What is Corporate Power?

May 14, 2008


What is Corporate Power? Does it mean corporations shape our lives, regardless of our input? Or does it just mean corporations exist to beat out brick and mortar type stores. Regardless of how it is defined, it is clear corporations have significant influence on human life today. Of the 100 largest economies in the world, 51 are corporations and 49 are countries. This is a startling fact that neatly displays the influence that corporations have.Wal Mart

The beginnings of corporate power began with the age of “robber barrons”. You know, the guys who created railroads and oil companies with last names like Carnegie, Rockefeller, Morgan and Vanderbilt. This often ruthless group of men created vast empires of wealth by creating monopolies on certain areas of business which were often at the cost of the public. The effects of the creation of large corporations had longstanding effects on the people of the world. In America, it helped develop the middle class, created many jobs for the lower class, and forced the move of many to large cities. Unfortunately, it also had the longstanding effect of entrapping people in jobs these companies offered(which were often dangerous) and forced people to live off the products they created.

While much has changed today, Americans are still at the grasp large corporations. Looking at the most pertinent economical issue today, oil, has a profound impact on the lives of everyone across the world. Exxon, the world’s largest oil producer next to OPEC, generated an almost unheard of $40.61 billion dollars in profit in 2008. Gas prices themselves are hovering around $3.50/gallon. While not 100% Exxon’s fault, there are only 5 other major gas producers in the world who account for roughly 1/4 of the world yearly output of oil. Thus, a company like Exxon does have an effect on pricing. Everyone utilizes gas someway. Either in the car they drive or the gas in the truck that brought the food to the supermarket, the oil prices affect everyone. Massive corporations such as Exxon have a severe grasp on the everyday life of Americans. It’s not just oil companies either. Software companies, airlines, healthcare companies, all have a hand over humans throughout the world. For example, Microsoft Windows runs on roughly 80% of computers worldwide. Such a large number of customers allows Microsoft certain affordances such as almost forcing its web browser, Internet Explorer, on its customers. While Microsoft has recently been sued for this, it is testimony to the power that companies have developed over the years.

But is this all so bad? Is there any real horrible effect to the population? Well it depends. Certain numbers of jobs are lost to large companies such as Wal-Mart which push smaller brick and mortar run shops out of business. What you see and hear in the digital world is effected a la the Microsoft example above. Whether or not the rapid rise of corporate power in America is good or bad, it is clear it is very real.

http://science.jrank.org/pages/3574/Industrial-Revolution-Effects-Industrial-Revolution.html

www.yahoo.finance.com

http://news.softpedia.com/news/Windows-Vista-Barely-More-Market-Share-than-Windows-98-67907.shtml


What is New Media?

May 14, 2008

Before we can analyze the significance of corporate power in new media, it is important to have a working definition of the term “new media.” However, “new media” has proven to be a difficult term to define. One broad definition says that new media is “a catch-all term for all forms of electronic communication that have appeared or will appear since the original mainly text-and-static picture forms of online communication” (TechTarget, 2000). On the opposite end of the spectrum, some have defined new media with very specific lists of technology, such as “CD-ROM, HTML,CD streaming media, DV editing, web applications and DVD-video” (Iowa State University, 2008). Critics of this specific view argue that this definition will have to change every time a new technology develops or one of these technologies becomes obsolete. Another definition says that “new media describes any digital media production that is interactive and digitally distributed” (Sheridan College, 1998). However, according to Professor Lev Manovich, the inclusion of “digital media” in the definition of new media “signifies too broad a range of technologies” to be of any value in academic discourse (Manovich, 2001).

Wikipedia (itself considered a new media entity) lists the following as forms of new media (Wikipedia, 2008):

  • - Mashup
  • - Internet Art
  • - Video games and virtual worlds as they impact marketing and public relations.
  • - Multimedia CD-ROMs
  • - Software
  • - Web sites including brochureware
  • - blogs and wikis
  • - Email and attachments
  • - Electronic kiosks
  • - Interactive television
  • - Mobile devices
  • - Podcasting
  • - Hypertext fiction
  • - Graphical User Interfaces

With the lack of consensus about the definition of new media, we have chosen to focus our analyses within a narrow framework. Our study on corporate power in new media will focus on the Internet and related properties, specifically:

