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REVIEWREVIEW

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ConcentrationConcentration The communication business tends The communication business tends

‘naturally’ to concentration‘naturally’ to concentration Effort to become bigger: control larger marketsEffort to become bigger: control larger markets Cross media ownership: mergers and Cross media ownership: mergers and

acquisitionsacquisitions Ie. Concentration of firmsIe. Concentration of firms But also Concentration of..But also Concentration of..

ProductsProducts Media formatsMedia formats MarketsMarkets

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Trends to Concentration of Trends to Concentration of Media Ownership in CanadaMedia Ownership in Canada

Before WW1: 138 dailies with Before WW1: 138 dailies with different ownersdifferent owners

By 1992: only 18 independents By 1992: only 18 independents remaining– now even fewerremaining– now even fewer

Mostly owned by CanWest-Global who Mostly owned by CanWest-Global who bought Hollinger…42% of dailiesbought Hollinger…42% of dailies

Hollinger takeover of Southam in Hollinger takeover of Southam in 1995 was appealed by Council of 1995 was appealed by Council of Canadians but failed in lower courts.Canadians but failed in lower courts.

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Canadian Media Canadian Media Concentration of OConcentration of O

Bell Canada EnterprisesBell Canada Enterprises- February 2000 bought CTV for 2.3 bFebruary 2000 bought CTV for 2.3 b- Acquired Globe and MailAcquired Globe and Mail- Also own Expressvu: satelliteAlso own Expressvu: satellite- Also own Telco in Ont/QuebecAlso own Telco in Ont/Quebec- Owns Sympatico: Canada’s largest internet Owns Sympatico: Canada’s largest internet

portalportal

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Canadian Concentration of Canadian Concentration of OO

- CanwestCanwest ( Global) bought Southam Inc 2000 ( Global) bought Southam Inc 2000- Now owns most of the National PostNow owns most of the National Post- Over 12 markets the major papers and major Over 12 markets the major papers and major

TV stations ( eg: Canwest owns Sun, Province TV stations ( eg: Canwest owns Sun, Province and Tony Parsons)and Tony Parsons)

- QuebecorQuebecor owns TVA Videotron owns TVA Videotron- RogersRogers owns Maclean Hunter mags owns Maclean Hunter mags- Electronic players buy out the printElectronic players buy out the print- Made in Canada media moguls: Conrad Black, Made in Canada media moguls: Conrad Black,

Thompson, Seagrams/Vivendi now MNCs Thompson, Seagrams/Vivendi now MNCs ( most sales off shore)( most sales off shore)

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Advantages to ConcentrationAdvantages to Concentration

Vertical integrationVertical integration When one company controls all of its production, When one company controls all of its production,

distribution and salesdistribution and sales Time Warner can show Warner movie on HBO, promote Time Warner can show Warner movie on HBO, promote

it on AOL, then sell it to its cable franchises later in it on AOL, then sell it to its cable franchises later in distribution chain ( second and third windows on distribution chain ( second and third windows on release)release)

Or, Sony acquires software for the hardware companies Or, Sony acquires software for the hardware companies ( See Lorimer and Gasher “Vertical Integration Today” p ( See Lorimer and Gasher “Vertical Integration Today” p 184)184)

Horizontal integrationHorizontal integration Disney sells products across different media ( theatre, Disney sells products across different media ( theatre,

ABC etc) or forms marketing alliances: MacDonaldsABC etc) or forms marketing alliances: MacDonalds

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DisadvantagesDisadvantages Debt structureDebt structure Inertia or incompatible structuresInertia or incompatible structures Inability to effect the ‘grand design’Inability to effect the ‘grand design’ An “eternal Peter Pan industry”: An “eternal Peter Pan industry”: Economist’sEconomist’s thesis of failing to live up to responsibilitiesthesis of failing to live up to responsibilities Abuse of market power: risk of block booking, Abuse of market power: risk of block booking,

windowing as a form of price discrimination- tied windowing as a form of price discrimination- tied selling or other anti-competitive practicesselling or other anti-competitive practices

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Conglomerate Defense Conglomerate Defense Only size can offset risk: aggregate Only size can offset risk: aggregate

economies of scale to afford economies of scale to afford stars/innovationstars/innovation

