Political Economy of the Media
Summary and Keywords
Political economy of the media includes several domains including journalism, broadcasting, advertising, and information and communication technology. A political economy approach analyzes the power relationships between politics, mediation, and economics. First, there is a need to identify the intellectual history of the field, focusing on the establishment and growth of the political economy of media as an academic field. Second is the discussion of the epistemology of the field by emphasizing several major characteristics that differentiate it from other approaches within media and communication research. Third, there needs an understanding of the regulations affecting information and communication technologies (ICTs) and/or the digital media-driven communication environment, especially charting the beginnings of political economy studies of media within the culture industry. In particular, what are the ways political economists develop and use political economy in digital media and the new media milieu driven by platform technologies in the three new areas of digital platforms, big data, and digital labor. These areas are crucial for analysis not only because they are intricately connected, but also because they have become massive, major parts of modern capitalism.
Emergence of Political Economy
Political economy is one of the major perspectives in media studies. The political economy of the media originated in the 1920. Since then, the political economy of media has guided the works of media researchers around the world within communication and media research (Fuchs & Mosco, 2016a; Garnham, 2000; McChesney, 2008; Mosco, 2009; H. Schiller, 1992; Wasko, Murdock, & Sousa, 2011; Winseck & Jin, 2011). While there are several significant fields and subjects, political economy in the realm of media and culture looks especially at the production, distribution, and consumption of media resources, with a primary focus on ownership and power relations. Thus, it looks at concentration of media industries, trends of convergence, structural inequities of access, and labor processes that are exploitative. Inspired by Marx’s ideas of looking at capitalism as an unjust system, this approach points to media biases generated out of corporate ownership and control and how they affect the collective consciousness of people around the world. Since Marx shared this ethical concern and argued that it could only be eliminated by abolishing capitalism, the political economy of media was typically seen as the exclusive preserve of the political left, known as Marxism, because of its critical stance toward the media market (McChesney, 2008; Winseck, 2016).
What is significant is that when political economists conduct their research on communication and media, their works are mostly associated with their critique of modern capitalism. Due in large part to the criticism of mass production, monopolistic ownership, and capital gains to a handful of mega media giants, from the outset, “theoretical and empirical questions about how to organize economic life and balance markets against state intervention were inextricably bound up with questions about the constitution of the good society” (Wasko et al., 2011, p. 1). This crucial tradition has had a major impact on the political economy of culture and media precisely because “the media industries play a central role in modern societies, as industries in their own right and as the major site of the representations and arenas of debate through which the overall system is imagined and argued over” (Wasko et al., 2011, p. 2). Of course, several media scholars have criticized political economy of the media, assuming this to be reductionist, too economistic, and simplistic (Wasko & Meehan, 2013).
This article addresses the political economy of media as one of the most significant approaches in media studies. Political economy of the media includes several domains including journalism, broadcasting, advertising, and information and communication technology. A political economy approach analyzes the power relationships between politics, mediation, and economics. This article first identifies the intellectual history of the field, focusing on the establishment and growth of the political economy of media as an academic field. Second, it discusses the epistemology of the field by emphasizing several major characteristics that differentiate it from other approaches within media and communication research. Third, the article charts the beginnings of political economy studies of media with the culture industry and its regulation to an understanding of information and communication technologies (ICTs) and/or the digital media-driven communication environment. In particular, it discusses the ways in which media scholars develop and use political economy in digital media and the new media milieu driven by platform technologies, focusing on three new areas that political economists need to understand further, including digital platforms, big data, and digital labor. These areas are crucial for analysis because they are not only intricately connected but also have become the major parts of modern capitalism.
Literature Review: Political Economy of Communication
From the mid-20th century when traditional media, such as newspapers, broadcasting, and film influenced people’s lives, to our contemporary society in which ICTs and/or digital media tremendously influence our daily activities, media scholars have conducted their research on different subjects and themes, including media content, media policy, media structure, and audiences. Among these, the political economic approach and method is appropriate for media studies in many cases mainly because the political economy of media has focused on the structural and institutional changes within the broader context of society. As McChesney points out, “political economists of media do not believe the existing media system is natural or inevitable to change. They believe the media system is the result of policies made in the public’s name but often without the public’s informed consent. Political economists of media assume the media system is an important factor in understanding how societies function, but they do not assume it is the only or most importable variable” (McChesney, 2008, p. 12).
Above all, the rise of the communication industries in the 20th and 21st centuries has led business to take a close look at the economics of communications. The critical political economy of communication examines the nature of the relationship between media and communication systems and the broader social structure of society. In this regard, Dan Schiller argues that studying communication is not only to be concerned with the contributions of a restricted set of media: “The potential of communication study, in short, has converged directly and at many points with analysis and critique of existing society across its span” (D. Schiller, 1996, p. vii). Robert McChesney (2000) also emphasizes that the scholarly study of the political economy of communication entails two main dimensions. First, it addresses the nature of the relationship between media and communication systems on the one hand and the broader social structure of society. In other words, it examines the ways in which media and communication systems and content reinforce, challenge, and influence existing class and social relations. It does this with a special interest in how economic factors influence politics and social relations. Second, the political economy of media looks specifically at how ownership, support mechanisms (including advertising), and media and/or cultural policies influence media behavior and content. This line of inquiry emphasizes structural factors and the labor process in the production, distribution, and consumption of media and culture. The political economy of media cannot provide a comprehensive explanation of all media activity, but it can explain certain issues extremely well, and it provides a necessary context for most other research questions in media (McChesney, 2000, p. 111).
