The key for understanding the "culture industry" is that it is the meeting of culture, politics, and economics. It is not just culture alone. It is not simply the expression of people. That expression takes its form in an economic framework, and some cultural products are promoted through that framework while others are not. Culture becomes a matter of exchange, like any other commodity.
For the Frankfurt School, the political world has become technologized. This is the direction capitalism takes when it moves from widespread competition to the dominance of large industry. What effect does this have on culture, particularly what becomes known as "the culture industry"?
To begin with, it should be recognized that much of our culture is the result of replication. Images are replicated, almost ad infinitum.
Why is the result of this not called "mass culture"? Because Adorno and Horkheimer believed that the culture produced by large corporations did not arise spontaneously from the masses at all. Culture today is not the product of genuine demands, but is the result of demands which are "evoked and manipulated."
There was a time when most artistic performances would have been experienced live, in a culturally appropriate setting. Now, however, these performances are mostly heard or seen in contrived settings, torn from their context. Producing culture for consumption requires a technology of production, not simply machines but processes which regard both the source (the artists) and the receiver (the consumer) as parts of the machine. In other words, neither the producer nor the consumer has any sovereignty in this transaction.
Note that critical theorists are not saying there is some vast conspiracy here. The problem is that the aesthetic world has become disconnected from the world of human meaning. There is irony here - people will often say that a song expresses "just how they feel". Couples still identify a song as their song. However, despite this (Horkheimer, Adorno, and others argue) art has lost its autonomy. It used to be "for its own sake". Now it is for purposes, and the most basic purpose is to make money for producers, artists, and others.
There is an analogy in urban planning, in the move towards trying to create a "sense of place." This is a concern in downtown Orlando, which has seen various attempts at this over time. Developers try to guess what will connect with consumers, and give them that. The point is to make money for the developers, not to develop anything like real place at all. See, for example, the story on developing Orlando's downtown.
Another example: The Neilson ratings drive the kinds of TV shows that appear on network television. In the same way, the TV "product" has lost its status as artistic, because it is trying to guess the ever-shifting wants of a bored public and give it back to them. When there is a connection with the public, determined by the ratings - reality TV, for example - there is a flood of imitation. Whether this is anything but a opiate for the masses is a good question.
The goal of the culture industry is "an attentive but passive, relaxed and uncritical reception, which it induces through the production of patterned and pre-digested cultural entities." (Held, Introduction to Critical Theory p. 94) The result is the production of work that "kills style". It does not come to terms with reality, but rather is mimetic, just copying images that have worked. Culture becomes standardized.
The result is that we have a "pseudo-individualism". In other words, we think we are making individual choices, but they are in a world flattened into predictability. In fact, people tend to fear what is not predictable (which is why unfamiliar cultures remain a threat, and have to be understood in terms of one's own culture). Cultural objects present no surprises - we know how the movie will end in the first few minutes, we know what the song will be like.
David Held, describing a passage from Adorno's "Television and the Patterns of Culture":
At one level the series of shows presents an entertaining tale about the struggle for survival of an underpaid, young, very hungry school teacher. Supposedly amusing situations arise as she tries, without success, to win a free meal from friends and foes. The very mention of food becomes a stimulus for laughter. The series does not 'push' any set of ideas. Its 'hidden message' emerges as its pseudo-realism promotes identification with the charming and funny heroine. The script implies, Adorno contends:
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