, the general and specialized sites in the Web, as well as the remuneration modes (in other word, the relationship between advertising and sponsorship, in one hand, and in the other consumers payments) that have not been establish, will possibly give way to several formulas.

Needless to say, logics’ description and their origin are a valuable asset to interpreting the changes that are taking place; in the same way functioning norms are destined to reproduce in equal conditions. Contrarily to what is firmly believed, information-communication did not just appear.

Advertising and Other Publicity and Stimulating Mechanisms

Advertising and the media have been long related, even before Emile de Girardin changed history by separating editorial content from publicity in the press, and charged for advertising according to announced fees. These mechanisms, simple as they might be, sometimes cannot be clearly understood. They give way to a double market: the editor or producer selling a text (and keeping their audiences) to publicists for the diffusion of advertisements or spots. In other words, two successive and linked activities occur:

The establishing of an audience (first client) who is loyal and can be authenticated through precise measurements.

Research through sale control spaces available to advertisers (second client), who will sell advertisement spots with costs accorded to a preplanned impact.

This second market activates a complete logistic, generally unknown to consumers, and that has been perfected throughout the years as resources diversify and competition increases. Has it been forgotten that press editors have not ceased to demand and obtain from government officials the desire to limit and control the increasing television advertising.

This situation with double markets would only be of an accountability value if the relationship between the media and the advertisement resources (that many professionals incorrectly qualify as investments) would not be presented as accidental or by chance. There is a constant interrelation between them, and only in France could the alternative option—common to the group of conservative parties since 1928 and during for half a century—prevent it from being clearly exposed. There is no other funding that the one supplied by advertisers, except a media public service if it has enough resources.

The media is not the only provider of publicity; actually it is less every day. Since the beginning of the 1990s there has been a change in direction, inadvertently for everybody except for experts in the area, thus non-media supports (“not from the media” according to the expression used by specialist, or “direct marketing”) could take the lead over information supports (press, radio, films, billboards, television, and now the Internet). Today the costs from “direct marketing” would represent, according to approximations done by professionals, close to double in fees assigned to the media (according to the Union of Advertisers, UDA for its acronym in French, the distribution in 2004 was of 63% for the publicity not shown in the media and a 37% for publicity in the media). Financially speaking, media resources affected do not change, leading this increase especially to new supports (prospects, gift cards, etc.) that lead to the establishment and later on the consolidation of the personalized relationship with consumers.

Certainly, the evolution described cannot be underestimated. Advertising campaigns know very well how to join the different supports and socio-symbolic efficiency is not measured by publicity costs assigned to different supports. This situation highlights the limits of the impact of the current media supports. From a publicists’ interest point of view, and within the perspectives of dominating the markets, the dominant media would be relatively inadequate, but with the Web, the creation of new communication means is compromised to open these new spaces.

It is favorable to add advertising as another market’s publicity and stimulating mechanism, such as marketing techniques (in a strict manner). These, under multiple forms, are used as companions to product commercialization, but fewer resources are destined to promote product innovation. The obstacles at this level are real, the current methods are not enough to operate, even after different tests. On the contrary, the consumption field is the “focus point”, and industrial promotion (editor, producers, large distributors) is omnipresent and has no opposition, due specifically to the decrease, and even marginalization, of the specialized critic. It is then, that the marketing magazines take the place (intelligently) of specialized research works and categorized critics of magazines.

The Convergence of Various Phases

This convergence deserves a precise idea, for it was long announced and presented by technologist and unavoidable politicians. It was always underway and far from being effective. Its promoters, who stimulate technology as a propelling element, still cannot agree over its content: Is the convergence among telecommunications, informatics, and the audiovisual sector? Between phones, mobile phones, or the Web? Or the emergence of educational ICT and new content industries? Among the different cultural industries? Etcetera. The objective seeks an articulation with the web industries (more than the telecommunication operators, for examples, with the access providers, web managers, etcetera), the material industries (micro informatics, mobile telephony, program and/or communication terminal-receptors), and the cultural and media industries. The objective’s structure, in this topic, is not evident. It uses multiple categories, whose strategies necessarily merge, and whose “interests” may even be opposed in the long run, from telecommunication operators and mobile terminal manufacturers, from the latter ones and the information societies, or information societies and the editors or content producers, from mobile telephony material manufacturers and the editors, as well as from the different areas of cultural industries (the multimedia integration is slowly progressing). The reader may easily find examples of recent issues, where strategies belonging to several of these categories, clashed.

This does not prevent the approximations, restructuring, and the execution of some agreements. This is because web development and material industries require the cooperation of the content industries, because they may not last without its help in the long run. In the first phase, its help was not essential and only included the active participation of the users that directly used the web or information equipment, but this is no longer the case. Also, these two industrial categories aforementioned learned, the hard way, that it is not easy to improvise as a cultural and information industry and that it includes heritage, program funds, competences, and gathered technical knowledge. All of these elements are far from being useless, even more within this transnationalization movement.

Content industries are higher value producers than their powerful potential partners. In other words, the content field is more promising than the web and material field. This idea, first emitted by an enlighten expert, can be easily proven. Could the event called “new economy” be proof to telecommunication networks and information material manufacturers of moving (partially) to cultural and information industries, leaving their places to new experimentations done by new qualified content producers?