Retaliatory market behavior will ‘trim Retaliatory market behavior will ‘trim the sails’ of aggrandizing companies: the sails’ of aggrandizing companies: Murdoch bought Fox, then 20Murdoch bought Fox, then 20thth Century Fox, then other studios Century Fox, then other studios ganged up by signing with rivalsganged up by signing with rivals

‘‘self righting’: no conglomerate can self righting’: no conglomerate can tell subsidiaries what to buytell subsidiaries what to buy

No harmful intentNo harmful intent

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LORDS AND THE LORDS AND THE LIBERALSLIBERALS

Structural Political EconomyStructural Political Economy A study of interlocking elites:A study of interlocking elites:

Political and media elitesPolitical and media elites Corporate and media elitesCorporate and media elites

A study of elite influence, censorship A study of elite influence, censorship and control over news manufactureand control over news manufacture

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Market Concentration TestMarket Concentration Test- Measured by subs, or audiences reached by Measured by subs, or audiences reached by

ownership groupownership group- Assessed by decision about effective competition Assessed by decision about effective competition

( between TV and news outlets)( between TV and news outlets)- Now over 60% of Canadians receive their Now over 60% of Canadians receive their

newspaper from the same co as one of their TV newspaper from the same co as one of their TV stationsstations

- Fall out: Quebecor takeover followed by Cuts, and Fall out: Quebecor takeover followed by Cuts, and CanWest takeover followed by cuts of 1/3 news CanWest takeover followed by cuts of 1/3 news

staff at the Post, and closure of websitesstaff at the Post, and closure of websites

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Basis for Public Policy Basis for Public Policy ConcernConcern

Impact on channels for editorial diversity Impact on channels for editorial diversity ( Vancouver: Sun,Province and BCTV, the ( Vancouver: Sun,Province and BCTV, the most viewed news source in Lower Mainland most viewed news source in Lower Mainland all owned by Izzy Asper)all owned by Izzy Asper)

Concern that Daily Newspapers have Concern that Daily Newspapers have become bland: unlikely to disturb the status become bland: unlikely to disturb the status quo due to market pressuresquo due to market pressures

After takeovers there are layoffs, in search After takeovers there are layoffs, in search to reduce costs, and shrink reportageto reduce costs, and shrink reportage

Rural areas without news bureaus, Rural areas without news bureaus, replicating centre periphery dominancereplicating centre periphery dominance

CMNS 130

The Criticisms of Commercial Ownership and The Criticisms of Commercial Ownership and ControlControl

Examples: Ben Bagdikian “Lords of the Examples: Ben Bagdikian “Lords of the Global Village’– Mosco, Schiller, Murdoch, Global Village’– Mosco, Schiller, Murdoch, Clement, Hannigan, Babe, Mansell other Clement, Hannigan, Babe, Mansell other authorsauthors

Look at the interlocks and interpenetration Look at the interlocks and interpenetration of media and corporate or state elites: 40 to of media and corporate or state elites: 40 to 60% overlap on Boards and other networks 60% overlap on Boards and other networks of powerof power

Social and structural interlocks between Social and structural interlocks between powerful economic and media and political powerful economic and media and political eliteselites

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Criticisms from an O & C Criticisms from an O & C perspective perspective

Assume either direct economic censorship Assume either direct economic censorship or indirect censorship through ideological or indirect censorship through ideological limits on the manufacture of news– either limits on the manufacture of news– either through reinforcing professional norms, through reinforcing professional norms, organizational cultures, or other systemic organizational cultures, or other systemic controlscontrols

Point to instrumental examples of economic Point to instrumental examples of economic censorship: GE is the US’ largest weapons censorship: GE is the US’ largest weapons manufacturer but NBC has pulled stories on manufacturer but NBC has pulled stories on arms trade ( Anderson: 26) or focuses solely arms trade ( Anderson: 26) or focuses solely on Saddam Hussein’s ‘weapons of mass on Saddam Hussein’s ‘weapons of mass destruction’, not asking what is the US role destruction’, not asking what is the US role in build up of arms, norin build up of arms, nor what the military what the military industrial complex gains when Bush pushes industrial complex gains when Bush pushes to warto war

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Critical StudiesCritical Studies

