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The Economics of Big Media

• By far, most U.S. media is for-profit.
• Profit concerns dominate considerations about
  content and policy.
• Like other capitalist institutions, the media
  always serves the private interest.
• However, the U.S. capitalist media its content
  and its policies - may or may not serve the
  larger public interest.
• Generally the U.S. capitalist media is very
  entertaining, but not very informative.

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Changing Patterns of Media Ownership

• Ownership is an important issue.
• Democratic societies require an informed
  citizenry, and we rely upon the media to help
  inform citizens about policies and platforms.
• Whoever owns a specific media controls the
  content of that media.
• Owners are not all of one mind, so it is too
  simplistic to see Big Media as a conspiracy of
  like-minded powerful owners.

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Concentration of Ownership

• The U.S. is in a period of monopoly and oligopoly
  in many industries, including media.
• This is due partly to the failure of government
  to regulate and protect diversity of ownership.
• By 1992, the mass media (TV, radio, print, etc)
  was dominated by only 20 companies.
• For example, while there were more than 3000 book
  publishers in the U.S., 5 corporations accounted
  for more than half of the annual book revenues in
  the 1990s, and it is worse today.
• Concentration has occurred in book publishing,
  the magazine industry, in newspapers, and in most
  of the media.

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Media Concentration 1983-92
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Concentration of Ownership

• The extraordinary concentration of media
  ownership is not common knowledge.
• This is because most magazines, newspapers and
  book publishers operate under a variety of names.
• Five key book publishers own more than 3000
  differently-named book labels, like Ballantine,
  Penguin, Random House, etc.
• The Charlotte Observer appears independent on the
  surface, but they are owned by the McClatchy
  newspaper chain.

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Number of Firms that Dominated the Mass
Media,1983-2006 Sources Ben Bagdikian, The Media
Monopoly, 2000 Mother Jones, Mar-Apr 2007
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By 2006, Media Ownership was Dominated by 8
Corporations Source Mother Jones Magazine,
Mar-Apr, 2007

• Walt Disney - 73 Billion Market Value
• ABC, AE, Lifetime channel, U.S. Weekly, ESPN
• Time Warner - 91 Billion
• HBO, Cinemax, CNN, Time Magazine, Sports
  Illustrated
• Viacom/CBS - 54 Billion
• CBS, Showtime, MTV, VH1, SimonSchuster
• General Electric/NBC Universal - 391 Billion
• NBC, MSNBC, CNBC, Bravo, History Channel
• News Corporation - 57 Billion
• Fox TV, Fox News, Harper Collins
• Yahoo! - 40 Billion
• Microsoft - 306 Billion
• Google - 155 Billion

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Conglomeration and Integration in the Media

• Conglomeration this is when media firms become
  involved in a variety of diverse business
  activities.
• Example General Electric makes nuclear weapons
  as well as TV content.

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Horizontal and Vertical Integration

• Vertical Integration Cross-industry ownership,
  or the degree a single firm owns its upstream
  suppliers and its downstream buyers. Here one
  firm engages in different aspects of the
  process,from production to distribution.
• Example a firm hires an artist, records them,
  distributes them on stations they own and
  features them in clubs they own.
• Horizontal Integration Consolidation of many
  firms that handle the same part of a production
  process. When a firm buys out other firms doing
  the same thing, it is seeking horizontal
  integration. It seeks to increase its share of
  the market. Most anti-trust laws are aimed at
  horizontal monopoly.
• Example When MTVs Viacom buys other cable
  channels, magazines, and other distributing means
  it is seeking horizontal integration in
  distributing.

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Consequences of Conglomeration and Integration

• 1. Homogenization.
• 2. Higher profits for big media.
• 3. Horizontal Integration.
• 4. Vertical Integration.
• 5. A shift to the right, ideologically.
• 6. Increased self-censorship toward the
  ideological right.
• 7. The public is locked out of participating in
  the media.

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Consequences of Conglomeration and Integration

• 1. Homogenization.
• Today there are fewer and fewer locally owned
  radio and TV stations.
• There has been an erosion of local culture as
  national chain-media emphasize non-local content.
• Homogenization threatens cultural diversity.
• The homogenization hypothesis (see next page).

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The Homogenization Hypothesis

• This thesis argues that concentration leads to a
  lack of diversity in content.
• Research reveals that, while generally true, it
  depends on the specific industry
• In the newspaper industry, increased
  concentration does not appear to change content
  very much.
• This is because newspapers have been concentrated
  since the early 20th century and theyve
  standardized content a front page, a sports
  page, a lifestyle page, etc, with editorializing
  relegated to a page or two.