Meanwhile, Garnham (2000, p. 4) claims that the structures and processes of media are deeply embedded within the wider structures and processes of a given social formation. “Who can say what, in what form, to whom, for what purposes, and with what effect” will be in part determined by and in part determine the structure of economic, political, and cultural power in a society. Vincent Mosco (2009, p. 24) especially defines the political economy of media as the study of the social relations that “mutually constitute the production, distribution, and consumption of communication resources,” such as newspapers, videos, films, and audiences.
What these scholars commonly argue is that the media are the leading sector of the capitalist economy as they became a central part in an economic system with the growth of the media market and the development of communication technologies. As Winseck aptly puts it, “political economies of media take it as axiomatic that the media must be studied in relation to their place within the broader economic and social context. This context is undeniably one where capitalist economies have expanded greatly” over the past several decades (2011, p. 4). For them, political economy has been useful to criticize a government-controlled media system while the political economy of communication is to analyze and criticize the corporate communications system and the relationship between governments and media in a corporate capitalist society.
Furthermore, the political economy of media approach considers media and communication to be parts of the whole economic system, even becoming among the main sectors with the development of information and communication technologies. Of course, understanding the changing media and communication industries is not brought about by examining only the communication industry itself, but by also examining the communication industry as a core business of highly capitalized corporations; therefore, it is critical to investigate the political economic development of the media industry and its ongoing re-configuration (Jin, 2011).
However, over the past two decades, there have been some criticisms from diverse perspectives on the political economy of media. These critics have focused on the presumable lack of methodological rigors and conceptual changes since the early 1990s. In other words, critical political economy thesis has come under increasing criticism from various aspects. Several media scholars (Curran & Park, 2000; Jung, 2011; Langdale, 1997; Straubhaar, 1991) argued that it was no longer possible to sustain the notion of Western media domination, which had been a major position of political economy under the contemporary global media milieu, which is characterized by a plurality of players and cultural flows. What they commonly argued was that there were a few emerging cultural industries in the world, including Brazil, Mexico, India, and Korea. Television program producers in Mexico and Brazil (e.g., Telenovela) have created programs for Latin America, and producers in Korea have made programs for the East Asian cultural market (Jung, 2011; Sinclair, Jacka, & Cunningham, 1996). With the example of Televisa in Mexico and TV Globo in Brazil, Straubhaar (1991) emphasizes that national cultures can defend their ways of life and, in some respects, even share their images with the rest of the world. Meanwhile, Curran and Park (2000) developed de-Westernization theory to make their critiques on critical political economy by emphasizing the increasing role of non-Western countries in the global cultural and media markets. Likewise, these media scholars argued that the term dominance itself was vague, as political economists did not explain the range of dominance well. Of course, their major criticism was the lack of methodologies to measure the degree of dominance of one particular nation-state of region over other countries.
However, several political economists like Christian Fuchs and Dwayne Winseck have continued to intensify their analyses of media and culture mainly because the media industries and content are becoming bigger and more significant in the 21st century. While admitting these criticisms of political economy, Jonathan Hardy (2014) argues especially that critics—classical free-market economists and cultural studies scholars—often reduce and dismiss such work done by critical political economists without understanding the diversity and self-criticism of political economy; therefore, he clearly states the significance of the further development of critical political economy in the digital media era.
Intellectual History of the Political Economy of Media
While there were several precedent developments in the field of political economy, the Frankfurt School is mainly identified as the starting point of our contemporary understanding of political economy. In other words, critical political economy originated with the Institute of Social Research, established at the University of Frankfurt in 1923. Upon the appointment of Max Horkheimer as director in 1930, the Institute turned from its initially hard-nosed brand of Marxism; rather than presuming strict economic determinism, it began taking seriously “the claims of culture and consciousness” (Eagleton, 2003, p. 71). This transformation entailed “shifting the focus from society’s socio-economic base to its cultural superstructure” (Jay, 1992, p. 21). After 1930, critical theorists at the Frankfurt School eschewed the hard-economic determinism characterizing the early Frankfurt School. Several key Frankfurt theoreticians denied that knowledge can ever be value-free; a position distinguishing them again from conservative political economists. They especially maintained that culture is key to understanding power relations in our contemporary society, and hence critical theorists addressed mass media, thereby inaugurating critical media studies. Much later, critical political economy and cultural studies were separated (Babe, 2009, p. 16).
Most of all, Theodor W. Adorno, who was one of the key figures of the Frankfurt School, deeply influenced later critical political economists. Although several media scholars seldom identified him as an inaugurator of critical political economy of media, some admit him as a critical theorist (see Gunster, 2004). His most renowned essay on the political economy of media, “‘The Culture Industry: Enlightenment as Mass Deception’ in a book (Dialectic of Enlightenment, coauthored with Max Horkheimer) was dedicated to critiquing instrumental reason; therefore it is indisputably a factor that Adorno invented the analytical construct, the culture industry, and did so to help describe and investigate the consequences of mass producing culture for purposes of profit” (Babe, 2009, pp. 18–19). Babe (2009, p. 19) argues that “Adorno inaugurated political economy studies of media.” As Foster and McChesney (2013) point out, “central to the Frankfurt School’s concerns was the relationship of mass culture to politics and social change,” and in this regard, the Frankfurt School attempted to synthesize Marxist theories of political economy with Freudian psychoanalytical perspectives (Foster & McChesney, 2013). Adorno viewed the political economy of culture through multiple lenses. For example, his knowledge of music contributed to the case study of a cultural form undergoing massive changes due to its industrialization (Morgan, 2013). Regardless of some critiques, the Frankfurt School theorists, in particular Adorno, can be seen as “early exemplars of a critical-institutional perspective on cultural production, media, and communication” (Morgan, 2013, p. 46).
