California Public Policy and Citizen Participation/Chapter Eight

Concentration of media ownership (also known as media consolidation or media convergence) refers to a process whereby progressively fewer individuals or organizations control increasing share of the mass media. Contemporary research demonstrates increasing levels of consolidation, with many media industries already highly concentrated and oligopoly,dominated by a very small number of firms. The majority of the major media outlets are owned by a proportionately small number of conglomerates and corporations.

Media concentration closely related to issues of editorial independence, media bias, and freedom of the press. In that sense, the term "media consolidation" is used especially by those who view such consolidation as sociologically detrimental, dangerous, or problematic.

Debates
Concentration of media ownership is very frequently seen as a problem of contemporary media and society. When media ownership is concentrated in one or more of the ways mentioned above, a number of undesirable consequences follow, including the following:


 * Commercially driven, ultra-powerful mass market media is primarily loyal to sponsors, i.e. advertisers and government rather than to the public interest.
 * If only a few companies representing the interests of a minority elite control the public airwaves of 300 million US citizens, then calling them "public airwaves" is only lip service.
 * Healthy, market-based competition is absent, leading to slower innovation and increased prices.

It is important to elaborate upon the issue of media consolidation and its effect upon the diversity of information reaching a particular market. Critics of consolidation raise the issue of whether monopolistic or oligopolistic control of a local media market can be fully accountable and dependable in serving the public interest. If, for example, only one or two media conglomerates dominate in a single market, the question is not only that of whether they will present a diversity of opinions, but also of whether they are willing to present information that may be damaging to either their advertisers or to themselves.

This despite the fact that before deregulation there were only the Big Three television networks.

On the local end, reporters have often seen their stories refused or edited beyond recognition, in instances where they have unearthed potentially damaging information concerning either the media outlet's advertisers or its parent company.

An example would be the repeated refusal of networks to air "ads" from anti-war advocates to liberal groups like MoveOn.org, or religious groups like the United Church of Christ, regardless of factual basis. Journalists and their reports may be directly sponsored by parties who are the subject of their journalism leading to reports which actually favor the sponsor, have that appearance, or are simply a repetition of the sponsors opinion. 

Consequently, if the companies dominating a media market choose to suppress stories that do not serve their interests, the public suffers, since they are not adequately informed of some crucial issues that may affect them. If the only media outlets in town refuse to air a story, then the question becomes, who will?

Concern among academia rests in the notion that the purpose of the first amendment to the US constitution was to encourage a free press as political agitator evidenced by the famous quote from US President Thomas Jefferson, "The only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. It is necessary, to keep the waters pure."

Critics of media deregulation and the resulting concentration of ownership fear that such trends will only continue to reduce the diversity of information provided, as well as to reduce the accountability of information providers to the public. The ultimate consequence of consolidation, critics argue, is a poorly-informed public, restricted to a reduced array of media options that offer only information that does not harm the media oligopoly's 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 of information communicated through major media channels. Increased concentration of media ownership can lead to the censorship of a wide range of critical thought

AAnother concern is that consolidated media is not flexible enough to serve local communities in case of emergency. This happened in Minot, North Dakota, in 2002, after a train filled with anhydrous ammonia derailed. None of the leading radio stations in Minot carried information on the derailment or evacuation procedures, largely because they were all owned by Clear Channel Communications and received automated feeds from the corporate headquarters in San Antonio, Texas. 1600 people were injured and one died

Determinants of media pluralism
Pluralism is a very complex issue that cannot be secured by creating one panacea solution. According to Gillian Doyle, the following have to be investigated in order to decide what sort of acts or policies are the best for any given country that want to support media pluralism: size and wealth of the market; diversity of suppliers; consolidation of resources; and diversity of output.

Size and wealth of the market
“Within any free market economy, the level of resources available for the provision of media will be constrained principally by the size and wealth of that economy, and the propensity of its inhabitants to consume media.” [Gillian Doyle; 2002:15] Those countries that have relatively large market, like the United Kingdom, France or Spain have more financial background to support diversity of output and have the ability to keep more media companies in the market (as they are there to make profit). More diverse output and fragmented ownership will, obviously, support pluralism. In contrast, small ones like Ireland or Hungary suffer from the absence of all those that are given in bigger countries. It means that “support for the media through direct payment” and “levels of consumers expenditure”, furthermore “the availability of advertising support” [Gillian Doyle; 2002:15] are less in these countries, due to the low number of audience. Overall, the size and wealth of the market determine the diversity of both media output and media ownership.

