Accueil > The Economics of the Media: a Global Perspective

KCOE 4150 - The Economics of the Media: a Global Perspective

Type d'enseignement : Seminar

Semester : Autumn 2017-2018

Number of hours : 24

Language of tuition : English

Pre-requisite

At least, level 4 in English language.

Course Description

The economic outlook for most media companies around the world is extremely difficult. We observe a collapse in the number of journalists – and a casualization of the profession – in all developed countries. The media is not in a better shape in most developing countries where press freedom is under attack. Everywhere, trust in the media is sinking to new low. Concurrently, high-quality journalism and independent media are more necessary than ever, in particular faced with the rise of populism. But how to sustain independent media companies while it is harder than ever to monetize news and the information preferences of the media and the public seem to diverge? The goal of this course is to provide exploratory answers to this very complex set of questions. How would you fund the launch of a new news media? How much will it cost to produce the media? What will be the sources of revenue of the media? Who will produce the information? What kind of information will you produce? How will you define your target audience? We will tackle these different issues and more, and examine the extent to which solutions differ depending on the countries considered. In order to do so, we will review different business models of the media in the age of new media. Moreover, an encounter with young professionals with an experience of launching a media outlet will be organized. Note: this course is not a substitute to the “The Future of the Media: New Models, Economic Perspectives and Lessons for Democracy” course that I teach in “Formation Commune”. I will cover different topics in the two classes, with a different approach, so it is definitely possible (but certainly not compulsory) for a student to attend both classes without being afraid of repetitions. “The Economics of the Media” adopts a practical, case-based approach to changing business models and the creation of new media outlets. “The Future of the Media” stresses the interaction with political participation, social and economic development, and the financing of democracy. Session 1: Media in crisis: a global overview The multidimensional crisis of the media: (i) an economic crisis; (ii) a confidence crisis; (iii) a quality crisis; (iv) an “independence” crisis with the rise of media capture. In this introductory session, we will go through specific illustrations of the media crisis all around the world, from France and the United States to Eastern Europe (Poland, Hungary), Turkey, India and Cameroon. Session 2: The news gap To which extent do the news preferences of the journalists/media companies differ from the ones of the consumers? Are news companies providing too much “hard” high-quality news (e.g. about politics or international affairs) compared to citizens' preferences? Should they provide more entertaining news to increase their profitability? But if they do so, what will be the “cost” for the quality of the public debate and more broadly democracy? In this session, we will go through the main findings of the Boczkowski and Mitchelstein's News Gap book, and discuss the challenges faced by news entrepreneurs willing to produce hard news in a world where consumers are not willing to pay for it. We will examine the cases of BuzzFeed, Mashable and Vice, and discuss the growing use of Snapchat by media companies. Session 3: The other news gap: the digital gap in developing countries In this session, we will first study the development of Information and Communication Technologies in developing countries (the Internet, wireless networks, mobile phones, etc.), using in particular the example of Kenya. We will investigate how these technologies have affected the media landscape, offering new ways of getting access to information. We will also discuss the question of the differentiated level of access to new technologies (the digital gap). How does news consumption differ by socioeconomic grouping? We will finally see that market segmentation and the digital divide is also an issue in developed countries (e.g. the United States). We will draw policy implications from these findings (e.g. classifying the Internet as a public utility). Sessions 4 & 5: Funding the launch of a new news media In these sessions, we will review the different possibilities offered to a media entrepreneur (you!) willing to launch a new news media, depending on the country(ies) where she plans to found it. From the Google's fund for European publishers (the Digital News Initiative) to the foundation model, passing through crowdfunded and crowdsourced journalism, we will discuss the advantages and limits of each of these (non exclusive) solutions. In particular, we will insist on the importance of protecting journalists against commercial and political influence. One of the two sessions will be devoted to an encounter with young media professionals having the experience of such a launch. Session 6: The business model of the media What is the business model of the media? What are the specificities of the production of information (compared to other goods/services)? Who are the journalists and how are they paid? In this session, we will study important basics in media economics (e.g. fixed costs and increasing returns to scale). These are essential fundamentals for whoever willing to launch a media company and to write down a business plan. Session 7: Monetizing the news in the online world: Plagiarism and slow journalism in the digital era Who are the main providers of original news in an online world? What are the benefits of breaking out a story? What is the life cycle of the value of news? How does information change as it propagates? In this session, we will first establish a number of important facts on online news propagation. We will then tackle the key issue of copyright violations online. In particular, we will review EU regulatory battles against Google. Finally, we will draw implications in terms of editorial choices: should media companies invest in slow journalism in the online world? Session 8: Monetizing the news in the online world? Paying for content and advertising revenues What can be the sources of revenue of a news media in the online world? In this session, we will go through different funding models depending on the media support (e.g. print newspapers, radio, television, pure internet media). We will discuss in particular the collapse in the advertising prices – to the exception of new advertising formats whose limits we will discuss –, the global rise of adblocking and the need for new funding models. Session 9: From competition to coalition: new alliances between rival media outlets Skyline and Gravity in France, the News Media Alliance in the United States: how to understand the new alliances between rival media outlets? In this session, we will first analyze the rationales behind the emergence of new media alliances in face of unfair competition by Google and Facebook. We will then discuss the optimal strategy that should be chosen by young media entrepreneurs in particular in terms of the pooling of the production of information (e.g. through news agencies, the syndication of content or joint operating agreements) and of the pooling of the distribution of information (e.g. through the use of micropayments – Blendle – or in France “La Presse Libre”). Do such initiatives have a future while competing with Facebook's Instant Articles or Apple's News? Session 10: The importance of collaborative journalism In this session, using in particular the example of the International Consortium of Investigative Journalists and of the Panama Papers, we will discuss the importance of collaborative journalism. We will go through the impact of these influential stories in a number of countries, in particular Brazil, Costa Rica and India. We will examine the extent to which investigative journalism can be sustained nowadays independently of such consortiums. We will also review the case of ProPublica and of similar newsrooms that have developed all around the world. Session 11: The fight against fake news The growing importance of fake news: from disinformation websites to the raise of “alternative facts”. What are the motivations behind fake news? Money or politics? What can be done in the fight against fake news? Are Google and Facebook (part of) the solution? Or isn't it a risk of censorship? In this session, we will review a number of solutions that can stop fake news that have been implemented recently (e.g. Snopes, BBC World Hacks, Le Monde's Decodex, Poynter's International Fact-Checking Network, etc.). We will discuss the limits of these solutions and try to propose alternatives. Session 12: The end of intermediation? Politicians as media With the rise of information technologies and social networks, some have argued that this leads to “the end of intermediation” in news production: everyone becomes both a producer and consumer of information. In various countries, new political leaders and organizations have also attempted to bypass traditional media and to become their own media. This includes the example of Donald Trump's use of Twitter in the United States, but also Macron's new political party “La République en Marche” (which recently announced its objective to become “its own media” and to use public funds coming from party financing to produce videos and news content) as well as Mélenchon's “La France insoumise” Youtube channel. Are these viable and/or desirable long-term evolutions? What are the issues in terms of regulatory and financing reforms raised by the changing frontiers between political and media organizations?