Against this backdrop, several political economists in the field of communication and media developed their theoretical and methodological frameworks in both Europe and North America. Several Frankfurt School members, including Paul Baran, fleeing, to the United States in the 1920 and 1930s especially, became a key historical juncture to academically connect Europe and North America. In Europe, political economists, such as Kaarle Nordenstreng and Tapio Varis (1974), Peter Golding and Graham Murdock (1991), Nicholas Garnham (2000), and Christian Fuchs and Vincent Mosco (2016a, 2016b) have greatly contributed to the advancement of the political economy in the global context, which has also substantially influenced media and communication studies.
The Legacy of Robert A. Brady in North American Political Economy of the Media
Unlike Europe, in North America, the political economy of media was profoundly influenced by the economist Robert A. Brady, so this part focuses on the genealogy of political economy in the North American context. Brady obtained a PhD in economics from Columbia University in 1929, when Frankfurt scholars fled Germany and began to teach and research at the same school, and he joined the University of California at Berkeley in 1929 until 1963. He developed the ideas for the political economy of media as the first generation of political economy.
As an economist, his essential work is “about power and the organization of power around the logic of technology as operated under capitalism” (Lynd, 1943, p. viii), yielding insights and understanding of modern society’s careening path between enhancing or destroying “life and culture.” In his several works, including Business as a System of Power (1943), Brady traced the rise of bureaucratic centralism in Germany, France, Italy, Japan, and the United States, and the emergence of an authoritarian model of economic growth and development. Brady (1952) focused on consumer interests and economic planning in government and, as a result, had a wealth of experience out of which to formulate the thesis of the citizen’s stake in price control (Brady, 1952). Brady criticized that “the process of expanding business organization and business-government interpenetration has been greatly speeded up. . . . For example, fascist Italy has greatly expanded the power and influence of the corporate system” (1943, pp. 295–296) As Dan Schiller clearly puts it:
Throughout the 1930s and 1940s, within the broader political context of U.S. anti-fascism, Brady developed a potent analysis of emerging authoritarian economic and cultural practices. This framework was substantially carried over, and further developed, by the two pioneers of the political economy approach, Dallas W. Smythe and Herbert I. Schiller. Before World War II, electronic media and telecommunications systems emerged in favored regions and joined the urban press and the film industry as major enterprises embodying new forms of economic, political, and cultural practice modes.
(D. Schiller, 1999, p. 89)
Brady later asked several fundamental questions that can be applied in the realm of media and communication, differentiating himself from other conservative economists. He did not formally work within the established edifice of Marxist theory but instead consistently stressed the socioeconomic power of business. He emphasized that the centralizing tendencies came to pervade business, not only in its internal organization but also in its relations with society at large (Brady, 1943). Brady found that a centralized new system dominated instead of competitive interactions among many individual economic units as in the laissez faire era. The vital question was whether the resultant webs of control could be made to harmonize with democracy or whether centralized business power would take the totalitarian road (D. Schiller, 1999, pp. 89–90). Brady argued that “in the struggle for control over business power, small business is everywhere losing out” (1943, p. 4).
He was also interested in identifying a few key issues, such as the forms of ownership and control that typified this thriving communications sector and policies that determined the societal distribution of goods and services, as well as the ways in which the media’s emerging systems of decision making interlocked with those that governed other economic, political, and cultural institutions. These were questions that a radical political economic of communication arising between 1950 and 1970 in the United States (D. Schiller, 1999, pp. 89–90). Brady had a profound impact on the conceptual framework on which the postwar political economy approach was built.
Most of all, the plausible candidate for point of origin of critical political economy of media is the University of Illinois at Urbana-Champaign (UIUC), where, in 1948–1949, Dallas W. Smythe began teaching the first course in the United States on the political economy of communication. Dallas Smythe, who knew Brady at UC Berkeley, worked together with Brady as colleagues during the early 1960s at UIUC, with Thomas Guback and George Gerbner; and Dallas Smythe and Herbert Schiller integrated Brady’s ideas into a political economy of communications. Smythe’s book on the political economy of media, Dependency Road, appeared in 1981, and several of the major constructs developed in Dependency Road—the consciousness industry, the commodification of culture, audience as commodity, the consumption of entertainment as extended work time, conflicts between individual psychological needs and requirements of the socio-economic system—were anticipated in the work of both Horkheimer and Adorno in the 1930s and 1940s (Babe, 2009, p. 23). In fact, at UIUC, Smythe was joined by Herbert Schiller, and an American tradition in critical political economy of media was born (Babe, 2009, p. 50).
Smythe, a Canadian, served as the first chief economist at the U.S. Federal Communications Commission and went on to introduce the first courses in the United States on the political economy of communications (1948–1949) at UIUC (Maxwell, 2003). Smythe emphasized the significance of media and communication as social processes and the need to consider media and communication activities within larger political and economic contexts, which has become one of the most important norms in the field of political economy of the media. In Illuminating the Blindspots (Wasko, 1993), a collection of articles by political economists dedicated to Smythe, his “teaching and theoretical work in political economy provided a foundation for one of the major critical approaches to the study of communication.” Smythe’s emphasis on the industrial uses of the radio spectrum also prepared the way for later research that would emphasize the emergent significance of communications as a pivot of late capitalist development. Finally, Smythe’s major conclusion echoed Brady’s guiding tenet that democratic principles somehow had to be squared with modern industry (Schiller, 1999, p. 98).
