Hall has become one of the main proponents of reception theory, and developed Hall's Theory of encoding and decoding. This approach to textual analysis focuses on the scope for negotiation and opposition on part of the audience. This means that the audience does not simply passively accept a text — whether a book or a film — and that an element of activity becomes involved. The person negotiates the meaning of the text. The meaning depends on the cultural background of the person. The background can explain how some readers accept a given reading of a text while others reject it. This theory is also one of the main proponents used to describe audience reception.
Hall developed these ideas further in his model of encoding and decoding of media discourses. The meaning of a text lies somewhere between the producer and the reader. Even though the producer encodes the text in a particular way, the reader will decode it in a slightly different manner — what Hall calls the margin of understanding. This line of thought has links with social constructionism.
In Policing the Crisis: Mugging, the State and Law and Order (1978), Stuart Hall and his colleagues studied the reaction to the importation into the UK of the heretofore American phenomenon of mugging. Employing Cohen's definition of moral panic, Hall et al. theorized that the "rising crime rate equation" has an ideological function relating to social control. Crime statistics, in Hall's view, are often manipulated for political and economic purposes. Moral panics (e.g. over mugging) could thereby be ignited in order to create public support for the need to "police the crisis." The media play a central role in the "social production of news" in order to reap the rewards of lurid crime stories.[8]
His works — such as studies showing the link between racial prejudice and media — have a reputation as influential, and serve as important foundational texts for contemporary cultural studies.
Hall has also