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The Audience as Product, Consumer, and Producer in the Contemporary Media Marketplace

Chapter · January 2015with1,117 Reads
DOI 10.1007/978-3-319-08515-9_15
Authors and Editors
Philip Napoli at Duke University
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Abstract
One of the most distinctive characteristics of the media marketplace is the role and function of the audience. In the dual-product marketplace that characterizes media, in which content is sold (or given) to audiences and audiences are, in turn, sold to advertisers, audiences occupy the unique position of being the customer in one market and the product in the other market. This dynamic is further complicated by the ways that digital, interactive media are increasingly providing audiences with the opportunity to also serve as content producers, capable of producing content of significant value to other media consumers and to advertisers. This chapter will outline the key distinctive characteristics of audiences as product in the media marketplace and the implications of these distinctive characteristics for media management. This chapter will also examine audiences as both consumers and (increasingly) producers or creators of media products, with an emphasis on the unique management challenges and opportunities associated with the contemporary media audience.
The Audience as Product, Consumer,
and Producer in the Contemporary Media
Marketplace
15
Philip M. Napoli
15.1 Introduction
One of the most distinctive characteristics of the media marketplace—and thus one
of the most important points of focus for media managers—is the role and function
of the audience. In the dual-product marketplace that characterizes media, in which
content is sold (or given) to audiences and audiences are, in turn, sold to advertisers,
audiences occupy the unique position of being the customer in one market and the
product in the other market. A substantial literature—some of it critical, some of it
strategic/managerial—has developed around the dynamics of this dual-product
marketplace, in which the audience occupies this prominent dual role (see, e.g.,
Ang, 1991; Meehan, 1984; Napoli, 2001, 2003; Owen & Wildman, 1992; Smythe,
1977; Webster, 1998).
New media technologies related to the Internet have contributed to an unprece-
dented transformation of the media marketplace on a variety of levels (see, e.g.,
Garfield, 2009; Wirtz, 2011). One of the most significant aspects of this trans-
formation is that it has further expanded the role of the audience (Napoli, 2011).
Today, the audience as consumer/product dynamic is being further complicated by
the ways that digital, interactive media are increasingly providing audiences with
the opportunity to also serve as content producers, capable of making and distri-
buting content that can be of significant value to other media consumers—and to
advertisers (Benkler, 2006; Livingstone, 2003; Napoli, 2010; Shirky, 2010). That is,
media users now regularly produce and distribute content that reaches, and is
consumed by, audiences. In addition, media users often produce content, such as
social media comments and endorsements, that assist advertisers in delivering
brand messages and that can also be used as data in assessing the effectiveness of
advertising campaigns.
P.M. Napoli (*)
School of Communication and Information, Rutgers University, New Brunswick, NJ, USA
e-mail: phil.napoli@rutgers.edu
#
Springer International Publishing Switzerland 2016
G.F. Lowe, C. Brown (eds.), Managing Media Firms and Industries, Media
Business and Innovation, DOI 10.1007/978-3-319-08515-9_15
261
The traditional dual-functionality of the “audience” in the media marketplace
has taken on an increasingly prominent third dimension, thereby further
entrenching the audience as perhaps the most significant of the various key
stakeholders (including content producers and distributors, advertisers, media
buyers, and research companies). Clearly, understanding the nature of the media
audience is fundamental for media managers looking to effectively navigate the
unique complexities of the media marketplace.
When addressing the question of what is so special about media management, an
important part of the answer is in our understanding of the audience, as the audience
is much more than the traditional consumer of goods that characterizes most other
product markets. The audience serves a number of additional roles, all of which are
interconnected and all of which can have profound implications for the manage-
ment of media organizations. This chapter outlines key distinctive characteristics of
the audience as product in the media marketplace and the implications of these
distinctive characteristics for media management. The chapter also examines
audiences as both consumers and producers of media products. In exploring these
various dimensions, the chapter will pay part icular attention to what these various
dimensions of the audience mean for the management of media organizations, as
well as how they have been addressed in media management scholarship.