  • - Mashups and remix culture
  • - Websites (particularly social networking sites)
  • - Video services
  • - Interactive video gaming

Related links:

http://en.wikipedia.org/wiki/New_media
http://www.sheridanc.on.ca/news/releases/newmedia/definition.html
http://www.webanalyticsassociation.org/en/art/?179
http://searchsoa.techtarget.com/sDefinition/0,,sid26_gci213507,00.html
http://newmedia.engl.iastate.edu/about/what_is_new_media


Online video

May 14, 2008

YouTube

Online video use has grown rapidly in the past few years as home broadband Internet access has increased from 32% in 2003 to nearly 89% in 2008 (Website Optimization, 2008). 9.2 billion videos were watched on the Internet in September 2007 alone (comScore, 2007). It is unsurprising then, with the growth of online video use, that corporations are eager to find ways to profit off this development.

Top U.S. Online Video Properties* by Videos Viewed
Total U.S. – Home/Work/University Locations
Source: comScore Video Metrix
Property

Videos

Share (%) of

(MM)

Videos

Total Internet

9,211

100

Google Sites

2,608

28.3

Fox Interactive Media

387

4.2

Yahoo! Sites

381

4.1

Viacom Digital

304

3.3

Time Warner Network

198

2.2

Microsoft Sites

194

2.1

Disney Online

92

1

ESPN

89

1

Comcast Corporation

52

0.6

CBS Corporation

48

0.5

Google, which makes a majority of its profits through related text advertising, launched a video form of its ad service AdSense in February of this year. This service adds related graphical or text overlays to videos on YouTube (a Google property), Google Video, and a host of other online video sources. Many in the industry had anticipated the release of video AdSense as a prime and necessary revenue source for Google after its $1.65 billion acquisition of YouTube has been questioned due to significant infringement liabilities. In February 2007, media giant Viacom filed a $1 billion lawsuit against YouTube for alleged infringement of over 160,000 unauthorized clips. A few months later, NBC Universal joined with Viacom in a friend of the court brief opposing Google’s attempt to dismiss litigation brought by 1992 L.A. riot observer Robert Tur. The outcomes of these cases will have great impacts on legal interpretation of the DMCA.

In March 2007, NBC and Fox joined forces to develop Hulu, an online video on demand site that provides full episodes and clips from NBC and Fox programming, including shows aired on the networks’ cable properties. Unlike YouTube, which succeeds largely due to user content and uploads, Hulu is simply a content provider with little interactivity in comparison to YouTube. NBC, Fox, CBS, and ABC each maintain individual ad-supported streaming video services through their respective websites.

Apple’s iTunes is another major player in online video. Unlike YouTube and Hulu, which offer free streaming content, iTunes gives consumers the ability to purchase video for $1.99, including TV shows, feature films, and music videos. iTunes recently announced a deal with major film studios and premier independent film studios to make new DVD releases available for download the same day they are released to traditional retailers. New films are priced at $14.99 and catalog films are priced at $9.99. Apple’s DRM technology also allows for movie rentals through iTunes, priced at $4.99 for new releases and $3.99 for catalog films. This agreement hinged on the promise of 60-70% profit margins for the movie studios, which is reportedly double the margin of traditional DVD sales.

To summarize: how does corporate power exert its influence on online video? It is clear that major content providers (studios, networks, conglomerates) wield power through advertising, copyright protection, and threat of litigation. The outcomes of current litigation against Google/YouTube will have a profound effect on the future of the medium.

Related links:

http://www.apple.com/pr/library/2008/05/01itunes.html

http://valleywag.com/386323/obscene-itunes-profit-margins-finally-win-hollywoods-heart

http://www.google.com/ads/videoadsolutions/index.html

http://newteevee.com/2008/02/20/google-finally-launches-adsense-for-video/


Web Content/Social Networking

May 14, 2008

When considering the Web and social networking sites, a distinction can be drawn between professionally (corporate) produced content and user generated content. Recently, however, the lines between these two types of content and the platforms on which they are hosted are being blurred. Take a look at YouTube, for example. Professionally produced content, such as the Dove Real Beauty ads, is being posted by users. It is no longer exclusively the corporations who are sharing their content. In addition, this content is mixed in with user generated content, such as lonelygirl16’s video blog. This co-mingling of content demonstrates that the corporate sphere has collided with the amateur sphere and this has been made possible by new media technology.

