Video Websites’ Impact on Mainstream Media

Mainstream media in the U.S are privately owned. Private ownership and the First Amendment are shields that prevent government from controlling or censoring news and information. In an ideal market system, competition between media outlets stimulates more variety and better quality of information and entertainment. The Internet technologies have changed the role of mainstream media and influenced its audiences, advertising and even media messages.

Mainstream media has been affected with the rise of the Internet websites replacing its main products and attracting its target audiences. To some extent, mainstream information can be considered as a product sold by the Internet companies through other channels¹. Critics admit that: “some of the trends that will play out are the continued mainstream adoption of fiat-panel televisions as well as the growing use of streaming video”².

Traditionally, television has credited with having a tremendous impact on our culture, both positive and negative. Virtually everyone from public figures and media critics to the lay public has both lauded and villified television for its alleged role in affecting our perceptions of ourselves and perceptions of America by other nations throughout the world. The Internet has dramatically changed television medium and channels of communication. Such online video sites as YouTube and Joost make thousands of films and video information available for mass consumers³.

The online video web-sites substitute mainstream products and propose users easy access to video databases. Direct-response and database marketers had long known that not every customer had equal value to the marketer. Even some brand strategists had embraced the challenge to develop new research methodologies (e.g., the rise of differential marketing)⁴. They all would have to identify the most valuable customers; the customers that gave the firm more business through referrals; the customers who were not worth catering to at all; the prospects the firm would like to convert to customers; and the types of consumers the firm would consider real prospects. Easy access makes loyal customers more loyal and satisfied with the services proposed by web sites.

Web-sites like YouTube or Joost attract Internet users and PC users appealing with unique value proposing and services. People tend to spend more time with online television. The white homogeneity of media content may have a powerful influence on audiences and may help explain the persistence of stereotypes in culture. According to Naim (2007): “Every month, YouTube receives 20 million visitors, who watch 100 million video clips a day. There are 65,000 new videos posted every day”⁵.

The internet makes YouTube or Joost global companies which propose information and video to global consumers. In this case, mainstream media cannot compete with the Internet because it requires sophisticated technology and services. Although music is a traditional forum for African-American achievement, minority performers stay in the background on music. The lack of portrayals of minorities in mainstream media, and the lack of variety among available portrayals, suggests that minority concerns are not likely to be represented on public agendas that affect future media priorities, public policy, and even political and social behavior⁶.

The technological developments that are taking place will extend the range of products used to connect to the WWW and other Internet services. Examples of this development can be seen with televisions and video clips allowing connection to the WWW⁷. This combination of the WWW’s flexibility and the simplicity of the browser software provides tangible business benefits in terms of reduced training, lower development costs and an increase in the range of users who can have access to the organization. The benefits of using WWW technology are available to all sizes of organization, irrespective of whether they intend to possess their own WWW site.

Like the telephone network, the Internet operates globally. Once connected, the scope of access is not conditioned by geographic boundaries. Unlike the telephone network, the costs involved in global connection are not related to the distances involved. Conducting transactions with the adjacent office costs the same as contacting the farthest continent. The mindset that equates distance with cost must change when using the Internet⁸.

As has already been illustrated, the number and breadth of types of users who have access to the Internet is increasing rapidly. The narrow band of high income, professional and predominantly male users is changing to reflect more accurately the normal demographic distribution. No other communications medium has had access to such a large audience and range of people which increases the ability to leverage the value of information to a scale that has never before been possible⁹.

Many viewers do not want to pay for additional services proposed by mainstream media companies. Future information goods are likely to be characterized by the disaggregation of information content to facilitate novel pricing strategies¹⁰. The units of sale for information goods can now be redefined: for example digital maps can now be sold centered on a point specified by the customer rather than as a paper map sheet defined by the producer. It has been argued that a change to disaggregated information products implies that there is no need for ‘fair use’ provisions, as anyone wanting access to an information good can pay a ‘micropayment’ to the creator for the smallest unit of information required¹¹.

In this case the Internet as a channel of distribution is both changing the nature of the media products created and the way that they are sold. There are now emergent information goods that can only be created and sold using the Internet, for example certain kinds of collaborative games. The low marginal cost regime for digital information representations created by the Internet also has the potential to change the way governments handle information¹².

