Conglomeration of media ownership inhibits media content

Submitted by Faiza Zia Khan on February 16, 2006.English | Media Ownership

Faiza Zia Khan

The 1980s -90s denote an era of mergers and buyouts of media and entertainment companies. The trend towards media conglomeration has generated heated debates among communications scholars, policy makers and industry practitioners (Crouteau and Hoyes, 2001). Drawing from a social public sphere theory, opponents have called such an acceleration of consolidation the homogenization of media and a threat to democracy (Olmstead and Chang, 2003). Hollifield (2001) examines the important role media conglomerates play in the production of culture and the influence of corporate structure, strategy, management, and behavior on the nature and supply of “content”.

The political economy of communication (PEC) analyzes media conglomerates and the affect on shaping media content. This paper argues in context of political economy of communication, conglomeration has a restricting effect on media content.
Media critic Ben Bagdikian (2000) observes that media ownership is oligopolistic, defined as being concentrated in the hands of a few firms. Despite the fact there has been a varied dispersal of ideas by critics on the repercussions of media conglomerates; this paper examines three arguments in detail. --

First, the historical and theoretical role of market as a democratic institution in the media is studied. This argument is countered through the notion that media conglomerates also give their audiences content they do not desire (McChesney, 2004). It is further discussed with the example of vertical integration of media organizations. Second, the rise of communications conglomerates through commercial synergies reduces the diversity of cultural goods in circulation (Golding and Murdoch, 2000). It is examined keeping in view the Bertelsmann group. Counter argument presented here is, it is not the conglomeration structure, but the nature of media markets that commodifies content (Mosco, 1996). Third, the relationship between creative talent and commerce is ignored by commercial media in favor of commercial viability (McChesney, 2004). This is then countered by the notion of counter culture audiences who do not accept what the media offers in the name of entertainment and look for alternatives.-- There is concern among Canadian citizens for preference of commercialized content instead of local creative expression. Finally, with substantiation of evidence the paper concludes to critique that conglomeration has a constricting effect on media content.--

A brief historical context is discussed to understand the present state of market as a democratized media institution. Innumerable efforts have been made in the past to democratize the media. Robert Hackett (1999), states these efforts date back at least as far as the debates over the New World Information and Communication Order (NWICO) in the 1970s, but without much success. Herman et al (1997) reiterate Hackett’s opinion. They state that the NWICO operated on the ‘begging’ operation asking western media firms to curtail profitable operations and still get nothing in return. It also had the objective of Western governments to donate capital for Third World Communication investment. With its foundation based on such philosophies NWICO was destined for failure since its very conception.

Since the 1980s, however, these efforts have been more diverse, on the local, national and international levels. They include public access and alternative media organizations, distribution networks for independent media, media resource centers to support community organizing and political activism, media monitoring and "watchdog" institutes and journals, ad hoc campaigns to influence dominant media, policy advocacy groups concerned with communications issues, professional organizations, trade unions representing journalists, other media workers, and ‘culture jammers’ who try to satirize and denaturalize the dominant media's representations (Hackett et al , 1999).

The theoretical role of market as a democratic institution in the media is studied next. McChesney (2004) observes the basic principle of markets as voluntarist mechanisms in which people interact freely. He applies the same principle in theory to the media. If people desire specific media content, competition will force media corporations to provide such content. Media firms will be forced to give people what they want or close operations. New firms will emerge in the market and provide people what they want and capture market share. Thus, market serves as a democratic institution in the media providing content that is democratic and wanted by audiences.

On the other hand, the opposite side undermines the theoretical basis to this argument. Fortunato (2000) argues that too much power is granted to mass media in terms of selecting and framing messages that are designed to influence the public without an inclusion of a role. McChesney (2004) argues, ““we give people what they want” is a half-truth…Concentration and conglomeration, as I’ve demonstrated, raise significant barriers to an effectively free operating market.” He clarifies that media markets give people content that lies strictly within the sphere of profit generation. Content is not based on what people want. There is tendency of media conglomerates towards vertical integration. Bagdikian (2000) defines vertical integration as the merger of a media company at a different stage in the production process. It is likely to raise anti trust concerns only if one of the companies already enjoys some monopoly power, which the deal might allow it to extend into a new market. Many of the media firms are vertically integrated in networks such as toys, clothing, retailing etc. While this is good for their business, the diversity of opinions and issues being discussed will be less well covered. Bagidikian (2000) further supports his view point. He states that dominant vertical corporations now have government support and have merged into ever larger total systems. The critique on such corporations, including those in the media, is that they have remained largely unrestrained. They give audiences content that is commercially viable whether they want to see it or not. Furthermore, vertical integration helps to enhance marker power by cross selling and cross promotion.

In support of Bagdikian’s observation, Disney’s animated movie The Lion King (1994) is critiqued as an example of vertical intergration. This movie generated over $1 billion in profit. It led to a lucrative Broadway show, a TV series and all sorts of media spin-offs. It also led to 186 items of merchandising. Wall Street analysts gush at the profit potential of animated films in the hands of media conglomerates; they estimate that such films on average generate four times more profit than their domestic box-office take. (McChesney, 1999). It can be analysed that audiences wishing to avoid The Lion King will still end up buying one or more of the associated products due to cross marketing. Therefore, the argument that audiences eventually end up getting content they do not want is valid in light of the above evidence.