Diversity of suppliers/owners
From the previous paragraph can be assumed that size/wealth of the market have a very strong relation to the diversity of supplier. If the first is not given (wealthy market) then it is difficult to achieve fragmented supplier system. Diversity of suppliers refers to those heterogeneous independent organizations that are involved in media production and to the common ownership as well. The more various suppliers there are, the better for pluralism is. However, “the more powerful individual suppliers become, the greater the potential threat to pluralism.”

Consolidation of resources
The 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 radio broadcasters, the more homogeneity possible between different services held in common ownership (or the more elements within a programme schedule which can be shared between ’different’ stations), the greater the opportunity to reap economies.” Though the main concern of pluralism is that different organization under different ownership may buy the same e.g. news stories from the same news-supplier agency. In the UK, the biggest news-supplier is The Press Association (PA). Here is a quoted text from PA web site: “The Press Association supplies services to every national and regional daily newspaper, major broadcasters, online publishers and a wide range of commercial organisations.” Overall, in a system where all different media organizations gather their stories from the same source, then we can’t really call that system pluralist. That is where diversity of output comes in

Concentration of media ownership globally
Globally, large media conglomerates which may operate in California at any time include, National Amusements, Viacom, CBS Corporation, Time Warner, News Corp, Bertelsmann AG, Sony, General Electric, Vivendi SA, The Walt Disney Company, Hearst Corporation, Organizações Globo and Lagardère Group.

As of 2010, The Walt Disney Company is the world's largest media conglomerate, with News Corporation, Time Warner and Viacom ranking second, third and fourth respectively.

United Kingdom
Many Californians may utilize UK media due to its good reputation and the common language. United Kingdom|Britain and Ireland, Rupert Murdoch owns best-selling tabloids News of the World, The Sun (newspaper)|The Sun as well as the broadsheet The Times and Sunday Times, and 39% of satellite broadcasting network BSkyB. BSkyB in turn owns a significant part of ITV plc. Daily Mail and General Trust (DMGT) own The Daily Mail and The Mail on Sunday, Ireland on Sunday, and free London daily Metro (Associated Metro Limited)|Metro, and control a large proportion of regional media, including through subsidiary Northcliffe Media, in addition to large shares in ITN and GCap Media.

Richard Desmond owns ''OK! magazine, Channel 5 (UK)|Channel 5, the Daily Express and the Daily Star (United Kingdom)|Daily Star''.

The Evening Standard and The Independent are both owned by Russian businessman and ex KGB agent Alexander Lebedev.

Israel
Many Californians may access Israeli media especially for opinions on international events. In Israel, Arnon Mozes owns the most widespread Hebrew newspaper, Yediot Aharonot, the most widespread Russian newspaper Vesti (newspaper)|Vesty, the most popular Hebrew news website Ynet, and 17% of the cable TV firm Hot (Israel)|HOT. Moreover, Mozes owns the Reshet TV firm, which is one of the two operator of the most popular channel in Israel, channel 2.

Mexico
Many Californians read Mexican media. In Mexico there are only two national broadcast television networks, Televisa and TV Azteca. The former has a 70% market share. Though concern about the existence of a duopoly had been around for some time, a press uproar sparked in 2006, when Ley Televisa|a controversial reform to the Federal Radio and Television Law, seriously hampered the entry of new competitors, like Cadena Tres.

Televisa also owns subscription TV enterprises Cablevisión (Mexico)|Cablevisión and SKY Latin America|SKY, publishing company Editorial Televisa, and the Televisa Radio broadcast radio network, creating a de facto media monopoly in many regions of the country.

United States
In the United States, movie production is known to be dominated by major studios since the early 20th Century; before that, there was a period in which Motion Picture Patents Company|Edison's Trust monopolized the industry. The music and television industries recently witnessed cases of media consolidation, with Sony Music Entertainment's parent company merging their music division with Bertelsmann AG's BMG to form Sony BMG and TimeWarner's The WB and CBS Corp.'s UPN merging to form The CW. In the case of Sony BMG, there existed a "Big Five" (now "Big Four record labels|Big Four") of major record company|record companies, while The CW's creation was an attempt to consolidate ratings and stand up to the "Big Four" of United States|American network television|network (terrestrial) television.