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Music radio homogenization depends upon various
factors

• 1. Degree of competition.
• The less competition, the more homogenized the
  content. (The homogenization hypothesis).
• Today 4 record corporations control 80 of the
  music market. They prefer safe musical content
  that is fairly standardized.
• 2. Openness to new music.
• The more a station manager is open to new music,
  the more diverse the musical content.
• This presumes the station manager is allowed to
  influence content. Corporate radio has taken much
  of the freedom away from managers and DJs,
  preferring safe content dictated from corporate
  headquarters.

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Talk radio homogenization

• Today roughly 80 of talk radio consists of
  right-wing commentary.
• Loss of diversity of radio ownership has led to
  emergence of Clear Channel-style radio, with a
  clear bias toward the political right.
• Radio owners are wealthy. Most prefer Republican
  to Democratic platforms, especially on economic
  issues. They hire talk radio hosts who reflect
  their conservative world views.
• The demise of the Fairness Doctrine, which used
  to require balanced views, allowed radio/TV
  owners to load up on right-wing content without
  being fair and balanced. Example Fox News.

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Consequences of Conglomeration and Integration,
continued

• 2. Higher profits for big media.
• Stockholders benefit from conglomeration, but the
  public doesnt.
• 3. Horizontal integration.
• The loss of independence between films, TV, and
  music means the same artist we see in the movies
  may also show up on an album. Or visa versa. They
  will be cross-promoted, guaranteeing success even
  if they arent very good. Example Britney
  Spears.
• This also means the look matters. In the age of
  MTV, musical artists who dont look good
  generally dont get promoted.

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Consequences of Conglomeration and Integration,
continued

• 4. Vertical Integration.
• When the same firm that produces a musical artist
  also distributes the artist, it virtually
  guarantees they will sell. Ex Britney Spears.
• However, independent artists get locked out of
  the system. Independent artists bring innovation,
  creativity, and diversity of content.
• Instead, we see more of these in-house top 40
  performers (are they artists?) in heavy rotation.
  
• Corporate media prefers safe content. Roughly
  50 of all musical content on commercial radio
  consists of safe love songs, sung by safe
  artists.

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Consequences of Conglomeration and Integration,
continued

• 5. A shift to the right, ideologically.
• While anti-establishment content is sometimes
  allowed as long as it is profitable Big Media
  prefers artists who are friendly to their agenda,
  and this agenda leans to the middle and right.
• ESPN hired Rush Limbaugh for sports commentary.
  (He didnt last long).
• Clear Channel censored the Dixie Chicks, Neil
  Young, Rage against the Machine, etc, while
  sponsoring pro-Bush, pro-war rallies.
• Fox News is the most biased of all major TV
  networks, yet claims itself to be fair and
  balanced using cynical advertising techniques.

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Consequences of Conglomeration and Integration,
continued

• 6. Corporate self-censorship has increased.
• News that challenges the legitimacy of capitalism
  or the policies of private corporations is more
  likely to be censored by corporate media.
• Example 1 GE refused to let NBC report on GE
  corruption in the nuclear industry.
• Example 2 Big Media has yet to cover the Iraq
  invasion from anything but a moderate or a right-
  wing perspective.

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Consequences of Conglomeration and Integration,
continued

• 7. With concentration, the public gets locked out
  of participation.
• As local media decline, ordinary folks have less
  influence.
• Today, freedom of the press is limited to those
  who can afford to own radio and TV stations the
  millionaires and their corporations.
• Media corporations routinely use the rhetoric of
  freedom at the same time that media oligopoly
  serves to reduce choices.

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Conclusion The Issue of De-Regulation

• Big Media claims that de-regulation brings
  freedom and diversity to the market.
• In fact, it has done the opposite.
• This is because de-regulation has allowed large
  corporations to concentrate, eliminating smaller
  media outlets. This brings monopoly and
  oligopoly, which violate the public interest.

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Conclusion The Issue of De-regulation

• What does de-regulation really mean if the media
  today are essentially one big media cartel?
• The agenda of most large media corporations is to
  lobby for more de-regulation as they seek even
  more concentration and integration.
• Politicians, beholden to Big Media lobbyists,
  usually give Big Media most of what they want.
• Unfortunately, neither the public interest nor
  democracy itself is served by these policies.

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The Case of Clear Channel

• The following local radio stations are owned by
  Clear Channel
• 99.7 WRFX Classic rock
• 96.1 Beat
• 102.9 Lite
• 96.9 Kat Country
• 106.5 New rock
• Today, the musical play lists of these stations
  are relatively homogenized to reflect the top
  40 agenda of Clear Channel Corp., although
  limited discretion is given to DJs and station
  managers.