The collision between corporate and individual power may spell trouble for corporations. BusinessWeek states that the user generated content available on the Web means that traditional news and media sources are no longer the gatekeepers of content. The article quotes Michael Arrington, chairman of edgeio.com and founder of techcrunch.com, as saying, “Power is shifting toward the individual, operating at the edge of the network and away from the giant companies at the center of the network…It’s a paradigm shift for everyone on the Internet.” So it seems that traditional media corporations are losing their power over what content is distributed and through which channels. If they expect to maintain their power they will have to change their methods and adapt to the new media environment.

Internet companies and new media corporations, such as Google, Yahoo, MySpace, and Facebook, are leading the way in exercising corporate power in this new environment. They are laying the foundation on which traditional corporations can become involved in the online world and extend their power. What is this foundation? Advertising. The business model for companies such as Google and Yahoo revolves around advertising. The business model for social networking sites such as MySpace and Facebook also revolves around advertising. Advertising means money and money means control. Corporations may have lost their influence on content, but social networking sites show that they will retain their financial control and power.

Advertisers, such as Interpublic Group, are the first major group of corporations to realize that they can use the fact that “user-generated content is exploding in popularity, as technology puts more power into the hands of individuals and communities” (BusinessWeek) to their advantage. Facebook and MySpace are leveraging their communities of users to advertisers in return for ad-based revenue. Facebook not only has advertisements on the sidebars of its pages, but it also features branded applications. Users can “sell” or recommend corporate products to their friends. This capitalizes on the community aspect of social networking sites so that advertising appears to be more word-of-mouth. Many corporations have pages on Facebook and MySpace. They are infiltrating these online communities in order to sell their products and establish a young, cool brand identity.

So why does this matter? We are familiar with corporate power in traditional media – why is corporate influence in new media a cause for concern? The primary reason that it is a cause for concern is that many people are unaware of the corporate influences in their social networks. They see the online environment as a place where they are able to dictate the content and choose the media that they are consuming. People’s barriers are down and they fail to realize the extent to which corporations affect their online behavior, such as directing traffic flow to certain websites. The second reason that corporate power is significant online is that there are new privacy issues inherent in online advertising. Corporations that pay to advertise on social networking and other websites will have unprecedented access to your preferences, your location, and your online activity (WireTap Magazine). Corporate power over content may be waning, but corporate power backed by advertising and revenue generation is alive and well.


Mickey Mouse Monopoly: Disney, Childhood & Corporate Power

May 14, 2008

I thought this was a real interesting video you should all check out. Basically, it’s an overview of Disney’s cultural influence over the years. Disney has such a large market share in the world of media and particularly in children’s entertainment you wonder what kind of long term influences they have. In the video they ask kids if they have ever seen an African American in a Disney video and they all resoundingly say no. The same went for Asian people, only stereotypes are displayed. While maybe they’re just cartoons, the social influence on impressionable children is definitely clear. Disney’s response to this is that they have no reason to make a statement or make art, “to make money is [our] only objective”(Michael Eisner). I think this is a little depressing considering Disney is well aware of its influence and should be a little more concerned with the minds they are affecting.


Mashing up the New Creativity

May 14, 2008

The array of methods that corporations use to influence new media is astounding and as such it is tricky to pinpoint the most relevant manifestation of corporate power in new media. However, one important way that corporations exert their influence is through legal regulation. This implicates copyright as a relevant framework for examining the issue.

By focusing on concrete examples of copyright legislation, and subsequent cases, we can clearly demarcate a regulatory environment that influences the distribution and ownership of new media products. In conjunction with this investigation we can ask how corporations influence copyright legislation and what this means for new media’s proliferation into the public consciousness.

Recently, copyright has become especially problematic for the entire music industry. Questions regarding the legality p2p downloading have been at the forefront, but the new digital media universe has produced others. An interesting one, in the context of corporate power, has been the ownership and distribution of remix songs.

These “remixes” or “mashups” are creations that splice together existing works of music to create a new song. They are controversial by the fact that they blur the distinction between old and new. As a consequence there is some difficulty in asserting ownership rights over the new song for corporations.

