Concentration of Media Ownership and Implications for Democracy Outline for presentation on December 3, 2003
I’ll use the US as the example today, but I think you will see that the implications are global! A quiet struggle is taking place in the US that is pitting ordinary citizens against some of the world’s most powerful and influential corporations. Some say that Democracy is at stake since the struggle is about diversity and access to information.
First a brief introduction about the US and rules for media ownership.
The US Constitution guarantees free speech and a free press. The First Amendment to the Constitution states: “Congress shall make no law … abridging the freedom of speech or of the press…”
This generally refers to content, since there are a variety of laws regarding the media business.
Radio and TV are regulated because unlike newspapers, they use a scarce public resource, the electro magnetic spectrum. The Communication Act of 1933 says that the airwaves belong to the publicThere are also regulations regarding the conduct of any business enterprise. Such as financial reporting for tax purposes and Anti-Trust law which attempts to limit corporate power used against competition.
With this in mind, the much of US history with the regard to media has been unfettered and colorful. There has always been truth in the saying:
· There is freedom for those that own the presses!
Until recently the business of publishing has been mostly local, and has often pitted various personal philosophies of owners against each other. This has meant really divergent views. During the 19th Century the press was truly representational and interests of the workers and average people had strong proponents.
The theory of “a market place of ideas” is used to describe this robust environment. This served the ideal that citizens needed diverse sources of in formation in order to exercise their rights to vote and take part in democracy.
Around the beginning of the 2oth century this competitiveness brought about profound changes. In order to maximize advertising revenues, newspapers began to take a more neutral point if view in their coverage of events, maintaining owner views for the editorial page. This led to what we today call journalism.
Radio broadcasting took hold in the US around this time and operated in the same model. Lots of local owners, lots of competing ideas and like newspapers of the period mostly profit driven.
By the early 1930’s it became clear that there needed to be regulation of broadcasting, since the technology depended on a finite resource, the electro magnetic spectrum or the airwaves.
Congress passed the Communications Act, which said that the Public owned the airwaves that all regulation should be in the public interest. The Federal Communication Commission (FCC) was created to be the watchdog and regulator. The Commission would consist of two members from each major political party plus the Chair chosen by the President.
Thus broadcast licensees would be granted upon showing how this public interest would be served. Still the model of communication was “the market place of ideas”, it was envisioned that the combined voices of the radio stations would reflect the diversity of America’s communities, opinions and ideas.
We need to leap forward 30 plus years. Television had taken the country by storm and across the US stations were granted licenses to broadcast in the public interest. Due to costs involved with major productions, 3 major networks were formed and tons of money was being made on both local and national levels. In those days (and until the 1990’s), those seeking licenses had to show:
they offered local programsserved community interests knowledge and understanding of their communities.
This was mandated to insure that there was genuine diversity among owners. Limits were placed on cross ownership, TV and Newspapers not allowed to have the same owner (exceptions were made where this was pre-existing) One owner could not have two stations in the same market, networks were limited to the number of stations that they could own directly so that they were limited or capped at not more than 35% of the national market
MONEY AND INFLUENCE
While all of this was good in theory, media owners loved the system. They discovered that lobbying dollars bought government influence. Politicians needed favorable media and media needed favorable politicians. Owners found that they could manipulate the regulatory aspects and provide very little to the public. As dollars increased, so did the desire for profits. Programs became more formulaic and public interest fell by the wayside.
As advertising revenues increased, so did the desire for bigness!
To increase profits, media companies sought economies of scale and vertical integration.
Another leap forward to 1983, Pulitzer Prize winning journalist and Professor Ben Bagdikian published his book The Media Monopoly. He detailed how 50 big companies controlled the media, and theorized how this trend was harmful to democracy.
He pointed out how in order to increase profits the media began to rely on sensation, sex and violence to sell advertising, this combined with cutbacks in news gathering, and the exercise of editorial control to not offend government would limit the information available to citizens. He was called alarmist and largely dismissed.
In 1987 the 2d edition of Media Monopoly was published, now there were 29 owners controlling most media, and still little attention was paid, but in 1997 when the firms numbered 10, people started to pay attention.
In 2000, just 17 years after the first book, the number was 6. In 1983 the biggest company was worth $340 million and in 2000 (AOL)/Time Warner was 1,000 times larger with a corporate worth of $350 billion!
These six firms control not only radio and television, but most publishing, and almost all forms of entertainment an now the Internet. News has become a miniscule part of the profits and now seen as maybe too costly. These conglomerates are not involved in competing ideas, for the most part they may compete in business, but their corporate philosophies are very similar.