15.2 The Audience as Product
Many (though not all) media organizations derive at least part of their revenue from
the sale of audiences to advertisers. The transaction essentially involves selling the
attention (hopefully, but not certainly) of potential consumers to advertisers seeking
to sell products to them. When talking about this “audience marketplace”
(see Napoli, 2003), we are basically discu ssing something that is grounded in the
rather murky economics of human attention (see, e.g., Davenport & Beck, 2001;
Goldhaber, 1997).
The extent to which media organizations participate in this audience market-
place varies by industry sector and even by individual media organizations within
sectors. Today some of the key strategic decisions that media managers must make
involve questions of if and how they are going to attempt to monetize audiences
through collecting advertising revenue. We have seen some social media organ-
izations, such as Twitter, migrate to a business model that is increasingly dependent
upon advertising reve nues (Lee, 2010), and others, such as Facebook, engage in
significant reconfigurations in terms of how they sell their audiences’ attention to
advertisers (Heine, 2012 ; Williams, 2012).
One of the most important aspects of the audience as product is the fact that not
all audiences have the same value for the consumers of audiences (i.e., advertisers).
The value of an audience varies across a wide range of criteria (see Napoli, 2003).
The most significant and well-known criteria are, of course, the essential demo-
graphic characteristics of age and gender. For many years, the audience
262 P.M. Napoli
marketplace has been driven by a powerful demand among advertisers to reach men
and women in the 18–49 age bracket (Napoli, 2003). In many cases, an even
narrower audience segment is highly desired (men and women age 18–34). And
for many advertisers, the relative scarcity of young men in the media audience (they
tend to consume less media) has made them particularly valuable. Other related
factors that have been shown to bear directly on advertisers’ valuations of media
audiences include inco me, education, and race/ethnicity (Napoli, 2003).
Why are certain demographic groups worth more than others? The answer lies in
the fact that these demographic characteristics have historically served as the best
available (or at lea st the most economically viable) proxy for what advertisers
presumably care about the most, which is audiences’ product purchasing
preferences and behaviors. And so, at the most general level, audiences in certain
age/income/education categories have been valued more than others largely on the
basis of an assumption that these audiences are more likely to spend money on the
products being advertised, for reasons ranging from having a greater amount of
disposable income to spend, to being more susceptible to adver tisements, to a lack
of established brand loyalties that might be built up over time to the advantage of
the advertiser (Napoli, 2003).
However, it is important to emphasize that audience demographics are an
imperfect proxy for the genuine source of the value of audiences and that this
approach is an effort by the key stakeholders (commercial media and advertisers) in
the marketplace to bring a manageable level of simplicity and efficiency to a very
complex process. Advertisers have tended to value certain demographic groups
well beyond the extent to which these groups can be empirically demonstrated to
warrant such interest (for reviews of this literature, see Napoli, 2003, 2012a). Th ere
has always been a fair bit of what we might call “slippage” between those character-
istics of the audience that genuinely matter most to advertisers (what products they
buy or are likely to buy) and characteristics that actually serve as the key valuation
criteria (demographics) in the audience marketplace (see, e.g., Seles, 2010). Yet,
advertisers and content providers have for years persisted in relying on this
established template for making decisions in the audience marketplace.
As stakeholders have recently begun to meaningfully confront dramatic changes
taking place in the population as a whole, we are beginning to see buyers and sellers
of audience s move away from heuristics that have long guided their decisions and
behaviors. Thus, for instance, the aging of the sizable Baby Boom generation has
compelled some advertisers and content providers to rethink their strategies of
largely ignoring older audiences (in the 60-plus age range). That is partly because
Baby Boomers continue to demonstrate behavioral characteristics that are appeal-
ing to advertisers, being more active consumers than previous generations of older
audiences (because of better health and more wealth), and partly because they
represent a very large (and too large to ignore) percentage of the overall population
(BoomAgers, 2012; Elliott, 2009; Moses, 2011).