There may also be some large-scale owners in an industry that are not the causes of monopoly or oligopoly. Clear Channel Communications, especially since the Telecommunications Act of 1996, acquired many radio stations across the United States, and came to own more than 1,200 stations. However, the radio broadcasting industry in the United States and elsewhere can be regarded as oligopolistic regardless of the existence of such a player. Because radio stations are local in reach, each licensed a specific part of airwave by the Federal Communications Commission|FCC in a specific local area, any local market is served by a limited number of stations. In most countries, this system of licensing makes many markets local oligopolies. The similar market structure exists for television broadcasting, cable systems and newspaper industries, all of which are characterized by the existence of large-scale owners. Concentration of ownership is often found in these industries.

In the United States, data on ownership and market share of media companies is not held in the public domain. Academics, for example at MIT Media Lab and NYU, have struggled to find data that show reliably the concentration of media ownership.

History
Prior to 1927, public airwaves in the United States were regulated by the United States Department of Commerce and largely litigated in the courts as the growing number of stations fought for space in the burgeoning industry. The Federal Radio Act of 1927 (signed into law February 23, 1927) nationalized the airwaves and formed the Federal Communications Commission|Federal Radio Commission (later named the Federal Communications Commission, or FCC) to assume control of the airwaves.

The Communications Act of 1934 refined and expanded on the authority of the FCC to regulate public airwaves in the United States, combining and reorganizing provisions from the Federal Radio Act of 1927 and the Mann-Elkins Act of 1910. It empowered the FCC, among other things, to administer broadcasting licenses, impose penalties and regulate standards and equipment used on the airwaves. The Act also mandated that the FCC would act in the interest of the "public convenience, interest, or necessity." The Act established a system whereby the FCC grants licenses to the spectrum to broadcasters for commercial use, so long as the broadcasters act in the public interest by providing news programming.

Lobbyists from the largest radio broadcasters, ABC and NBC, wanted to establish high fees for broadcasting licenses, but Congress saw this as a limitation upon free speech. Consequently, “the franchise to operate a broadcasting station, often worth millions, is awarded free of charge to enterprises selected under the standard of ‘public interest, convenience, or necessity.’”

Nevertheless, radio and television was dominated by the Big Three television networks until the mid-1990s.

The Telecommunications Act of 1996 set the modern tone of deregulation, a relaxing of percentage constrictions that solidified the previous history of privatizing the utility and commodifying the spectrum. The legislation, touted as a step that would foster competition, actually resulted in the subsequent mergers of several large companies, a trend which still continues. Over 4,000 radio stations were bought out, and minority ownership of TV stations dropped to its lowest point since the federal government began tracking such data in 1990.

The Federal Communications Commission|FCC held one official forum, February 27, 2003, in Richmond, Virginia in response to public pressures to allow for more input on the issue of elimination of media ownership limits. Some complain that more than one forum was needed.

On June 2, 2003, Federal Communications Commission|FCC, in a 3-2 vote under Chairman Michael Powell (politician)|Michael Powell, approved new media ownership laws that removed many of the restrictions previously imposed to limit ownership of media within a local area. The changes were not, as is customarily done, made available to the public for a comment period.


 * Single-company ownership of media in a given market is now permitted up to 45% (formerly 35%, up from 25% in 1985) of that market.
 * Restrictions on newspaper and TV station ownership in the same market were removed.
 * All TV channels, magazines, newspapers, cable, and Internet services are now counted, weighted based on people's average tendency to find news on that medium. At the same time, whether a channel actually contains news is no longer considered in counting the percentage of a medium owned by one owner.
 * Previous requirements for periodic review of license have been changed. Licenses are no longer reviewed for "public-interest" considerations.

The decision by the FCC was overturned by the United States Court of Appeals for the Third Circuit in Prometheus Radio Project v. FCC in June, 2004. The Majority ruled 2-1 against the FCC and ordered the Commission to reconfigure how it justified raising ownership limits. The Supreme Court of the United States|Supreme Court later turned down an appeal, so the ruling stands.

Cross-ownership proceedings
The FCC voted December 18, 2007 to eliminate some media ownership rules, including a statute that forbids a single company to own both a newspaper and a television or radio station in the same city. FCC Chairman Kevin Martin (FCC)|Kevin Martin circulated the plan in October 2007. Martin's justification for the rule change is to ensure the viability of America's newspapers and to address issues raised in the 2003 FCC decision that was later struck down by the courts. The FCC held six hearings around the country to receive public input from individuals, broadcasters and corporations. Because of the lack of discussion during the 2003 proceedings, increased attention has been paid to ensuring that the FCC engages in proper dialogue with the public regarding its current rules change.

FCC Commissioners Deborah Taylor-Tate and Robert McDowell joined Chairman Martin in voting in favor of the rule change. Commissioners Michael Copps and Jonathan Adelstein, both Democrats, opposed the change.