Like Like Project Censored, or Project Censored, or NewswatchNewswatch

Look for the stories which do NOT Look for the stories which do NOT make the news:make the news:

The biggest power of the press is to The biggest power of the press is to ignoreignore Examples:Examples:

Environmental impacts of the OlympicsEnvironmental impacts of the Olympics Problems with salmon farmingProblems with salmon farming Weaknesses of the Access to Information ActWeaknesses of the Access to Information Act

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The Myth of Consumer The Myth of Consumer SovereigntySovereignty

Consumers can refuse to buy, Consumers can refuse to buy, but cannot directly control the but cannot directly control the cultural products availablecultural products available

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Myth of Public Media Myth of Public Media TransparencyTransparency

webs of relationships: public information on webs of relationships: public information on these private consortia is weakthese private consortia is weak

There is no ‘access to information act’ There is no ‘access to information act’ which controls the private sector boardroom which controls the private sector boardroom

Even if a Even if a No legal protections for journalists or No legal protections for journalists or

creators against economic censorshipcreators against economic censorship Journalists are gagged:Journalists are gagged:

In an MA study ( Ian Ross) of NDP and press, BC In an MA study ( Ian Ross) of NDP and press, BC journalists afraid to express an opinionjournalists afraid to express an opinion

Cannot protest coverage ( eg. Mad Cow Disease Cannot protest coverage ( eg. Mad Cow Disease scare)scare)

Some professional unions ( eg CEP) wonder if it is Some professional unions ( eg CEP) wonder if it is necessary to pass status of the journalists necessary to pass status of the journalists legislation in Canadalegislation in Canada

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The Corporate Propaganda The Corporate Propaganda ModelModel

Not crude conspiracy theoryNot crude conspiracy theory Instead, argues, like Noam Chomsky, Instead, argues, like Noam Chomsky,

that the media delimit the bounds of that the media delimit the bounds of expression, exclude dissent from expression, exclude dissent from entrenched, official positions, serving entrenched, official positions, serving the interlocking interests of state and the interlocking interests of state and corporate powercorporate power

Media reflect and entrench the status Media reflect and entrench the status quoquo

CMNS 130

News Watch Canada: Hackett, Gutstein and News Watch Canada: Hackett, Gutstein and ZhaoZhao

Top 30 stories in Project Top 30 stories in Project Censored focus on reluctance of Censored focus on reluctance of media to cover business media to cover business misconductmisconduct

In US: complicity of business In US: complicity of business press in Enron and other press in Enron and other scandalsscandals

CMNS 130

Studies on the Economic Effects of Studies on the Economic Effects of ConcentrationConcentration

Ad rates rise ( proven after takeover of Ad rates rise ( proven after takeover of Tribune by Southam in 1980)Tribune by Southam in 1980)

Positive: economies of scalePositive: economies of scale Negative: loss of local control, job lossNegative: loss of local control, job loss Kent Commission (1980): proposed limiting Kent Commission (1980): proposed limiting

ceiling on Chain growth, ordering ceiling on Chain growth, ordering divestiture, exempting papers from taxes, divestiture, exempting papers from taxes, shield laws for editors in chief, press riths shield laws for editors in chief, press riths panel in the Human Rights Commissionpanel in the Human Rights Commission

All rejected except Press Councils All rejected except Press Councils

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Cases of Direct Owner Cases of Direct Owner Censorship Hard to FindCensorship Hard to Find

Irving: New Brunswick Oil SpillIrving: New Brunswick Oil Spill Winnipeg Free Press: owner Winnipeg Free Press: owner

directed papers to attack the directed papers to attack the Income Tax Act in 1965Income Tax Act in 1965

Analysis of systemic/ideological Analysis of systemic/ideological factors growingfactors growing

See Lorimer and Gasher: What See Lorimer and Gasher: What Won’t You Do? Pages 112-113.Won’t You Do? Pages 112-113.

CMNS 130

Content EffectsContent Effects

Before and after study of front page, editorial, Before and after study of front page, editorial, features,sources of content,areas of interest, features,sources of content,areas of interest, revealed changes in Windsor Star ( Winter revealed changes in Windsor Star ( Winter study)study)

Evaluation of whether these changes are Evaluation of whether these changes are positive or negative depends on one’s positive or negative depends on one’s ideological position.ideological position.