It is important to emphasize that the reason for the historical disconnect between
how audiences are valued and purchased and why audiences are actually valuable is
to some extent a function of the ways in which media audiences have traditionally
15 The Audience as Product, Consumer, and Producer in the Contemporary Media... 263
been measured in the audience marketplace. The process of quantifying human
attention for sale in the audience marketplace brings us into the realm of audience
measurement as an institutionalized practice (see, e.g., Bermejo, 2007, 2009;
Napoli, 2011). One cannot discuss the audience as product without discussing
audience measurement. Audienc e measurement systems are the means by which
a product as intangible as human attention is made tangible. Traditionally, audience
measurement systems have focused on recruiting a relatively small—though,
ideally, representative—sample of a total population and asking that sample to
participate in whatever measurement system the firm relies on for information
about them (Bermejo, 2007; Webster, Phalen, & Lichty, 2013). Sample-based
audience measurement continues to dominate most media platforms, including
radio, television, and magazines.
More interactive technologies such as the Internet and digital cable television
have contributed to an ongoing migration away from this traditional sample-based
process (at least within these platforms), as consumption data can be gathered from
virtually every user (see Napoli, 2011). However, even in these contexts, sampling
still maintains a prominent role as a control mechanism intended to enhance the
generalizability of the findings and to provide the necessary demographic data that
advertisers continue to demand (Napoli, Lavrakas, Callegaro, & Mane, 2014).
Considering, then, the role of demographics in this process, it is important to
emphasize that, given the many complexities involved in such processes (sample
recruitment, retention, proper participation, etc.), emphasizing demographic
distinctions has been the most cost-effective means that measurement firms could
implement for categorizing the audience as product. More complex categorizations
that are based, for instance, on product affinity and purchasing behaviors of
individual audience members would introduce a much higher (and perhaps unwork-
able) degree of com plexity into the decision-making processes for buying and
selling audiences. Equally important is that attempts to systematically link
audiences’ media consumption activities with their product purch asing behaviors
have failed on a number of occasions, due largely to the measurement challenges
and costs. These challenges and costs are associated with the difficulty of
maintaining a sufficiently large and representative sample of participants who are
willing to engage in all of the activities that are necessary to have their media
consumption and product purchasing behaviors accurately measured (Napoli,
2011). Thus, the default system for measuring and valuing media audiences has
long been focused on demographics.
This traditional approach to producing the audience product is further
challenged by dramatic transformations affecting the media environment. Of par-
ticular importance is the increased fragmentation both within and across media
platforms, which is a result of the increasing bandwidth and channel capacities with
the various media, and the proliferation of new devices and platforms that are
changing the media landscape (see Napoli, 2011). Fragmentation makes it increas-
ingly difficult for sample-based measurement systems to fully capture the complete
range of audience’s media usage. As the number of channels available to a typical
television household or the number of Web sites available online increases, the
264 P.M. Napoli
extent to which audiences are spread across these available content options
increases as well (though certainly not proportionally). The result is that a growing
proportion of the available content options have audiences that are quite small (the
well-known “long-tail” phenomenon; see Anderson, 2006).
This situation poses real problems for audience measurement. A sample of say
25,000 television households, or even a million Internet households, becomes
increasingly inadequate to provide accurate and reliable audience projections for
all of the content options that are available. Consequently, advertisers’ trust in the
audience estimates is reduced, and thus the value of those small audiences declines.
But increasing the sample size increases the costs, and there are limits to what can
be charged to clients. Essentially, then, an increasing proportion of total audience
attention falls through the measurement cracks. This “dark matter” of audience
attention (see Napoli, 2011) cannot be effectively monetized. This ongoing process
has been perhaps one of the key issues confronting media managers—and audience
measurement firms—ove r the past decade, as it involves a disruption in the very
economic foundation of the audience marketplace (see, e.g., Garfield, 2009).
