Annotated Bibliography (1491 words)
“What are the positive and negative effects of competition on the quality and diversity of media programmes?”
Lund, A.B., Berg. C.E, 2009. Denmark, Sweden and Norway: Television diversity by duopolistic competition and co-regulation. International Communication Gazette, 71 (1-2), 20-27
The authors investigated the effects of competition and regulation on Television Diversity in Scandinavia. They found that de-monopolisation in Scandinavia (1987), Denmark (1988) and Sweden (1992) increased competition, and increased diversity with the subsequent formation of a “dual-market” structure with three types of channels- PSBs funded by a licence fee, purely commercial broadcasters (CSBs) and “hybrid channels” (HSBs) financed by advertising whilst also retaining certain obligations to provide Public Service commitments. The authors find that while increased competition has led to a change in PSB ‘tactics’ resulting in more ‘popular’ schedules, they still remain strong and remark on the “relatively stable” PSB and HSB audience share. This duopoly maintains stable market share even when the net output of CSBs, for example, is higher, and is an attempt to secure program diversity whilst maintaining public service commitments in a competitive market brought about as a result of the de-monopolisation of public service radio/television.
Park, S., 2005. Competition’s effects on programming diversity of different program types. The International Journal on Media Management, 7 (1-2), 39-42
The author examines the different ways in which diversity can be measured, (cited Wildman and Owen, 1985) and how diversity can be found within program types of the same genre, with different target audiences for example. Competition is essential as media policy prescribes variety and diversity of content, however an “increased number of outlets or channels does not automatically lead to greater diversity” (cited Jacklin, 1978). Park notes that when faced with competition, often broadcasters revert to variations of successful formats, rather than brand new, risky ideas. Media markets are “dual markets” supported by advertising revenue, and broadcasters often have to consider audience share versus diversity of programs. Moderate competition leads to product differentiation, while higher levels of competition, as brought about by a “newcomer” for example, leads to risk-averse, ‘tried-and-tested’ formats. Park argues that it is difficult to measure competition or diversity as there is no agreed measurement, and there are contradicting studies as a result of this.
Van der Wurff, R., 2005. Media markets and media diversity. Communications: The European Journal of Communications Research, 30 (3), 249-299
Wurff looked at the impact of market forces on diversity within the media market. Like Park, he concluded that some level of competition is preferable and constitutes diversity, but more intense competition can reduce diversity. Quality, it can be inferred, may also be affected by increased competition, as Wurff states that “competition between (an increasing number of) channels will first result in program duplication”, with diversity coming later. He also looked at newspapers and trade magazines, and argued that they are subject to market forces as well due to advertising and subscription revenue. The extent to which competition affects diversity is linked to cost and demand and audience structure, which vary from formats. Regulation and media policy ensure that whilst competition on its own cannot be relied on to stimulate diversity, it must not threaten it.
Hollifield, C. A., 2006. News media performance in hypercompetitive markets: An extended model of effects. International Journal of Media Management, 8 (2), 60-65
The author also sees competition as being positive and leading to consumer choice, diversity, and higher quality products. It is noted that as competition grows with more competitors, so does financial input, for example with news production or television broadcasters. However, this does not automatically guarantee an increase in quality or diversity:
“Lower reporter workloads were found to increase the degree to which stories were balanced as measured by giving both sides of a story approximately equal attention” (Lacy, Fico, et al., 1989 cited Hollifield 2006)
Hollifield concludes that competition can have a negative effect on the quality and subsequent market performance unless media organisations invest in high-quality shows, but investment and profits are only possible in a stable market environment i.e. when competition is not too high.
Becker, L. B., et al 2009. Is more always better? Journalism Studies, 10 (3), 369-376
The authors argue that despite traditional theory, competition leads to a decrease in quality and diversity. Hyper-competition leads to supply outweighing demand, and in a high-competition market revenue and profits may fall, meaning that the level of financial investment available decreases leading to lower-quality news products, despite potential demand for higher-quality products. This is in agreement with the previous articles; however the authors go further in their analysis and link the effects of competition to media independence. Competition can lead weaker media organisations to be susceptible to outside influence and bribery as they seek additional revenue. However, the authors propose that competition is a positive trait in that markets with a monopoly may have high performance and revenue, but without competition would have no incentive to produce high quality news. Competition is directly linked to journalist’s wages and quality of news reports, and to the quality and diversity of media organisations, as well as the level of revenue received and the level of financial input. Monopolies do not necessarily constitute a higher quality of programmes as indicated by financial revenue, however hyper-competition likewise does not constitute higher quality/diversity as lower revenue means lower financial input.
