Communications Policy, Media Development, and Convergence
Douglas A. Galbi
Senior Economist[2]
Competitive Pricing Division
Common Carrier Bureau, FCC
January 18, 2001
** This paper (including a pdf version) is freely available from http://www.galbithink.org **
Version 1.06[1]
Abstract
In the deliberations of scholars, policy analysts, and policy makers, television has exceptional power and influence. Yet the historical record shows that television has not changed the economics of attention for large populations in the course of their daily lives. This contrast is not merely a fluke or just ironic. It points to a major impediment to the development of information societies. State-owned-and-controlled media can be an important policy lever for overcoming this opposition and promoting the growth of more diverse media environments and more diverse ways of interacting with media.
Contents
I. Introduction
II. Thirty Years of Deliberation of US Broadcast Law
III. Time with Media in Everyday Life
A. Media Use Prior to Radio and Television
B. Radio and Television Time in the late 1990s
C. The Boring Story
IV. Macro-Economics of Attention Seeking
A. Advertising’s Share of the Economy: Constant Long-Term
B. Real Advertising Spending Per Media Hour: Constant Long-Term
V. Effects of Advertising Prior to Radio and Television
A. Visions and Aspirations
B. Building National Brands
C. Commercial Value
VI. The Importance of Attention to Government
A. The Future Includes State Media
B. Promoting a Multiplicity of Sources and Outlets
VII. Conclusion
I. Introduction
Convergence is widely considered to be about television. Anticipated developments – “interactive television,” “TV meets the Web,” “the coming collision of the Internet with broadcast law, ” etc. – describe enhancements to television, new platforms for television, and the relationship between the regulatory framework for television and that for other media.[3] Policy makers have considered at length how to foster the development of high-density television and digital television.[4] Internet content providers have sought to move from banner advertisements to advertisements more like those on television. From the perspective of many advertising agencies and Internet entrepreneurs, streaming media, following the model of television, are necessary to get rich, to be entertaining, and to hold persons’ attention.
Television is subject to detailed and distinctive government regulation, and among most scholars, policy-analysts, and policy-makers, television is considered especially powerful and influential. Thirty years of deliberation of US broadcast law demonstrate clearly the power and influence of television on this group of persons. Further scholarly and policy deliberation about the special power and influence of television does not appear to be worthwhile. If convergence is about television, or something like television, convergence will happen only very slowly.
The historical record indicates, however, that different media have not had dramatically different effects on the mundane personal choices of large populations. Television did not replace reading or other activities; it supplemented them. Over the past seventy-five years, growth in discretionary time can account for all the time currently spent watching television. Moreover, the advent of radio and television has not changed total advertising spending as a share of total output, nor changed significantly total advertising spending per adult media hour. The historical record shows that print media alone were sufficient to create new visions and aspirations, build national brands, and generate significant commercial value. For the most part, divergence never occurred in the economic effects of media.[5] Hence convergence cannot be slow in coming.
In any case, communications policy should promote, not convergence, but worthwhile social, political, and economic goals. The historical record shows that over seventy-five years advertising has grown about the same rate as the over-all economy. Thus if policy seeks information industries to serve as an engine for creating new economic opportunities and jobs, policy should seek to develop media not supported by advertising. Most persons today spend a large amount of time within the home, sitting down, watching pre-packaged, distributor-scheduled streaming audio and video, i.e. television. If “the greatest menace to freedom is an inert people,” policy should encourage the growth of more diverse media environments and more diverse ways of interacting with media.[6] To promote serious discussion of serious issues, as well as the release of human energy in healthful productive, avocational, social, political, and ludic communications,[7] policy should encourage the development of a multiplicity of communications sources and outlets.
Stating policy goals is easy; the question is always what to do. The growth in the number of participants in the communications industry, the globalization of firms, and rapid technological change make many traditional policies unintelligible or ineffective. In the Microsoft antitrust case, in the AOL Time Warner merger, and in formulating pricing policies, policy makers and industry participants are increasingly recognizing the importance of economics of attention.[8] An insightful policy analyst pointed out early in the 1990s:
When new technologies conducive to increasingly diverse and smaller-scale mass communications emerge, commercial market forces and deeply ingrained media habits pull back hard in the other direction.[9]
Communications policy needs to identify effective levers for influencing commercial media development and wide-spread habits of media use.
