The lively debate over media ownership between Robert McChesney and Benjamin Compaine on openDemocracy has centred on a key issue: whether a highly concentrated, commercial media industry adequately provides the kinds of cultural and informational resources that nourish democratic practices and institutions.
Robert McChesney argues eloquently for the failure of the untrammelled market to provide such resources, particularly in the United States. Ben Compaine counters not so much by disputing McChesneys conclusions (though he disagrees with these too), but by contesting the empirical basis of his arguments. Media ownership, Compaine argues, is not becoming more concentrated in fewer hands; mergers and acquisitions are offset by the entry of small but influential players in the media marketplace; and anyway these structural issues have little effect on programming content.
In effect, Compaine argues that media mergers dont matter. Well, they do matter, and in this article I will explain why. But firstly we need to try and answer the empirical question: is ownership in the media industry becoming concentrated?
Measuring concentration
McChesney and Compaine disagree on this initial question. The answer ultimately hinges on the methods we use to measure concentration. The most common approach is to analyse market share within a specific industry (for example, book sales, magazine ad sales or television audience share), paying attention to the concentration ratio the combined market share of the largest firms in the industry. The various editions of Ben Bagdikians well-known critique, The Media Monopoly, employ this kind of analysis, tracking the number of dominant media companies those that accounted for more than half of the market in each sector.
Between 1983 and 1992, concentration in the newspaper, magazine, and book industries all increased substantially from twenty to eleven dominant companies in newspapers, twenty to two in magazines, and eleven to five in book publishing. Television and film, already highly concentrated with three and four dominant companies, respectively, remained stable. Using this market share measure, Bagdikian found that the total number of dominant companies in the media industry shrunk from forty-six to twenty between 1983 and 1992. However, given the convergence of media technologies and the growth of cross-media ownership, it is now far less useful to evaluate concentration in each specific sector of the media industry. (The most recent editions of The Media Monopoly discuss ownership concentration in the media industry as a whole).
Whats distinctive about the current round of conglomeration is the degree to which it is about building horizontally-integrated media companies. Earlier media conglomeration aimed at building companies that controlled production and distribution within a single medium. Changes in regulatory policy in the 1980s and 1990s helped set the stage for the growth of new conglomerates that own and operate production, manufacturing, and distribution across different media. Now, each of the major media conglomerates owns a vast portfolio of media across the various sectors of the media industry, a condition graphically illustrated by The Nations recent chart of The Big Ten.
The growth of these media conglomerates AOL Time Warner, Disney, Viacom, News Corporation, Bertelsmann, Vivendi/Universal is a qualitatively new development. When we see ownership concentration as part of this process of conglomeration, it is clear that McChesneys basic position on concentration is accurate: the global media industry is becoming increasingly concentrated. While Compaine is correct that the US television industry has become less concentrated in recent years, he misses the broader point: namely, that in each sector of the media industry, only a handful of companies are dominant; although the specific number of top firms may fluctuate, this handful are, in large measure, divisions of the same media conglomerates that dominate the industry as a whole.
In other words, each of the media conglomerates is a major player in multiple sectors of the media industry. AOL Time Warner is among the leading companies in movies, the Internet, cable television, books, music, and magazines. Disney is among the leaders in movies, broadcast television, cable television, and radio. Viacom is among the leaders in radio, movies, books, broadcast television, and cable television. They produce and distribute products that have an increasingly expansive reach; AOL Time Warner boasts that its brands touch consumers more than 2.5 billion times each month.
Conglomerates attack competition
These major media conglomerates are often more cooperative than competitive, with an increasing number of strategic alliances and joint ventures. Given the small number of major media players, there is very little competition in the media industry and the major media companies use a variety of strategies to try to reduce the limited competition that does exist.