The Six:
AOL/TIME WARNER, revenue 36.2 billion in 2001
General Electric/NBC, revenue 129.9 billion
Viacom/ CBS, revenue 20 billion
The Walt Disney Company/ABC, revenue 25.4 billion
NEWS Corp./ Star TV and Fox ,revenues 11.6 billion
Bertelsmann, revenue 16.5 billion
The next 4 are/were
Vivendi Universal revenues 37.2 billion (note: as of last month, Universal is being sold to GE)
Liberty Media revenue 42 billion
Sony, revenues 53.8 billion
AT&T revenues 66 billion
And almost all of them have significant financial involvements with each other.
This was the playing field as of one year ago when the FCC, under the leadership of Michael Powell (son of Secretary of State Colin Powell) announced its intention to permit further consolidation of ownership. This in response to “market forces” AND DEFINITLEY NOT THE MARKET PLACE OF IDEAS!
After nine months of so called research and with only one public hearing, the new rules were announced to the surprise of no one.
BIG MEDIA GETS MOST OF WHAT IT WANTED:
Newspapers could own TV stations and visa versaNetworks could own individual stations reaching 45% of the marketOne company would be allowed to increase station ownership in single markets.
It was not surprising that in the past 8 years media corporations showered the FCC with more than 2.8 million dollars worth of travel and entertainment.
There was a surprise however. In just nine months after announcing the rule making process, the FCC heard from more than 750,000 citizens saying no!
Not only were the numbers surprising, but the diversity of viewpoints represented further shocked the politicians. The Socialist Workers Party, Fundamentalist religious organizations, radical feminists, the Consumer Federation of America, the National Rifle Association, labor unions, and others who often have nothing in common, have all become part of a national movement to restore regulation in the public interest, and reverse the monopoly trend.
This outpouring of public rage has caused the US Congress to initiate legislation reversing the FCC. The issue has become an issue in the upcoming Presidential elections.
The political heat has been so intense, that many who originally supported the merger philosophy, are now opposed, including close political associates of President Bush.
Why are they so upset? Why should you care?
First it should be clear that to have the bulk of information in the world’s largest economy and only superpower controlled by a handful of like minded corporate boards, will means that only the narrowest kind of news reporting will take place (if at all –there is a trend to drop news all together in many cities). IN THIS CASE NO NEWS IS BAD NEWS FOR THE ABILITY OF CITIZENS TO BE INFORMED!
Are there concrete examples of how this ownership concentration works to the detriment of an informed citizenry? YES!
News Corp head Rupert Murdoch has several time intervened directly in the assets he controls to stifle ideas and opinions. His Harper Collins publishing Co. had planned to publish Chris Paten’s book about the hand over of Hong Kong by the British to the PRC. After protests by the PRC government, the book was dropped. Likewise when China objected to BBC reports about China, Murdoch dropped the BBC from his Star TV satellite delivery system to China.
While we cannot exactly see the future, we can tell you what has happened in the recent past. In 1996, when the last major round of media consolidation took place in the US, Clear Channel Communications owned 40 radio stations, today they own more than own more than 1200 which used to be more than 70 separate companies.
Together with other mergers and cost cutting automation10,000 jobs have been lost in radio alone. Don’t forget it is people who report news, not machines.
To cut costs Clear Channel “tracks” messages from a central control room to various stations that are automated. An overworked voice actor records messages to be aired in the various communities. The same voice saying good morning, it’s a beautiful day in your city…makes you think this is a local broadcast.
One day a city that was devastated by a terrible storm, with loss of life, heard “It’s a Beautiful Day via their Clear Channel station at half hour intervals for 6 hours!
More frightening is the use of corporate power and monopoly presence in the media to mobilize political pressure that fits the corporate agenda. As Paul Krugman recently reported in NY Times, the Texas-based Clear Channel Communications Inc. was the driving force behind a wave of pro-Iraq war rallies across America.
The Vice-Chairman of Clear Channel is Tom Hicks, close associate of President Bush. Note Clear Channel also banned air play of any of the recordings of The Dixie Chicks after they publicly criticized the war.
News Corp.’s Fox Television News gained notoriety both before and during the Iraq war for its blatant cheerleading! While most American News sources failed miserably at reporting anti war opposition, Fox News probably achieved new lows. One anchor said as part of so called news (back when the reason for the war was weapons of mass destruction), said “If there are no weapons of mass destruction, I’ll resign”. Well there aren’t and he hasn’t! Television and radio have become weapons of mass distraction.
Recent history has shown us that deregulated big companies have sorry ethical records. ENRON, WORLD COM, and GLOBAL CROSSING were huge corporations. They sold government on the line that “bigger is better for us and the economy”! The same song that is being sung by today’s media giants. Greed took control and ethics were cast aside in favor of more and more money for a few.
The impacts of these practices reverberate around the world. The Media companies in question are global. Not only do they have immediate impact on news, but on how we are entertained, how we are socialized, how we think. Their revenues make them as economically powerful as nations, their technology has a direct relationship to what we know, and how we know it. Sure much of what they sell we enjoy, but at what price?
