Page 148 - Critical Political Economy of the Media

Political economy of the Internet 127

whom 45 per cent used these as a means of publishing original material,
although only 11 per cent published on matters concerning current affairs and
politics. Another study found that 38 per cent of US teenagers regularly share
content online, 21 per cent remix original content and 14 per cent post blogs
(Purcell 2010: 4, cited in Freedman 2012: 76). This proliferation of commu-
nications activity has profound implications, but how far it mitigates concerns
about the range and quality of supply of public media content is a central issue
for debate.
In the 1990s media conglomerates seemed threatened with extinction as paths
to profitability appeared blocked. As well as new entrants taking market share,
easy digital reproduction undermined the means to create scarcity and monetise
content through copyright, and advertising finance would fail, as users would
not be compelled to stay in their seats to watch ads. These remain profoundly
challenging areas, responsible for much of the uncertainty and volatility for
content and communications businesses. Yet, as McChesney (2013: 124)
summarises:

The corporate media sector has spent much of the past fifteen years doing
everything in its immense power to limit the openness and egalitarianism of
the Internet. Its survival and prosperity hinge upon making the system as
closed and proprietary as possible, encouraging corporate and state surrep-
titious monitoring of Internet users, and opening the floodgates of
commercialism.

In entertainment media, the most significant breakthrough has been proprie-
tary models to sell content that also place restrictions on reproduction and
circulation by users. Apple’s iTunes, Amazon’s Kindle and e-book business,
Netflix, LoveFilm and other legal streaming services have been commercially
successful and have shifted a significant user base from pirate downloads to legal
purchases. Their success does not confirm a smooth triumph for media giants
but rather more complex inter-corporate competition. Apple and Amazon’s
dominance of retail, and linked software and hardware, has given them con-
siderable power over pricing. New digital giants like Amazon, Google, Apple, as
well as telecoms, ISPs, and manufacturers like Samsung and Sony, are also
investing heavily in the struggle to realise future convergence, and competitive
advantage, by capturing the potential sales and advertising income streams across
the Internet, DTV smart screens and mobile devices. Google protests against
the proprietary ‘walled gardens’ created by Apple and Facebook, while laun-
ching its own proprietary services such as Google+. Such volatility is far from
the competitive markets envisioned by ‘new economy’ advocates, but the clashes
between leading corporations in different sectors highlights the utility of a net-
work analysis suggested by Arsenault. The new digital giants also demonstrate
the significance of network effects, whereby, according to Metcalfe’s law,
the value of a network increases in proportion to the square of connections.