Van Cuilenburg, J., 2005. On monitoring media diversity, media profusion, and media performance: Some regulator’s notes. Communications: The European Journal of Communications Research, 30 (3), 301-307
The author describes how media diversity can be defined as source diversity (media ownership/workforce) and content diversity. Media markets “have an inherent tendency toward concentration”, and media regulation and policy must take into account the growth in media products. Growth allows for consumer choice, linking to diversity. Media performance is highest when supply leads to demand, which is in contrast to the Becker L. B et al (2009) study above. Looking at the Dutch media market, the author states that:
“The highly concentrated Dutch television market produces a high degree of both media profusion and media diversity, overall resulting in a well-performing media market”
This goes against other theories that a high concentration leads to lower diversity/quality. However, in “a healthy marketplace” with stable competition two or more independent broadcasters with “equal opinion market share” is ideal for preventing a dominating broadcaster.
Edge, M., 2004. Pie sharing or food fight? The impact of regulatory changes on media market competition in Singapore. International Journal of Media Management, 6 (3-4), 184-190
The author investigated the effects of Singapore’s attempt in 2000 at deregulation and the introduction of limited “controlled competition” into the media market, which actually had a negative impact on the media formats. The ‘commuter’ tabloids began to compete heavily for advertisement revenue, as the author states: “In its quest for advertisers, Today even sold its entire issue of March 24, 2003 to HP”. The 3 years of “controlled competition” resulted in heavy financial issues for all those involved; it was debated whether Singapore was large enough to support the competitive media market. However, television broadcasting, it was concluded, was strong enough of “supporting more than one player” while the newspaper industry was not strong enough- “Higher start-up costs and lower marginal costs” meant that competition would more likely stunt growth and in turn diversity and quality. This shows that competition can have detrimental effects on smaller markets, as well as on broadcasters etc. with less revenue. The aim of competition in a media market is to ensure diversity and growth, as well as quality, but this study shows that in smaller markets the introduction of competition can stifle growth, without adequate revenue.
Masson, R. T., et al 1990. Oligopoly in advertiser-supported media. Quarterly Review of Economics and Business, 30 (2), 4-10
The authors looked at competition within advertising in the media market. They view the media market as an industry selling advertisements, which could “be expected to act as profit-maximisers”. However, audience and public interest is essential, and therefore increasing advertisement time would potentially decrease audience. The authors state that “Firms in actual practise have considerable latitude in setting the quantity of advertising minutes”. This implies, therefore, that firms with a higher revenue/market share do not have to have as many advertising minutes as a struggling firm, e.g. the BBC firm is funded by a license fee, not advertising revenue. Reducing advertising ‘density’ increases price to advertisers, as well as less time for advertisement ‘space’, but increasing density leads to negative effects on the media-consumer. This again shows the effects competition has on the media market, as advertising affects revenue and time-allocation for shows and ‘commercials’. As postulated, higher revenue leads to higher quality and diversity of media programmes, and a larger audience share, and commercial broadcasters receive a large percentage of revenue from advertisement.
Trappel, J., 2008. Online media within the public service realm? The International Journal of Research into New Media Technologies, 14 (3), 313
The author looks at the growing online, new mass media and the importance of diversity therein. He views the emerging new media as being an important step and opening up options as it has fewer restrictions than other formats, e.g. time constraints and space, and the option of multi-media integration and interactive options. These options and fewer limitations mean that the scope for diversity is great in the online media environment. However the author distinguishes between content diversity and owner diversity, and finds that in the new media marketplace owner diversity is limited to well-established organisations such as internet service providers (ISPs) and those with independent owners. Despite the scope for interactivity and multi-media integration, the author finds that often these options are under-used and the extent of content diversity limited. However, certain PSBs have expanded into the online environment, and Trappel marks that “BBC online is considered one of the most elaborate online media” and is used as an “industrial benchmark”. The author views the development of the online media as being driven by market forces, leading to “little increase in diversity”, while the restrictions PSBs place on themselves and by regulators (high quality, diversity etc) public service media might “enhance the performance of online media” thereby increasing diversity and quality.
Critical Review (889 words)
The media marketplace is one of the most important institutions in today’s society as a place of mass communication, news and entertainment as well as public service commitments. It is also one of the biggest financial sectors with large financial input and profit gain, and as such there is a lot of vested interest in the media market and how it is managed and what improvements, if necessary, can be suggested.
The question of how competition in the media marketplace affects quality and diversity are among the most important topics of discussion, particularly in today’s climate. Competition is important in capitalism as it is an important factor in producing an environment in which quality and diversity are prevalent, and regulating this environment; the article by Hollifield, C. A (2006) insinuates that competition leads to consumer choice, diversity and higher quality. As noted by the Lund, A.B. (et al 2009) investigation, the de-monopolisation of the television market in Scandinavia (1987) increased competition and in turn diversity, with the formation of different types of channels. Although the PSBs had to compete for audience share and it was noted that their schedules resulted in an increase in ‘popular’ shows versus ‘quality’ shows, particularly at ‘primetime’, they still maintained a stable audience share.