But increasing commodification of the news, in But increasing commodification of the news, in search for profitssearch for profits

Emergence of ‘lifestyle’, tabloid news, blurring Emergence of ‘lifestyle’, tabloid news, blurring ‘reality’genres‘reality’genres

More wire imports from AP/etc. globally. Less More wire imports from AP/etc. globally. Less local coveragelocal coverage

Reduced editorial pagesReduced editorial pages

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Partisan EffectsPartisan Effects Some owners write editorials Some owners write editorials

( Asper: Shawinigate)( Asper: Shawinigate) Editorial Pages sometimes come Editorial Pages sometimes come

out for partiesout for parties But, study of elections does But, study of elections does notnot

suggest a consistent pattern suggest a consistent pattern concluding that these patterns concluding that these patterns of editorial support swing votesof editorial support swing votes

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Commercial ReductionismCommercial Reductionism See Lorimer and Gasher text, pp. 116-118See Lorimer and Gasher text, pp. 116-118 Sometimes called the Lowest Common Sometimes called the Lowest Common

Denominator of taste effect: need to Denominator of taste effect: need to maximize audiences and profits, drive to maximize audiences and profits, drive to ‘dumb down’ news and current affairs, ‘dumb down’ news and current affairs, slant to violence and sex as non-verbal, slant to violence and sex as non-verbal, universal global formulae entertainment universal global formulae entertainment with high export valuewith high export value

Also called LOP– least objectionable Also called LOP– least objectionable program ( see Grossberg et al, p 112)program ( see Grossberg et al, p 112)

CMNS 130

Global versus National Global versus National TensionsTensions

Trends to concentration are now globalTrends to concentration are now global ‘‘six’ large multinational mega companiessix’ large multinational mega companies Sole defense against international Sole defense against international

agglomeration: foreign investment rulesagglomeration: foreign investment rules Now Canadian owners are arguing they Now Canadian owners are arguing they

want access to more foreign capital: want want access to more foreign capital: want to make more investments abroadto make more investments abroad

Currently under review by SenateCurrently under review by Senate

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History of Economic History of Economic OrganizationOrganization

Until 1980 predominantly within Until 1980 predominantly within National BordersNational Borders

Most countries had local ownership Most countries had local ownership rules ( no more than 20 % foreign rules ( no more than 20 % foreign media control, and indigenous media control, and indigenous boards, reporting if publicly traded boards, reporting if publicly traded companies)companies)

Entertainment markets begin to Entertainment markets begin to globalize through film, videogames globalize through film, videogames and TV series: increasing trade in all and TV series: increasing trade in all media sectorsmedia sectors

CMNS 130

MultiNational GiantsMultiNational Giants

1.1. AOL Time WarnerAOL Time Warner: larger than the : larger than the GDP of most countries ( US $29 b)GDP of most countries ( US $29 b)

2.2. Disney Disney ( US $ 17 b)( US $ 17 b)3.3. Bertelsmann ( German)Bertelsmann ( German)4.4. Sony ( Japan)Sony ( Japan)5.5. ViacomViacom ( US) ( US)6.6. Fox(Australia)Fox(Australia)7.7. ThomsonThomson8.8. GE/NBCGE/NBC9.9. AT&T and LibertyAT&T and Liberty

CMNS 130

TradeTrade Growth in world trade in last 20 years has Growth in world trade in last 20 years has

been 7 times the average growth of GNP been 7 times the average growth of GNP Canada’s Open Economy among the most Canada’s Open Economy among the most

trade dependent of the G-8trade dependent of the G-8 30% of GNP derived from exports30% of GNP derived from exports Most of the trade still in resources but for new Most of the trade still in resources but for new

exporters: Northern Telecom, Spar, Telcosexporters: Northern Telecom, Spar, Telcos Canada has a persistently high deficit in tech Canada has a persistently high deficit in tech

trade deficit, and high trade deficit in media trade deficit, and high trade deficit in media hardware and softwarehardware and software

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US dominance of World US dominance of World TradeTrade

Controls 75% of world trade in Controls 75% of world trade in audio visual mediaaudio visual media