It is important to emphasize that the realm of audience measurement is a
dynamic landscape, particularly in light of the abovementioned change s in the
media environment that require effective responses for the audience marketplace
to operate as efficiently as possible. Alterations to existing audience measurement
systems can recast the nature of the audience—and its value—in significant ways
(see, e.g., Barnes & Thomson, 1994; Buzzard, 2002). New systems of audience
measurement can emerge that illuminate new potential sources of audience value.
Thus, for instance, in recent years, we have seen the emergence of “social TV
analytics,” in which data from social media conversations about television
programs is collected, aggregated, categorized, and reported in ways that allow
the volume and valence of soci al media discussion about programs to serve as an
alternative, or supplement at least, to traditional ways of measuring and valuing
television audiences (Napoli, 2012b). Obviously, how many people are discussing a
television program online (and how positive or negative their sentiments)
represents a very different representation of the audience than the traditional
approach of measuring (vi a a representative sample) the size and demographic
characteristics of the audience exposed to the program. Not surprisingly,
participants in the contemporary television audience marketplace have been
engaged in a fairly detailed examination—and sometimes contentious discus-
sion—of whether social TV analytics represent a meaningful approach for measur-
ing and valuing the television audience (Napoli, 2012b).
This social TV example is just one of the many ways in which the new,
interactive media environm ent has disrupted established approaches to understand-
ing audiences. To address this increased complexity, media organizations and
advertisers are now drawing upon a wider array of information sources, ranging
from the use of various forms of “big data” (consumer purchasing and lifestyle data,
server logs, etc.) to more granular forms of qualitative and ethnographic data that
seek to understand the ever-changing dynamics of audiences’ media usage across a
growing array of platforms. These approaches create new information flows that are
15 The Audience as Product, Consumer, and Producer in the Contemporary Media... 265
contributing to a dramatic reconfiguration of how media organizations and
advertisers go about understanding and valuing their audiences.
These patterns and dynamics are part of a much broader transition away from
measuring and valuing audiences merely on the basis of their exposure to media
content and/or advertisements to instead measuring and valuing audiences on the
basis of their demonstrated level of engagement with the content and/or advertise-
ment (Napoli, 2011, 2012a). Inherent in such a transition is the institutionalization
of the value of a dimension of audience behavior that had been largely neglected
under the established parameters of the audience marketplace. How this situation is
resolved remains to be seen.
The first point here, however, is that various technological and institution al
changes can contribute to reformulations of the key criteria of audience value, but
any such reformulation must ultimately emerge from—and be supported by—
systems of audience measurement that all of the relevant stakeholders in the
audience marketplace perceive as sufficiently accurate and reliable to be useful
(Balnaves & O’Regan, 2010; Buzzard, 2002). The second important point here is
that the value of the audience product is inextricably intertwined with the ways in
which the audience is measured. The mechanisms of audience measurement have
the power to uncover or unlock previously untapped sources of audience value.
These systems also have the potential, via the particular methodological approaches
they employ, to neglect potentially important sources of audience value.
From a management standpoint, there are a number of important implications
that emerge from the nature of the audience as product and these rapidly evolving
dynamics of the audience marketplace. The first is that audiences are a uniquely
intangible product. Because the audience product is often the projection of a
particular (potentially fallible) measurement system, buyers and sellers of
audiences face a high degree of uncertainty about the product that is central to
their transaction. Media managers must therefore maintai n a comprehensive under-
standing of the strengths and weaknesses of the specific measurement systems that
are being used to translate audience attention into something tangible that can be
bought and sold in the marketplace.
Second, as the recent evolutionary patterns discussed above illustrate, the pro-
cess of understanding and capturing the true sources of audience value is ongoing,
which creates an im portant opportunity for media managers. What is particularly
interesting about the contemporary media environment is the extent to which
stakeholders are embracing alternative sources of audience value and thus insti-
tutionalizing a greater diversity of success criteria in the audience marketplace.
