MEDIA CONGLOMERATES, MEGA MERGERS, CONCENTRATION OF OWNERSHIP

What is Concentration of media ownership?

contemporary mass media  MEDIA CONGLOMERATES, MEGA MERGERS, CONCENTRATION OF OWNERSHIP

Concentration of media ownership (also known as media consolidation) is a commonly used term among those who are concerned that the majority of the media outlets are owned by a small number of conglomerates and corporations- especially those who view such consolidation as detrimental, dangerous, or otherwise worrying- to characterize ownership structure of mass media industries. These individual media industries are often referred to as a ‘Media Institution’. Media ownership may refer to states of oligopoly or monopoly in a given media industry, or to the importance of a low number of media conglomerates.

Some nations can influence and control their media greatly. In addition, powerful corporations also have enormous influence on mainstream media. The idea of corporate media itself may not be a bad thing, for it can foster healthy competition and provide a check against governments. However, the concern is when there is a concentration of ownership due to the risk of increased economic and political influence that can itself be unaccountable.

Global conglomerates can at times have a progressive impact on culture, especially when they enter nations that had been tightly controlled by corrupt crony media systems or nations that had significant state censorship over media. The global commercial-media system is radical in that it will respect no tradition or custom, on balance, if it stands in the way of profits. But ultimately it is politically conservative, because the media giants are significant beneficiaries of the current social structure around the world, and any upheaval in property or social relations—particularly to the extent that it reduces the power of business—is not in their interest. — Robert W. McChesney, The New Global Media; It’s a Small World of Big Conglomerates, The Nation Magazine, November 29, 1999

We are here to serve advertisers. That is our raison d’etre. — the C.E.O. of Westinghouse(CBS), Advertising Age, February 3, 97

Having a few huge corporations control our outlets of expression could lead to less aggressive news coverage and a more muted marketplace of ideas. — Rifka Rosenwein, Why Media Mergers Matter, Brill’s Content, December 1999

It is useful to remind ourselves that free expression is threatened not just blatantly by authoritarian governments and all those in the private sector who fear public exposure, but also more subtly by the handful of global media conglomerates that have reduced meaningful diversity of expression in much of the globe. — Gerald Caplan, Advancing Free Media, Open Markets, Open Media forum, November 1997

There have been a lot of mergers and buyouts of media and entertainment companies since the 1980s. Mainstream media has since become more concentrated in terms of ownership and the influences of advertisers and owning companies both have an enormous in how mainstream media shapes itself and society.

Mother Jones magazine once reported that by the end of 2006, there will be only 8 giant media companies dominating the US media, from which most people get their news and information:

  • Disney (market value: $72.8 billion)
  • AOL-Time Warner (market value: $90.7 billion)
  • Viacom (market value: $53.9 billion)
  • General Electric (owner of NBC, market value: $390.6 billion)
  • News Corporation (market value: $56.7 billion)
  • Yahoo! (market value: $40.1 billion)
  • Microsoft (market value: $306.8 billion)
  • Google (market value: $154.6 billion)

Yahoo!, Microsoft, and Google are new media companies compared to the other “traditional” 5 players. Most of these companies are in the global elite of media companies, too. At the end of the 1990s, there were 9 corporations (mainly US) that dominated the media world:

  • AOL-Time Warner
  • Disney
  • Bertelsmann
  • Viacom
  • News Corporation
  • TCI
  • General Electric (owner of NBC)
  • Sony (owner of Columbia and TriStar Pictures and major recording interests), and
  • Seagram (owner of Universal film and music interests).

As Robert McChesney, a media critic, and author of Rich Media Poor Democracy, (University of Illinois Press, 1999) describes, these are the “first tier” companies and following them are around 50 or so “second tier” companies doing media-related business at either national or regional level. All of these companies each do more than one billion dollars worth of business. Compared to the 1980s, this is quite a limited market in terms of diversity of ownership:

How does all of this affect concrete media coverage?

“If media moguls control media content and media distribution, then they have a lock on the extent and range of diverse views and information,” says Chuck Lewis, executive director of the Centre for Public Integrity. “That kind of grip on commercial and political power is potentially dangerous for any democracy.”— Miren Gutierrez, Fewer Players, Less Freedom, Inter Press Service, March 20, 2004

At first thought, one might ask, what is wrong with a few companies becoming so big? Isn’t that how business works? Even from a business perspective, the oligopolies or monopolies is not desirable. Considering the important role that a free and diverse media takes on in a functioning democracy, these questions become even more important. One of the major concerns that arise from such concentration is that there are very few media owners in the mainstream that reach out to the masses. As a result, there is the risk of reduced diversity of issues and perspectives as well as undue political influence and interests from a few affecting the many.

Most citizens get their views and understandings of the world around them from the mainstream media. It is therefore critical to understand some of these underlying issues.