Despite competition’s role as a regulator of content in the marketplace, it can have detrimental effects on the quality and diversity of media programmes. The studies by Park (2005) and Wurff (2005) both induce that in the face of competition, broadcasters often duplicate ‘tried-and-tested’ formats that have proved successful, rather than trying to produce new ideas. This, it can be argued, reduces diversity in the marketplace rather than encouraging it. However, in a system where there is a monopoly, despite higher financial resources available the lack of competition would provide no incentive to produce high-quality, diverse products (Becker L.B et al 2009). So it seems that a stable competitive market is essential for ensuring quality and diversity. A high-competition market would mean more competitors and thus a lower audience share leading to lower revenue and lower financial input in quality programming; coupled with an increased reluctance to try new ideas/formats, this leads to a detrimental effect on the quality and diversity of programmes which is essential in the mass media marketplace. (Becker L.B et al 2009).
One of the important uses of mass media is to provide public service commitments. Another important topic of discussion is how public service commitments are maintained under competition. This is important as many view mass media as a format to provide news, information, culture and values and preserve a national identity. The important factor of PSBs is that they often have certain criteria or obligations to meet, for example to provide quality programming coupled with diversity in all areas. Therefore it is essential that they maintain certain standards, even in a competitive marketplace. Although there are discussions about the detrimental effects of competition on public service organisations, (for example the ‘dumbing down’ argument or the increase in ‘popular’ programming to attract audience share), it seems that overall the standards set to produce diversity and quality prevail under competition. Trappel, J. (2008) investigates the emerging ‘new media’ and concludes that PSB influence (for example BBC online) has had a positive effect on maintaining quality and diversity in the new online environment, even when commercial competitors have failed to make use of the possibilities. It seems that PSBs are affected by competition as far as competing for audience share, possibly leading to more ‘popular’ programmes; but overall the self-regulation and standards set by the PSBs mean that quality and diversity are important guidelines for the foundation of the programmes.
In conclusion, it is clear that competition has both positive and negative effects on quality and diversity. Too much competition can stifle growth, while a monopoly does not promote diversity or even quality. Therefore a stable competitive environment is preferable, however there are exceptions to every rule. Even controlled competition can have detrimental effects in smaller markets with limited revenue, for example Singapore’s media marketplace, although it can be argued that under different organisations/broadcasters it could be viable (Edge. M., 2004). Some highly-concentrated markets flourish though, as Van Cuilenburg (2005) argues. His study investigated the “highly concentrated Dutch television market” which he concluded to produce “a high degree of both media profusion and media diversity”, although he argues that stable competition is necessary to prevent a monopoly. Competition means that broadcasters have to compete for audience share and therefore revenue, which obviously does not affect licence-fee funded PSBs as much as commercial, advertiser-funded broadcasters. This is why PSBs can focus more on quality and diversity rather than popular, audience-grabbing programming. The more competition and broadcasters there are, the more the audience share is divided, leading to lower revenue and less investments in ‘quality’ programming. A stable competitive environment allows for growth but too much competition can produce the opposite result, with lower quality programmes and formats and less diversity of ideas/formats. Obviously a large factor in the quality and diversity is linked to the broadcasters/publishers/organisations themselves, for example PSBs set their own standards and self-regulate. However it is clear that competition has a major impact in the marketplace as a whole, affecting advertising; audience share; revenue and subsequent investment in programming; quality of programming; diversity; growth etc
References:
Lund, A.B., Berg. C.E, 2009. Denmark, Sweden and Norway: Television diversity by duopolistic competition and co-regulation. International Communication Gazette, 71 (1-2), 20-27
Park, S., 2005. Competition’s effects on programming diversity of different program types. The International Journal on Media Management, 7 (1-2), 39-42
Van der Wurff, R., 2005. Media markets and media diversity. Communications: The European Journal of Communications Research, 30 (3), 249-299
Hollifield, C. A., 2006. News media performance in hypercompetitive markets: An extended model of effects. International Journal of Media Management, 8 (2), 60-65
Becker, L. B., Hollifield, C.A., Jacobsson, A., Jacobsson, E., Vlad, T., 2009. Is more always better? Journalism Studies, 10 (3), 369-376
Van Cuilenburg, J., 2005. On monitoring media diversity, media profusion, and media performance: Some regulator’s notes. Communications: The European Journal of Communications Research, 30 (3), 301-307
Edge, M., 2004. Pie sharing or food fight? The impact of regulatory changes on media market competition in Singapore. International Journal of Media Management, 6 (3-4), 184-190
Masson, R. T., Mudambi, R., Reynolds, R. J., 1990. Oligopoly in advertiser-supported media. Quarterly Review of Economics and Business, 30 (2), 4-10
Trappel, J., 2008. Online media within the public service realm? The International Journal of Research into New Media Technologies, 14 (3), 313
negative entropy 