Education
Hello, welcome to COMM122 podcast! This is episode nine. This week, our focus is on the commercial media model, which is the dominant model of media operation in the US. Throughout the classes this week, you will hear the term, mandate. A mandate refers to a media outlet’s foremost purpose, namely, what is its mission, and who and what does it serve. Generally speaking, there are the commercial media mandate and the non-commercial media mandate, which is the topic of next week. The commercial mandate is followed by commercial media outlets, such as HBO, Hulu, the New York Times, and the big four TV networks, CBS, NBC, ABC, and FOX. In fact, most media outlets here in the States are based on the commercial mandate. That means their primary mission is generating profits. However, we do have media outlets based on the non-commercial mandate. For example, PBS and NPR are public broadcasters in the country, whose primary mission is not profit-making, but to educate, inform, and entertain the community. While the commercial mandate is very dominant in the US, it is not necessarily so elsewhere in the world. Take Europe for example, in 2017, public funding accounts for 24% of the revenue of its TV industry, whereas in North America, the number is merely 1%. If we look at the level of public funding for public broadcasters, the US and Canada are at the bottom of the rank, and European countries, such as Norway, Germany, Sweden, and Denmark are on the top.Between various mandates, their key differences lie in: who pays for the media, who does it serve, and what determines success. In reviewing the funding sources of commercial media outlets, we will notice an important shift in the industry, which is the shift from, ad-supported media to, paid media. Let’s unpack that.In the business of TV, we know that in the states there are four big TV networks: CBS, NBC, ABC, and FOX. They broadcast national news, and also have local affiliates across cities to produce regional news. They stream Super Bowl, Emmy’s Award, the Academy Award, and very likely, they carry your favorite TV series. It used to be that the TV networks were 100% supported by advertising. In the pre-digital and pre-cable era, all you needed was a TV antenna to pick up the signal from the TV networks. You didn’t have to pay to watch the content. The content was freely available via radio airwaves. But, what was described has long gone. Between the 1950s and 1980s, most commercial TV stations were funded entirely by the advertising dollars. Yet, in 2004, we, the consumers, spent more money on media than advertisers. And in 2008, we spent more time with paid media than with ad-supported media.So, what has happened? Note that the TV industry is no longer dominated by the big four. We have hundreds of cable channels, which require paid subscriptions. We also have video streaming platforms like Netflix, Hulu and Amazon Prime Video. They also draw revenue from user subscriptions. Besides, we have the iTunes Store, Google Play Store, and many other such stores that allow users to buy or rent a particular episode of a TV show. These are examples of paid-media. Currently, the revenue of the TV industry comes from three main sources. First, licensing fees and broadcasting rights. For instance, one of the big four TV networks strikes a deal with the NFL to live broadcast Super Bowl. The broadcasting right tends to be exclusive, and the TV network gets paid if an overseas broadcaster’s live feed of the game comes from the TV network. The second source of revenue is advertising. This is pretty obvious: during the 2019 Super Bowl, the game's broadcasting rights holder, CBS, charged a record $5.25 million on average for a 30-second spot. The third source is subscriptions. This applies to cable channels but also increasingly the big four TV networks as they individually launch or plan to launch streaming and on-dema