Tuesday, September 6, 2011

Anderson - Three-Party Market

In his article "Free 101," Anderson confronts the idea of why/how consumers are able to be provided free content or materials and details how, in almost every format, money is changing hands.

The basic set-up of the three-party market includes, of course, three distinct players: the producer, the advertiser, and the consumer. According to the diagram on page 25, money switches hands twice. The producer develops the content, sells ad space to the advertiser (first exchange of money) and provides the content broken up by advertisements (commercials for tv and radio) to the consumer for "free." The assumption is that the consumers will purchase the goods or services that have been advertised (second exchange of money). And as the cycle continues, the ad space can become more or less valuable to the advertisers depending on the number of viewers.

It's a pretty logical system when you think about how the media works. There must be revenue coming to stations that broadcast over the air because of the capitalistic society in which we live. As advertising comes into the picture, the pieces fall into place. Companies pay the producer to "publicize" their product. And at the root of that is the idea that advertisements help the company to sell its product. So in essence, we can see the over-the-air channels for free, because the money is changing hands behind the scene.

To look at who gets the best deal, I first think it's important to see if any of components are being exploited. On the surface, I basically think that each party is gaining something from the deal, whether it be entertainment for the viewers, profit for the producers, or exposure that leads to profit for the advertiser. However, when I look at it, the audience is being subconsciously subjected to the advertisements which could be a form of exploitation. But maybe that's the price we pay for something "free."

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