Should we care who owns the media? Does it matter if, step by step, a consolidation process is taking place, creating a small group of global companies with interests spanning film, music, television, entertainment and the printed word?
Increasing business concentration is a facet of globalisation. Most newspapers, television and radio stations are owned by large and powerful multi-national companies…
- in 1983, 50 corporations dominated most of every mass medium and the biggest media merger in history was a US$340 million deal;
- in 1987, the fifty companies had shrunk to 29;
- in 1990, the twenty-nine had shrunk to 23;
- in 1997, the biggest firms numbered 10 and involved the US$19 billion Disney-ABC deal, at the time the biggest media merger ever;
- in 2000, AOL Time Warner's US$350 billion merged corporation was more than 1,000 times larger than the biggest deal of 1983;
- the merger between Vivendi, Canal Plus and Seagram, announced in June 2000, made it the 2nd biggest media group in the world in terms of market capitalisation (valued at US$100,000 million), just behind AOL-Time Warner;
- in 2003, the global media system was dominated by a first tier of 9 giant firms. The five largest are Time Warner (1997 sales: US$24 billion), Disney (US$22 billion), Bertelsmann (US$15 billion), Viacom (US$13 billion), and Rupert Murdoch's News Corporation (US$11 billion).
- The European Audiovisual Observatory (2002) compiles the only publicly available statistical data comparing European and US global companies. According to the most recent edition of media statistics, the top 50 European companies in the global audiovisual sector had a share of 32.5% of the market while US companies controlled 42.8% in 2000. The market share of US companies grew 6% since 1996.
Is it really an issue if, at international as at national level, a handful of companies are becoming dominant?
- Rupert Murdoch is the largest owner of television stations in the USA. Originally an Australian citizen, his American citizenship was ‘fast-tracked’ in the ‘80s to allow him to own television stations in the country. In Australia, Rupert Murdoch owns 7 out of the 12 national daily newspapers and 7 out of 10 Sunday newspapers. In one city, Adelaide, Murdoch owns all the newspapers;
- in 1998, Rupert Murdoch owned 34% of the daily newspapers and 37% of the Sunday newspapers in the United Kingdom. He often uses the large resources of his multinational companies to lower the price of his newspapers in an attempt to put rival newspapers out of business;
- one man, John Malone, owns 23% of the world's cable stations. His Discovery Channel commissions programs after ‘market approval’ and avoids ‘controversial subjects’. The phrase ‘dumbing down’ has entered the language as television concentrates on gossip and celebrity stories rather than serious issues.
- Europe often (not always) has more pluralistic laws than the English-speaking world. Due to very segmented media markets with language differences, small size of the national markets, various socio-political traditions and the strong presence of local players, European media are not concentrated on an international level. Most European media industry sub-sectors are strongly concentrated at the national level;
- among the most concentrated industries are daily newspapers, cable and satellite TV. As in the US, growing media concentration within national borders in Europe is seen as a threat to media pluralism, diversity and quality of journalistic work;
- in France, there are laws prohibiting any single organisation from controlling newspapers with more than 30% of the combined national and regional readership. In addition, all publications have a legal right of distribution. In Germany, minority shareholders can veto editorial decisions. In Sweden small independent newspapers are supported and financed by law;
- the largest European multinational company is Bertelsmann, with 24 TV stations and 14 radio stations in ten countries, which makes it the largest TV and radio group. The German-based company also holds stakes in content production, new media, magazine and book publishing, music and media services. Vivendi Universal tried to emerge as a second global media powerhouse, but finds itself in a diminishing role by merging its entertainment assets with General Electric’s NBC unit;
- the marketisation of West European broadcasting has already led to concern – and not a little controversy – over the issue of concentration. In Italy, often evoked as the classic case, Silvio Berlusconi acquired during the 1980s a virtual monopoly of that country’s private commercial television sector. During the election campaign of 1994, which resulted in his assuming the premiership of Italy, he deployed this formidable media power to evident success;
- across Europe, strategic alliances have been made between giant media groups keen to exploit its newly liberalised commercial broadcasting markets. Thus, Berlusconi’s Fininvest company supported the Kirch/Springer group in Germany and acquired stakes in French and Spanish private commercial broadcasting as well. Germany’s public telecoms operator, Deutsche Telekom, took a stake in the highly successful Luxembourg Astra satellite television company. The Compagnie Luxembourgeoise de Television (CLT) acquired stakes in commercial broadcasting operations in Germany, France and the Benelux countries. (1)
(1) Peter Humphreys, “The Changing Nature of the Broadcast Media in Europe: Some Key Policy Issues”, University of Manchester, 1995.