News Corporation: Corporate Profile

Media Management and Leadership
Spring 2010

Corporate Profile: News Corporation

From Riches to Über Riches, A Corporate History of New Corp

In 1952 Rupert Murdoch inherited 3 Australian papers from his father, Keith. Eight years later Rupert began acquiring media and has not yet ceased. Between 1960 and 1973 he acquired 8 newspapers and started one of his own. In 1973 he bought his first of many US papers. Other firsts for Rupert in the 70’s include getting the “Murdoch Amendments” passed in the Australian parliament, which changed media ownership laws that allowed him to purchase yet more media. Also, he launched his first tabloid, “The National Star”.
The eighties were when the real media feeding frenzy began for Rupert. News Corporation was officially born in 1980. By 1985 he had acquired so much US media that he had to get American citizenship, so that he could buy more. His holdings expanded into book publishing, numerous television stations and the FOX network is established. After acquiring numerous international newspapers, News Corp is bankrupt by 1990 and is forced to sell off some of its assets. In an attempt to diversify outside of the media industry News Corp begins to buy properties in sports. Including official broadcasting rights for the NFL. The rights to the NFL cost over a billion dollars but gave FOX the boost it needed at the time to stay afloat and compete with the top 3 broadcasters. By 2004 News Corp had managed to pull of duopoloies in LA, Washington DC, Orlando, Houston, Chicago and Minneapolis .
By the time this paper is passed in, FOX cable news will have hit its 100th month as being the top rated cable news channel , not bad for a news channel that got it’s start in 1996. Also in a time when newspapers are losing steam nationally, Rupert has set out to overtake the New York Times with his competing Wall Street Journal.
News Corp is the 3rd largest media company in the world (revenue-wise). In 2008 they brought in $33 Billion in revenue and trailed only Disney ($37.8 billion) and GE ($183 billion) out of the top 6 global media companies. News Corp is not only a media goliath, its content is wildly popular in the US and abroad. In its 6th week, Avatar, released by 20th Century Fox, earned $1.8 billion globally. Second only to Titanic also, a 20th Century Fox release .

Financials

On April 28, 2010 News Corp stock price closed at $17.88 per share with 798.52 million outstanding shares. According to these numbers News Corp’s current market valuation is $14.277 billion. In the second quarter of 2009, the company brought in $881 million in revenue and had $564 million in net cash from operating activities. Their long-term debt was at $13,435,000 and their total gross operating profit was $3,076,000 .

Corporate Structure and Governance
Attached is a map of the top four tiers of the corporate governance of the company. Underneath the shareholders and Rupert is the Board of Directors. Below the Board of Directors are all of the News Corp Executives. The information on the corporate governance map was provided by www.Newscorp.com. Also attached is a complete list of what News Corp owns outright and has partial ownership in.
The management style of News Corp really sheds light onto their success. Rupert often takes a vocal and leading role in aggressively pursuing new strategies. A recent example of this strike first businesses strategy is embodied in his attempts to save print newspapers (mainly his). Last year he threatened to pull the content from his papers out of Google. The Times, The Sunday Times of London and The Wall Street Journal are all behind pay walls now in an aggressive first step for his newspapers to gain back lost revenue. Meanwhile circulation and advertising revenue are in consistent decline across the industry. The second punch to the industry is Rupert’s outright crusade to take over the New York Time’s market share and advertisers.
According to a recent article in the New York Times, The Wall Street Journal lost $80 million last year and The New York Post loses about $70 million a year. Meanwhile, last year The New York Times made about $21.2 million in operating profit . Rupert is not afraid to lose a little blood in the matter, “Mr. Murdoch has a long history of going after rivals in an aggressive and public way to win over readers and advertisers. ” The potential gain in the market over his competitor is enough to merit such battles.
Roger Ailes is another example of the aggressive management style of the company. Ailes, (featured in the red star on the News Corp power map) is the Chairman and Chief Executive of Fox News Channel and Fox Business Network. He is also the Chairman of FOX TV stations and Twentieth Television. Roger Ailes got his start at in conservative media at age 27, working for the Nixon campaign. Many years of experience later he has become a savvy and aggressive business leader. When Ailes caught wind that Rupert was considering endorsing Barack Obama in 2008 in the New York Post, he threatened to quit. Rupert responded to Ailes putting his foot down firmly in this seemingly internal political spat by giving him a huge raise and having The Post endorse McCain. Ailes is famous in indignant liberal blogs for being unashamedly conservative and for the FOX news channels brand of “Fair and Balanced” reporting.