This creates greater opportunities for new and innovative types of content to
potentially take hold and can actually serve as an incentive for experimentation
and innovation.
266 P.M. Napoli
15.3 Audience as Consumer
The second dimension of the dual-product marketplace that characterizes the media
sector involves the audience as consumer of media products. It is important to
emphasize the overlap between this dimension and the audience as product dimen-
sion, given that audiences’ behavioral patterns as consumers factor directly into
how they can be packaged and sold to advertisers. But here the focus is on
audiences in terms of the dynamics of how they consume media products (rather
than how these dynamics are measured and valued). Of particular emphasis will be
the role that audiences can play as a direct source of revenue for media organ-
izations (i.e., as paying customers) and the associated range of complications for
managers of media companies.
The media sector is characterized by a wide range of strategic approaches within
and across platforms in the extent to which media organizations seek to capture
revenue directly from audience members. Different strategic approaches have been
employed over time even by the same organization. Thus, for instance, the story of
the New York Times (along with many other online newspapers) in the digital age
has been an ongoing saga of the company imposing and then removi ng paywalls
and experimenting with other payment and access variations (see, e.g., Salmon,
2011).
These activities reflect the changing dynamics of the contemporary media
marketplace, an environment in which, due largely to the increased availability of
“free” content via both legal and illegal channels, audiences’ willingness to pay for
content has diminished (see Anderson, 2009). Capturing revenue from audiences
today therefore involves a complex and dynamic strategic challenge as media
managers must determine whether audiences’ demand for content is sufficiently
high to sustain consumer payment and develop pricing and access strategies that
can effectively parse low value and high value content in ways that maximize
revenues.
To illustrate, we see sites such as ESPN.com and Hulu making the bulk of their
content available for free but withholding some higher value (premium) content for
those willing to pay a monthly subscription fee. This “freemium” strategy (see
Anderson, 2009) for pricing access to content is increasingly common and depends
on an accurate assessment of how audiences value different types of content. This
strategic approach can be difficult to implement, however, particularly on a global
scale. Particular strategies and access models adopted in one domestic market may
not work across geographic boundaries or (as in the case of “windowing”) may
require that content access models and platforms shift over time. This suggests the
need to maintain a dynamic and fluid perspective, but of course that is no recipe for
stability and predictability—which are important for business. Moreover, such
strategic differentiations can be undermined all too easily by the ways in which
pirated content often circulates freely online.
Questions about if, when, where, and how much to charge for content need to be
assessed in conjunction with an understanding of how the different pricing
15 The Audience as Product, Consumer, and Producer in the Contemporary Media... 267
strategies interact with potential advertising revenues. Thus, the interaction
between the audience as product and the audience as consumer has obvious
importance. Content made available for free will usually attract a larger audience
than paid-for content, and a larger audience stands a better chance of being
successfully monetized in the audience marketplace. However, it is possible that
more revenue could be derived from imposing a requirement to pay directly for
access than would be obtained purely from advertising if the content is made freely
available. So the choice is not always straightforward or self-evident. The revenue
captured on a per capita basis from paying customers can be significantly higher
than what individual audience members are worth to advertisers. Medi a managers
today frequently find themselves trying to ascertain how best to navigate this dual-
product marketplace at a time when both the content and audience marketplaces are
in a period of profound change.
It is important to understand, as well, that the audience as a consumer of media
products goes beyond the fairly narrow issues regarding the dynamics of consumer
payment. Whether content is free or not, audiences are still engaged in processe s of
searching for, learning about, selecting, and consuming media products. Increas-
ingly today, this also involves sharing their media consumption experiences with
others. Media managers must have a thorough understanding of the dynamics of all
of these components of the diverse and complex processes by which audiences
consume media.