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Clear Channel Corporation

• Began acquiring radio stations in 2000.
• Now owns about 1200 stations across the country,
  representing 10 of all radio stations.
• Owns ½ of all major radio stations.
• Owns stations in 47 of the top 50 markets.
• Has 110 million U.S. listeners.
• 3 billion in annual revenues.
• Controls 60 of all rock music radio.

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Clear Channel Goals

• Horizontal and Vertical integration
• Horizontal Buy up as many radio stations as they
  can.
• Vertical Buy up venues for live shows and use CC
  radio to promote CC shows.
• For example, Clear Channel teamed up with Verizon
  (wireless, amphitheater) in Charlotte and
  elsewhere.
• By 2002 Clear Channel controlled about 70 of all
  live venue concerts and used its radio stations
  to promote its own concerts. Rival or independent
  performers could not get their music or concerts
  promoted on Clear Channel stations.
• Clear Channels stated goal is synergy - a
  euphemism for monopoly control.

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Clear Channel Origins

• 1996 Telecommunications Act
• Allowed unlimited ownership of radio stations by
  a single corporation, or horizontal integration.
• Prior to this, a corporation could own a maximum
  of 40 radio stations.
• Immediately after this law, Clear Channel and
  Infinity began buying up radio stations across
  the country.

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The Politics of Clear Channel

• Owned by a conservative Texas corporation.
• Like Fox News, Clear Channel favors a right wing
  slant in content.
• Sponsored rallies to support the 2003 U.S.
  invasion of Iraq.
• Censored opposing viewpoints and artists who
  disagreed with the invasion.
• Homogenized or safe play lists emphasized.
• DJs denied play list freedom and censored or
  fired for complaining.
• Payola via third party agents.

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Summary

• Clear Channel is the outcome of the de-regulation
  policies.
• De-regulation led to increased monopoly and
  oligopoly at the expense of the public interest.
• Media content is being homogenized toward a
  corporate-conservative agenda under the rhetoric
  of free market.
• The public interest is better served with
  diversity of ownership and diversity of content.
• Diversity of viewpoint sustains democratic debate
  and an informed public.

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Media Control and Political Power

• Can the concentration of media undermine our
  political system?
• Yes. Corporate Media routinely lobbies and
  donates funds to politicians in exchange for
  favorable treatment.
• Many politicians are afraid to be openly critical
  of Corporate Media policies because they have
  become dependant on their donations to get
  re-elected.

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Censorship

• It is ironic that most discussion of censorship
  and free speech focuses on government censorship,
  not corporate censorship.
• Most media censorship is corporate censorship. It
  is self-censorship.
• Corporations are reluctant to publish news that
  reflects badly upon themselves.
• Example tobacco firms and self-censorship.
• Corporations use Public Relations firms to spin
  the truth a version of censorship.
• Rupert Murdocks Fox News censors out of self
  interest, favoring a right wing slant.

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How is Corporate Media Biased?

• Corporate media is biased in different
  directions, depending on the issue and the
  specific media (recall talk radio). There is a
  general observation
• Social issues like sex, drugs, rocknroll, race
  issues, gay issues, etc corporate media offers a
  generally moderate to liberal slant.
• Americans are shifting to the left on social
  issues, and corporate media likes to appeal to
  mainstream America.

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How is Corporate Media Biased?

• Economic issues pertaining to government
  legislation of the economic sector, distribution
  of wealth, the welfare state, etc corporate
  media offers a generally moderate to conservative
  slant.
• While most Americans are not economic
  conservatives, most private corporations are.
• U.S. corporations favor the economic-conservative
  ideology more than any other.
• To corporate media, the bottom line is profit
  maximization via laissez faire government
  economic policies and/or favorable legislation
  that gives them an economic advantage. They are
  fundamentally capitalists.

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Mass Media for Profit

• Capitalist media focus on one specific goal
  financial profit.
• The problem is there is no sure-fire way to make
  a profit.
• In network TV, only a handful of new shows are
  successful.
• These hit shows are hugely profitable.
• As few as 10 of media productions can provide
  profits large enough to make up for the vast
  number of shows that lose money.

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Prime Time Profits

• Given their profit motive and the failure rate of
  new shows, network programmers follow the logic
  of safety.
• They seek to minimize risk by adopting a simple
  formula Avoid shows which are too controversial,
  too original, or too risky in any way.
• The consequence of the logic of safety is network
  TV shows that are imitations or spin-offs of the
  rare hit shows.
• For example, there are more than 200 reality TV
  shows, almost all of which are imitative. This
  system drives quality downward.