In the right media environment, state-owned-and-controlled media can be such levers consistent with liberal, democratic values. The unattractive history associated with such forms of media, as well as the past limited scope of broadcasting opportunities, has rightly foreclosed most consideration of such policy instruments.[10] Current and anticipated changes in relevant circumstances suggest that more extensive discussion of state media is now warranted.[11] State-owned-and-controlled media might be used to help change habits of media use, address issues that are hindering the development of business plans for commercial Internet information sources and services, and further the separation of politics and business in the information industry. Recognizing the importance of economics of attention, communications policy should converge with media developments.
II. Thirty Years of Deliberation of US Broadcast Law
Since the late 1960s scholars, policy-analysts, and policy-makers have deliberated extensively about the legality and desirability of regulating broadcasting differently from print media in the US.[12] The US experience offers rich insight into the special power and influence of broadcasting. In contrast to most countries, in the US there has been private, commercially driven broadcasting continually since the mid-1920s. The fundamental US sector-specific statutory law regulating broadcasting has not changed since 1934. Moreover, in contrast to European constitutional law, US constitutional law features greater continuity of texts, a more clearly defined domain of texts, and a more rigidly structured textual hierarchy. In this context, commercial and institutional incentives, deep ideological currents of skepticism toward constraints on personal and entrepreneurial freedom, and a rich civic tradition of articulating the public interest have powered deliberatively productive clashes between broadcast law and other legal claims. In the US the special nature of broadcasting has been discussed and scrutinized at various levels for over thirty years.
At the end of the year 2000, highly respected commentators and relevant US government institutions are deeply divided on broadcast law, and there have been no clear, widely accepted changes in policy orientation.[13] The current practical significance of US broadcast programming regulation may be rather small.[14] However, the discourse associated with US broadcast programming regulation is closely related to that associated with broadcast ownership regulation. Parties have argued that such regulation has highly significant effects, and regulations concerning broadcast ownership currently present important, contentious issues before the FCC. Moreover, broadcast programming regulations often have a broader scope and are more determinately implemented elsewhere.[15]
In important ways thirty years of deliberation of US broadcast law have been fruitful. This experience provides important evidence about the economics of human attention with respect to scholars, policy-analysts, and policy-makers. It shows that broadcasting has a powerful and influential position, and that changes in broadcast law are not likely to be the result of scholars, policy-analysts, and policy-makers’ deliberations.[16]
Consider an important text published and widely read in the US over twenty years ago. A young scholar wrote, acknowledging and strengthening the conclusions of a growing literature, “Differences [between print and broadcasting] indeed exist, but they are either too insignificant to justify momentous distinctions in treatment under the first amendment or too broad and vacuous to be persuasive. We must, therefore, conclude that they are the same.”[17] He then noted, “…society has long considered broadcasting to be meaningfully different from the print media, and this perception has greatly influenced the decision to allow regulation only in the former.”[18] Finally, the scholar went on to provide a rational defense for different regulatory treatment of broadcasting, given that there are no relevant differences between broadcasting and print. This argument proved to be highly influential, at least in the legal academy.[19] The success of the argument shows the powerful intellectual position of broadcasting law and the extensive rational resources and options available to justify it.[20]
Broadcasting has successfully invoked the emotive power of democracy, education, and other important values.[21] The following scholarly analysis of broadcasting’s importance provides a good example:
A well-functioning democracy therefore depends not just upon a formal education system, but also upon an ongoing informal education system.
In the United States, this informal education system has many components – film, newspapers, books, journals of opinion, magazines, radio, political campaigns, billboards, marches, workplace conversations – but none is as important as television.
…The Internet provides vastly more information than television, but does so only if citizens actively seek that information out. Television informs even the passive observer.