The second argument of the paper discusses the rise of communications conglomerates through commercial synergies reduces the diversity of cultural goods in circulation (Golding and Murdoch, 2000). They state, cultural production is also strongly influenced by commercial strategies that exploit the overlaps between the company’s different media interests. Bertelsmann AG, one of the few dominating conglomerates in the media market is exemplified. The website states, “Bertelsmann produces, serves and markets media. Our content is contributed by RTL Group, the No. 1 European broadcaster; Random House, the world's largest book-publishing group; Gruner + Jahr, Europe's biggest magazine publisher; and BMG, the umbrella of Sony BMG Music Entertainment and BMG Music Publishing. Arvato provides media services, while Direct Group is the global market leader in media distribution through clubs and on the Internet” (Bertelsmann, 2005). It is important to note here that the content produced by the parent concern RTL Group is produced by all Bertelsmann subsidiaries. Audiences in North America are being exposed to European broadcasting content. The diversity of the cultural good produced is thus restricted as the same content is being distributed over entirely different regions of the market.

Golding and Murdoch (2000) further state the case of Bertelsmann, the company has used extensive German publishing interests as a launch pad for diversification. The company’s publishing house will give free publicity to their television or the records. This is critiqued by the fact that overall effect of synergies is to inhibit and reduce the diversity of cultural goods in circulation. Apparently the effect is there are many commodities in circulation quantitatively but are variants of the same theme or principles.

However, the other side of this argument is countered by the view, it is not the conglomerate structure but the nature of the media markets that commodifies content. Media markets differ from other markets due to their tendency to commodify ideas, culture, journalism, religion and even audiences that causes concern among citizens (Thompson, 1995). Mosco (1996) gives the PEC view on commodification of content. A sequential process is followed while commodifying content. Messages are transformed into marketable products. This content is marketed to generate profits and surpluses. For content to be marketable enough to gain profits, it is necessary for the content to be controlled and tailored. It should be in accordance with the needs of those who will provide revenues. Again the commercial aspect comes to the forefront. Mark Crispin Miller (2001), Professor of Media studies at New York University makes this interesting observation: “Against the daily combination of those corporate tendencies--conflict of interest, endless cutbacks, endless trivial pursuits, class bias, deference to the king and all his men--the public interest doesn't stand a chance. Despite the stubborn fiction of their "liberal" prejudice, the corporate media have helped deliver a stupendous one-two punch to this democracy.” Miller’s argument stands particularly true in the light of control of information and news. The example that illustrates control of news content is the Iraq War. Iraq was attacked on March 19, 2003 by U.S. forces and President George W. Bush declared it over on May 1, 2003. This war is unique among others as it was televised frame-to-frame over broadcast networks. It has also been dubbed the first “interactive war”. It was watched in 212 countries with a daily audience of one billion globally (CNN.com, Archives 2003). Despite all the media hype created around this war the information being broadcast was heavily censored and regulated. The images of war were being engineered to appeal to the masses, not drive them away from the screens. This not only enhanced ratings but also pulled in revenues for the broadcasters. Thus, it can be seen here that media markets differ from other markets due to their tendency to commodify content for profit maximization. The question remains: Who provides revenue for profit maximization? This leads to the third argument of the paper.

The third argument is the relationship between creative talent and commerce is ignored by commercial media in favor of commercial viability. The role of advertising is a significant source of revenue for media conglomerates. McChesney (2004), states this changes the logic of media markets radically, as interests of consumers must be passed through the demands of the advertisers. Critical analysis demonstrates the results are not always audience friendly. Media conglomerates do not compete with each other for profits anymore. They cooperate instead, so the audiences can be captured for profits. They have an agreement on what content to provide to audiences. It can be seen that creative talent is not the motivation behind selection of content but the objective of maximizing profit. Media conglomerates aim at maximizing revenues and provide content that has commercial value. The example for this is an observation of the U.S. media coverage of 9/11 events. In the aftermath of the incident news channels broadcast the images of the planes colliding into the twin towers repeatedly sponsored by various major advertisers as a commemoration. The routine was followed by the major news networks namely MSNBC, Fox, CNN. The philosophy behind this idea was to create a monopoly of content, where audiences were forced to watch the coverage as it pleased the advertisers. This did not necessarily reflect the audiences’ tastes.

This argument is then countered by the PEC view projected by iconoclasts or counter culture groups who do not accept the content media provides. Canadian citizens are concerned that creative expression produced locally such as music, books or music is not necessarily identical to those of media corporations. An example that is true here is of the documentary Fahrenheit 911, by director Michael Moore. This documentary is based on criticism regarding the government of President George W. Bush. It had been refused distribution by all networks in United States of America. The reason behind this refusal is the lack of commercial viability of the film. The creativity of the content, director’s brilliance and authenticity of events was tossed aside in view of pleasing the sponsors, advertisers and the government. Finally, Lions Gate Films a Canadian media conglomerate decided to distribute it across North America. This demonstrates that counter culture groups do exist who revolt against content that media conglomerates provide. Many Canadian citizens switch over to other modes and means that provide an alternative to the ideas of the mainstream media.

After examining all the evidence in light of the central argument of the paper a general critique is necessary regarding the above arguments. The case for media firms is weak here as media firms do not provide audiences content they desire. This might not be done intentionally by the media conglomerates. Canadian citizens are concerned with the accumulation of excessive power and revenue among few media conglomerates. In reality large media firms are too far removed from their customers to recognize their needs and tastes. Media conglomerates are less motivated towards profit and more towards creative content. Strong policy measures and subsidies can encourage a vibrant non-profit and non-commercial media sector.

In conclusion, it can be argued that conglomeration has a restricting effect on media content from the political economy of communication perspective. Concentration of information control in hands of the few not only regulates; but also denies free access to content, a basic democratic right. Canadian citizens express concern over the external influence especially that of the United States taking over local Canadian content. It is necessary that as Canadians we maintain our distinct expression and ideas in the media to reflect upon our existence as a diverse and democratic nation. --

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