Introduction to Institutions and Audiences

The above document is the exact wording from the OCR AS/A Media Studies specification outlining just what you need to be prepared for and need to know before sitting the Institutions and Audiences section of the G322. Have a read through, take a deep breath and then don't panic...

There's a lots of new words in there and complicated sounding stuff but all that is being asked is whether you understand how and why we get the wonderful media products we consume daily.

We've decided to study the magical world of videogames so it's asking us who made CoD: Black Ops? How did they? How did they advertise the game? Who is it designed to appeal to? How did we get hold of a copy? How do we play it?

Or if CoD: Black Ops isn't your thing just replace it with Sims 3, Red Dead Redemption, Angry Birds or even CityVille...

If we condense the above information we need to know about the following 4 main aspects of the videogames industry:

Production - how it was made

Distribution - how consumers could hold of it

Marketing - how the game was advertise and how we heard of it

Exchange - how we gave our money in order to play it

Then alongside this we have be able to understand key media concepts and industry strategies the identify where they have had an effect or have been used in the above aspects.

The idea of this blog is to introduce you all these new concepts, define them and put them into context where you can understand them. Use the labels on the side to navigate through the information and get what you need from the resources.


Just some last minute info on words that might come up in the question and might unnecessarily scare you.

If the word EXHIBITION comes up - don't panic. Games aren't 'exhibited' like, for instance, films are - but this is the point consumer get to see/consume the product - so for games you can talk about consumption, exchange and distribution. 

If CONSUMPTION comes up in the question, what they want to know about is how audiences interact with the media products - how they use them and how the  patterns in consumption are changing. Things to talk about:

1) You're own consumption patterns - do you play games more than you did? Do you expect games to be free? Do you play on more online? Do you play more on tablets/smartphones? Do you buy fewer games and play them for longer (CoD FIFA)? Were you never a gamer but now play due to Facebook or Smartphone games?

2) Consumers becoming 'prosumers' (consumers now interacting with the products are creating their own stuff
Convergence Culture (Jenkins)
When old and new media intersect in such a way that the way in media producers and media consumers interact changes. 
Use: The consumption of RDR is a good example of media convergence as consumers have used both old and new media to alter the way in which they experience the game. For instance RDR fans have used the internet to create fansites and communities to share tips, stories and experiences about the game. They have also developed their own modifications and shared them over the internet.
Machinima e.g. this RDR Fan Film
User generated content 
Mods e.g. this RDR mod that (I think) allows you to ride bulls.

3) The importance of the consumer in marketing products, specifically making things go viral - sharing things they found on social media e.g. first Angry Birds trailer, Angry Birds scores, RDR Gunslinger on Facebook, photos of interesting outdoor adverting (RDR New York Mural).

4) The importance of freemium - more consumers expect content to be free and EA believe it could be the future of the whole games industry and are beginning to bring In-App-Purchases or micro-transactions to their games. The beauty of freemium is treats consumers differently. The traditional business model (that RDR used) presumes that every consumer wants to pay just £40 for a game and that's that. Freemium allows different consumers to pay different amounts for different experiences e.g. Angry Birds - pay more to get Mighty Eagle (easier game) or more levels.

5) The fact that the average age of console gamer is 37 and so might expect more 'mature' material such as RDR or as the 37 is time poor (family, work) can only play in short bursts or on the go therefore Angry Birds is more appropriate.

Here's a few quotes stats and facts that might help you - basically the average gamer is no longer the teenage boy.

In the UK, 37 % of the population played games in the last 12 months. That's 21m people.

Almost 90 % of 11-year-olds across Europe play video games in some form.

Almost 25 % of 11- to 14-year-olds in UK play games on social networks.

In UK, only 5% of people say they play games on apps, online AND packaged. In the UK there is a huge contingent that only plays packaged goods.

In the UK in terms of value, the majority of revenue - around 80 % - is driven by packaged goods.

Pre-owned is 16 % of the UK market.