Herbert Schiller, another early key figure in political economy of the media, emphasized the significance of Brady’s writings for his own outlook. Raising the communications sector to a new analytical prominence, Schiller’s depiction of the web of connections that constituted the communications military-industrial coalition still lay within the formal orbit traced by Brady. The contemporary character and workings of this antidemocratic power nexus was the chief subject of Schiller’s book (1992) (D. Schiller, 1999, pp. 98–99). The coalescence of electronics and economics detected by Schiller toward recognition of the communications industries as pivots of an informationalized capitalist accumulation process, directly recalled the combination of spirit and structure that Brady had seen 30 years earlier as distinctive of an encroaching fascism (Schiller, 1999, p. 99). Where Brady’s interest was national, Herbert Schiller’s main focus was international, emphasizing the asymmetrical power relations between Western and non-Western societies. H. Schiller argued that “the American interest in overseas communications extends from direct ownership of broadcast facilities to equipment sales, management service contracts, and program exports” (1992, p. 125). As such, early political economists were indebted to Brady for their own research interests and critical understanding of media, which built the tradition of political economy of the media in North America.
Epistemology of Political Economy of Media
The philosophical foundation of the political economy of media can be understood by advancing basic epistemological and ontological principles. “An epistemology is an approach to understanding how we know things. The political economy of communication is grounded in a realist, inclusive, constitutive, and critical epistemology” (Mosco, 2009, p. 128). The political economy of media is realist in that it recognizes the reality of both concepts and social practices, thereby distinguishing itself from diographic approaches that argue for the reality of ideas alone and nomothetic approaches, which claim that ideas are only labels for the singular reality of human action. Following from this, political economy is inclusive in that it rejects essentialism, which would reduce all social practices to a single political economic explanation, in favor of an approach that views concepts as entry or starting points into a diverse social field (Resnick & Wolff, 2006, cited in Mosco, 2009, p. 10). As Mosco (2009, p. 10) also argued, “the epistemology is constitutive in that it recognizes the limits of causal determination, including the assumption that units of social analysis interact as fully formed wholes and in a linear fashion. Rather, it approaches social life as a set of mutually constitutive processes, acting on one another in various stages of formation, and with a direction and impact that can only be comprehended in specific research” (Mosco, 2009, p. 10);
The approach is critical because it sees knowledge as the product of comparisons between research findings and other bodies of knowledge as well as with social values. For example, this political economy is critical in that it regularly situates the knowledge acquired in research against alternative bodies of knowledge in, for example, neoclassical economics, pluralist political science, and cultural studies.
(Mosco, 2009, pp. 10–11)
More specifically, several key political economists of the media claim that political economy has four major elements that differentiate it from other academic fields: history, social totality, moral philosophy, and social praxis. First, political economy has given priority to understanding “social change and historical transformation.” For political economists like Karl Marx, “it meant examining the dynamic forces in capitalism responsible for its growth and change. The object was to identify both cyclical patterns of short-term expansion and contraction as well as long-term transformative patterns that signal fundamental change in the system” (Mosco, 2009, p. 26).
Second, political economy has sustained that “the discipline should be firmly rooted in an analysis of the wider social totality. This means that political economy spans the range of problems [in the 2010s] tend to be situated in the compartments of several academic disciplines where those with an interest in social class go to sociology, those interested in government to political science, in the market to economics, and so on. Political economy has been taken up with the mutual constitution and multiple determination of social life” (Mosco, 2009, p. 28). Instead of treating the economy as a specialist and bounded domain, political economy focuses on “the relations between economic practices and social and political organization” (Wasko, Murdock, & Sousa, 2011, p. 2). In fact, political economists see things in totality. In other words, political economists prefer a holistic approach because the economy is believed to interrelate with other spheres (Golding & Murdock, 1991). Mosco (2009) examined the social whole that makes up the economic, political, social, and cultural areas of life.
Third, political economy emphasizes ethical and normative questions (McCheseny, 1999; Mosco, 2009; Winseck & Jin, 2011). Mosco (2009) argues that political economists are committed to moral philosophy. They explicitly write about basic moral questions such as justice, equity, fairness, and public good (Golding & Murdock, 1991; Wasko et al., 2011). “Moral philosophy refers to social values and to conceptions of appropriate social practices. The goal of this particular form of analysis is to clarify and make explicit the moral positions of economic and political economic perspectives, particularly because moral viewpoints are often masked in these perspectives” (Mosco, 2009, p. 32). The moral, cultural, or spiritual domain is itself the central subject of analysis (Mosco, 2009, p. 33).
Fourth, political economists believe in social praxis: social transformation relies on unifying thinking and doing. Research is seen as a form of social intervention, an act of activism. Intellectual life is not something carried out in an ivory tower, but a means to effect social change. Praxis is “an idea with deep roots in the history of philosophy and one which has found several paths to communication studies, including Marxian theory, the Frankfurt School of critical thought and the action-research tradition best embodied in sociology. Most generally, praxis refers to human activity and specifically to the free and creative activity by which people produce and change the world, including changing themselves” (Mosco, 2009, p. 34). Mosco discusses it furthermore:
Praxis is important to both the epistemological and substantive premises of political economy. In brief, praxis guides a theory of knowledge to view knowing as the ongoing product of theory and practice. It rejects as partial those epistemologies which conclude that truth can only result from contemplation. Knowledge requires more than a process of honing and purifying conceptual thought. Rather it grows out of the mutual constitution of conception and execution.