…It [television] defines the public. …more than forty million households tuned in for the final episode of Seinfeld [a thirty minute adult situational comedy]. Television is unique in its capacity to produce this type of shared experience and for that very reason can be regarded, at least today, as the paramount public medium.[22]
Here television shows its power in a seamless argument from democracy to education to Seinfeld. Other arguments have linked broadcasting to other emotive subjects such as raising children, sex and violence, self-improvement, and helping disabled persons. The success of such arguments demonstrates broadcasting’s tremendous power in policy deliberations.
Broadcasting is also very powerfully positioned economically. A significant amount of deliberation about broadcast law has drawn upon economic authority. For example, an important proposal for communications policy put forward four principles. Two of these principles draw directly on the authority of economics:
[Principle: ] As a matter of policy, government should foster access by speakers to media. …access means the ability to reach any willing recipient by any speaker willing to pay the economic cost [omitted footnote defining economic cost in a standard way] of doing so (and does not mean that government must or should require others to subsidize the would-be communicator). …
[Principle: ] Government policies should foster diversity in the media marketplace. …diversity is achieved when people are allowed to bid for any information or entertainment they desire – no censorship – and they receive what they seek, so long as they are willing to pay the economic costs of receiving it. That is, the diversity principle dictates that there be no artificial government-imposed barriers to transmission or reception of speech.[23]
While the above principles might be interpreted as endorsing the extension of a vulgar kind of freedom widely experienced and cherished in some societies, the principles are also associated with economic authority. In economics, “cost” and “willingness to pay” are key terms in disciplined analysis.[24] The phrase “no artificial government-imposed barriers” can best be understood as an emphatically phrased conventional descriptor for a particular comparative setting in an economic model. Overall, the two principles above resonate with the terms and thrust of the First Fundamental Welfare Theorem of Economics, widely considered to be a key source of authority in economics.
Using terms of economic authority, broadcasting can be also contraposed to that authority in ways much more intricate, awe-inspiring, and powerful. One can consider the public goods aspects of media products, positive and negative externalities, the implications of collecting money only from advertisers, the conflict between advertisers’ and audiences’ interests, the malleability of preferences, the role of information problems, the significance of monopolistic competition, the impact of international trade, and “Ruinous Competition: Too Many Products, Too Much Fake Diversity.”[25] There is also “A Solution and New Problem: Price Discrimination.”[26] One scholar has cataloged, “…ten generic types of externalities that greatly affect whether a market production of media content will correspond to the content that would be produced if the audience got what it wanted when charged its real cost.”[27] Another scholar’s text supplies a list of eleven perceived problems and associates them with the proposition that “well-functioning television markets are inadequate.”[28] This same text also contains references to “the television market,” “the communications market,” “the emerging communications market,” “the broadcasting market,” “the media market,” and “the emerging media market.”[29] The complex analytical work necessary to sort out and evaluate the functioning of all these different configurations of markets is rather intimidating, and the effect is to induce deference to the associated general claim.
A recent text on television and the public interest illustrates well this economics of attention. The text starts with the following two sentences:
The communications revolution has thrown into question the value of imposing public interest obligations on television broadcasters. But the distinctive nature of this unusual market – with “winner-take-all” features, with viewers as a commodity, with pervasive externalities from private choices, and with market effects on preferences as well as the other way around – justifies a continuing role for government regulation in the public interest.[30]
The second sentence presents as its subject “the distinctive nature of this unusual market.” Use of the word “market” economically invokes the authority of disciplined analysis and the readers’ personal representations of the status quo in communications, media, broadcasting, or television.[31] The preceding adjectives “distinctive” and “unusual” help color the readers configuring of these representations. The second sentence dashes off jargon, economic terms, and complex interactions, and then releases intellectual tension in a familiar conclusion. Readers economically defer to economic authority, connect television to the need for government regulation, and conserve attention in dealing with the rest of the text.
Recent texts from influential sources in Europe also highlight the distinctive power of audio-visual media. This term encompasses all streaming pre-produced audio and video, but in deliberations it does not appear to be economically distinguishable from the terms broadcasting or television.