Strengths Weaknesses Opportunities and Threats

Relatively, News Corps debt is not very high to their net value. There is some cash on hand for the company to invest in the best way the leaders see fit. Which is what Rupert has been doing while setting his sights on the NYC local market. A major strength of News Corp is their willingness to be very aggressive in whatever their endeavors are, in the most recent case this means vying for the NYC market territory formerly occupied by the New York Times in a time of declining newspaper readership, nation-wide. This can also backfire in certain scenarios. If The New York Times actually put up a fight, News Corp might just end up throwing their money away and drain resources from other money making parts of the company, much like how the New York Post is a revenue sucker, thus weakening the entire structure.
Google is always a threat. No one realizes how much of a threat Google is to their business, because their credo is to, “Do No Evil”. There is also no (seemingly) linear focus to Google’s business plan. They come up form behind and they are quiet. That is Google’s strategy. Another inherent threat to or weakness of New Corp, as well as any other huge company, is that their size is often a detriment in a rapidly changing media landscape. There is always a tendency for large companies to be slow in reaction to new changes in the market place. Other weaknesses for Rupert’s media empire are familial disloyalty and the indignant liberal media. These may seem like trivial cracks in the façade of the third largest media company on the globe, but if the leadership grows complacent, changes hands or if conditions external to the company change, News Corp could lose its footing.
Another possible opportunity for News Corp may lie in their satellite TV infrastructure. There might be a way for them to harness what is there and use it to possibly enter the high-speed internet market. Currently the market for satellite television isn’t so hot, News Corp may as well try to make some money from their satellite infrastructure.


Conclusion:

News Corp is in a dominant position globally and has a very aggressive management style. This strike first competitive attitude of their leadership allows them to maintain their position as well as grow into myriad media markets. The management in the company also has symbiotic relationships with key government figures across the globe which also gives them strategic advantage over their smaller competitors. When Rupert, (now 79 years old) hands down the torch of his position as CEO and Chairman, it will be interesting to see how the media empire he created adapts.



