CHAPTER ESSENTIALS

• Media industries have one of three common structures: monopoly (when a single firm dominates production and distribution in a particular industry), oligopoly (when a few firms dominate the industry), or limited competition (when there are many producers and sellers but only a few products within a particular category) (pp. 451–452).
• By the mid-twentieth century, the U.S. shifted from a manufacturing-based economy to one fueled by information and cooperation with other economies, causing mass media industries to expand globally. Although early regulation was designed to break up monopolies, deregulation of the industries won out, leading to a growth of mergers and acquisitions (pp. 452–453).
• Today’s media powerhouses avoid monopoly charges by purchasing diverse types of media rather than controlling just one medium (pp. 453–454).

• Media companies make money from direct payments, which come from consumers who buy media products, and indirect payments, which come from advertisers and companies that purchase ads to attract specific customers. Companies also come up with specific business strategies to maximize profits. For example, many try to achieve economies of scale, the economic process of increasing production levels so as to reduce the overall cost per unit (pp. 456–457).
• Historically, media companies have operated in separate industries; however, the Internet is changing the way people consume media. It presents new opportunities for some media organizations while posing challenges for some older media companies (pp. 457–458).
• Other trends that have affected the media economy include flexible markets and the decline of unionized labor, and a growing wage gap (pp. 458–459).
• All these trends take place, in part, because mass media play a powerful role in establishing hegemony in society, where its least powerful members are persuaded to accept the values defined by its most powerful members (pp. 459–460).

• As globalization increased, companies began specializing to enter the new, narrow markets in other countries. They also sought to spur growth through synergy—the promotion and sale of different versions of a media product across a media conglomerate’s various subsidiaries (pp. 461–462).
• The Walt Disney Company is an example of a media conglomerate that has excelled at specialization and synergy. The company has also had success with its global expansion(pp. 462–463).
• Following Disney’s model, many media conglomerates look to international expansion as a way to access markets and to provide opportunities to advance (pp. 464–465).

• Critics of mergers and media consolidation argue that antitrust laws are limited, that there are still fewer voices in the marketplace and less competition among industry players (p. 465).
• Others decry consumers’ loss of control in the marketplace when just a few companies determine what messages and media content are produced (pp. 467–469).
• Still others warn against the infiltration of American culture and media messages into every corner of the globe—a situation known as cultural imperialism (pp. 469–470).

• Democracy suffers when news coverage is determined by fewer decision makers and when media powerhouses increasingly shape the regulatory environment. Grass-roots organizations and the Internet have enabled media reform groups to form globally, suggesting that consumers might be willing to look more closely at the media marketplace’s impact on our lives (pp. 470–471).