If look at top ad agencies, If look at top ad agencies, takeovers of American MNCs, see takeovers of American MNCs, see growing foreign (non American) growing foreign (non American) share share

Still a dominant market power: Still a dominant market power: after defense, entertainment is after defense, entertainment is the US biggest exportthe US biggest export

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Ways to Measure Trade Ways to Measure Trade DominanceDominance

Share of Domestic Markets Share of Domestic Markets ( individual nation basis)( individual nation basis)

Share of total world tradeShare of total world trade

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US Share of Canadian US Share of Canadian Domestic MarketDomestic Market

80% of books and magazines 80% of books and magazines consumed in Canada are consumed in Canada are AmericanAmerican

66% of viewing time to English 66% of viewing time to English TV is to USTV is to US

97% of movies are US97% of movies are US Comparison: less than 2% of US Comparison: less than 2% of US

TV is foreignTV is foreign

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US Share of World TradeUS Share of World Trade Estimated in Burnett, Estimated in Burnett, Global Global

JukeboxJukebox, 1995:, 1995: Broadcast and cable 75%Broadcast and cable 75% Film: 55%Film: 55% Video/sound recordings:55%Video/sound recordings:55% Books: 35% Books: 35%

(caution: difficulty of source checking)(caution: difficulty of source checking)

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Why the DominanceWhy the Dominance US products can recover up to 80% of their costs in US products can recover up to 80% of their costs in

their home market due to size of their market and their home market due to size of their market and consumer preference for US made mediaconsumer preference for US made media

Thus can afford to sell abroad more cheaplyThus can afford to sell abroad more cheaply Costs of foreign licensing of US product are between Costs of foreign licensing of US product are between

1/6 to 1/101/6 to 1/10thth the cost of original production the cost of original production thus there are strong incentives to buy US fare and thus there are strong incentives to buy US fare and

repackage it to maximize profitsrepackage it to maximize profits There is a huge large market advantage ( and small There is a huge large market advantage ( and small

market disadvantage) in the ‘block buster’ media market disadvantage) in the ‘block buster’ media and entertainment marketand entertainment market

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Conclusion: Conclusion: As the number of corporate owners drops, more As the number of corporate owners drops, more

content is controlled by fewer companies. Oligopoly content is controlled by fewer companies. Oligopoly describes this condition.describes this condition. Journalists find themselves in a conflict of interest Journalists find themselves in a conflict of interest

situation in reporting on the malfeasance of their situation in reporting on the malfeasance of their ownersowners

Societies debate whether the media are public or Societies debate whether the media are public or private goods every generation– Ideological private goods every generation– Ideological pendulums shiftspendulums shifts Should governments regulate competition? How?Should governments regulate competition? How?

States are concerned about world market States are concerned about world market dominance of US—call for fair trade not free tradedominance of US—call for fair trade not free trade

An International Movement led by Canada now is An International Movement led by Canada now is trying to protect smaller countries against trying to protect smaller countries against overwhelming US global dominanceoverwhelming US global dominance

CMNS 130

Other SourcesOther Sources Jim Winter, Jim Winter, Democracy’s Oxygen,Democracy’s Oxygen,

19951995 Ben Bagdikian, “Lords of the Ben Bagdikian, “Lords of the

Global Village”Global Village” Robert McChesney, Robert McChesney, Global MediaGlobal Media Lorimer and Gasher, pp. 203-Lorimer and Gasher, pp. 203-

218;222-232218;222-232

CMNS 130

Study Guide: State, Media Politics and MarketStudy Guide: State, Media Politics and Market

What are the major questions posed by What are the major questions posed by capitalist organization of the media?capitalist organization of the media?

How does capitalism relate to ideology, and How does capitalism relate to ideology, and what are the accepted roles of the state?what are the accepted roles of the state?

CMNS 130

Other Major QuestionsOther Major Questions

Why do people take for granted that the media Why do people take for granted that the media should operate within and as a part of the should operate within and as a part of the capitalist economy?capitalist economy?

How does the organization of the media as How does the organization of the media as private, profit making ventures influence the kind private, profit making ventures influence the kind and quality of media available to audiences/ and quality of media available to audiences/ consumers/citizens?consumers/citizens?