News Corp holdings according to the Columbia Journalism Review
Television
Fox Broadcasting Company
Fox Television Stations
WNYW - New York City
WWOR - New York City
KTTV - Los Angeles
KCOP - Los Angeles
WFLD - Chicago
WPWR - Chicago
KMSP - Minneapolis
WFTC - Minneapolis
WTXF - Philadelphia
WFXT - Boston
WTTG - Washington D.C.
WDCA - Washington D.C.
KDFW - Dallas
KDFI - Dallas
WJBK - Detroit
KUTP - Phoenix
KSAZ - Phoenix
WUTB - Baltimore
WRBW - Orlando
WOFL - Orlando
WOGX - Ocala
WAGA - Atlanta
KRIV - Houston
KTXH - Houston
WTVT - Tampa
WHBQ - Memphis
KTBC - Austin
DBS & Cable
FOXTEL
BSkyB
Sky Italia
Fox News Channel
Fox Movie Channel
FX
FUEL
National Geographic Channel
SPEED Channel
• Fox Sports Net
FSN New England (50%)
FSN Ohio
FSN Florida
National Advertising Partners
Fox College Sports
Fox Soccer Channel
Stats, Inc.
Film
20th Century Fox Español
20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Television
Fox Studios Australia
Fox Studios Baja
Fox Studios LA
20th Century Fox
Fox Searchlight Pictures
Fox Television Studios
Blue Sky Studios
Newspapers
United States
New York Post
The Wall St. Journal
Dow Jones
United Kingdom
News International
News of the World
The Sun
The Sunday Times
The Times
Times Literary Supplement
Australasia
Daily Telegraph
Fiji Times
Gold Coast Bulletin
Herald Sun
Newsphotos
Newspix
Newstext
NT News
Post-Courier
Sunday Herald Sun
Sunday Mail
Sunday Tasmanian
Sunday Territorian
Sunday Times
The Advertiser
The Australian
The Courier-Mail
The Mercury
The Sunday Telegraph
Weekly Times
Magazines
InsideOut
donna hay
SmartSource
The Weekly Standard
Big League
ALPHA
Books
HarperMorrow Publishers
HarperMorrow
General Books Group
Amistad
Caedmon
Avon
Avon A
Avon Inspire
Avon Red
Collins
Collins Design
Ecco
Eos
Fourth Estate
Harper Mass Market
Harper Pakerbacks
HarperAudio
HarperBusiness
HarperCollins
Perennial
Perennial Modern Classics
HarperCollins e-Books
HarperLuxe
Rayo
William Morrow
William Morrow Cookbooks
Children's Books Group
Amistad
Greenwillow Books
Joanna Cotler Books
Eos
Laura Geringer Books
HarperAudio
HarperCollins Children's Books
HarperFestival
HarperTeen
Katherine Tegen Books
Julie Andrews Books
Rayo
Trophy
HarperCollins International
HarperCollins Canada
HarperCollins Australia
HarperCollins UK
HarperCollins India
HarperCollins New Zealand
Zondervan
Other
Los Angeles Kings (NHL, 40% option)
Los Angeles Lakers (NBA, 9.8% option)
Staples Center (40% owned by Fox/Liberty)
News Interactive
Fox Sports Radio Network
Broadsystem
Classic FM
Festival Records
Fox Interactive
IGN Entertainment
Mushroom Records
MySpace.com
National Rugby League
NDS
News Outdoor
Scout Media
Rotten Tomatoes
AskMen
FoxSports.net
WhatIfSports
kSolo
Fox.com
AmericanIdol.com
Spring Widgets
News Digital Media
News.com.au
FoxSports.com.au
CARSguide.com.au
Careerone.com.au
Truelocal.com.au

From One UMasser to Another: Part 2

Tackling the GRE:

Again, without knowing you (the reader) or how you operate as a student, I can only offer what worked in my experience and pose questions for you to consider. The GRE is good for 5 years after you take it. Although I was not sure about my post-undergrad plans I knew that it was best for me to take it as soon as I was done with school while my study habits were still intact. I also forced myself to study regularly for it (which I didn’t do for the SATs). I carried homemade vocabulary flash cards and used GRE study guides from the library to practice Math problems for a few hours a week. Many study guides offer practice tests, which are also very helpful. The exams don’t change very much from year to year so I suggest a minimal investment in study materials. Get everything you can from the library.

Admissions & Your Personal Statement:

DO NOT UNDERESTIMATE THE IMPORTANCE OF KNOWING THE SCHOOL
Please refer to the questions on the handout for finding out what you want to do and what schools you would be interested in attending. While you are working through which schools you would like to go to, visit them if possible. Don’t be afraid to open a dialogue with someone in admissions. That is their job security, make them do some work. Ask a million questions. Find out exactly what they are looking for and what the school/students are like. You are the one making the huge investment in school and you have the right and obligation to know everything about the school.

After you engage thoroughly in an honest and open dialogue with a few schools (as is important in every relationship) you are now ready to begin the personal statement. Each school asks different questions and it is important to address each individually. Don’t write one that you will send into all the schools. It is cheap and it weakens your argument for them to accept you.