By corporation

 * Hunt Valley, Md.-based Sinclair, controls rights to cable broadcast of ABC, CBS, NBC and Fox (see full story at http://www.cfnews13.com/article/news/ap/december/188808/Time-Warner-Cable-says-Big-4-shows-to-stay-onair)
 * Among other assets, Disney owns American Broadcasting Company|ABC, Buena Vista Motion Pictures Group, ESPN, and Miramax Films.
 * CBS Corporation owns CBS, CBS Radio (formerly Infinity Broadcasting), Simon & Schuster editing group, a 50% ownership stake in The CW Television Network|The CW, etc. Though technically separate companies, CBS and Viacom (owners of MTV Networks and several mostly cable television stations) have a large portion of common ownership through Sumner Redstone's National Amusements.
 * NBC Universal is owned by Comcast (51%) and General Electric (49%).
 * Time Warner owns CNN, Time (magazine)|Time, and a 50% ownership stake in The CW Television Network|The CW, etc.
 * Bertelsmann owns Arvato, Direct Group, RTL Group (which in turn owns VOX (TV channel)|VOX and Five (channel)|Five, a part in Métropole 6|M6 TV channel, and FremantleMedia North America), and several other companies.
 * Bain Capital and Thomas H. Lee Partners own Clear Channel Communications, one of the largest radio station ownership groups in the United States, and a share in The Weather Channel.
 * Rupert Murdoch, the media magnate, a part of News Corp., also owns British News of the World, The Sun (newspaper)|The Sun, The Times, and The Sunday Times (UK)|The Sunday Times, as well as the Sky Digital (UK & Ireland)|Sky Television network, which merged with British Satellite Broadcasting to form BSkyB, and SKY Italia; in the US, he owns the Fox Networks and the New York Post. Since 2003, he also owns 34% of DirecTV Group (formerly Hughes Electronics), operator of the largest American satellite TV system, DirecTV, and Intermix Media (creators of myspace.com) since 2005. See also Murdoch Newspaper List.
 * Oaktree Capital Management's Triton Media Group is rapidly consolidating assets in the radio industry, acquiring Dial Global, Waitt Radio Networks and Jones Radio Networks, three major satellite music radio providers; they also own Gap Broadcasting, which has mainly bought radio stations away from Clear Channel Communications, and also is a large creditor to Clear Channel.
 * Lagardère Group owns Hachette Filipacchi Médias, which is the largest magazine publisher in the world, 100% of Lagardère Media, 34% of CanalSat, and Hachette Livre (as well as parts in the European military aerospace EADS company).
 * Vivendi owns Canal Plus|Canal + Group and Universal Music Group.
 * Edouard Etienne de Rothschild|Edouard de Rothschild has 37% of French left-wing daily Libération since 2005.
 * Arms company Dassault owns 82% of the Socpresse, which controls conservative Le Figaro (in which the Carlyle Group previously had a 40% stake), as well as L'Express (France)|L'Express.
 * L'Origine du monde|Le Monde is owned by La Vie Le Monde, which also controls Télérama and other publications of La Vie Catholique, as well as 51% of Le Monde diplomatique.
 * French Bouygues company owns 42.9% of TF1 TV channel, and is the parent company of Bouygues Télécom (company)|Bouygues Télécom.
 * Modern Times Group, quoted on the Stockholm Stock Exchange, owns Viasat TV network and Metro International, which is the world's largest chain of free newspapers, publishing 57 daily Metro editions in 18 countries.
 * In the UK, Daily Mail and General Trust plc owns newspapers including the Daily Mail, Euromoney Institutional Investor PLC, has a 29.9% stake in GCap Media (the owner of Classic FM (UK)|Classic FM and other radio stations), and a 20% stake in ITN, and also owns regional publisher Northcliffe Media.
 * Bolloré, owned by Vincent Bolloré, who is Havas's main share-holder and president and UK group Aegis Group plc|Aegis' first share-holder. Bolloré owns Direct 8 French TV channel.
 * Arnoldo Mondadori Editore, controlled by Fininvest, the family holding company of Silvio Berlusconi, possesses a large share of the magazine publishing industry in Italy.
 * Mediaset, also controlled by Silvio Berlusconi's Fininvest, owns 3 out of 7 national TV channels in Italy. Mr Berlusconi in his function of prime minister also exerts great influence over 3 more channels (RAI-owned), thus directly or indirectly controlling almost 90% of Italy's mass media.