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Concentration of media ownership


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Concentration of media ownership

  1. 1. Concentration of media ownership (also known as mediaconsolidation or media convergence) is a process wherebyprogressively fewer individuals or organizations controlincreasing shares of the mass media. Contemporary researchdemonstrates increasing levels of consolidation, with manymedia industries already highly concentrated and dominated bya very small number of firms.Globally, large media conglomerates include Viacom, CBSCorporation, Time Warner, News Corp, Bertelsmann AG, SonyCorporation of America, NBCUniversal, Vivendi, Televisa, TheWalt Disney Company, Hearst Corporation, Organizações Globoand Lagardère Group.As of 2010, The Walt Disney Company is the largest mediaconglomerate in the US, with News Corporation, Time Warnerand Viacom ranking second, third and fourth respectively.In nations described as authoritarian by most internationalthink-tanks and NGOs like Human Rights Watch (China, Cuba,Russia), media ownership is generally something very close tothe complete state control over information in direct or indirectways (see Gazprom Media).MergersMedia mergers are a result of one media related companybuying another company for control of their resources in order
  2. 2. to increase revenues and viewership. As information andentertainment become a major part of our culture, mediacompanies have been creating ways to become more efficientin reaching viewers and turning a profit. Successful mediacompanies usually buy out other companies to make themmore powerful, profitable, and able to reach a larger viewingaudience. Media Mergers have become more prevalent inrecent years, which has people wondering about the negativeeffects that could be caused by media ownership becomingmore concentrated. Such negative effects that could come intoplay are lack of competition and diversity as well as biasedpolitical views.Media oligopolyAn oligopoly is when a few firms dominate a market.[9] Whenthe larger scale media companies buy out the more smaller-scaled or local companies they become more powerful withinthe market. As they continue to eliminate their businesscompetition through buyouts or forcing them out (becausethey lack the resources or finances) the companies leftdominate the media industry and create a media oligopoly.Elimination of net neutralityNet neutrality is also at stake when media mergers areoccurring. Net neutrality involves a lack of restrictions oncontent on the internet, however, with big businesses
  3. 3. supporting campaigns financially they tend to have influenceover political issues, which can translate into their mediums.These big businesses that also have control over internet usageor the airwaves could possibly make the content availablebiased from their political stand point or they could restrictusage for conflicting political views, therefore eliminating NetNeutrality.Debates and issuesConcentration of media ownership is very frequently seen as aproblem of contemporary media and society. When mediaownership is concentrated in one or more of the waysmentioned above, a number of undesirable consequencesfollow, including the following:Commercially driven, ultra-powerful mass market media isprimarily loyal to sponsors, i.e. advertisers and governmentrather than to the public interest.Only a few companies representing the interests of a minorityelite control the public airwavesHealthy, market-based competition is absent, leading to slowerinnovation and increased prices.Diversity of viewpointsIt is important to elaborate upon the issue of mediaconsolidation and its effect upon the diversity of information
  4. 4. reaching a particular market. Critics of consolidation raise theissue of whether monopolistic or oligopolistic control of a localmedia market can be fully accountable and dependable inserving the public interest.Freedom of the press and editorial independenceOn the local end, reporters have often seen their storiesrefused or edited beyond recognition. An example would bethe repeated refusal of networks to air "ads" from anti-waradvocates to liberal groups like, or religious groupslike the United Church of Christ, regardless of factual basis.Journalists and their reports may be directly sponsored byparties who are the subject of their journalism leading toreports which actually favor the sponsor, have that appearance,or are simply a repetition of the sponsors opinion.Consequently, if the companies dominating a media marketchoose to suppress stories that do not serve their interests, thepublic suffers, since they are not adequately informed of somecrucial issues that may affect them.Concern among academia rests in the notion that the purposeof the first amendment to the US constitution was toencourage a free press as political agitator evidenced by thefamous quote from US President Thomas Jefferson, "The onlysecurity of all is in a free press. The force of public opinioncannot be resisted when permitted freely to be expressed. The