Don’t complain about your life, no matter how shitty it actually is. Talk about your trials in an empowering way; i.e., some people would complain about x,y, or z, but I am better now for the experience and it allowed me to see the world in yadda yadda light, etc.

Personalize it by connecting your experience to your interests. There has to be a “BING!” moment when you realized what made sense for you. Try a short narrative within the body of the essay. See if it fits. If it doesn’t, toss it.

Experiment. Have some wine and write whatever comes to mind. Come back to it in a couple of days. It takes time and should take time. It is a process, and you may actually learn more about yourself because you are forced to be autobiographical.

Remain authentic. You are cool, and they need to know how cool actually are. Everyone can write a ‘smart’ essay, but can they write a smart and authentically cool essay? It is important to separate yourself from the boring essay writers.

Have people read it (only people you respect, it saves you trouble).

Good Luck, in all of your endeavors!

If you made it this far, you will be rewarded. Below is the handout from the alumni event and below that is my personal statement. Not only did I get in to the New School, they also gave me %25 off the cover price (a merit scholarship). Hopefully it will give you some ideas. Any questions, e-mail me: Medeiros.lindsey@gmail.com

From One UMasser to Another: Advice for Post-Undergrad Pursuits

Unfortunately, I can’t be there to give you personal advice tailored to your interests, background and personality quirks. Fortunately for you, I am familiar with the “Post-Undergrad Existential Crisis” and can pose questions that will help you navigate through this seemingly swampy abyss. These questions are based on the assumption that you intend on doing something at some point in time that will propel you to a higher (either enlightened, monetary or both) living standard.

1: Do you know what you want?
--If not, take the time to figure it out. As long as you continue pursuing your interests in whatever manner, it will lead you to a decision. Interested in advocacy? Join a non-profit and donate your time. Want to be an educator? Sign up to be a sub or do some after school tutoring. Do you want to be a chef? Work in a restaurant kitchen for a little while. You will realize if it is or isn’t your scene quickly. If it isn’t, you will know and can move on to something that is for you. It is a simple process of elimination without a financial commitment.

2: Would you like the culture of fraternities? Do you want your teacher to know you by name? Do you want to choose your own focus within a program?
--These are all important when choosing a university. Each program is different. Some schools with nice names have classes with 300 students in them and strict curricula. Make sure to check out campuses and TALK TO SOMEONE THERE before you sign the loan.

3: Are you afraid to travel?
--Mandarin Chinese speakers command high salaries across the board. If you aren’t afraid to travel to one of the many English schools in China (that want to pay you good money for your time) I say, DO IT. Learn Mandarin, make money and incite envy in everyone that knows you all at once. When you come back, learn more Mandarin and make more money.

4: Do you consider yourself an indignant liberal but would some day like to pay back your debt and not sustain on a diet of canned vegetables and ramen noodles?
--Rejoice! Many business/management schools (such as Milano @ The New School) are popping up and growing in popularity. Schools that will teach you to be a conscientious leader and which incorporate many liberal arts values (environmentalism, multiculturalism, lots of –isms) into their curriculum are out there and want people like you to be the next generation of leaders. Seriously, check it out! (Ashoka.org has a large presence in the Milano School.)

About Me:
I graduated from UMass Boston in December 2006 with a BA in Political Science. It took me over 2 years to answer question number one on this list. Currently, I am attending the Graduate Media Studies program at the New School where the focus is on the intersection of media practice and theory. We learn multi-media production and study the effects of media as well as it’s content. Please don’t hesitate to e-mail me at the above address with any questions you have.

Admissions, GRE, and Essay advice will all be posted from April 20th-27th here:

Personal Statement Fall 2009

"Understanding several media simultaneously is the best way of approaching any one of them." - Marshall McLuhan

I have 162 text messages in my cell phone inbox. I am sitting on the couch with nine tabs open on my Firefox browser on the Mac laptop to my left. There is a Miriam Makeba vinyl playing on a turntable hooked up to a 3-CD changer, tape deck and radio combo receiver. In front of me are four bookshelves full of DVDs, VHSs, books, and magazines. On the coffee table by my feet are more magazines and old newspapers scattered around. The television is off, so I can concentrate long enough to write this. My life like many others is totally saturated with messages and forms of communication, which affect us more than we are conscious of, for better and for worse.