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Profit and the News Media

• Commercial news organizations are for-profit too.
• With oligopolization, the news divisions of
  various media have been criticized by
  owners/stockholders as not profitable enough.
• News divisions are typically not as profitable as
  Entertainment divisions.
• Therefore, under pressure to increase profits,
  news policies have shifted in recent years to
  increase corporate profits.

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Corporate News Recent Changes

• Corporate news programs have found numerous ways
  to increase profits
• 1. Less investigative reporting.
• 2. Use fewer news sources.
• 3. Decreased news staffs.
• 4. Make the news more entertaining.
• More emphasize on if it bleeds, it leads.
• 5. Focus on sensational or tabloid news stories
  (like OJ, Britney Spears, man bites dog, etc).
• 6. Include soft human interest stories that
  reassure audiences with their happy endings.
  Use upbeat styles.
• 7. Hire personalities (like Katie Couric at CBS)
  rather than real journalists to deliver the news.
  Place emphasis on these news personalities as
  celebrities to worship.
• 8. Eliminate the news altogether and play re-runs
  of former hit shows.

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Prime Time Profits

• As a result of these corporate media policies,
  American prime time news has suffered a severe
  drop in quality since the 1970s, and virtually
  all of the major network news shows are
  carbon-copy imitations of each other.
• The same exact news byte on CBS will air on the
  competitor networks, often at the same exact
  time.
• This pattern is similar to price-fixing and
  relates to the oligopolistic nature of U.S.
  corporate media. Rather than be different, the
  networks have worked out a defacto arrangement to
  be similar to each other.

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Prime Time News

• The real casualty of the decline of news quality
  has been the U.S. public.
• When it comes to world affairs, Americans are
  among the most misinformed and ignorant
  populations of all industrial societies, partly
  due to the low quality of information supplied by
  U.S. commercial TV networks.
• Studies suggest that loyal Fox News viewers are
  the most ignorant and misinformed on issues like
  the U.S. invasion of Iraq, largely because Fox
  News coverage is so slanted.
• However, Fox News is more profitable than most
  other news organizations because Fox rejects
  traditional journalism in favor of infotainment.

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Advertising and the Press

• The traditional take on the British press was
  that 19th century British newspapers won their
  freedom from government and party control as they
  shifted to an advertising-driven press.
• This view claimed they achieved economic
  independence, allowing them to become watchdogs
  or the fourth estate.

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Advertising and the Press

• However, this argument obscures how advertising
  led to new forms of self-censorship.
• An advertiser-driven press is not a free press.
  It is beholden to the advertisers interests in
  order to sustain revenue.

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Advertising and the Press

• Advertisers in the 19th century were not
  interested in the problems of the working class,
  or in criticizing industrial capitalism.
• To the extent the working class press criticized
  capitalism, advertisers withdrew support and gave
  it to the more conservative press.
• Ultimately, the ad-driven press led to
• the decline of the radical ideology press
• the emergence of a press inclined toward
  non-ideological coverage, such as lifestyle
  pages
• more balanced coverage of events in order not
  to offend paying consumers.

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The American Press

• Advertising driven, mostly. Therefore, it is
  biased toward capitalist values. Most content is
  ads.
• Radical ideology is almost totally censored.
• Prefers safe or soft content that is
  non-ideological over hard or controversial
  content. Hence lots of sports, leisure
  lifestyles, local news, tabloid, etc.
• Relegates politics and (controversial)
  editorializing to the back page(s).
• Tries to present relatively balanced coverage in
  order not to offend different constituencies.
• The objectivity norm in journalism relates here.
• Recent exceptions include Fox News, Sinclair
  Broadcasting and other heavily-biased media that
  seek an ideological niche at the expense of
  balance.

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Advertising and News

• Advertising exerts pressure on the news media to
• Avoid upsetting the sponsors, who are typically
  major capitalist corporations.
• Use safe stories that wont rock the boat.
• Present a world view consistent with that of the
  advertisers.
• Utilize subtle reassurance messages that the
  status quo is just and orderly.
• Self-censorship no direct criticism of
  capitalism is expected.
• The news beat is biased toward the powerful
  especially capitalists at the expense of
  balance.

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Conclusion

• A capitalist media will rarely be an objective
  media. It will typically be biased toward the
  agenda and world view of capitalists,
  particularly corporate capitalists.
• This can be very costly when citizens need
  crucial information about social policy.
• The profit motive behind capitalist media
  explains why the emphasis is on entertainment
  more than information or news, and why the
  content is self-censored toward the agenda of
  capitalism.
• Corporate conglomeration and oligopoly have
  degraded the U.S. news-information system.

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End