The European Commission wrote in March, 1999:
The socio-cultural impact of the audiovisual sector, in particular broadcasting, is without parallel. …The audiovisual sector, for its part, combines economic, social, and cultural issues in a unique way. The socio-cultural impact of television, for example, is without parallel.[32]
The European Parliament wrote in October, 1999:
Parliament also considers that television as referred to in the Directive Television without Frontiers [includes cable and satellite delivered television] will remain the principle medium of primary information provision and processing for the foreseeable future and that it is therefore of paramount importance in helping people in our pluralist societies to arrive at opinions and decisions and in the functioning of democracy, the preservation of cultural diversity and conveying social values, irrespective of the type of financing (charges, advertising, subscriptions, pay-per-view) and the method of transmission;[33]
The Report of the High-level Group on Audiovisual Policy (October 1998) wrote:
…it is essential that the specificity of the [audiovisual] sector continues to be recognized….[34]
The Seminar on Audiovisual Media and Authorities (November, 1998) wrote:
There was a consensus on the specificity of the audiovisual sector and the consequent need for regulatory measures which addressed this specificity….[35]
A recent influential review of Europe’s digital revolution put in print an unusually detailed and direct analysis:
The true rationale for broadcasting regulation lies in the uniquely influential role of a medium which helps form public opinion, provides a forum for public debate and discussion, and – in places where regulation has not intervened to prevent it – offers a unique source of commercial and political power for private media owners [reference omitted].[36]
The pervasiveness and influence of such written texts provides compelling evidence of the distinctive power of audio-visual media. Some philosophically oriented persons may find it difficult to accept the truth that audio-visual media are especially powerful.[37] But facts should be recognized: the issue has been extensively deliberated for over thirty years in the US and the power of audio-visual media has been repeatedly affirmed. The same conclusion has been emerging more recently in the much different institutional and historical setting of Europe. Further deliberations in this area might seek to emulate recent successes in theology, such as the Lutheran-Catholic statement on justification or Pope Paul II’s actions and statements in Jerusalem.[38] Nonetheless, the above analysis of the economics of human attention indicates that prospects for similar successes in broadcasting law – deliberation clarifying and changing policy positions – are rather low.
III. Time with Media in Everyday Life
How a population allocates its time deserves more consideration from business persons, policy-analysts, and policy-makers. Time is widely thought to be an important empirical measure of attention.[39] The quality of politics, and the fortunes of particular politicians, depends significantly on the extent of public attention. For businesses, attention is a prerequisite for a sale. From a macroeconomic perspective, services are growing in importance. Services are often denominated in time, and the consumption of services is typically much more time dependent than the consumption of goods. Time may be more important than money.
Adults in high-income countries have gained significant additional discretionary time over the past seventy-five years. Discretionary time is time remaining after time spent on paid work, family care, personal care (sleeping, eating, hygiene, and grooming), and associated travel. Methodologically sophisticated time budget surveys in the US show that average discretionary time for persons ages 18-64 rose from 34.8 hours per week in 1965 to 41.0 hours per week in 1995.[40] Based on more fragmentary evidence, discretionary time for a male household head rose 220% in the US from 1880 to 1995.[41] These trends, along with other data, indicate that in the mid-1920s adults in the US probably had about 26 hours of discretionary time per week.[42] Thus over seventy years discretionary time of US adults increased from about 26 hours per week to 41 hours per week. Discretionary time probably increased even more significantly in countries, such as those in Europe, that currently have lower average hours worked per year than the US.[43]
A. Media Use Prior to Radio and Television
The media environment and time spent with media were much different about 1925 than now. Television did not exist in 1925; black and white television sets started to appear in a significant number of consumers’ homes only about 1948. In the US and the UK, which pioneered household radio, only about 1% of households had radios in 1923, with that figure rising to 20% in 1926.[44] Silent movies and audio recordings were the only non-print media just before the growth of radio. US movie theatre attendance in 1925 averaged about one attendance every two weeks, or an average of about 50 minutes per week.[45] Expenditure on musical recordings was about one-fourth of expenditure on movies.[46] Thus in the US about 1925 non-print media probably occupied only an hour of an adult’s discretionary time per week.