My intellectual development heavily coincided with the U.S.'s involvement in many national and internationally illegal undertakings. Early on in my undergraduate study my knowledge of the field of politics mortified and disgusted me. For this reason I decided to try Poli-Sci 101 and fell in love. In my studies I learned that there were many people fed up with the military industrial complex, the abuse of labor and land, the lack of transparency and accountability and the resulting pain around the globe. Dedicated members of the independent press and nonprofit organizations have devoted a large part of their lives towards progressive change. Early in my undergraduate studies I decided that I too, would work towards those same principles. At that point, I was not sure in exactly what capacity I would be working for that change.

At the University of Massachusetts at Boston I had earned a 3.8, interned at State Representative Louis Kafka's office, completed a Senior Honors Thesis, and studied abroad to Cuernavaca, Mexico. I also completed two minors, one in Spanish and the other in Economics and the Certificate Program in International Relations all while winning three academic awards (see Curriculum Vitae). In my International Relations Seminar the class had only four white Americans, and something like a dozen students from the African Diaspora, three or four students from the Middle East including a Muslim Arab and an Israeli Jew, and a handful of students from everywhere else but Antarctica. International Relations debates were never so gritty for me as they were in that seminar or on that campus.

Originally, I wanted to go to the New School's program in International Affairs. I was attracted to the school's fusing of intellectual elements and it's non-traditional approach to its subjects. The school and its program appeared excellent, I however, was unsure about pursuing an advanced degree in International Affairs.

In the two-year period after school I worked in bookstores, restaurants, and for temp agencies so I could figure out what I wanted to do with my life without too much professional pressure. With all the spare time I had being chronically underemployed and eventually unemployed, opportunities arose for me to develop my many outside interests. In 2007 I lived with students from Mass College of Art and Design, who through osmosis taught me that communication could also come in non-linear and creative mediums and not just “The Ten Page Essay”. I spent a lot of time with students from the Studio for Interrelated Media, as well as from the Photography and Glassblowing Departments. Their creative energy had rubbed off on me.

The following year, I moved to Somerville, the other side of the city, where I joined the Community Access TV station and learned how to communicate via digital media and learned to utilize software like FinalCut Express and PhotoShop. I helped many members and the station produce programs and began my own live weekly TV call-in show, “The Soap Box” (http://scatsoapboxtv.blip.tv). On the show, my co-host and I discuss topics that we feel are missing in mainstream TV discourse and periodically bring in knowledgeable guests to enhance our discussion. Our latest episode, Soap Box 17 featured human rights worker and author Nadejda Marques. She came onto the show to commemorate the 60th anniversary of International Human Rights Day.

My interest in media led me to a Research Assistant position with Dr. Bill Baker at the Hauser Center for Non Profit Research in the Harvard Kennedy School of Government. Together we are examining the size, scope and reach of nonprofit journalism throughout old media and new in hopes of finding the next viable formula for journalism. My amateur media activism is hopefully the beginning of a dynamic and growing media career. I look forward to learning what the Media Studies program has to teach me about production and media philosophy.

Media is in a deeply transitional phase. Print newspapers are losing readers and turning heavily to a web platform. Millions of Americans get their news from shows such as the Daily Show and Colbert Report, both of which first aim to entertain and then inform. Meanwhile, cable news programs that claim to inform appear to have entertainment as their first priority. Infotainment as well as the conglomeration of media outlets threatens the informed debate and diversity of voices needed in our democratic forum. At this critical point in media's evolution, I want to be a part of the next generation of creative communicators that bring critical information to the public in a scrupulous and engaging way.