There’s a long tradition of rese arch that has sought to enhance media managers’
(and scholars’) understandings of how and why audiences consume media. Early
research in this vein examined issues such as consumer satisfaction with various
media products (see, e.g., Lazarsfeld & Field, 1946; Steiner, 1963). Over time, the
study of media consumers has come to increasingly focus on understanding how
consumers choose various media produc ts (see Owen & Wildman, 1992). This
body of primarily theoretical work has sought to develop predictiv e models for
consumer content selection and the associated content provision decisions of media
organizations under varying consumer preferences, channel capacities, and compe-
titive conditions.
Empirical work inspired to some extent by the program choice literature has
delved into a wide range of factors that impact consumer choices. The findings
include both audi ence factors (i.e., the characteristics of the media consumers,
such as tastes, preferences, and awareness of various content options) and
media factors (i.e., the quantity of content options, the range of media consum ption
technologies available). This research seeks to account for both the structural-level
and individual-level factors that impact consumers’ choices in the media market-
place (Webster & Phalen, 1 997).
This research has addressed questions such as the extent to which media
consumers’ individual genre or format preferences drive media consumption,
how content selection is impacted by changes in the technological environment
(such as increased channel options, or increased technological choices), and, more
broadly, the extent to which media consumers exhibit passive versus active
tendencies in their media consumption behaviors (and how such tendencies may
268 P.M. Napoli
vary across different media types and across different demographic categories). The
primary objective is to identify consistent and predictable patterns in consumer
choice that can have both applied utility for media managers and yield theoretical
insights into the dynamics of media consumption.
Another important behavioral pattern among media consumers, from a media
management standpoint, involves the “one- way flows” of media products (see, e.g.,
Kim, 2006; Wildman, 1994). Research on one-way flows has illustrated enduring
patterns in med ia consumer behavior involving (as the name suggests) the tendency
for the consumption of media products to flow from large markets to small markets
(both nationally and internationally), but seldom vice versa. Such patterns illumi-
nate an important tendency among media consumers to gravitate toward content
produced for larger markets, due in large part to the higher production budgets that
result in more appealing products (Owen & Wildman, 1992 ). Many of the recurring
patterns we see in the distribution of audience attention in the contemporary media
environment, such as the well-known “long-tail” phenomenon (see Anderso n,
2006; Brynjolfsson, Hu, & Smith, 2006; Elberse, 2008), can be explained in large
part by audiences’ tendencies to gravitate to content options with very large
production budgets—i.e., the “big head.”
Despite some general predictable patterns and tendencies in the consumption
patterns among media audiences, it is important to emphasi ze an inherent unpre-
dictability. Although audiences exhibit fairly predictable patterns acro ss the a ggre-
gate of content options, and of course those patterns vary across cultures and media
environments in different countri es, everywhere there remains a tremendous
amount of uncertainty about audience selection of individual content options.
From the “nobody knows anything” mantra that has long permeated the film
industry, and research into motion picture audiences (e.g., De Vany, 2004), to the
“all hits are flukes” pers pective that has emerged from research on the produc tion
and consumption of televisi on (see Bielby & Bielby, 1994), media consumers have
been, and continue to be, very difficult to predict with regard to specific content
options.
For these reasons, media managers often conceptualize consumption as a two-
stage process (see, e.g., Webster & Phalen, 1997). The first sta ge is about making
the decision to consume content via a particular medium. This stage is reasonably
predictable and exhibits fairly stable behavioral patterns. The audience is going to
watch TV, go to the movies, read a newspaper, or go online. The second stage is
about the selection between individual content options, and this is highly unpre-
dictable. Which TV channel to watch, which movie to see, which paper or even
which article to read, and which site to visit?
