The audience product and the new media environment: Implications for the economics of media industries

Audiences are the primary product manufactured and sold by advertisersupported media. In selling audiences to advertisers, media firms deal in human attention, which resists the type of exact verification and quantification typical of transactions in other industries (Napoli forthcoming). Verifying the presence of human attention to media generally requires entering people’s living rooms, bedrooms and cars, and monitoring their behaviour. For such monitoring to be maximally effective requires audience members’ explicit permission and cooperation to turn something as abstract as attention into tangible data that can be sold in the marketplace. In addition, the audience product is produced from raw materials (consumers) that the producers (media organizations and audience measurement firms) can not control (Berry & Waldfogel 1999). Since the production of audiences is not controlled by the manufacturers, any efforts to bring predictability and rationality to the process of producing audiences must draw upon a sophisticated understanding of the essentially uncontrollable, yet somewhat predictable, behaviour of media audiences. Thus, the economics of advertising-supported media revolve around efforts to predict and measure the behaviour of media consumers. Such efforts persist because greater effectiveness in audience prediction and audience measurement brings greater efficiency and greater revenues to the audience marketplace (Barnes & Thomson 1988, 1994; Fournier & Martin 1983). By the same token, conditions that undermine such efforts damage the audience marketplace. Ongoing changes in the media environment have the potential to cause such damage. The purpose of this article is to identify the key means by which the new media environment is threatening to undermine the audience marketplace. By focusing on such issues, this article is intended to serve as a counterweight to the prominent discourse emphasizing the opportunities and benefits the new media environment offers advertisers and content providers. This analysis is organized around a conceptual model in which the audience product is separated into three interrelated components: (a) the predicted audience; (b) the measured audience; and (c) the actual audience. As this article will illustrate, the new media environment is increasing the disconnects between these components of the audience product.