I am very enthusiastic about the curriculum and class offerings at the New School. The integration of philosophy, art, media theory, and politics into a program that thoroughly teaches multi-media production is ideal for being a conscientious media producer. The unique and creative intellectual culture at the New School and the fact that it is located in New York City, the media capital of the world, is the perfect setting for me to contribute to and enhance the media community. After graduating with a Masters in Media Studies from the New School I hope to continue my media activism throughout many different media platforms. In the distant future I see myself working in community media and teaching media literacy and production.

Finally, I hope that you will consider me for admission to the New School Graduate program in Media Studies, as I will enthusiastically bring a fresh perspective and innovative ideas to the changing field of media.

Mcluhan & Luhmann in web 2.0

Spring 2010

MS Ideas

“Subliminal and docile acceptance of media impact has made them prisons without walls for their human users.”-Marshall Mcluhan

Despite the triteness of the following statement, it is necessary for the major point of this work: The Internet has changed everything. It will continue to change everything. How and to what extent it has changed us and the world we live in is a picture that will only become clear to us as a culture when a new all encompassing media destroys our apparent sense of normalcy. Niklas Luhmann’s work, “The Reality of Mass Media” uses a constructivist autopoeitic approach to understand the system and operation of mass media (and society in general). His analysis of the function of the mass media is valuable. However, at the time this was originally published (1996) the internet had just begun to be available for civilian use. The internet is the wrench which threatens to undermine his entire thesis (more on this below). Marshall Mcluhan on the other hand paid a lot of attention throughout his works on new media and how they changed everything along their respective time lines. Despite the work, “Understanding Media” being written in 1964 and his death in 1980 his work embodies a keenness as to the effects of new media. Because his focus was on the changing nature of society and culture in relation to the introduction of new media, Mcluhan is better suited to the task of predicting just how we might expect the internet to affect everything it (may or may not) touch. Together, Luhmann and Mcluhan’s understanding of the nature of media gives us a dynamic insight into the changing media environment and specifically the rapid transformation of our internet soaked culture.

First, let us examine and understand Luhmann’s system of the Mass Media, then we will be better positioned to understand the similarities and differences that penetrate in the internet age. He posits that the Mass Media is a self-created and self-sustaining system in an environment with other similarly self-created and sustaining systems. Mass Media as defined by Luhmann, “…includes all those institutions of society which make use of copying technologies to disseminate communication.” Also, “Interaction is ruled out by the interposition of technology…”. A play is not considered Mass Media because the communication only exists in the space while the play is happening. If a recording is made and copied for distribution it becomes part of the mass media. Also important in his definition is the manufactured nature of any reproduction. Hand copied books do not count as being part of mass media, printed books are. Digitally copied materials would be considered part of the mass media as well.

In a constructivist sense the media is a self-created entity that focuses on other-reference, constantly looking outside of itself at other systems and reacting to outside irritations. Narratives are created and utilized according to what could be considered a formula. What is considered information and non-information is heavily dependent on time. If it already happened and was reported on it is no longer considered news. Unless of course the information is considered antique or retro, then it can be recycled with a new perspective on it (a great example would be the VH1 series that began with, “I Love the 80’s”). The memory of the system plays an important part in allowing for the creation of reality as well. Things are forgotten to make room for more or redundant news and for conflicting information to be absorbed. The mass media system is so huge and is constantly being irritated by outside forces but that is what allows it function so well. According to Luhmann:

The more complex the system becomes the more it exposes itself to irritations, the more variety the world can permit without relinquishing any reality- and the more the system can afford to work with negations, with fictions, with ‘merely analytical’ or statistical assumptions which distance it from the world as it is.