This explains todays’ keen interest in, and increasingly sophisticated uses of, the
ever-growing amounts of data that can be gathered about audiences’ media con-
sumption processes, in efforts to develop more predictive models of audience
behavior. As was noted above, in today’s increasingly int eractive media environ-
ment, audiences frequently leav e measurable traces of their media consumption
choices—digital footprints, of sorts. These traces can be aggre gated and analyzed in
a variety of ways that can, presumably, reduce uncertainty about audi ences’ media
15 The Audience as Product, Consumer, and Producer in the Contemporary Media... 269
consumption patterns. And so, for instance, motion picture studios increasingly rely
on sophisticated algorithms to predict the likely performance of films well before
they are even produced (Davenport & Harris, 2009). Predictive tools are derived not
only from historical patterns in moviegoing but also from analyses of the sentiments
expressed online about individual films. Similar ly, online “buzz” is used to predict
the likely audi ence sizes for new television programs (Napoli, 2011). In these and
many other ways, mining the vast and growing troves of data about audiences’
media consumption has become a vital tool for med ia managers seeking to effec-
tively anticipate and serve audiences’ content preferences.
The key point here is that audiences’ media consumption decisions are uniquely
difficult to predict, which makes most sectors of the media industry very high-risk
endeavors. From a management standpoint, this situation emphasizes the impor-
tance of developing the necessary analytical tools for effectively predicting audi-
ence behavior. While, as was noted above, the industry is developing a wide range
of data-based tools for making such predictions, there are others who would argue
that understanding and anticipating audiences’ tastes and preferences is more art
than science and that the most successful media managers have been those with an
innate sense of what types of content will succeed and wha t types will fail.
And here, of course, is where the unique dual-product marketplace of the media
sector comes into play once again. Whereas the manager of an automobile factory
can make a very accurate prediction about how many cars the factory will produce
in a given day, the producer of audiences for sale in the audience marketplace often
lacks any such certainty, given the unpredictable nature of audiences’ media
consumption. This situation imposes levels of risk and uncertainty that are, in
many ways, defining characteristics of the media sector that media managers
must learn to effectively navigate.
15.4 Audience as Producer
In recent years, the role of the audience in the media marketplace has expanded
significantly, in ways that further distinguish media management from other mana-
gerial fields. No longer does the audience serve only as consumer and product in the
media marketplace. Today, in a media environment of increased interactivity, in
which audiences’ opportunities to engage in the production and distribution of user
generated content are increasing well beyond those that were available in the
“traditional” media era, audi ences are incr easingly able to operate alongside tradi-
tional media companies as content producers, competing with them for audience
attention and, to some extent, advertising revenues (see, e.g., Napoli, 2010; Shirky,
2010). To return to the automobile industry comparison, automobile manufacturers
generally don’t have to worry about their customers deciding to produce and
distribute their own cars. In the media sector, in contrast, the contemporary environ-
ment is one in which every media consumer can also become a competitor for
audience attention and advertising dollars.
270 P.M. Napoli
Prominent new media platform s such as YouTube place traditional,
institutionally produced media content alongside user-generated content emerging
from what some characterize as “the people formerly known as the audience” (see
Rosen, 2006). While it seems a bit extreme to claim that the concept of the
“audience” is fundamentally outmoded, it is important to understand and appreciate
the ongoing expansion of the audience’s role in the media marketplace and how it is
factoring into media managers’ decision-making.
At the most basic level, the rise of user-generated content can be seen as both
threat and opportunity for media organizations (see, e.g., Bughin, 2007; Mabillot,
2007). The threat arises largely from the extent to which this content can serv e as
competition for audience attention (and advertising dollars) in an already highly
fragmented and competitive media marketplace. Aggrega tors and facilitators of
user-generated content, such as Facebook and YouTube, have proven tremendously
powerful in attracting and retaining audience attention—and increasingly in cap-
turing advertising dollars. But such platforms also represent inherent opportunities
in user-generated cont ent, as clearly evident in the fact that there is substantial
revenue potential for media companies that manage to effectively aggregate and
package user-generated content for audience consumption. And, of course, a
particularly appealing aspect of user-generated content is that media organizations
that find effective ways of aggregating it and monetizing do not have to incur the
substantial production costs associated with traditional types of content.