Vertical Integration

Many of the large media company owners are entertainment companies and have vertical integration (i.e. own operations and businesses) across various industries and verticals, such as distribution networks, toys and clothing manufacture and/or retailing etc. That means that while this is good for their business, the diversity of opinions and issues we can see being discussed by them will be less well covered. (One cannot expect Disney, for example, to talk too much about sweatshop labor when it is accused of being involved in such things itself.) The wider ramifications are highlighted well in this following quote: Vertical Integration was once looked upon with alarm by government. It was understood that corporations which have control of a total process, from raw material to fabrication to sales, also have few motives for genuine innovation and the power to seize out anyone else who tries to compete. This situation distorts the economy with monopolistic control over prices. Today, government has become sympathetic to dominant vertical corporations that have merged into ever larger total systems. These corporations, including those in the media, have remained largely unrestrained. — Ben H. Bagdikian, The Media Monopoly, Sixth Edition, (Beacon Press, 2000) Vertical integration is also a part of a business strategy that serves to enhance market power, by allowing cross-promotion and cross-selling. Robert McChesney highlights this well: The pressure to become a conglomerate is also due to something perhaps even more profound than the need for vertical integration. It was and is stimulated by the desire to increase market power by cross-promoting and cross-selling media properties or “brands” across numerous, different sectors of the media that are not linked in the manner suggested by vertical integration. … “When you make a movie for an average cost of $10 million and then cross promote and sell it off of magazines, books, products, television shows out of your own company,” Viacom’s Redstone said, “the profit potential is enormous.”

Robert W. McChesney, Rich Media Poor Democracy; Communication Politics in Dubious Times, (University of Illinois Press, 1999), p.22

It is interesting to note how a film goes beyond box office take, but goes towards larger market share and profit through all the cross-selling. That is, a film may generate certain revenue, but the overall profit will be even more than the revenue. On such television channels or newspapers/magazines owned by such large corporations, you are understandably not going to read much criticism about those companies. Furthermore, you are not likely to see much deep criticism about economic, political or other policies that go against the interest of that parent company. So, while it is understandable why a company would aim for such cross selling and integration, the threat to diversity and meaningful competition is real. For smaller companies (who might still have multi million dollars backing) without such an arsenal of distribution and cross-selling possibilities, the competition is very difficult, and they face either going out of business, or being bought out, or try to emulate them.

Interlocking Directorates

Interlocking directorates is also another issue. Interlocking is where a director of one company may sit on a board of another company. As pointed out by U.S. media watchdog, Fairness an Accuracy In Reporting (FAIR) for example, Media corporations share members of the board of directors with a variety of other large corporations, including banks, investment companies, oil companies, health care and pharmaceutical companies and technology companies.

Ben H Bagdikian, in his book, The Media Monopoly, details some of the impacts of this interlocking. In these cases where directors from numerous large corporations sit on each others boards and own or sit on boards of large media companies, he points out that conflicts of interest can be numerous. Furthermore, he also points out that it is difficult to show beyond doubt that these conflicts of interest make their way into media decisions:

The deeper social loss of giantism in the media is not in its unfair advantage in profits and power; this is real and it is serious. But the gravest loss is in the self-serving censorship of political and social ideas, in news, magazine articles, books, broadcasting, and movies. Some intervention by owners is direct and blunt. But most of the screening is subtle, some not even occurring at a conscious level, as when subordinates learn by habit to conform to owners’ ideas. But subtle or not, the ultimate result is distorted reality and impoverished ideas. — Ben H. Bagdikian, The Media Monopoly, Sixth Edition, (Beacon Press, 2000), pp. 35—36, 45.

Many stations report news on the very same stories at the exact same time and have commercial breaks at the same time! The sensationalism they compete for is what they hope will drive audiences to their channel. This type of competition affects the ability to provide quality news and affects the depth and even reputation of professional journalism.

Media executives speak in the language of war—of bombarding audiences, targeting markets, capturing grosses, killing the competition, and winning, by which they mean making more money than the other guy. Some news organisations even refer to their employees as “the troops”. It is hard for media workers, including journalists, to operate outside the ethos of hyper-competition and ratings mania. As willing or unwilling conscripts in the media war, journalists imbibe its values and become warriors themselves. —

Danny Schechter, Chapter 2, Peace Journalism and Media War: the Fight to Reform Journalism, What Are Journalists For?, presented on the Conflict and Peace Forums, September 1998.