(Mosco, 2009, p. 35)
Most of all, political economists and media economists may examine the same market features (such as market structures, firm behaviors, competition, and consumer behaviors), but the fundamental assumptions and motivations are different (Wasko et al., 2011, p. 3).
These foundations are crucial for political economy because they depart from the traditional approach to political economy which concentrates on such structures as the business firm and government, by placing social processes and social relations in the foreground (Mosco, 2009, pp. 10–11). Political economy of the media is more philosophical, historical, and still practical. Therefore, comprehending the epistemology of political economy will strengthen not only people’s ideological understanding of media but also their practices as scholars, policy makers, and workers in the realm of media.
Contemporary Trends in the Political Economies of the Media
There are many significant areas that political economy needs to play a key role in research and practice. In fact, political economy of the media evolves in relation to developments in its objects of analysis—media institutions, technologies, markets, and society—and to changes in scholarship. However, as Winseck (2011, p. 13) points out, “the fact that so much is changing around us means that we must be open to theoretical revision more than ever.” There is a tendency to see the political economies of media as constituting a single field, from neoclassical political economy to the cultural industries school (Winseck, 2011).
Previously, political economists focused on either traditional media like broadcasting and newspapers or new media like the Internet as their main subjects and topics when they attempted to understand the power relations in the broader society. While this tradition continued into the 2010s, political economy now needs to be accustomed to a shifting media milieu that includes new digital media, both social media and platform technologies. As Jonathan Hardy (2014) and Christian Fuchs (2014) argue, it is critical to understand contemporary political economy in tandem with digital technologies, including social media, platform technologies, and mobile media. These two critical scholars based in the United Kingdom rejuvenated audience-commodity theory developed by Dallas Smythe in their analysis of social media.
Regardless of these several significant core areas, this final section emphasizes that political economy of the media in the early 21st century has to expand its scope and areas to newly advanced digital media technologies, such as social media and platform technologies, mainly because these have rapidly changed and influenced the media and communication industries. These areas are growing on a large scale, and they have not only replaced traditional media functions, they have also developed a new modern capitalism by fundamentally changing major players and directions in the global markets, which requires consideration of new perspectives.
In addition, big data has become one of the most significant parts of the information and communication society. Big data “is used to describe a set of practices involving the collection, processing and analysis of large data sets. The term enables members of the general public to engage in debates, albeit often uninformed, on the ongoing transformation of our knowledge economy, but it disguises more than it reveals despite its vagueness. The term captures something of significance about contemporary Western societies, where economic value is generated through the processing of information and the monetization of knowledge” (Schäfer & van Es, 2017, p. 13). Therefore, political economy of the media in the 2010s must understand the complex connectivity among digital platform owners, big data produced by user activities, and the customers as users mainly because the capitalization process in digital platforms focuses on the immaterial user activities instead of material trade in the form of CDs, DVDs, and programs. Political economists must pay attention to these new fields of study as they are not only providing new looks toward our understanding of new media but also developing new capitalism based on monopolistic concentration of ownership and therefore capital accumulation in their hands.
Digital platforms, including social network sites (e.g., Facebook, YouTube, and Twitter), search engines (e.g., Google, Bing, Baidu, and Naver), and smartphone and relevant applications (e.g., free mobile messengers like WeChat, WhatsApp, KakaoTalk, and Line), as well as online streaming services (e.g., Netflix) have greatly changed both the media industries and people’s daily lives. Until the early 2000s, there were no special digital platforms; however, as these digital platforms started to come online in the mid-2000s, they immediately became major players in that they acted as new media. From elementary school students to businessmen, smartphones have become necessary tools, and the emergence of SNSs (simple notification services) has been widely used for organizing civic movements. Global youth also rapidly access social media like Twitter, Facebook, Instagram, and Snapchat as their new primary communication platforms. With the rise of digital platforms, people’s understanding and use of digital media have become more important features of the contemporary society.
Most of all, digital platforms have gained significance for the digital economy in the networked 21st century. Digital platforms are some of the most recent tools in garnering capital gains for the developers and owners of these platform technologies. The speed of growth has been unprecedented as well. For example, Facebook increased its revenues, from only $0.9 billion in 2009 to $17.9 billion in 2015. As a reflection of these new media environments, the contemporary political economy of media starts to focus on digital platforms, which are critical for people’s daily activities.
Several non-Western countries, including China and Korea, have developed unique digital platforms to compete with the information dominance of Western countries. However, these non-Western countries have not constructed a balanced global order, because their own platforms are mainly used in their own countries, not the global markets. As with the early Internet era, people believe that digital platforms provide an egalitarian arrangement, promising to support those who stand upon them (Gillespie, 2014). However, global flows of new media technology have been asymmetrical, and thus the emergence of digital platforms asks us to identify whether asymmetrical relationships between a few developed and many developing countries continue. In fact, characterized in part by unequal technological exchanges, the current state of platform development implies a technological domination of U.S.-based platforms that have greatly influenced the majority of countries (Jin, 2015).