The story of low power FM radio in the US is instructive. After years of requests by would-be community broadcasters for licenses to operate ten and one hundred watt radio stations, the Federal Communications Commission announced in 2000 that it would begin licensing low power FM radio stations that reach an area with a 3.5 mile radius, are required to be non-commercial, and cannot be operated by existing media companies. Then the commercial broadcast industry stepped in. The National Association of Broadcasters (NAB) launched a major lobbying campaign to stop low power radio, which broadcasters claimed would interfere with commercial radio signals despite considerable evidence to the contrary. To make their case, the NAB distributed a compact disc to congressional offices that simulated the sounds of radio interference. This focus on interference obscured the more fundamental economic threat posed by community radio. Broadcasters opposed low-power radio because it was a new competitor for market share and an incursion on the corporate domination of radio. In response to the NAB campaign, the US Congress passed legislation that dramatically limited low power radio, effectively scuttling even this modest plan designed to open local radio to a new set of voices.
The market: economic benefit, democratic deficit
Limited competition, however, is only part of the story. As David Hesmondhalgh argues, there is no simple relationship between ownership structure and media content. Studies of the music and newspaper industries have shown that competitive media are often no more diverse than media in oligopolistic markets. Even relatively competitive media industries may often produce content that does little to serve a democratic citizenry. Because of their inexpensive production costs and relative popularity among consumers, market forces might lead to the transmission of an ever-growing stream of light entertainment, pornography, or news about titillating scandals; in short, blandly homogenous programming. Alternatively, media companies might target their products at very narrow demographic groups, with the assumption that different groups have distinct interests and tastes, fragmenting the audience.
In either case, even if the media market were quite competitive, what would be classified as market success would produce a kind of political and cultural failure. In the first case, the proliferation of superficial entertainment can supplant substantive information, educational media, or challenging cultural presentations, all of which are likely to have more value to democratic processes than to corporate media companies. In the second case, segmented media can reinforce existing prejudices, widen the gap between different people, or contribute to a fragmented society what Cass Sunstein has called the daily me in which people interact primarily with those in the same demographic market, and are exposed solely to those opinions with which they already agree. Success in reaching target audiences may stifle meaningful democratic deliberation among citizens.
Both examples illustrate how market-oriented media systems make no distinction between peoples role as consumer, which is private and individual, and their role as citizen, which is public and collective. This is why market-oriented media have a tendency to produce economic benefits while simultaneously sustaining democratic deficits.
The wages of synergy are profit
The growth of media conglomerates raises new questions about the relationship between ownership and content. While the continuing wave of media mergers has been driven, in part, by an effort to eliminate competition, the main attraction for media conglomerates is the possibility of leveraging synergy. In this era of horizontal integration, media conglomerates are capable of pursuing elaborate cross-media strategies, in which company owned media products brands can be packaged and promoted across the full range of media platforms. Feature films, their accompanying soundtracks and VHS/DVD releases, spin-off television programs and books, along with magazine cover stories and licensed merchandise, can all be produced and distributed by different divisions of the same conglomerate with each piece serving to promote the broader franchise. And in a capital-intensive industry where one or two major hits can be the key to corporate profitability, there is additional pressure to pour resources into the multi-media re-packaging and distribution of proven blockbusters.
Since the ability to package the same story in multiple formats is a central aim of media conglomerates imagine the financial benefits of turning one basic story into three or four media products it is no wonder that generic content is preferable to products that are too medium-specific for reformatting. This business goal of crossover potential may not directly undermine artistic or journalistic professionalism, but it does alter the terms of the transaction between producers and media companies. The bottom line approach of media conglomerates leaves little room for those concerned about the integrity of their specific product: the novel which wont work as a film, the soundtrack designed to suit the mood of the film not the needs of the international pop market. It is becoming a liability for media content, even news stories, to be singular or unexploitable. It is simple, recognisable, uncontroversial and transferable brands Teletubbies, Pokemon, Harry Potter which suit this business model, not complex, medium-specific, challenging or unfamiliar media texts. In short, media conglomerates prefer content with many uses and content-providers that can supply re-usable commodities.