For example, George Bush must have been delighted to learn from a Washington Post-ABC News poll that 56 percent of Americans still think Iraq had weapons of mass destruction before the start of the war, while six in 10 said they believe Iraq provided direct support to the al-Qaida terrorist network — notions that have long since been thoroughly debunked by everyone from the U.S. Senate Intelligence Committee to both of Bush’s handpicked weapons inspectors, Charles Duelfer and David Kay. Americans believe these lies not because they are stupid, but because they are good media consumers. The media have become an echo chamber for those in power. Rather than challenge the fraudulent claims of the Bush administration, they’ve had a media acting as a conveyor belt for the government’s lies.

As the Pentagon has learned, deploying the American media is more powerful than any bomb. The explosive effect is amplified as a few pro-war, pro-government media moguls consolidate their grip over the majority of news outlets. Media monopoly and militarism go hand in hand.

When it comes to issues of war and peace, the results of having a compliant media are as deadly to our democracy as they are to our soldiers. Why do the corporate media cheerlead for war? One answer lies in the corporations themselves — the ones that own the major news outlets. At the time of the first Persian Gulf War, CBS was owned by Westinghouse and NBC by General Electric. Two of the major nuclear weapons manufacturers owned two of the major networks. Westinghouse and GE made most of the parts for many of the weapons in the Persian Gulf War. It was no surprise, then, that much of the coverage on those networks looked like a military hardware show.

We see reporters in the cockpits of war planes, interviewing pilots about how it feels to be at the controls. We almost never see journalists at the target end, asking people huddled in their homes what it feels like not to know what the next moment will bring.

The media have a responsibility to show the true face of war. It is bloody. It is brutal. Real people die. Women and children are killed. Families are wiped out; villages are razed. If the media would show for one week the same unsanitized images of war that the rest of the world sees, people in the U.S. would say no, war is not an answer to conflict in the 21st century.

But we don’t see the real images of war. We don’t need government censors, because we have corporations sanitizing the news. A study released by American University’s School of Communications revealed that media outlets acknowledged they self-censored their reporting on the Iraq invasion out of concerns about public reaction to graphic images and content. The media organizations in charge of vetting our images of war have become fewer and bigger — and the news more uniform and gung ho. Six huge corporations now control the major U.S. media: Rupert Murdoch’s News Corporation (FOX, HarperCollins, New York Post, Weekly Standard, TV Guide, DirecTV and 35 TV stations), General Electric (NBC, CNBC, MSNBC, Telemundo, Bravo, Universal Pictures and 28 TV stations), Time Warner (AOL, CNN, Warner Bros., Time and its 130-plus magazines), Disney (ABC, Disney Channel, ESPN, 10 TV and 72 radio stations), Viacom (CBS, MTV, Nickelodeon, Paramount Pictures, Simon & Schuster and 183 U.S. radio stations), and Bertelsmann (Random House and its more than 120 imprints worldwide, and Gruner + Jahr and its more than 110 magazines in 10 countries).

As Phil Donahue, the former host of MSNBC’s highest-rated show who was fired by the network in February 2003 for bringing on anti-war voices, told “Democracy Now!,” “We have more TV outlets now, but most of them sell the Bowflex machine. The rest of them are Jesus and jewelry. There really isn’t diversity in the media anymore. Dissent? Forget about it.”

The lack of diversity in ownership helps explain the lack of diversity in the news. When George W. Bush first came to power, the media watchers Fairness and Accuracy in Reporting (FAIR) looked at who appeared on the evening news on ABC, CBS and NBC. Ninety-two percent of all U.S. sources interviewed were white, 85 percent were male, and where party affiliation was identifiable, 75 percent were Republican.

In the run-up to the invasion of Iraq, there was even less diversity of opinion on the airwaves. During the critical two weeks before and after Colin Powell’s speech to the United Nations where he made his case for war, FAIR found that just three out of 393 sources — fewer than 1 percent — were affiliated with anti-war activism. Three out of almost 400 interviews. And that was on the “respectable” evening news shows of CBS, NBC, ABC and PBS.

These are not media that are serving a democratic society, where a diversity of views is vital to shaping informed opinions. This is a well-oiled propaganda machine that is repackaging government spin and passing it off as journalism.

For the media moguls, even this parody of political “diversity” is too much. So as Colin Powell led the war on Iraq, his son, Michael Powell, chairman of the Federal Communications Commission (FCC), led the war on diversity of voices at home.

In the spring of 2003, Michael Powell tried to hand over the airwaves and newspapers to fewer and fewer tycoons by further loosening restrictions on how many media outlets a single company could own. Powell tried to scrap 30-year-old rules that limited the reach of any television network to no more than 35 percent of the national population, and limits on cross-ownership that, for example, prevented newspapers from buying television or radio stations in the same city. The new rules would have allowed a broadcast network to buy up stations that together reached 45 percent of the national population.

The attack on the existing media-ownership rules came from predictable corners: Both Viacom, which owns CBS, and Rupert Murdoch’s conservative FOX News Channel were already in violation, and would be forced to sell off stations to come into compliance with the 35-percent limit. The rule change would enable Murdoch to control the airwaves of entire cities. That would be fine with Bush and the Powells, since Murdoch is one of their biggest boosters.

