Media market concentration and pluralism by Torben Stuhmeier. A few comments by Augusto Preta

1. Torben Stuhmeier
Media market concentration
and pluralism
A few comments by Augusto Preta - IIC
EUI, Florence, 25 March 2017

2. Focus of the paper
1
• Digitalization of content causes market exit and consolidation on traditional
media
• Media policy is not only concerned because of reduced economic competition,
but also because of potentially reduced pluralism.
• The paper analyzes the relationship between media market concentration and
pluralism.
• In particular, the distinction between internal pluralism and external
pluralism.

3. Main results
2
• Internal pluralism is high in concentrated markets, while external pluralism is
not.
• A monopoly market does not necessarily offer less pluralism than a
competitive one
• Also, advertising-financed media does not necessarily offer less pluralism than
pay media (which contradicts the common wisdom that pluralism under
advertising-financed media is low).

4. General comments
3
• Relevant subject, with respect also to individual and social public values like
freedom of expression, diversity, participation, democracy
• Internal pluralism analysis is not so common in the public debate (safeguard
obligations only for public service broadcasting in Italy)
• Distinction between competition and pluralism also provides in some
countries a different scope for NCAs and NRAs to intervene (i.e. Italy)
• Pluralism is becoming a common issue not only in media regulation but also
in the convergent regulation (net neutrality in Europe in particular)

5. Media pluralism: what is it?
4
• “ Media pluralism is a concept that embraces a number of aspects, such as
diversity of ownership, variety in the sources of information and in the range of
contents available in the different Member states. For many analysts or
observers, media pluralism has come to mean, almost exclusively, plurality of
ownership. Concentration of ownership, it is feared, may result in a skewed
public discourse where certain viewpoints are excluded or underrepresented.
[...] “
• However, we have seen above that a definition only in terms of ownership is too
narrow, because each outlet also provides internal pluralism, offering a range of
different views.

6. Basic model and suggestions
5
• In this model, demand elasticity of advertising in equilibrium is in the inelastic region.
• A more elastic demand function would fit more ‘real-life’ scenarios, as is in the
case of many two-sided advertising markets.
• It is something that should be explored: probably there could be some changes in
the results of IP and EP equilibria.
• It seems that this model allows us to put a ‘price’ on pluralism. This could allow to
quantify the value of a social optimum in this sense.
• Can it become a tool to evaluate the benefits of optimal scenarios that achieve
certain “required” minimal levels of IP, while maximizing EP?
• Usually, the regulatory process aims at maximizing External Pluralism. This model
brings a focus on the interaction between EP and IP.
• Is IP something the regulatory authority should consider? And try to maximize?
Can we use as a tool to regulate and achieve an adequate/minimum pluralism
level in monopolistic markets?