There are a variety of additional roles that user-generated content can play in the
strategies of media organizations. Many news organizations are utilizing such
content to supplement content produced by their often-dwindling news-gathering
resources (i.e., fewer journalists) and as a means of providing a more interactive, and
thus more appealing, experience for their audiences (see, e.g., Gal-Or, Geylani, &
Yildirum, 2010). Advertisers have, in some instances, relied upon consumers to
generate advertisements for them (Burstein, 2012). And a variety of television
programs are drawing upon the ever-growing amount of user-generated video posted
online (Reinhard & Amsterdam, 2012). In these and many other ways, the effective
integration and interplay of user-generated content with traditional, institutionally
produced content has become a strategic imperative (Mabillot, 2007).
To date, however, advertisers tend to value media content produced by the
audience much less than professionally produced content (Rosenbaum, 2011). It
is important to emphasize this is not to say that the audiences are intrinsically less
appealing than those for more professionally produced content, but rather that
advertisers are wary—or at the very least uncertain—of the “context” (i.e., the
nature of the content) in which their advertisements are likely to appear. Here is
another instance of the problem of unpredictability in media industries, and thus as
a key dimension in their management.
Here we also have an example of the type of emergent (and still evolving)
market dynamics characteristic of user-generated content. Other emergent issues
include revenue sharing, liabi lity, and the as-yet unclear dynamics surrounding
audiences’ long-term demand for opportunities to both produce and consume user-
generated content in conjunction with traditional media content. All of this
15 The Audience as Product, Consumer, and Producer in the Contemporary Media... 271
highlights a new set of strategic imperatives that media managers are faced with
when thinking about “the audience.”
Finally, media managers need to be cognizant of the ways in which the
audience’s role as content producer can interact with its role as product and
consumer. Thus, for instance, as the social TV example discussed above illus trated,
some forms of user-generated content can be aggregated to serve as data that inform
and affect decisions about the buyin g and selling of audiences. Similarly, various
forms of online conversation, such as user-generated reviews and
recommendations, are playing an increasingly influential role in audiences’ media
consumption decisions, creating an important and influential form of “word of
mouth” that becomes a vital point of focus for media managers.
15.5 Conclusion
This chapter has addressed a variety of interacting functions that the audience
serves in the media marketplace as a key driver explaining why and how media
management is fundamentally different from management in other industries.
Certainly conceptualizing and understanding consumers for the products of most
industries is inherently challenging; it seems rather clear that the degree of com-
plexity and uncertainty involved with this require ment for managing in the media
industries is greater than most others. On the face of it, the idea of the “audience”
seems rather simple, but in fact media managers must contend with a complex,
abstract, and unpredictable entity that is fundamental to their successes and capable
of simultaneously being a product, consumer, and producer in the media
marketplace.
Fortunately, media managers have a growing array of analytical tools at their
disposable for trying to understand, predict, and value audiences in their multiple
roles. This also makes it clear that the work of the media manager is increasingly
specialized, given the range of dedicated tools for measuring, engaging, valuing,
and monetizing media audiences and the fact that these tools continue to grow and
become more sophisticated. In this regard, a persistent theme in the media trade
press is the increasing analytical sophistication and analytical skill sets that need to
be brought to bear on all aspects of the process of buying, selling, attracting, and
monetizing audiences (see, e.g., Allen, 2012; Kaye, 2012; Soloff, 2011). Thus, as
the nature of the media audience continues to evolve, so too do the necessary
conceptual, analytical, and prac tical skills required of media manager s in their
persistent need to understand audiences in their diverse roles.
As noted at the outset, media management can be distinguished from other fields
of management in large part by the centrality of the dual-product marketpl ace. As
this discussion makes clear, it is further distinguished by the comparatively unique
degrees of ambiguity, malleability, and persistent unpredictability of the audience
product. Moreover, as this chapter has illustrated, the media audience is a rapidly
evolving construct and its evolution is driven by technological changes that impact
272 P.M. Napoli
not only how audience use media but how those usage patterns are perc eived and
valued by industry stakeholders. Keeping apace of this evolution is a central
challenge for media management practitioners and researchers.
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