Communication

iResearchNet

Custom Writing Services

Custom Writing Services
Communication » Media » Ownership in the Media

Ownership in the Media




Structures of media ownership take the form of either public or private enterprises. “Public” refers to those media funded at least partially out of general public revenues, whereas in the general sense “private” means media whose financing is provided by individuals, families, or groups. Public media can be state-owned (as in the former Soviet Union) or state-managed, controlled by the government in power (such as China’s ruling Communist Party newspaper, Renmin Ribao), or can have a charter making them relatively independent of the state or governing power (such as Britain’s BBC). The type of structure, public or private, does not necessarily correspond either to the degree of professional freedom enjoyed by the media organ or to its quality. Some African broadcast media are modeled on the BBC but operate with far less openness and with frequent political interference. Community media, such as community newspapers and radio stations, which typically rely on listener sponsorship and grants and receive little if any government financial support, are generally much smaller in scope and reach but often exercise considerably more freedom than their public-media counterparts and often transmit a broader range of political, social, and cultural programming.

Privately controlled media, especially of the publicly traded stockholder type, have become more prevalent worldwide during the past 25 years. In the United States and other market economies, media industries have been permitted wide latitude to engage in mega-mergers of the various industries within the sector, a trend that accelerated in the US following the FCC’s elimination of the “Fin/Syn” rules in 1995, which had previously prohibited in-house production and syndication ownership. The 1996 Telecommunications Act relaxed restrictions on station ownership, enabling media owners such as the Sinclair Broadcast Group to expand their reach to more than a quarter of American homes. Even before the Act, non-media businesses, such as General Electric and Westinghouse, were allowed to purchase multimedia enterprises, including two of the major television networks, RCA and CBS. Two radio networks, Clear Channel and Viacom’s Infinity Broadcasting, together now control more than a third of all radio advertising revenue and as much as 90 percent in some markets. There still remains, however, a large number of private newspapers and a smaller number of television stations that are owned independently or by families. With the breakup of stockholder media groups such as Knight Ridder (US) and the Tribune Company (US), more have been added. Among the largest corporate media conglomerates in the world, the German Bertelsmann Corporation is of the “private” type (i.e., not traded), as is Cox Communications in the US. An exceptional media type, the St. Petersburg Times, a Florida newspaper, is run as a nonprofit institution.




Media conglomerates, headquartered in Japan, Western Europe, and North America, typically are vertically integrated firms cutting across a number of different media and other industries. The Sony Corporation (Japan), for example, manufactures numerous media and communication devices (televisions, radios, DVDs, CDs, VCRs, computers, camcorders, microwave telecommunication systems, digital radio and satellite systems, and other equipment) and also owns all or part of major film production and distribution outlets (Sony Pictures, Columbia Pictures, TriStar Pictures, MGM, United Artists, and others) as well as the Sony/Loews Theaters Group (some 3,000 screens in North America), plus various companies for games, music, and television production and distribution, and various television interests in Asia, Europe, Latin America, and Australia. Vivendi (France) owns the Canal + Group of television and cinema studios, theme parks, and cable channels, almost 40 record labels, a video games division, a telecommunications group, and still other businesses. The largest media corporation, Time Warner Inc. (US), owns AOL and other computer-based enterprises, one of the biggest cable operations in the United States together with the Turner Broadcasting System, New Line Cinema, Warner Bros. Pictures and the Warner Bros. Television Group, Home Box Office operations, dozens of Time Inc. magazines, comic books, and still other media holdings (Greenwald et al. 2006).

Ownership Patterns In The US

In the US, one of the prevailing patterns of broadcast ownership is control by major banking and financial institutions. The major stockholders and board members of leading broadcasting networks include such banks as BankAmerica, Citigroup, Chase Manhattan, Bankers Trust, Washington Mutual, and Morgan Guaranty Trust, which interlock not only with the media and other major industries but also among themselves; they are thereby able to exercise significant influence over fiduciary functions and management hiring in the media. Major media organizations also interlock with Fortune 500 corporations, including airline, energy, nuclear power, insurance, telecommunications, and weapons industries. Ford Motor Company has enjoyed interlocking directorships on the boards of the New York Times, Washington Post, and Los Angeles Times. A simpler ownership structure is that of Bertelsmann AG (Germany), whose majority stockholder and founder is an individual, Reinhard Mohn. With his family and foundation, Mohn until recently held 75 percent of stock voting rights in the company until forced to open share ownership (25.1 percent) to the Belgian–Canadian financial holding company GBL. In 2005, the Sony Corporation, which as shown above is widely diversified in product lines and ownership, and has a number of foreign stockholders, appointed an American, Harry Stringer, to be its first foreign chairman and chief executive officer. A recent trend is that Wall Street investment houses are bypassing film studios and making deals directly with successful producers to finance their projects.