The scholarly literature on the growth and spread of newspapers tends to emphasize the enthusiasm of readers. A leading US social history invokes images of starvation and the distribution of necessities: as the mass press spread into the countryside farmers “who never before had a chance to receive a daily ration of fresh news from the city, gorged themselves with two or even three daily papers….”[47] In 1925 US daily newspaper circulation amounted to 1.2 newspapers per household.[48] Scholars have noted and lamented the subsequent sharp decline, with newspapers per household falling to 0.6 in 1998.[49] Before the advent of radio and television, did the average person spend more time reading news, or at least reading newspapers?[50] What about reading in general in the era before radio and television?
Circumstantial evidence suggests that the growth of radio and television – hot, rich media – has not dramatically affected discretionary time allocated to reading. Among the highest income countries (OECD members), newspaper circulation per person shows no overall trend from 1950 to 1996.[51] Moreover, in contrast to newspaper circulation, magazine circulation in the US shows a dramatic rise from 0.5 magazines per person in 1922 to 1.9 magazines per person in 1998.[52] A US study in the mid-1920s found that popular weeklies, such as the Saturday Evening Post and Literary Digest, were retained for about six months on average.[53] This suggests that in the mid-1920s magazine reading was not a structured habit that kept up with the pace of periodical publication. Book reading is the most difficult type of reading to assess empirically. Based on Publishers Weekly’s count of new books and editions, the number of new books and editions published in the US rose from 0.1 per thousand persons in 1925 to 0.3 per thousand persons in 1997.[54]
Direct evidence on reading time in the mid-1920s suggests that the average adult in the US spent 23% of discretionary time reading, with newspaper reading amounting to about 10% of discretionary time. According to an academic leader in the movement to provide a scientific, factual foundation for advertising, the average reader in 1925 spent 15 minutes per day reading the newspaper. Surveys that this scholar conducted and reviewed support that conclusion, as did an earlier survey.[55] In contrast, scholars associated with libraries and educational organizations found, in surveys focused on reading habits and materials, much greater reading times. Personal interviews with 314 adults in Chicago in the early 1920s elicited reading times that averaged 28, 24, and 41 minutes per day for books, magazines, and newspapers, respectively. The interests of the interviewer, the narrow scope and personal nature of the interview, and the socio-economic status associated with reading created significant potential for over-reporting; reported counts of reading material suggest that reading may have exaggerated by a factor of two or more.[56] Evidence from general time budget studies in the early and mid 1930s suggests that persons read newspapers about 20-25 minutes per day, or about two and a half hours per week.[57] Total reading time per adult in the mid-1920s probably averaged about six hours per week.
B. Radio and Television Time in the late 1990s
In most countries over the past seventy-five years, television has dramatically reshaped use of discretionary time. In the US, knowledgeable observers have linked current television use to a figure of 7 hours per day, which implies 49 hours per week.[58] This figure effectively conveys the awesome amount of television viewing time, but otherwise has little relevance. Table 1 provides, using data from television rating services, average weekly television viewing time for adults in OECD countries in 1998.[59] Viewing time ranges from 17 hours per week in Austria and Sweden to 30 hours per week in Mexico.
Based on ratings data, US television viewing time per person is 28-30 hours per week. Television viewing times per person are much less than the occasionally quoted figure of 49 hours of television per week, but they are large relative to a typical adults’ amount of discretionary time.
In collections of industry statistics on media usage, time allocated to radio and television is far larger than time allocated to other media. Table 2 provides data, from the Statistical Abstract of the United States, on US media usage for a variety of media in 1998. The time associated with daily newspapers is only 10% of television usage time and 15% of radio time. The usage times associated with radio and television are more than four times greater than the time associated with the next most intensively used medium.