Always springtime in adland
We also need to remember that media markets are quite distinctive. Most businesses sell products or services to buyers. Media sell goods directly to consumers and they sell the attention of consumers to advertisers. Media content is often a kind of bait, intended to lure audiences who are the valuable commodity for sale. The result is a mediated market in which media companies need audiences but receive most of their revenue from advertisers, who are interested in very specific segments of the public.
The role of advertising raises tough questions about the claim that market-driven media respond to consumer demand. High-income audiences, for example, are more appealing than low-income audiences, since they are more likely to have resources to purchase advertised products. Advertisers also have a strong preference for younger audiences, and are relatively uninterested in citizens over age fifty. And media companies trying to increase ad sales often pursue intricate strategies to raise their demographics both by adding upscale audiences and trying to shrink their low-income audience. Unlike a democratic one person, one vote dynamic, markets explicitly favour those with more resources. Even if we accept the claim that markets are responsive to buyers, it is clear that buyers in the media marketplace are often advertisers, not the general public. As a result, media content routinely displays images of young people and the well off, paying little attention to the experiences of citizens who are unattractive to advertisers.
Can public interest media survive the conglomerate era?
Compaines enthusiasm for market-driven media is reminiscent of former FCC Chief Mark Fowlers, who suggested that television is a simple appliance, a toaster with pictures. But media are not merely appliances to be used by consumers. Media constitute a central political and social institution, one that is essential for the construction of citizenship and the maintenance of a healthy public sphere. This unique status of media in a democracy is reflected in the legal protections the industry enjoys in most democratic societies.
The broad embrace of market-driven media and the growing power of the media conglomerates have produced global media policies aimed at deregulation. In the United States, the deregulatory climate has advanced so far that the FCC is on the brink of eliminating whats left of the pre-Telecommunications Act of 1996s regulatory framework. Indeed, the Telecom Act helped to usher in this new round of conglomeration by removing or relaxing several media ownership rules.
Since the removal of the cap on radio station ownership, Clear Channel Communications, has grown from forty-three radio stations in 1995 to almost one thousand two hundred stations in 2001. The 1995 elimination of the so-called Fin/Syn rules, which prevented television networks from owning the programming they broadcast, was heralded as a major step forward by the networks. Without these limits on program ownership, the US broadcast networks now insist on an ownership stake in virtually all of their programming. By 2000, ABC, CBS, and NBC all owned most of their programming. The FCC is currently considering the elimination of regulations barring ownership of a television station and a daily newspaper in the same market and is revisiting regulations limiting the reach of cable television companies. When the dust settles, it is likely that media ownership restrictions will be almost entirely eliminated in 2002.
In this deregulatory climate, even public broadcasting has turned to the market. In recent years, US public television, an ostensibly non-commercial system, has become increasingly integrated into the commercial broadcasting industry, developing new market-oriented business practices that emphasise the building of brand identity across a range of product lines. But these strategies are producing a public television that is losing its distinctive public service identity, as it becomes just another brand, competing for consumer attention in an increasingly cluttered commercial marketplace.
Ultimately, the debate about media ownership is just the tip of the iceberg, but it draws attention to broader questions about the global media system. When market enthusiasts talk about the global media, there is rarely room for discussions of citizenship or the public interest. Their celebratory discourse narrows the concept of the public interest to the economic benefits to consumers. If we define the public interest in terms of the contribution to a vibrant public sphere and the promotion of citizenship, then the growth of the media conglomerates raises serious concerns about whether a public of citizens, not just consumers, can be served by the new media giants.
Rather than debating the degree of media concentration, it behoves us to recognise that the growth of global media conglomerates poses a new challenge for those concerned about promoting cultural and political democracy. As a start, we need to develop a framework for effectively assessing the degree to which the conglomerate-dominated media industry serves the public interest. With global media conglomerates continuing to expand occupying more and more cultural space this is no time for smug indifference. We need to look squarely at the causes and consequences of conglomeration, protect and strengthen the remaining outposts of public service media, and revitalise the work of building a global media system that nourishes citizenship and enriches public life.