The biggest issue in media ownership is industry concentration, both at the national and international level. In the US, there is no dispute about the high media concentration ratios (number of companies controlling each segment of the industry), but not all agree that this condition violates the public interest. Although media concentration is high in most countries, it is a particularly contentious issue in the US, where ownership of media and communication systems has historically been private, commercially driven, and, until a wave of consolidation began to accelerate during the past 25 years, quite competitive. Many intellectuals and other leaders around the world complain that these monopolistic tendencies have intensified American media and cultural domination in their societies. Indeed, media content in most countries bears the heavy imprint of “Hollywood” and “Madison Avenue.” Robert McChesney (1999) listed eight global corporations that owned 79 percent of the American mass media: television, newspapers, magazines, radio, satellite systems, cable, book publishing, film production and distribution, movie theater chains, the core elements of the Internet, billboards, and theme parks. Two bookstore chains, Borders/Walden and Barnes and Noble, accounted for a third of all retail book sales in the country. Worldwide, McChesney found that the mass media are controlled by between 70 and 80 firstand second-tier corporations.

Ownership Patterns Worldwide

Media policy in Australia, New Zealand, Canada, and Western Europe has followed a similar pattern of consolidation. The very high concentration of media ownership in Australia is led by Rupert Murdoch’s New York-based News Corporation (which formerly had its headquarters in Adelaide), which alone controls some 70 percent of the country’s newspapers. News Corporation, along with John Fairfax Holdings, the Harris Group, and West Australian Newspapers, make up the Australian Associated Press, which dominates national news distribution in the print and broadcast media (Given 2001). Similarly, New Zealand is dominated by four foreign-owned giant media corporations. Only 9 percent of the country’s readership is tied to domestically controlled newspapers. In radio, the concentration ratio is even higher, with 97 percent of the country’s stations controlled by a single joint Australian (ANM)–United States (Clear Channel) group. In television broadcasting, the state-owned but commercial TVNZ (TVI and TV2) competes with the Canadian-owned (Canwest) stations TV3 and TV4. Pay TV is controlled by the foreigncontrolled (formerly by Murdoch, now Fairfax) Independent News Ltd., comprising 80 newspaper and magazine titles in New Zealand (New Zealand 2003).

In Canada, media ownership patterns did not significantly change until the mid-1990s, when the government’s Canadian Radio-Television and Telecommunications Commission (CRTC) liberalized ownership rules to permit companies to own multiple television stations in the larger markets. Currently, nearly all of Canada’s commercial stations are owned by national conglomerates. Mergers have brought about a tight consolidation of television station ownership across the country. With waivers given by the CRTC, some of the same conglomerates also took over major newspapers, and by 2001 all but one of the major urban newspapers were owned by a conglomerate. At the same time, ownership has been somewhat fluid, as major newspapers have passed from one chain to another in the last decade. Canada restricts foreign ownership of media companies to 20 percent. Although Canadian stations are required to air a majority of domestically produced content, most Canadians have access to American television, especially during prime time; it is easily accessible over the air, by cable, and via satellite. Canada is one of the most heavily foreign-penetrated media markets in the world.

In most of Western Europe, as in Canada and other leading industrial states, public service requirements are more established, and publicly funded broadcasting is more competitive with the commercial sector than in the United States. In Britain, for example, the BBC, publicly funded through license fees, is the country’s largest broadcaster, with two national television channels (with national and regional sub-divisions), five national radio stations, cable and digital TV channels, and more than 40 local radio stations. However, Western Europe is also experiencing an expansion of commercial broadcasting and the mass media overall. Italian broadcasting, for example, is dominated by Fininvest, a company owned by former prime minister Berlusconi, who also has interests in France’s TF1, Germany’s Tele 5, Spain’s TeleCinco, stations in the former Yugoslavia, and other countries. French and British print media have also been consolidated over the past decade by major transnational corporations (European Federation of Journalists 2005).