|
Table 1 Television Viewing Based on Ratings Data (hours per person per week, 1998)
|
|||
|
Country |
Hours |
Country |
Hours |
|
Australia |
23 |
South Korea |
19 |
|
Austria |
17 |
Mexico |
30 |
|
Belgium |
21 |
Netherlands |
19 |
|
Canada |
22 |
New Zealand |
20 |
|
Czech Rep |
24 |
Norway |
18 |
|
Denmark |
19 |
Poland |
24 |
|
Finland |
18 |
Portugal |
18 |
|
France |
23 |
Spain |
25 |
|
Germany |
22 |
Sweden |
17 |
|
Greece |
26 |
Switzerland |
19 |
|
Hungary |
27 |
Turkey |
27 |
|
Ireland |
23 |
UK |
27 |
|
Italy |
25 |
USA |
28 |
|
Japan |
29 |
|
|
|
Table 2 Media Use In the US Based on Industry Sources (hours per week per person in 1998)
|
|
|
Type of Consumer Media |
Hours |
|
Television |
30.3 |
|
Radio |
20.2 |
|
recorded music |
5.5 |
|
daily newspapers |
3.0 |
|
consumer books |
1.8 |
|
consumer magazines |
1.6 |
|
home commercial video |
1.1 |
|
movies in theatres |
0.3 |
|
home video games |
0.8 |
|
consumer online Internet |
1.4 |
A deeper understanding of the data in Tables 1 and 2 requires additional analysis. In economics a basic analytical move is to trace the implications of a budget constraint. Time budget studies indicate that the average person in the US had about 41 hours of discretionary time in 1995. The total number of hours listed in Table 2 is 65.9. Since Table 2 does not include media usage during work time, a significant amount of usage given in Table 2 must be occurring simultaneously. In the mid-1920s media usage accounted for about 27% of discretionary time. Suppose that in 1998 media usage accounted for 50% of discretionary time (as defined and discussed subsequently, this in fact appears to be the case). Then about 70% of media use given in Table 2 must have been in conjunction with some other discretionary activity.
An analysis of Tables 1 and 2 should also include an analysis of sources and methods used to compile the data. The US Census Bureau published the data in Table 2, which it takes from Veronis, Suhler & Associates’ Communications Industry Forecast. Veronis, Suhler & Associates describes itself as “the leading independent merchant bank solely dedicated to the media, communications and information industries.”[60] Media usage for radio and television are based on commercial rating data, while the other data are based on survey research and consumer purchase data. A wide variety of industry organizations apparently collected the data. No information is provided on survey methodology, response rates, sample sizes, etc.
Veronis, Suhler & Associates’ television viewing data can be traced to Nielson Media Research, which is a firm similar to that which produced the data in Table 1. Nielsen Media Research’s website provides some information about its sample and methodology.[61] It also describes an important use of its data:
Nielsen Media Research ratings are used like currency in the marketplace of advertiser-supported TV. When advertisers want a commercial to reach an audience, they need to place it in TV programs which deliver an audience. The more audience a program delivers, the more the commercial time is worth to advertisers. So the amount charged for advertising is usually a negotiated rate per thousand viewers multiplied by the Nielsen Media Research audience estimate (in thousands).[62]
One critic of Nielsen’s rating data recently stated, “The numbers are paid for largely by the TV networks, stations, and syndicators that sell the airtime…,” and she noted that industry participants are trying to organize a rival rating service.[63] The commercially and politically contentious nature of the service that Nielsen and other rating companies provide is underscored by interest in these statistics at the highest political levels: the US Congress directed investigations of television ratings in 1960-1961 and the US House Commerce Committee held hearings on television ratings in 1963-1964.[64]
For the purposes of the discussion here, comprehensive time budget scholarship provides better evidence on media usage. This scholarship has focused on scientific analysis and remained relatively separate from commercial and political concerns.[65] It takes a comprehensive approach to time usage, ensuring methodological consistency among times allocated to different activities. Time budget methodology recognizes that activities, such as media use, may occur simultaneously, and it addresses the dimension of attention by allowing respondents to associate a “primary” and “secondary” activity with any block of time.
Analyzing time use raises difficult and complex issues. Time budget scholarship has drawn collaboratively upon a wide range of international experience, including Soviet experience dating back to time budget studies carried out in the mid-1920s. Methodological issues have been extensively discussed and documented, and a large amount of data has been placed in the public domain for wide-ranging scrutiny.[66] This approach to investigation and analysis gives time budget scholarship considerable scientific credibility.
