Reception theory as developed by Stuart Hall asserts that media texts are encoded and decoded. The producer encodes messages and values into their media which are then decoded by the audience. However, different audience members will decode the media in different ways and possibly not in the way the producer originally intended.
Stuart Hall states that audience members adopt one of the following three positions when they decode the text:
Dominant, or Preferred Reading - how the producer wants the audience to view the media text. Audience members will take this position if the messages are clear and if the audience member is the same age and culture; if it has an easy to follow narrative and if it deals with themes that are relevant to the audience.
Oppositional Reading - when the audience rejects the preferred reading, and creates their own meaning for the text. This can happen if the media contains controversial themes that the audience member disagrees with. It can also arise when the media has a complex narrative structure perhaps not dealing with themes in modern society. Oppositional reading can also occur if the audience member has different beliefs or is of a different age or a different culture.
Negotiated Reading - a compromise between the dominant and oppositional readings, where the audience accepts parts of the producer's views, but has their own views on parts as well. This can occur if there is a combination of some of the above e.g. audience member likes the media, is of the same age as you and understands some of the messages, but the narrative is complex and this inhibits full understanding.
Many factors could affect whether the audience take the dominant, oppositional or negotiated reading.
Mood at the time of viewing
The video below explains Reception theory.