It is important to remember that the cooperation of producers and content editors with technological industries of telecommunications and information world, would be effective in the long term. They can hardly provide for their future out of the information in the web and mobile communications, but certainly not through them. The practices of the user consumers also intervenes in the relation among the three components, as well as the political administrative regulations, which can be deficient or discreet sometimes, and have not yet considered the size of the new challenges that have just been defined.

Urgent Concentration: Now

In the media and cultural industries, the phenomenon of concentration is an old one. All the history of cultural industries and great media is based in absorptions, fusions, acquisitions, control management and attempted brutal rescues. Frequently, the damaging effect that these operations have over the cultural innovation and information quality, are reported regularly and even fought against. It would take too long to make a balance sheet of every area that has been affected by this phenomenon, for which a small number of powers in the cultural industries and media are responsible. One of them is even authorized to issue to every media and cultural industry (MCI) verifications carried out by to researchers (Hennion, 1981, p.199) related to the registered music industry. This is where the oligopoly and an anthill coexist, understood that the oligopoly is a reduced number of dominant group that has control over diffusion, and the ant hill is a large number of small independent innovative producers that have no other strategy, but only the interests of taking artistic risks, and to whom we owe the majority of the innovations. In the last 25 year, if the anthill has not decreased (in some areas it even broaden, sometimes even in scarce economic conditions), the oligopoly tended to convert to a duopoly or even a monopoly, as well as to internationalize. This characteristic should be considered essential, because it affects the industries related to this topic.

This evolution conceals, although not completely, other important changes that are financially related. In the last period there has been important capital movements assigned to a large sector of communication, and specifically, to the core of the content industries. How to explain this capital movement if not through the open perspective of mergence? But the answer is still incomplete and it is necessary to closely observe to understand the following:

The positioning linked to financing, and derived from the pension funds with an objective of a 12% to 15% of economic return.

The economic operations of financial groups. (Philippe Bouquillion, 2005, emphasizes the autonomy of these financial logics, mentioning among other examples the approaches between AOL and Time Warner, or Disney and ABC, which associate with events in the stock market. Another example can be Wendel Investissement that in 2004 reacquired Hachette, 60% of the editorial pole of Vivendi, to industrially manage these actives).

The capital operations of all kinds are based on one industrial strategy which, when dealing with the media and cultural industries, is never clearly established. Only the operations of third kind have directly involvement with the cultural innovation and the information quality (the others certainly have the power to question about an activity or editorial project).

In the issue of multiple operations and stock market hits, it is difficult to understand, even having in consideration that is best not to fuse the responsibilities of the companies (for example, Canal Plus International), of the groups (Canal Plus), of the financial poles (for example, Vivendi Unisersal), and even of the financial cores (banks or insurances companies that control the pole).

The industrial strategies, specifically ones that are directed to rationalize, reorganize, and force editorial politics by managing the cancellation of non-profitable productions or by imposing the exterior criteria of the cultural and information world, are not immediate and directly deducible of the financial logics. The majority of the authors in the special number of the Réseaux magazine N° 131, a magazine that deals with the concentration and changes in the media and cultural industries, state that the fact that the consequences of the important financial changes that the media and cultural industries are suffering are unknown or erroneously understood. There is no automatic relationship between financial control and the expected changes (which may translate into multiple partial modifications).

Nonetheless, professionals interested in the area are specially paying attention to the social movements linked to quality and pluralism of the information and to cultural creation freedom. Are some of the fundamental traits of media and cultural industry being or will be examined decisively?

It is impossible not to draw conclusions over this important matter. Throughout the history of the culture and media industries there have been concerns from the consumer users, professional and responsible politicians, which arise from strategic projects that come from economic and financial field, even though its industrial character. Due to reasons aforementioned, some specific changes have already begun. The greatest challenge lies in the continuity of the specificities of the media and culture industries.

References

Bouquillion, P. (2005). La constitution des pôles des industries de la culture et de la communication: entre coups financiers et intégration de filières industrielles. Réseaux, 23 (131), 111-144.

Collectif (2005). La concentration dans les industries du contenu. Réseaux, 131, 9-185.

Flichy, P. (1991). Les industries de l’imaginaire. Pour une analyse économique des médias. Grenoble-Paris: PUG, INA.

Hennion, A. (1981). Les professionnels du disque. Une sociologie des variétés. Paris: A.-M. Métailié.

Miège, B. (2000). Les industries du contenu face à l’ordre informationnel, Grenoble: PUG.

Miège, B. (2004). L’Economie Politique de la Communication: des apports toujours actuels. Revue Hermès, 38, 46-54.

Miège, B. (2006). La concentración en las industrias culturales y mediáticas (ICM) y los cambios en los contenidos. Cuadernos de Información y Comunicación, 11, 155-166.

Translator: Eleonora Lozano Bachioqui

Please cite the source as:

Miège, B. (2008). Media and cultural industries: a socioeconomic approach. Revista Electrónica de Investigación Educativa, 10 (1). Retrieved month day, year, from: http://redie.ens.uabc.mx/vol10no1/contents-miege.html