Time budget studies show that television as a primary activity uses 20-40% of discretionary time, while radio listening is primarily a secondary activity. Table 3 shows television viewing times based on methodologically consistent studies across twelve countries in 1965.[67] Television viewing times center around 10 hours per week and account for about 30% of discretionary time. US time budget studies show television viewing time increased about 50% from 1965 to 1995.[68] If television viewing times for most countries increased about that amount through 1998, then the ratings-based viewing times in Table 1 are slightly less than twice the times suggested from time budget studies. Radio listening times from time budget studies are more than ten times lower than those from ratings data. Such differences clearly are not measurement errors; time budget studies and ratings data use different attention thresholds in measuring media usage. This difference highlights the importance of considering attention in analyzing media usage.
|
Table 3 Television Viewing Based on Time Studies (hours per week per person as primary activity, 1965)
|
|||
|
Location |
TV Hours |
Discret. Time |
TV % |
|
Bulgaria (Kazanlik) |
6 |
27 |
21% |
|
USSR (Pskov) |
8 |
29 |
28% |
|
Yugoslavia (Kragujevac & Maribor) |
10 |
31 |
31% |
|
Hungary (Gyor) |
10 |
23 |
41% |
|
Peru (Lima) |
10 |
36 |
27% |
|
France (6 cities) |
10 |
29 |
33% |
|
Germany-West (ave. nat.) |
10 |
32 |
32% |
|
German-East |
11 |
27 |
39% |
|
US (ave. national) |
11 |
35 |
31% |
|
Poland (Torun) |
12 |
31 |
39% |
|
Czech Rep (Olomouc) |
12 |
28 |
44% |
|
Belgium (national) |
13 |
35 |
37% |
C. The Boring Story
A large amount of discretionary time is allocated to television in widely varying economic, cultural, and programming environments. While there are differences in television viewing times across countries, on average persons with a television spend a large fraction of their discretionary time watching television. This rough empirical regularity suggests that the attraction of television as a use of time is largely a characteristic of the medium-apparatus itself and very general patterns of human activity.
The contrast between the US and the USSR in the mid-1980s highlights the attraction of television. In the mid-1980s television programming and broadcasting in the USSR was state-owned, state-controlled, and highly centralized.[69] Households had little opportunity to choose between programs. In the USSR in the mid-1980s, 68% of households received two or fewer program channels.[70] In contrast, television in the US in the mid-1980s was privately owned and commercially driven, and television offered viewers many programming choices. In the US in the mid-1980s, 88% of households received five or more over-the-air television signals, while cable systems, with median capacity of over 30 channels, passed 76% of households.[71]
Despite these and other sharp contrasts between the US and the USSR, the television set, the way television was watched, and time spent watching television were remarkably similar. In both the US and the USSR the average viewer sat on a couch and watched a rectangular colored screen about two meters away.[72] In the US in 1985 television viewing times for employed men and women were 14.6 and 12.1 hours per week respectively.[73] In Pskov, USSR in 1986, television viewing times for employed men and women were 14.5 and 10.7 hours per week respectively.[74] One might debate whether television programming in the USSR was better or worse than that in the US. Clearly it was much different. There were also many fewer choices available for viewers, who lived in much differently ordered societies. Rather than speculating about differences in the quality of programming or the quality of the audience, a simple explanation for these facts is that television programming content has not strongly shaped the physical characteristics of viewing or the amount of viewing time.[75]
Growth in discretionary time is closely related to growth in media use. Table 4 shows trends in media use and discretionary time in the US from about 1925 to 1995. The share of discretionary time allocated to media grew from about 25% in 1925 to about 50% in 1995. But the power of the new media on ordinary persons’ time has operated in a particular way. Note that time spent reading newspapers did not change significantly between 1925 and 1965, and discretionary time allocated to non-media activities has changed little between 1925 and 1995.[76] Most of the increase in media usage since 1925, in particular television viewing, is accounted for by increases in discretionary time.[77] Historically, the growth in time spent with television has largely come from growth in discretionary time.[78]
|