Teachers

  • CAGÉ, Julia (Enseignant/Chercheur (Assistant Professor) en Economie)
  • FIZE, Etienne (ATER à mi-temps)

Pedagogical format

Lecture course: 24 hours (12 x 2 hours).

Course validation

If you are registered for this course, you will need to complete the following assignments: 1. A short class presentation based on a media event (in the news) of your choice (30%). A more detailed description of the expectations for the presentation will be provided during the first session. 2. A final exam (50%). 3. Everyone is expected to participate in class discussions: class participation will be taken into account in the final grade (20%).

Required reading

  • Cagé, Julia (2016): Saving the media. Capitalism, Crowdfunding and democracy. Harvard University Press.
  • Taplin, Jonathan (2017): Move Fast and Break Things. How Facebook, Google and Amazon Have Cornered Culture and What it Means for All of Us. Macmillan.
  • Boczkowski, Pablo J. and Eugenia Mitchelstein (2013): The News Gap. When the Information Preferences of the Media and the Public Diverge. MIT Press.
  • Cagé, Julia, Nicolas Hervé and Marie-Luce Viaud (2017): L'information à tout prix. Paris: Institut National de l'Audiovisuel.
  • Starkman, Dean (2013): The Watchdog That Didn't Bark. The Financial Crisis and the Disappearance of Investigative Journalism. Columbia University Press.