News and in depth reporting rely on categorizing information to make sense of the world. Often news is based around a certain selection of narratives to produce news stories. The selectors are as follows; surprise, conflicts, quantities and growth, local relevance, and finally norm violations and moral judgments. We can all think of examples for each of these because they are constantly in use. Conflicts are great for the system because they are ongoing and the outcome is not known. Norm violations and moral judgments also known as SCANDALS are great outside irritants for the mass media. When a norm is violated by a public figure we can all watch and judge them accordingly without having to forgive them. Scandals unite us, “…the mass media are able to generate greater feeling of common concern and outrage than in other ways…the norm is only generated through the violation…” A perfect example of the media frenzy surrounding a scandal would of course be the recent transgressions of Tiger Woods.

The scandal, as Luhmann posits also allows for the media to reinforce societal norms. An integral part of Woods scandal is that it is also tied up in with the advertising industry (the economic systems coupling with mass media system). Advertisement relies on the media for programming just as importantly as the mass media relies on advertisement for revenue. As Woods’ scandal blew up in the news and the size of his transgressions were made more public, his endorsers lost their faith in him. Not in his athletic ability, but in his ability to sell his product, his character to the audience. According to Luhmann, the mass media and advertisers have a set of assumptions about the audience, which allows them to function on the scale that it does and in the manner, which it does:

‘The Person’ is therefore implied in all program strands of the mass media, but not, of course as a real reproduction of his or her….consciousness…but only as a social construct. The construct of the ‘cognitively more or less informed, competent, morally responsible person’ helps the function system of the mass media constantly to irritate itself with regard to its biological or psychic human environment.

The mass media assumes then that we have better moral standards than those put on display for judgment during a scandal, and that we would never buy anything from a company that endorses promiscuous athletes. That assumption about the audience continues along these lines:

In the system of the mass media this construction of the person reproduces the myth of service to the person. This person is ‘interested’ in information in vital ways; so he must be informed. He is morally prone to temptations; so he must constantly be taught the difference between good and bad behavior. He drifts out of control in the flow of circumstances; so he must be presented with a range of possible decisions- or… ‘mental orientation’.

In sum, the mass media is a constructivist observational system. It communicates what it observes based on it’s own reality displayed through certain paradigms. The communication works on assumptions about the audience as a social construction, which is then reinforced by the mass media communication. The construction of reality by the mass media has broad ranging repercussions because our concept of freedom is based on our ability to know what real reality is and make choices based on that.

The system of mass media has been blown apart with the wide availability of the internet. The distinction between creator and viewer has greatly blurred. On the web people can post and read first hand experiences. Information is produced, distributed and read across the systems and on the periphery. Importantly, this information does not need to go through the filter of the mass media communication system.

For more insight on how the internet may change the system of the mass media let us turn to the work of Marshall Mcluhan. The internet took off in popularity more than a decade after his death in 1980, and “Understanding Media” was published in 1964. None of this is a handicap for his work because he paid attention to how new technology changed and interrupted social patterns. He paid attention to the ephemeral and human reactions to it. Mcluhan was sensitive to how different media effected our perceptions of reality and re-orders the utility and purposes of previous media. All of which is exactly what is needed here to bring Luhmann’s system theory into the 21^st century.

The narrative and purpose of a medium changes when a new medium is introduced. “Radio changed the form of the news story as much as it altered the film image in the talkies. TV caused drastic changes in radio programming, and in the form of the thing or documentary novel.” The internet which has absorbed all other media is forcing the traditional institutions of the mass media to struggle to remain relevant. More often than not these traditional institutions of mass media are relying on the appeal of scandal and emotional epithets to draw viewers. Some of the more successful internet sources outside of the institution of mass media utilize the same formulas to gain and hold viewers attention despite being outside of the mass media institutions. For example, Perez Hilton is ranked the 190^th most viewed web page in the United States. The site’s entire existence is built off of scandal and thusly morality reinforcements and judgments as explained by Luhmann. The magic of Perez Hilton is that he covers Hollywood, which is a bottomless pit of irritants for his voyeuristic criticisms. On the one hand information coming from every system has never been so abundant. On the other hand to keep attention of viewers (needed for the mass media to justify it’s existence) we are forced to choke on scandal after scandal being pumped from the traditional sphere.