For example, Netflix, the world’s leading Internet television network with over 109 million members in over 190 countries as of December 2017, has become an exemplary digital platform. The company’s streaming-video service went live in 130 new countries in December 2016, and it has continued to increase its global service (Rubin, 2016; Netflix, 2017). “International expansion has become a vital part of Netflix’s growth strategy, since growth in the U.S., its biggest market, has been slowing. The company’s service has been a hit with consumers around the world, thanks to its strategy of coming to new countries with its growing menu of popular original content for a low monthly price.” Netflix helped bring about a big shift in how and when we watch videos, resulting in more binge-watching of series and more people leaving their cable subscriptions for streaming services. Hoping to become a bigger fixture of your TV, Netflix is ramping up its list of feature-length films and growing its roster of original TV shows, such as its popular political thriller House of Cards (Rubin, 2016). In fact, the next decade will be more amazing and tumultuous as Internet TV supplants terrestrial TV (AFP, 2017). “Netflix builds on models of individualized viewing practices and self-scheduling of TV” (Jenner, 2016, p. 267).
Significantly, in tandem with the growth of online streaming services, television continues to lose its function as a public sphere. As streaming service users are mainly seeking television programs, including dramas and entertainment shows, and films, the role of television news, which has been one of the most significant functions for democracy, has gradually disappeared. This implies that digital platforms are shifting not only the industrial structures and business models, but also the role of mass media, which must be the major concerns for political economists.
In addition, the growth of U.S.-based digital platforms implies that the United States continues to control the global markets as the number of global users is soaring. The asymmetrical relationship in platform technologies between the United States and many developing countries has intensified. People as platform users witness the forms of platform disparities because these digital platforms concentrate capital into the hands of U.S. platform owners, resulting in the expansion of the global divide (Jin, 2015). Critically interpreting the emergence of digital platforms from political economy has become significant. In particular, as the digital platform industries are getting transnationalized, understanding the power relationships between platform owners, who are mainly in the Western countries, and platform users who are mostly in non-Western countries can be carefully analyzed to determine the nature of modern capitalism driven by digital platforms.
The growth of digital platforms continues the process of building a global digital capitalism by concentrating production, distribution, and storage in a handful of mega corporations, and, in some cases, governments, that manage labor and consumption through the systems that digital platforms enable. In particular, it is critical to understand the relationship between digital platforms and big data, referring to “the movements to analyze the increasingly vast amounts of information stored in multiple locations, but mainly online and primarily in the cloud” (Mosco, 2014, p. 177). Big data is increasingly used to analyze, model, and forecast human behavior (boyd & Crawford, 2011). Several search engines, including Google, Yahoo, and Bing, apply algorithms to databases to deliver search results. Facebook’s Graph Search takes this to a new level by providing search results tailored to the record of subjective choices such as requests and “likes” (Mosco, 2014, pp. 182–183).
Due to its increasing significance, big data has rapidly become one of the most significant subjects in conjunction with digital platforms. Although other areas, like finance and even sports (e.g., the movie Moneyball), utilize big data, media studies has also paid attention to big data from several perspectives. Among these, political economy certainly extends its emphasis on big data as several platform corporations appropriate big data accumulated by user activities. Several political economists have critically analyzed big data due to its significant role in the information society.
Significantly, in October 2016, Dan Schiller participated in an interview at Chinese Social Science Report and expressed his concerns on big data by expressing the dilemma of humankind’s simultaneous deficit and surplus of information. He emphasized that big data refers “not just to the scale or volume and diversity of data that are now being created but also to the need to make sense of these data through data science, through network analysis, and through other specialized disciplines that are trying to grapple with this challenge. One problem is that this often accords a new priority to an old emphasis, which is empiricist. Anything can be data, so let’s just look for patterns. We don’t care if they amount to anything meaningful. Let’s just see what seems to be related to what. There is, however, a deeper issue. An instrumental purpose is typically encoded in the accumulation and subsequent analysis of Big Data” (Jianfeng, 2017). What he criticized was that we had a problem “because we need to know whose instrumental purpose it is and what goals it serves.” In other words, “big data is organized around the instrumental purpose of profit maximization, which is not only exploitative but also often carries what economists call externalities. It may have all kinds of other effects beyond the immediate goal of profit-making, but nobody pays for these—except the rest of us” (Jianfeng, 2017). Schiller continued:
Big data thus poses profound questions. Because on the one hand, it gives new power to the units of big capital that are learning to exploit it for profit-making, while, on the other hand, it takes away power from everybody else, often without anyone knowing what, specifically, is happening. So, we have a really big problem of balance—a power disparity—and, looking ahead, of a need for political creativity.
Big data tends to neglect context and history. That is partly because big data examines human behavior as a set of discrete events or data points; however, “human decisions are not discrete events. They are embedded in sequences and contexts. The human brain has evolved to account for this reality” (see Mosco, 2014 for citation of Brooks, 2013). “The fear is that the seemingly magical combination of large data sets and massive computational power will lead people to replace narrative with correlation and, more importantly, to ask only or mainly those questions that big data can handle. In the real world of history, if not in the metaphorical one of needles and haystacks, context counts. It is not just the place where truth or solutions hide, but context actively gives shape and substance to truth” (Mosco, 2014, p. 201).
As boyd and Crawford (2011) point out, the major problem is the big data divide between the Big Data rich (companies and universities that can generate or purchase and store large datasets) and the Big Data poor (those excluded from access to the data, expertise, and processing power), which highlights the fact that a relatively small group with defined interests threatens to control the big data. However, the divide at issue is not simply between database “haves” and “have-nots”; “it is also about asymmetric sorting processes and different ways of thinking about how data relate to knowledge and its application” (Andrejevic, 2014, p. 1676). What is significant in tandem with big data is algorithms that play “an increasingly important role in selecting what information is considered most relevant to us, a crucial feature of our participation in public life. Search engines help us navigate massive databases of information, or the entire web” (Gillespie, 2014, p. 167). The problem is that big corporations and governments manipulate our preferences against others to secure their monetary values.