France’s print media consolidation has been underway since the end of the World War II. The country’s 175 regional newspapers in 1946 were reduced to 55 in 2004, most of which were owned by major media groups. In 2004, the print media were further consolidated with the purchase of the Socpresse publishing group, including Le Figaro and many other titles, by the aeronautics corporation, Dassault. Its main competitors are the Lagardère Group, which owns several major French publishing firms, and the Filipacchi Médias Group, the largest magazine publisher in the world. The bailing out of the left-wing Libération newspaper by Baron Edouard de Rothschild in 2005 signaled the near-finale of the independent press in France.

Britain too has a high concentration in print media, which are dominated by four major groups that control about 85 percent of the national market, though the government maintains relatively strong cross-ownership restrictions. The most powerful media group in the country is Murdoch’s News International (NI), whose five newspapers, including The Times and the Sunday Times, have about 37 percent of the daily share and 39 percent of Sunday sales. NI also controls 75 percent of connected homes through its satellite BSkyB system. US companies also dominate Britain’s digital and broadband sections of the media.

Media Diversity

Currently, most American television stations are either owned by or affiliated to the large networks (ABC, CBS, NBC, Fox, Viacom, and Time Warner), both in over-the-air broadcasting and cable, constituting an oligopoly. The UPN network was taken over by a joint project of CBS and Warner Bros. Entertainment (CW) in 2006. It is sometimes argued that these companies actually operate as a functional monopoly, inasmuch as they share generic (often copycat) formats in programming, in both news and public affairs and in entertainment, and thereby cater to and present viewers with a narrow range of content, style, opinion, debate, and consumer tastes and preferences, and effectively censor that which is not profitable. Others argue, however, that the existence, depending on tiers of service, of potentially hundreds of stations via broadcasting, cable, satellite, and computer provides audiences with a high degree of diversity in programming, especially when one adds the countless number of Internet websites now available to most people. Still others insist that the number of broadcast outlets is not altogether relevant because their products are almost entirely, often crassly, commercial in character and thereby offer little of a public service remit, especially given the possibilities of earning a large share of their profits from overseas distribution.

From an international perspective, the capacity of vertically integrated media conglomerates to reach worldwide audiences raises the specter of cultural imperialism. The counter-thesis to this argument is that significant media industries exist in other parts of the world, such as Bollywood, Televisa, and the Chinese-language film and TV industry, which offset the influence of American-produced media. Non-US media conglomerates, such as Sony (Japan), Bertelsmann (Germany), News Corporation (Australia), and Vivendi (France), offer competition to US media even in the United States itself. Whether the number of competing entities or the provision of publicly funded media is the best measure of media service will remain a significant debate for the foreseeable future.

References:

  1. Bagdikian, B. H. (2004). The new media monopoly. Boston, MA: Beacon Press.
  2. Bennett, W. L. (2004). Global media and politics: Transnational communication regimes and civic cultures. Annual Review of Political Science, 7, 125 –148.
  3. Columbia Journalism Review website, at www.cjr.org; especially its Who owns what database, at www.cjr.org/resources/, accessed September 19, 2007.
  4. Compaine, B. (2002). Global media. Foreign Policy, 133 (November/December), 20 –28.
  5. Croteau, D. R., & Hoynes, W. (2005). The business of media: Corporate media and the public interest, 2nd edn. Thousand Oaks, CA: Pine Forge.
  6. European Federation of Journalists (2005). Media power in Europe: The big picture of ownership. At www.ifj-europe.org/pdfs/EFJownership2005.pdf, accessed September 19, 2007.
  7. Given, J. (2001). Media ownership in Australia: The laws, the players. Paper presented at the World Media Ownership conference, Centre d’études sur les medias, Laval University, Quebec City.
  8. Greenwald, R., Goodman, A., McChesney, R. W., et al. (2006). The national entertainment state. Nation, pp. 13 –30 (July 3).
  9. Grover, R., & Lowry, T. (2004). Rupert’s world. Business Week, pp. 52 – 60 (January 19).
  10. Herman, E. S., & Chomsky, N. (1988). Manufacturing consent: The political economy of the mass media. New York: Pantheon.
  11. McChesney, R. W. (1999). Rich media, poor democracy: Communication politics in dubious times. Urbana, IL: University of Illinois Press.
  12. Mosco, V. (1996). The political economy of communication: Rethinking and renewal. Thousand Oaks, CA: Sage.
  13. New Zealand, Ministry for Culture and Heritage (2003). Broadcasting in New Zealand: A 2003 stock-take. At www.mch.govt.nz/publications/broad-2003/broad-cast-2003.html, accessed August 2, 2007.
  14. Open Society Institute (2005). Television across Europe: Regulations, policy and independence. Belgrade: EUMAP.