In this type of new media the artist relies upon copyrighted content as the means of producing new works and under current law they are responsible for clearing that use of copyrighted content with the owner. At the inception of mashups this practice was not always observed and since the act of creating these types of works was so novel the rate of creativity outpaced the ability of artists to adhere to legal standards. As such the corporations who owned the copyrights on works that were being employed cried foul and filed lawsuits against the creators.

The technology enabling DJ’s to make these mashups followed trends observed elsewhere in the digital world. Lawrence Lessig refers to this as technology enabling a “cut and paste” culture where users can easily access one piece of content and join it to another.

This is a key point where corporate power comes into play; while any user may gain access to copyrighted content they cannot legally transform that content into a new work with out explicit permission. Michael Serazio views the creation of mashups as a backlash against the control of corporate content where technology becomes the vehicle by which users fend off and produce counterpoints to the “corporate and institutional power of today’s culture factories.”

This modification of the old works to create new ones has been a contentious issue for copyright legislation for a long time. Marcel Duchamp infamously drew a moustache on a copy of the Mona Lisa to illustrate that slight modifications of an existing work can create an entirely new meaning for the work and also to make statement about the amorphous boundaries of creativity.

Unlike paintings, popular music is beholden to an oligopoly of transnational corporations, namely UMG, BMG, EMI, Sony, and Warner. These institutions use cultural works to create financial gain. Consequently these corporations have a vested interest in defining the appropriate new uses of the works where they currently hold the rights.

High quality cultural creations are not granted a reprieve from these existing legal restrictions as evidenced by DJ Danger Mouse’s Grey Album. Here Danger Mouse mixed together cuts from The Beatles’ White Album with vocals from Jay-Z’s The Black Album to create a wildly popular and critically acclaimed mashup. Yet when EMI, who holds the rights to The Beatles’ recordings, found that Danger Mouse did not clear any copyrights they issued a cease-and-desist order that demanded Danger Mouse stop distribution of the album.

Corporate power in this context is the ability to stop the distribution of a work through legal regulation. There is a clear relationship between the methods employed to gain control over new works and the rules that existed to prevent the unfair redistribution of what we would consider traditional works (e.g. books). Lessig points out an inconsistency here as he notes that when a student uses a passage from a text in the creation of a paper there is an agreement that compensation is not necessary. This is known as the fair use doctrine, but when an artist takes a small sample from a piece of new media there seems to be no place for fair use to be envoked. This then results in exorbitantly high fees for the creator of a mashup and subsequently makes it extremely impossible for them to distribute a new work.

What then becomes of this new art form? Is it pushed to the periphery of the cultural consciousness? Well if we look around our existing cultural context the answer is no, but there are significant changes in the production of these works that are intended to make them more in line with the demands of law and the financial wants of corporations.

When companies saw the success works like The Grey Album they were quick to jump on board. Serazio claims that major labels began producing their own officially sanctioned mashups and signing DJ’s who would have been punished for creating their otherwise illegal creations. They speed and success with which these corporations were able to absorb this once underground trend is simply astounding.

The most successful mashup sanctioned by a corporation was a 2004 Warner release that brought together Jay-Z and the group Linkin Park for an album called Collision Course. Though the work was dismissed by critics the record debuted at number one and sold nearly 400,000 units in the first week. All the profits from these sales went back into the hands of Warner since they owned the rights to both artists’ works.

What once was the practice of individual users combining their personal tastes into new cultural artifacts became the domain of corporately sanctioned DJ’s working with a limited set of musical pieces to ensure that copyright violations would be avoided and profits would flow directly back to the owner of the relevant copyrights.

The corporate influence over mashups continued, demonstrated by the increased prominence of the genre combined with corporate sponsorship. For example David Bowie sponsored a mashup contest with iTunes and gained sponsorship from Audi, and in the summer of 2005 Heineken sponsored the first concert festival dedicated to live mashup collaboration. Obviously the intent the creators of the genre was not to find a way to sell cars or beer, but with corporations being able to control the flow of these mashups they took on characteristics that made them another means of advertising revenue.

The overarching question here is whether or not corporate influence of regulatory legislation is stifling the creativity of media savvy users. In many ways this form of music was not intended to be restricted to certain artists or songs, but with copyright legislation dictating who can use a work for a certain purpose it became increasingly apparent that artistic freedom cannot be proclaimed immune from the demands of corporate power in the new media atmosphere.