The second issue relevant to big data is privacy. In our digital society, where lots of information is stored in big data, an analysis of the databases can provide the opportunities to solve big problems of society. The problem is that “as the database contains the personal information, it is vulnerable to provide the direct access to researchers and analysts. Since in this case, the privacy of individuals is leaked, it can cause threat and it is also illegal” (Jain, Gyanchandani, & Khare, 2016, p. 3).
“The Apple/FBI showdown was the recent installment in an unfolding legal battle over privacy protection. Beginning with the Snowden revelations, it is widely thought that the major threat to our privacy in the digital era comes from the power of Big Government to access personal information stored in devices and websites. As this debate rages, we are losing sight of the other enterprise of personal data collection—known as ‘Big Data’—which is subject to less popular interest, but is far grander in scope, and it involves higher stakes and numerous ongoing legal battles” (Ben-Shahar, 2016). Big Data business is indeed big. As is well-known, “the collection of personal data by websites, mobile apps, retailers, insurance companies—any commercial entity that receives information from people. The sum of our activities—where we browse, shop, or drive; what we read, eat, or own; who we chat with, like, or love—is collected, neatly organized by algorithms, smartly analyzed by sophisticated software, and used or sold primarily for marketing purposes.” This is certainly a threat to our privacy. Unluckily, “people seem indifferent to Big Data collection. They share personal information on web platforms, knowing full well that it is collected by websites. Even more striking is how little people value potential protections” (Ben-Shahar, 2016).
Big data is especially relevant to the notion of digital labor, because platform users create data available for platform designers and owners, who garner capital through big data produced by the users. In other words, big data has been a part of a triangular circuit alongside digital platforms and digital labor. As digital platforms utilize big data gathered from platform users who contribute their time and energy, as well as creativity as producers, big data connect between platform technologies, on the one hand, and platform users on the other. Therefore, it is critical to analyze big data not only as a single area but also as part of the new media environment to make an endless chain connection from critical political economy.
The last, but not least, area that political economy needs to focus on in the platform era is digital labor. Compared to traditional media, digital platforms have utilized user activities, not only as customers but also as producers of content for these platforms, which becomes a new revenue source for platform owners. Platform owners have developed their strategies to appropriate user activities in order to transform users’ daily activities into monetary revenue resources (Jin, 2015). As Mosco aptly puts it:
The labor of communication is being commodified as wage labor has grown in significance throughout the media workplace. In order to cut the labor bill and expand revenue, managers replaced mechanical with electronic systems to eliminate thousands of jobs in printing industry as electronic typesetting did away with the jobs of linotype operators. Today’s digital systems allow companies to expand this process. Print reporters increasingly serve in the combined roles of editor and page producers. They not only report on a story, they also put it into a form for transmission to the printed, and increasingly, electronic page.
(Mosco, 2004, pp. 158–159)
For example, Facebook has continued to benefit from user activities. Facebook adds thousands of new user registrations globally every day. The number of Facebook users has grown from 585 million in December 2010 to 2.38 billion in December 2016, including 1.23 billion daily active users on average, and 1.15 billion mobile daily active users on average for December 2016. Approximately 85.2% of Facebook’s daily active users are outside the United States and Canada (Facebook, 2017). Facebook has changed our understanding of user activities. Facebook users constitute a meaningful economic entity, and therefore, researchers argue that user participation can be measured and sold to advertisers (Jin & Feenberg, 2015). In this regard, political economy needs to adapt audience commodity theory to user commodity. As Smythe argued, “several media research corporations and media corporations themselves as well as AC Nielsen quantified audience participation in order to assure that advertisers get what they pay for when they buy audiences” (Smythe, 1981, pp. 4–5).
Several theorists argue that traditional conceptions of audience participation cannot be applied to social media due to several reasons. Among these, Arvidsson and Colleoni (2012, p. 137) claim, “people who create value for Facebook and other social media platforms do so voluntarily without any kind of compulsion whatsoever. People indeed feel more than compensated by the use value and gratification they derive from these activities.” Jenkins, Ford, and Green (2013, pp. 58–60) also claim that social media users work for values, such as fun, excitement, and professional accomplishments rather than money rewards. Therefore, they argue for such digital labor “as engaged rather than exploited” (60). Meanwhile, Hardt and Negri (2000) argue, furthermore, that this immaterial labor is immeasurable. What they commonly argue is that the economics of the audience commodity theory might not be applicable to social media.
However, Christian Fuchs argues that, although there is no doubt that users are motivated by social and communicative needs and desires to use social media, the fact that they love these activities does not make them less exploited. He clearly indicates that “exploitation is measured as the degree of unpaid labor from which companies benefit at the expense of labor. If exploitation does not feel like exploitation, then this does not mean that it does not exist” (Fuchs, 2014, p. 64). Several theoreticians, like Arvidsson and Colleoni (2012) and Jenkins et al. (2013), might believe that Smythe’s audience commodity theory and the digital labor approach in digital platforms overlook that audience members benefit from digital platforms. However, they fail to understand that “money has a central importance in capitalism because it is a general equivalent of exchange; it is the only commodity that can be exchanged against all other commodities” (Fuchs, 2014, p. 64). In this regard, it is critical to acknowledge that the use value of users’ labor is established through specific processes of measurement that serve to quantify (Dowling, 2007).