Electric technology to Mcluhan is an extension of our central nervous system. Our nervous system has been drawn outside of us with each new electric medium. In order for people to cope with the new instant electrical technology we must numb ourselves to not be overwhelmed by it. While we have access to all of this information cutting across Luhmann’s systems, it is packaged in an overwhelming medium with absolutely too much information for anyone to absorb. This allows for an even greater possibility of realities and inevitably even greater distraction due to information (content) overload for the viewer. Mcluhan observes how, “Mental breakdown of varying degrees is the very common result of uprooting and inundation with new information and endless new patterns of information.”

With time and people getting used to the new patterns that the internet brings along with it our anxiety caused by the new technology will (hopefully) diminish. The ease with which every user can be a creator will forever change the face of the mass media system, possibly by making it more effective in it’s ability to recreate itself. For example Moeller describes in “Luhmann Explained” how currency is such an effective aspect of the economic system that it cuts into the other systems. In this way too, media and mass media technology enabled by the proliferation of the internet, allows it to effectively seep across the boundaries of all other systems and incorporate them into its pre-existing functions and patterns. A positive outcome of this user/creator melding would of course be the Tweets sent during the Iranian elections of the abuse by the police. The conversations on Twitter allowed the international community to know and what was going on while simultaneously condemning the government of Iran for its human rights abuses.

Advertising is also changing its face within the changing media ecosystem. As Mcluhan describes, “The continuous pressure is to create ads in the image of audience motives and desires. The product matters less as the audience participation increases.” This is exemplified by the numerous recent “crowdsourced” ad campaigns. Mountain Dew has been working directly with consumers of the product, through the internet, to determine the color, message, design and flavor or their new line. OgilvyOne and advertising agency is currently holding a video contest to see who can sell a red brick in the cleverest way. This contest is also being done via the internet. These types of campaigns that connect directly to the consumer along with the massive amounts of data collected about internet users via Facebook and Google are also changing the previous assumptions of the mass media system of the assumed viewer. With more information about viewers, the institutions are better able to market and target people. The ability for marketers to simultaneously target users consciousness and use them in their advertisement campaigns with the internet as it’s main vehicle this coupling becomes infinitely more powerful and perhaps is creating a new system that Luhmann did not see coming: The Adfo-Tainment-Industrial Complex.

In all, the internet as disruptive all encompassing technology has a two fold effect on the mass media. First, it takes away the legitimacy of institutionally communicated news because of the huge amount of information available across all subsystems provided by experts, first hand observers and anyone with an internet hookup. Second, the internet works to strengthen advertisers ability to latch on to our consciousness by way of data mining and crowdsourced campaigns which is sure to result in an even more warped perception of reality.

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[1] Luhmann, Niklas. The Reality of Mass Media. 2. Polity Press, 2000. 2. Print.

[2] Luhmann, Niklas, et al, Pg 7

[3] Luhmann, Niklas, et al. Pgs 28-29

[4] Luhmann, Niklas, et al, Pg 29

[5] Luhmann, Niklas, et al, Pg 74

[6] Luhmann, Niklas, et al, Pg 75

[7] Mcluhan, Marshall , Understanding Media: The Extension of Man, McGraw Hill, 1964 Pg 53

[8] Alexa, < http://www.alexa.com/siteinfo/perezhilton.com#trafficstats>,

[9] Mcluhan, Marshall, Et al. Pg 47

[10] Moeller, Hans-Georg, Luhmann Explained, Open Court, 2006, Pgs27-28

[11] Mcluhan, Marshall, Et al. Pg 226

[12] Another way advertisement is seeping into our subconscious minds has been by way of increased product placements in television shows which people now view in huge numbers on the internet. However, I did not focus on entertainment in this analysis but it is indeed an integral part to the system of mass media in both Luhmann and Mcluhan’s analysis.