Table 4 US Trends in Media Use Based on Time Studies (hours per week as primary activity)
|
|||
|
|
Year |
||
|
Time Use |
c. 1925 |
1965 |
1995 |
|
Reading |
6 |
4 |
3 |
|
Newspapers |
2.5 |
2.5 |
0.8 |
|
Television |
0 |
10 |
16 |
|
Other Media |
1 |
1 |
1 |
|
Total Discret. Time |
26 |
35 |
41 |
|
media time |
7 |
15 |
20 |
|
non-media time |
19 |
20 |
21 |
IV. Macro-Economics of Attention Seeking
Scholars, analysts, and publishers have long been concerned with how to effectively attract and sustain attention. Joseph Pulitzer, a major early US newspaper publisher, put the most important story on the right column of the front page of his newspaper, reversing earlier practice of placing the latest news on the inside pages.[79] Early in the twentieth century scholars carried out laboratory experiments in which small pointers were attached, using minute ivory or plaster cups, to a reader’s cornea in order to track reading behavior.[80] Other scholars in the late 1930s, using a contrasting “soft science” approach, conducted extensive interview-based studies of what parts of newspapers and magazines attracted readers’ attention.[81]
The search for empirical regularities in attracting attention has focused on narrow results. For example, a study of agricultural magazine readers found:
…regular readers showed more interest in covers that put farmers in the foreground, hogs in the background, than the reverse. On the other hand, new readers were better attracted by covers on which hogs loomed larger than farmers.[82]
A study of different advertising media in the US in the early 1920s found that street car advertising was noticed frequently (see Table 5), despite street car advertising spending probably amounted to less than 1% of total advertising spending.[83] More recently, the US Television Bureau of Advertising presented statistics indicating that, among different media advertising, the public perceives television advertising to be by far “most authoritative,” “most exciting,” “most influential,” and “most persuasive.”[84] On the other hand, a large joint research project by the Internet Advertising Bureau and Millward Brown Interactive found that a representative online (web) banner advertisement, as well as a print advertisement, had a larger brand-linked impact on viewers than did a representative television advertisement.[85]
While many studies address particular concerns, the economics of attention in the aggregate, over a long period of time, deserves more consideration. Aggregation can highlight statistical regularities; for example, whether a particular boy will attract the attention of a particular girl may be hard to judge, but that boys will attract girls’ attention is a clear empirical phenomenon. Taking a long-term view helps provide environmental variation to identify behavioral regularities. In particular, development and wide dissemination of radio and television sets has provided many new stages for attracting attention. Understanding how a population has reacted to these changes provides important insight into the economics of attention.
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Table 5 Type of Advertising Most Frequently Noticed (early 1920s; telephone-based survey)
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|
Type of Ad |
San Fransciso, Milwaukee, Chicago |
Los Angelos, Minneapolis |
|||
|
Street cars |
30.6% |
30.5% |
33.3% |
23.9% |
25.7% |
|
Newspapers |
26.9% |
29.1% |
23.2% |
37.9% |
35.3% |
|
Magazines |
12.8% |
16.8% |
17.2% |
13.9% |
19.6% |
|
Posters |
14.4% |
6.8% |
6.7% |
8.1% |
8.1% |
|
Electric signs |
8.9% |
11.6% |
13.8% |
11.5% |
6.8% |
|
Painted bulletins |
3.4% |
2.9% |
3.4% |
3.3% |
3.2% |
|
Signs on buildings |
1.5% |
1.7% |
1.6% |
0.9% |
0.7% |
|
Theater programs |
1.5% |
0.7% |
0.8% |
0.6% |
0.6% |
A. Advertising’s Share of the Economy: Constant Long-Term
While the historical development of radio and television has created new tools for attracting attention, total advertising spending as share of the economy has been constant long-term. Chart 1 shows US advertising spending, including direct mail advertising, as a share of the economy’s overall output (GDP) from 1925 to 1999.[86] The advertising share dropped sharply, and not surprisingly, during World War II, and experienced a dip in the late sixties and early seventies. There is no evidence of a long-term upward trend. As Table 6 shows, overall US advertising spending as a share of GDP was 2.6% in 1925 and 2.4% in 1998. Similarly, UK advertising spending as a share of GDP is roughly horizontal in the long run, with a somewhat greater reduction associated with World War II.[87] UK advertising as a share of GDP was 1.7% in 1924 and in 1998.[88] The advent of radio and television does not appear to have influenced tota