The commercialization of platform users has raised serious concerns because only a handful of platform owners and designers dominate the global platform markets. From a political economy perspective, digital labor as free labor cannot be exploited by platform corporations Users put in their time, energy, and creativity, accounting for the most significant immaterial goods and services, and therefore, their efforts should be rewarded. Of course, this includes both monetary rewards and non-monetary rewards, and how to make a well-balanced reward system needs to be determined. Platforms are not only gathering information from the massively increasing number of users, but also commercializing user information as a commodity, resulting in capital gains for platform owners in the Western countries (Jin, 2015). What makes the capital accumulation process for digital platforms different from the old media, broadcasting in particular, is “the way it acquires the audience commodity” (Bolaño & Vieira, 2015, p. 56). In other words, “television advertisers buy statistics about potential viewer attention to advertisements, a passive audience model.” Platform companies instead “offer and refine information collected from an active audience when users spontaneously provide data about their personal tastes, preferences, desires, and pathways through their browsers” Platform advertisers thus “can more accurately target the audiences they intend to reach” (Bolaño & Vieira, 2015, p. 56).
As such, the current digital labor discourse argues that such work undervalues human labor (Fuchs & Sevignani, 2013; Terranova, 2000) and fails to provide basic worker protections, such as a minimum wage, health insurance, and overtime compensation (Burston et al., 2010; Scholz, 2013, cited in Bucher & Fieseler, 2016). Digital labor might well represent “new forms of labor but old forms of exploitation” (Fuchs & Sevignani, 2013; Paolacci et al., 2010; Scholz, 2013, cited in Bucher & Fieseler, 2016, p. 2). What is missing in these previous works is the power inequality between Western and non-Western countries. Digital platforms are mainly developed by a few Western countries, in particular the United States, as Facebook, Twitter, and Instagram exemplify; however, the majority of users are non-Americans as several emerging markets, such as China, India, Indonesia, and Brazil are heavily relying on the U.S.-based digital platforms. In fact, as of December 2016, approximately 85.2% of Facebook’s daily active users are outside the United States and Canada (Facebook, 2017), which means that Facebook, as a U.S.-based social media platform, garners profits through its exploitation of global users, especially users in non-Western countries. As the United States has appropriated global media consumers with its popular culture, such as film, television programs, and music, American dominance in digital platforms has become eminent. It is serious because, unlike popular culture, American digital platforms control the global markets on a large scale. With popular culture, regardless of American influences, people like their own popular culture, so in many non-Western countries, like Korea, Mexico, and Brazil, media consumers still prefer local popular culture to American popular culture. However, in the realm of digital platforms, this is not the case because Google, Facebook, Netflix, and Android operating systems account for 80–90% of the global markets, which has not been observed previously. This implies that these platform corporations have utilized global users as digital labor, which should be critically analyzed.
Necessity of Political Economy in the 21st Century
The political economy of media has been one of the most significant fields in media and communication studies over the past several decades. Political economy has historically interpreted the structural transformation of media industries within the broader context of society. Admitting to the existence of earlier political economists, this article has discussed mainly the modern traditions of the political economy of media starting with the increasing role of the Frankfurt School, in particular, Adorno and Horkheimer in Europe and Robert Brady in North America. After documenting the genealogy of political economy by explaining the major works done by a few of the first generation of political economists such as Dallas Smythe and Herbert Schiller, this article carefully identified the epistemology of political economy. Most of all, it discussed several new areas that political economy must analyze, including digital platforms, big data, and digital labor, which are intricately connected. As Winseck argues, “Relations of power have become more complicated, and obscure in the age of the Internet and the post neoliberal order” (Winseck, 2016, p. 104), and these uncertainties have continued to grow in the era of digital platforms, because not only new digital technologies in the form of digital platforms, but also big data accumulated by the user activities and the growth of pro-sumers have fundamentally changed the media and communication infrastructure, system, and culture in the early 21st century.
Political economy in the era of digital platforms has continued as one of the most significant theoretical and methodological frameworks. Our modern capitalism relies on digital platforms as new drivers for the global economy and cultures; however, the level of oligopoly has intensified, which means that only a handful of platform designers and owners garner massive profits based on users’ activities creating big data. Globally, only a few Western digital platforms have increased their global dominance as Google and Facebook as well as Netflix have become major players in their fields. Regardless of the emergence of national players, such as Naver in Korea, Baidu in China, and VK in Russia, they are not able to penetrate the global markets, and only a few countries develop digital platforms, which means that the large majority of countries have no choice but to use Western-based digital platforms, which creates the imbalances between the global and the local forces. Therefore, the current milieu surrounding media and communication asks political economists to historically and systematically analyze the trend, not only to criticize the status quo, but also to provide better solutions.
Political economy is not the only academic discipline in communication and media studies. However, political economy is one of the most significant and respected research areas due to its nature, which asks people to ponder the issues of inequality, asymmetrical power relations, and skewed ownership, which influence cultural content. In particular, in the early 21st century, the necessity of political economy approaches is becoming evident because the newly developing media environment surrounded by digital platforms and big data-driven capitalism should be understood, challenged, and controlled. Political economy alone cannot resolve serious media issues; however, with the emphasis of political economy, we are able to develop well-educated people’s consciousness toward a new society in which people value equality, fairness, and diversity.
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