Half of the games played in the UK during 2012 were apps.

Angry Birds was the UK's most popular game in Q1 2012. It had 10 % of the total market.

In Europe 45% of all gamers are female, 49% is at least 35 years, while 12% is younger than 20 years.

 In 2012 the number of Facebook users who played game rose by 11% to 251 million, around a quarter of the user base

ex-EA COO John Schappert recently left the company to join firm Zynga stating that "Traditional games have become more (hard)core, they require an expensive console, use a controller which laymen are afraid of, and their interfaces are not always the easiest to use. People are buying fewer games and playing them longer. A lot of players are stretched for time - they don't have two hours, they have fifteen minutes and don't want to spend money."

By 2012 Steam had 54 million active users worldwide and had over 1860 games available. It is estimated that Steam makes up for around 70% of the digital distribution market for video games.

Then there’s issue of Whales and developer desire to hook them. Whales are defined as users that spend over $1000 on a IAPs on one single game and so will be responsible for as much revenue as several thousand low spending users or ‘minnows’. It is this type of consumer that makes the free to play model work with stories of users spending $6000 a month on games such as Clash of Clans, anecdotal evidence of one user spending $100,000 on Zynga’s Mafia Wars and estimates that just 1% of all Zynga’s customers account for 25-50% of the companies total revenue.

Physical sales of games in the US were down 22% in 2012 and the UK games market was down 17.4%

The way users are playing games is changing away from the console dominance which means that it’s only the top games – GTA, FIFA, Call of Duty, and the low budgets indie games – Limbo, Angry Birds, Hotline Miami etc that are make sizable profits. It’s in the middle of market where the problems are as console developers face high costs and often receive little reward. The knock-on effect of less games being sold is that the console manufacturers do not make a return in the investment of developing a console from the license fees. While is it is wrong to declare console gaming in terminal decline, it clear that the business model no longer working and can’t be sustained. 


Definition: The rapid increase in the amount of a product.

If a product proves to be popular and successful then other products similar in function, genre or style will be released in order to target a similar audience.

Digital distribution
Using downloads or streaming is far cheaper than physical distribution (no retail, shipping or packaging costs) and enables institutions to target a global market far easier. This encourages more and different types of companies (independents, major studios) to produce more content.

Technological convergence
The fact that nearly all digital products (tablets, smartphones, computers) have very similar functions – specifically the ability to connect to the internet and play various types of media (games, music, film) has two effects:
1) It allows for digital distribution (see above).
2) It creates a PROLIFERATION in platforms/hardware that can play ALL types of media.
It is because of technological convergence that your phone now plays games or your games console plays films – when once there were only a few formats you could play game/watch films on, now there are many. 

Increases the numbers of potential consumers
The proliferation of technologically converged hardware increases the size of the potential market for media products. e.g. Due to the proliferation of smartphones a huge number of consumers – who wouldn’t have bought a specific games console – now play games.

Games developers have a choice of format to create for
No hardware manufacturer has a monopoly on the market (Nintendo did have a monopoly in the 80s and could dictate what games developer could and couldn’t do).

Audiences are fragmented and hard to target
Institutions now have to cater for numerous ways of consumption or settle for only a fraction of the potential audience. In the games industry this means creating a version of your game for DS, 3DS, PC, PS3, 360, Mac, Ipad, Facebook, Chrome, PS Vita, Wii, Wii U – which would be costly and time consuming. In the film industry there is cinema, DVD, Blu-ray, downloads, streaming etc.

Promotion can become more important than product
One way of standing out in a busy marketplace is spend more on advertising and promotion. This could mean there is less to spend on production and potentially the quality of the product is reduced.

More competition means pressure to sell
The pressure to sell could mean less innovation – don’t take risks, just give consumers what they already like (more sequels, less creativity) or dubious business practices (in-app-purchases/freemium targeted at children)

More competition drives down the price
This is better for consumers but for institutions this mean less profit which scares of potential investment and businesses could fail.