Governments collect a wide range of information for various purposes including governance, regulation and the operation of services. In its governance role governments usually compel citizens to give personal details, for example to the census and the electoral authorities. In its services and regulation role information is usually collected as needed from citizens and business. Governments now have to decide whether to make a charge for information dissemination through the Internet (even though the costs are low) in order to pay for the (possibly high) cost of the information production. Hence, governments can choose the objectives to be served in making the information available: such as maximum use, value to society or cost recovery¹³.

The most important is that the Internet and websites have changed the idea of censorship and control over circulation of ideas and facts.

YouTube includes videos posted by terrorists, human rights groups, and U.S. soldiers in Iraq. Some are clips of incidents that have political consequences or document important trends, such as global warming, illegal immigration, and corruption. Some videos reveal truths. Others spread disinformation, propaganda, and outright lies. All are part of the YouTube effect”¹⁴.

A large and expanding ‘Internet watching’ industry has grown up to supply such data. Those statistics that can be gained directly from the Internet about its traffic volumes and the geographical segmentation of its users provide a reasonably accurate picture of what is happening¹⁵.

The number of host computers connected to the Internet continues to grow annually at over 60 per cent with their geographic distribution concentrated within a very few countries. Traditionally, mainstream media controls information and a context delivered to end consumers. The Internet and digital encoding of information representations have profoundly changed information, and probably knowledge with it¹⁶.

The changes are far reaching: the definition of intellectual property; the nature of the information ‘commons’ for the citizen; the right of privacy in communicated expressions; the regulation of information infrastructures (computer operating systems and networks); the definition of information goods; and the nature of government communication with its citizens¹⁷. These changes mostly revolve around information ownership and yet no consistent framework has yet to emerge as the question has mostly been approached in a piecemeal way. It is argued in conclusion that a new information dispensation must be built which guarantees information ownership, as this is the foundation on which systems of trading, governance and research can be built. Naim (2007) underlines a negative impact of the websites on society and images of the mass media.

“The YouTube effect has brought other mixed blessings. It is now harder to know what to believe. How do we know, for example, that the YouTube video of terrorized American soldiers crying and praying for their lives while under fire was filmed in Iraq and not staged somewhere else to manipulate public opinion? The more than 86,000 people who viewed it in the first 10 days of its posting will never know”¹⁸.

More interesting, though, was the extent to which users of the Internet as a news source say that as a result they are using traditional news. It seems that using online video sites may have a more negative effect on news viewing than news reading. This might be because Internet users most often go online for the sort of information featured by television news, especially cable¹⁹. In the early days the online companies did their very best to replicate the printed or media product. So with all this competition many media companies put so much effort into developing online products competitive with YouTube and Joost.

Traditionally, the pressure on television was severe, as demands emerged for an even more intrusive rating system, one based directly on the content of programming rather than on the recommended age of viewers. Congressional demagogues threatened to impose their own controls on television programming if the industry did not accept voluntary content-based ratings. But even the networks that accepted the new system expressed fear that content-based ratings would scare off advertisers and make shows easy targets for boycotts by interest groups²⁰. Cable television has also come under federal pressure to curb its sexually explicit programming.

The main problem is that mainstream media is still under pressure of strict censorship unable to compete with YouTube and Joost. Telecommunications, the transmission of information by wire, radio, optic or infrared media, has been subject to its share of secrecy, censorship and surveillance from its inception, but the emergence of the Internet signaled a telecommunications revolution that seemed to be free from the traditional forms of information control²¹.

The danger for mainstream media is that online video websites have the potential to combine all previous media in a personal, interactive form that could be virtually free from state or corporate censorship. The internet offers the promise of a truly democratic form of information exchange by combining the immediacy of telephone, the intimacy of mail, the graphics of television, and the social interaction of a community bulletin board²².

New forms of restraint on Internet communication have emerged, particularly with respect to what are called computer bulletin board systems. The ambiguity surrounding a sysop’s liability for a user’s action lies behind much of the self-censorship on the Internet. If a sysop has knowledge of a user’s actions and control over those actions, there is a greater likelihood of liability. Currently, there is a wide variety of levels of control over, and responsibility for, users’ messages²³.

These emergent digital information standards now pose a major problem for competition regulators around the world as they span jurisdictions and the market dominance they create are not easily broken up by their nature. Although in some markets the developers may license the ‘standard’ technology to widen participation (the digital cellular phone standard GSM is one example), in others the standard setter may aggressively protect its control over the standard as it regards it as an asset²⁴.