  5. 5. agitation it produces must be submitted to. It is necessary, tokeep the waters pure." [4]. Freedom of the press has long beencombated by large media companies, but their objections havejust as long been dismissed by the supreme courts.DeregulationOne explanation for the cause of the concentration of mediaownership is a shift to neoliberal deregulation policies, which isa market-driven approach. Deregulation effectively removesgovernmental barriers to allow for the commercial exploitationof media. Motivation for media firms to merge includesincreased profit-margins, reduced risk and maintaining acompetitive edge. In contrast to this, those who supportderegulation have argued that cultural trade barriers andregulations harm consumers and domestic support in the formof subsidies hinders countries to develop their own strongmedia firms. The opening of borders is more beneficial tocountries than maintaining protectionist regulations.Critics of media deregulation and the resulting concentration ofownership fear that such trends will only continue to reducethe diversity of information provided, as well as to reduce theaccountability of information providers to the public. Theultimate consequence of consolidation, critics argue, is a poorlyinformed public, restricted to a reduced array of media options
  6. 6. that offer only information that does not harm the mediaoligopolys growing range of interests.For those critics, media deregulation is a dangerous trend,facilitating an increase in concentration of media ownership,and subsequently reducing the overall quality and diversity ofinformation communicated through major media channels.Increased concentration of media ownership can lead to thecensorship of a wide range of critical thought.OtherAnother concern is that consolidated media is not flexibleenough to serve local communities in case of emergency. Thishappened in Minot, North Dakota, in 2002, after a train filledwith anhydrous ammonia derailed (see Minot train derailment).None of the leading radio stations in Minot carried informationon the derailment or evacuation procedures, largely becausethey were all owned by Clear Channel Communications andreceived automated feeds from the corporate headquarters inSan Antonio, Texas. 1600 people were injured and one diedunreliable source?]Determinants of media pluralism
  7. 7. Size and wealth of the market“Within any free market economy, the level of resourcesavailable for the provision of media will be constrainedprincipally by the size and wealth of that economy, and thepropensity of its inhabitants to consume media.” [Gillian Doyle;2002:15] Those countries that have a relatively large market,like the United Kingdom, France or Spain have more financialbackground to support diversity of output and have the abilityto keep more media companies in the market (as they are thereto make profit). More diverse output and fragmentedownership will, obviously, support pluralism. In contrast, smallmarkets like Ireland or Hungary suffer from the absence of thediversity of output given in countries with bigger markets. Itmeans that “support for the media through direct payment”and “levels of consumers expenditure”, furthermore “theavailability of advertising support” [Gillian Doyle; 2002:15] areless in these countries, due to the low number of audience.Overall, the size and wealth of the market determine thediversity of both media output and media ownership.Diversity of suppliers/ownersFrom the previous paragraph can be assumed that size/wealthof the market have a very strong relation to the diversity ofsupplier. If the first is not given (wealthy market) then it is
  8. 8. difficult to achieve fragmented supplier system. Diversity ofsuppliers refers to those heterogeneous independentorganizations that are involved in media production and to thecommon ownership as well. The more various suppliers thereare, the better for pluralism is. However, “the more powerfulindividual suppliers become, the greater the potential threat topluralism.”Consolidation of resourcesThe consolidation of cost functions and cost-sharing. Cost-sharing is a common practice in monomedia and cross media.For example, “for multi-product television or radiobroadcasters, the more homogeneity possible betweendifferent services held in common ownership (or the moreelements within a programme schedule which can be sharedbetween ’different’ stations), the greater the opportunity toreap economies.” [18][verification needed] Though the mainconcern of pluralism is that different organization underdifferent ownership may buy the same e.g. news stories fromthe same news-supplier agency. In the UK, the biggest news-supplier is The Press Association (PA). Here is a quoted textfrom PA web site: “The Press Association supplies services toevery national and regional daily newspaper, majorbroadcasters, online publishers and a wide range of commercial
  9. 9. organisations.” Overall, in a system where all different mediaorganizations gather their stories from the same source, thenwe can’t really call that system pluralist. That is where diversityof output comes in.