More choice
At first would be good for the consumers, but too much choice can be confusing and could cool consumers’ interest.

PROLIFERATION: Red Dead Redemption and Angry Birds


Only the PS3, 360 and high-spec PCs could manage to run Red Dead Redemption due to the open-world environment and HD graphics, this means Rockstar’s target audience was reduced to just the owners of these consoles and not everyone who plays games.

Rovio, however, due to the simplicity of Angry Birds, have been able to create Angry Birds for all tablets, phones, mobile game consoles allowing them to target a huge potential audience and achieve a billion downloads. Initially the proliferation of the iPhone and iPad helped their early success.
A userbase of 1 billion allows them to exploit the Freemium business model – giving the game away for free, monetize a percentage of the userbase with In-App-Purchases (e.g. Mighty Eagle 59p).

Keeping ahead of competition
Due to the success of Rockstar’s GTA series there was a proliferation of open-world games set in cities (Prototype, Infamous, Saint’s Row, Sleeping Dogs etc). To differentiate their games from the competition Rockstar were forced to create deeper more detailed experiences: RDR has countryside full of wildlife, GTA V has a far larger map than IV and much more different landscapes. This means the quality of the product increases (good for consumers), however, productions costs increase.

If production costs rise, the risk of creating games increases, which means failure may cost a company dearly. US games company Midway recently went bust when competing in the FPS market dominated by Call of Duty. Their game, Homefront, cost £20 million to make and didn’t sell enough to make back the initial investment.

If making game becomes riskier then companies will take less chances. Rather than be creative and innovative, they will rely on established brands and existing IP (films, superheroes, TV shows).

So proliferation increases competition that could improve the quality of a product in the short term BUT in the long term may have the opposite effect.

As the App Store reduced the barriers of entry into the games world (no physical distribution costs, 70/30 split with Apple) a huge amount of publisher/institutions/developer began creating content.

In Autumn 2008 the App Store reached the milestone of 10,000 apps.
Today (08/05/13) there are 867,530 apps available from a total of 229,094 active publishers/developers.
The biggest category of App in Games with 145,078 games available and Apple receiving 81 submissions to the App store every day.
Here's an article on the nature of the app business world and some of reasons behind proliferation.

The problem for developers/institutions
Due to competition to be successful you have to be Free and exploit using the Freemium business model.
But Freemium only works if you have a large userbase.
To create a large userbase means promoting your game to get users.
But as there’s no revenue coming in (as the game is free) this will need investment and there’s no guarantee the product will be successful.
The best way to attract consumers is to get on the ‘Top’ Lists as that is where most users look for content.
But getting on the ‘Top’ list requires users to download the product.

So how did Angry Birds become successful?
When Angry Birds was released in Dec 2009 there were 36,356 other games to compete against. Rather spending a lot on advertising, Rovio used PR (press relations) to get key websites and games forums talking about the game. This is a time consuming strategy especially as Rovio did it territory by territory, but they knew that once the right people played Angry Birds, due to the quality of the game they would begin talking about it.

The strategy worked: first it was a hit in Finland, then Sweden, then when it was a success in the UK Apple took notice and featured it on the App Store. To capitalize on this exposure Rovio created a Youtube animation of the characters and achieved both synergy (the App store feature and video combining to increase exposure) and the promotion of the game going viral (spread by existing social networks).

Once it was established in the ‘Top’ lists the success gathered its own momentum (consumer download apps in the charts which keep them in the charts). Rovio then ensured the game was talked about by releasing new products (Halloween, Rio versions) and achieving synergy by producing numerous type of Angry Bird product (25,000 and rising).

In 1983 the US games industry was worth $3.2 billion dollars.
30 new companies entered the games market - there were 12 consoles to choose from.
This proliferation drove down price and drove down quality - big losses were made, investment dried up.
1985 the US games industry was worth $100 million and was declared official dead by some analysts. 
Search for ‘All Your History: The Video Game Crash of 1983’ on Youtube for full story.