At present most of the dominant information standards have been developed by US companies and they can only be regulated effectively by the US Department of Justice. However, the US Department of Justice understandably only serves the US national interest: from their perspective an operating system ‘lock-in’ like Microsoft Windows is at least a domestic American ‘lock in’.

These technological questions will, however, mark out the information infrastructures of the next century. In the emerging technological and commercial environment defined by the digital encoding of information representations ‘ownership’ is coming to mean different things. For example, without encryption information ownership is only relative since owners of network servers and those with privileged access to them (e.g. intelligence agencies, hackers) can easily acquire and use information representations transmitted through the Internet. The Internet makes it possible to distribute information as a good in digital form at an extremely low cost, thus changing the economics of information decisively²⁵.

The internet and online video websites becomes a new sales channel uncontrolled by the state and free for mass consumers. If any element of the channel can be provided in a more cost-effective way, either by another organization or the application of technology, then the producer will have a strong incentive to change their sales strategy. Mainstream media is limited by censorship and regulations, channels of communication and geographical scope. In other words, this situation creates a channel conflict for mainstream media²⁶.

Whenever there are a number of different sales channel elements that can address the same customer base, then there is the potential for conflict. The computer industry is renowned for having multiple channels which often find themselves in direct competition. There have been many instances when the computer manufacture, its distributors and resellers are all fighting for the same business.

Advertising is another area occupied by online companies. Some direct marketers have long suspected that the reliance of media advertising on attitudinal factors, instead of behavioral ones, has resulted in “much ado about nothing.” Moreover, they consider the Internet an information media and therefore antithetical to media advertising²⁷. When these capabilities are combined to address traditional business situations, it is possible to generate tangible operational benefits. the American media marketplace is not only larger but far more specialized than any other environment worldwide. Also, historically, marketing and advertising, in particular television and electronic media, have had a far more significant role in the United States than elsewhere²⁸. Since 1960, advertising volume, measured against gross domestic product, has varied around 2 to 2.4%.

Cyclical fluctuations account for most peaks and troughs. Downcycles of the economy have often triggered deep decreases in total advertising volume and television advertising volume. These abrupt turns can best be seen through annual changes. In the light of the Internet and its direct potential, these targeting options remained narrow and one-sided. Based on a broadcast model, they made real time interactivity impossible. Having assessed the degree to which the Internet will affect the organization, the challenge is to manage the adoption of the new technology and the changes it will cause to existing processes.

Decisions will be required about the advisability and cost implications of running multiple sales channels and the conflicts that can be created. Additional challenges may come from the entrance into the market of new competitors who do not have to support an existing infrastructure and who can establish new customer expectations of pricing levels which can rapidly change the margin structure of an entire industry²⁹. It is predicted that:

streaming video is one application that really does offer a chance for healthy revenue. PC users can watch a video clip, a movie, or a live event and participate in two-way events such as videoconferencing and distance learning by connecting to a host World Wide Web site”³⁰.

Constraints on the geographic, industry or application areas of trading, available to each channel element, can suddenly disappear. Perhaps the most important thing that can be done is to recognize that a problem will exist and to ensure that the existing channel elements have been informed of how the changes will affect them³¹. If possible, these existing channel partners should be involved in the use of technology and encouraged to accept the changes by sharing part of the planned benefits.

There are several reasons why it may be necessary to reduce the level of margin on media products that are being sold via the Internet-related sales channel. It may be sensible to offer a pricing advantage to encourage customers to use the channel. This does not necessarily affect the overall net margin since the cost structure of maintaining the channel may be significantly lower than the traditional alternatives³².

In sum, the rise of the Internet websites such YouTube and Joost leads to decrease in viewership of television and traditional mass media. Online video sites succeed in moving economic activity closer to users (viewers) proposing low transaction costs, low barriers to entry, and improved access to information for the consumer. Thus, they have a negative and threatening impact on mainstream media, its audiences and media messages. The internet has penetrated these sectors unevenly, thus marketers and advertising use this medium to promote their services and products to end consumers. Lack of regulations and censorship help video websites better position themselves against the mainstream media companies.