Murdoch declared in February 2003 that George W. Bush “will either go down in history as a very great president or he’ll crash and burn. I’m optimistic it will be the former by a ratio of 2 to 1.” Murdoch leaves nothing to chance: His FOX News Channel is doing all it can to help.

It looked like Powell, backed by the Bush White House and with Republican control of Congress, would have no trouble ramming through these historic rule changes. The broadcast industry left nothing to chance: Between 1998 and 2004, broadcasters spent a boggling $249 million lobbying the federal government, including spending $27 million on federal candidates and lawmakers. This would normally be called bribery. At the FCC, it’s just business as usual.

You would think that FCC deregulation, affecting millions of Americans, would get major play in the media. But the national networks knew that if people found out about how one media mogul could own nearly everything you watch, hear and read in a city, there would be revolt. The solution for them was simple: They just didn’t cover the issue for a year. The only thing the networks did was to join together — and you thought they were competitors? — in a brief filed with the FCC to call for media deregulation. And then, something remarkable happened: Media activists — an unlikely coalition of liberals and conservatives — mounted a national campaign to defeat Powell and stop the corporate sell-off. The FCC received 2 million letters and e-mails, most of them opposing the sell-off. The Prometheus Radio Project, a grass-roots media activism group, sued to stop the sale of our airwaves, and won in federal court last June. These are hopeful signals that the days of backroom deals by media titans are numbered.

Powell announced his resignation as chairman of the FCC in January. Arguably the worst FCC chairman in history, Powell led with singular zeal the effort to auction off the public airwaves to the highest corporate bidder. In so doing, he did us all a favor: For a brief moment, he pulled back the covers on the incestuous world of media ownership to expose the corruption and rot for all to see.

Kevin Martin, Bush’s newly appointed FCC chairman, will, according to an FCC insider, be even worse than Powell. Leading conservative and right-wing religious groups have been quietly lobbying the White House for Martin to chair the FCC. Martin voted with Powell on key regulations favoring media consolidation, and in addition has been a self-appointed indecency czar. The indecency furor conveniently grabs headlines and pushes for the regulation of content, while Martin and the media moguls plan sweetheart deregulation deals to achieve piecemeal what they couldn’t push through all at once. This is the true indecency afflicting media today.

The major media conglomerates are among the most powerful on the planet. The onrush of digital convergence and broadband access in the workplaces and homes of America will radically change the way we work, play and communicate. Fiber-to-the-premise (FTTP) from the regional Bells, Voice over IP (VoIP) telephony, bundled services from cable companies, and increased capacity in satellite and wireless technologies will transform the platforms on which we communicate.

Who owns these platforms, what is delivered over them and, fundamentally, in whose interest they work are critical issues before us now. Given the wealth of the media companies and their shrewd donations into our political process, the advocates for the public interest are in far too short a supply. A blow against media ownership consolidation — now or in the future — will have far-reaching implications, as critical information gains exposure to a caring, active public. Instead of fake reality TV, maybe the media will start to cover the reality of people struggling to get by and of the victories that happen every day in our communities, and in strife-torn regions around the globe. When people get information, they are empowered. We have to ensure that the airwaves are open for more of that.

South Asia

The media authorities are now in a mood to deny and defy anything and everything legally, morally or socially important. Can one imagine that in India a very renowned daily newspaper of the country coming out everyday without the name of a proper editor? There is editor (marketing), brand editor, executive editor, managing editor, but there is no “EDITOR” although law of the land requires this and without fulfilling this provision it cannot be called a newspaper. But they do not care. Journalists have become contract-laborers under them. There is nothing “noble” in this “profession” now. Proprietors have become all-powerful. There is an unholy alliance between the media-proprietors and administrative heads. Having passed this extreme comments there are exceptions and it is because of these exceptions that there is a semblance of morality in the field of journalism although in a reduced form. Perhaps, for this reason, a good sense is prevailing in the minds of some people who have come forward to check the onslaught of cross-media ownership.

It has been proposed in the form of a bill to be introduced in the Lok Sabha. The name of the bill is “Broadcast Services Regulation Bill”. Through this bill government wants to control so many unwanted developments which have negated the basic motto of journalism i.e. free flow of news among the citizen. Through this new bill they want to control the monopolistic trend of cross media ownership. There is no dearth of other laws enacted by the Government of India. But what happened to them? In the media field people sitting at the helm of affairs dismissed them just by money, power and muscle power. Even the institution like Press Council of India has become laughing stock as their judgments is frequently ignored by many media owners, although this body was created by them. If you yourself is determined to kill your own creation, then who, on earth, can save it?

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