Page 144 - Critical Political Economy of the Media

Political economy of the Internet 123

assessments of the relative paucity of new ‘mass media’ providers must be balanced by
acknowledging the diversification of content creation today, the enormous expansion
of publication and online communication by organisations, and professional–
amateur content creation and communication (Fuchs 2008). As van der Wurff
(2008) and Benkler (2006) examine, there has been an enormous expansion in
content distributed free by non-media organisations and individuals, with motives
ranging from informing existing or potential customers to advocating causes –
but not with the aim of making money by selling content or advertisements. Yet
the resources for publication are greater in the commercial sector, and government,
than in civil society. The Internet has significantly advanced the erosion of
boundaries between editorial, marketing communications and transaction activ-
ities. Conventions to separate editorial and advertising, telling and selling, speech
and commerce have been established more weakly and unevenly online (Sparks
2004). This has been amongst the drivers for commercial organisations to invest
in online publishing and communications, in order to engage directly with
consumers without media intermediaries, or wholesalers and retailers.

Incumbent advantages and strategies
Media conglomerates pursue strategies to seek to maintain dominant market
positions, through investment, branding, cross-promotion and advertiser rela-
tionships (McChesney 2004b, 2008), control over gateways to services, efforts to
control intellectual property, and expanding sources of control through surveillance
and data mining to track and target users (Turow 2006, 2011). Some of these
strategies proved unsuccessful but others remain relevant advantages, in particular
those of branding and marketing (Sinclair 2011). Established media brands have
proved to be key assets in increasingly competitive and cluttered markets. Brands
could be extended into new online properties and services. Conglomerates can
use websites to cross-promote and sell their other products and services. Large
media companies could exploit their relationships with advertisers, for instance
offering (or requiring) cross-platform advertising packages. Large corporations
have greater access to capital than smaller companies and can invest in online
businesses as a form of research and development, and use their finance capacity to
seek to outspend rivals and outlast competition. The costs of maintaining Murdoch’s
short-lived iPad-only publication The Daily were estimated at $2 million per year for
running costs and promotion alone, requiring 2 per cent of total iPad users in
the US to subscribe 99 cents per week in order to break even.
There is support for the ‘new economy’ model advanced in Chris Anderson’s
Long Tail (2004, 2009). Anderson argues that online inventory overcomes the
physical and cost constraints of goods displayed on store shelves. Distribution
costs for digital goods like music, video and information approach zero, allowing
a long tail of marketable products. Instead of focusing on the ‘head’, the few,
lucrative blockbuster hits produced by global media corporations, Anderson calls
attention to the long tail, the expansion of low-volume transactions that are the