1. Korn, D. J., Time for Tech? as YouTube Continues to Generate Buzz and Google Trades at near $500 per Share, the Tech Sector May Be Ready to Regain Market Leadership. Black Enterprise 37 (2007): 80.
2. Ibid. 80.
3. Cohen, M. I. Contemporary Wayang in Global Contexts; Asian Theatre Journal 24 (2007): 338.
4. Chun, W.., Keenan, T. W. New Media, Old Media: A History and Theory Reader. (Routledge; 1 edition), 45..
5. Naim, M., The YouTube Effect: How a Technology for Teenagers Became a Force for Political and Economic Change. Foreign Policy, (2007): 104.
6. Ibid. 105.
7. Vivian, J. C. Media of Mass Communication. (Allyn & Bacon, 2008), 28.
8. Ibid. 29.
9. Ibid. 29.
10. Wilson-Goldie, K. The War Works: Videos under Siege, Online and in the Aftermath, Again. Art Journal 66, no. 2, (2007): 68.
11. Vivian, J. C. Media of Mass Communication. (Allyn & Bacon, 2008), 30.
12. Ibid. 65.
13. Ibid. 34.
14. Naim, M., The YouTube Effect: How a Technology for Teenagers Became a Force for Political and Economic Change. Foreign Policy, (2007): 108.
15. Marris, P., Thornham, S. Media Studies: A Reader. (NYU Press; 2 Sub edition, 2000), 76.
16. Ibid. 78.
17. Chun, W.., Keenan, T. W. New Media, Old Media: A History and Theory Reader. (Routledge; 1 edition, 2005), 23.
18. Naim, M., The YouTube Effect: How a Technology for Teenagers Became a Force for Political and Economic Change. Foreign Policy, (2007): 108..
19. Naim, M., The YouTube Effect: How a Technology for Teenagers Became a Force for Political and Economic Change. Foreign Policy, (2007): 108..
20. Marris, P., Thornham, S. Media Studies: A Reader. (NYU Press; 2 Sub edition, 2000), 41.
21. Ibid. 65.
22. Alaxander, A., Hanson, J. Taking Sides: Clashing Views in Mass Media and Society (Taking Sides: Clashing Views on Controversial Issues in Mass Media and Society). (McGraw-Hill/Dushkin; 2008), 47.
23. Ibid. 49.
24. Ibid. 87.
25. Ibid. 81.
26. Mayer, M. D., Mohn, W. A., Zabbal, Ch. PCs vs, TVs. The McKinsey Quarterly, (2001): 131.
27. Vivian, J. C. Media of Mass Communication. (Allyn & Bacon, 2008), 29.
28. Ibid. 98.
29. Ibid. 99.
30. Mayer, M. D., Mohn, W. A., Zabbal, Ch. PCs vs, TVs. The McKinsey Quarterly, (2001): 133.
31. YouTube home Page (2008); Joost Home Page.
32. Chun, W.., Keenan, T. W. New Media, Old Media: A History and Theory Reader. (Routledge; 1 edition), 56..

Bibliography

Alaxander, A., Hanson, J. Taking Sides: Clashing Views in Mass Media and Society (Taking Sides: Clashing Views on Controversial Issues in Mass Media and Society). McGraw-Hill/Dushkin; 2008.

Cohen, M. I. Contemporary Wayang in Global Contexts; Asian Theatre Journal 24 (2007): 338-340.

Chun, W.., Keenan, T. W. New Media, Old Media: A History and Theory Reader. Routledge; 1 edition.

Joost home Page. 2008. Web.

Korn, D. J., Time for Tech? as YouTube Continues to Generate Buzz and Google Trades at near $500 per Share, the Tech Sector May Be Ready to Regain Market Leadership. Black Enterprise 37 (2007): 80.

Marris, P., Thornham, S. Media Studies: A Reader. NYU Press; 2 Sub edition, 2000.

Mayer, M. D., Mohn, W. A., Zabbal, Ch. PCs vs, TVs. The McKinsey Quarterly, (2001): 131-135.

Naim, M., The YouTube Effect: How a Technology for Teenagers Became a Force for Political and Economic Change. Foreign Policy, (2007): 104-110.

Vivian, J. C. Media of Mass Communication. Allyn & Bacon, 2008.

Wilson-Goldie, K. The War Works: Videos under Siege, Online and in the Aftermath, Again. Art Journal 66, no. 2, (2007): 68-70.

YouTube Home Page. 2008. Web.