MAGISTERARBEIT - Hochschulschriften-Serviceothes.univie.ac.at/5860/1/2009-07-14_0248121.pdf · that...
Transcript of MAGISTERARBEIT - Hochschulschriften-Serviceothes.univie.ac.at/5860/1/2009-07-14_0248121.pdf · that...
MAGISTERARBEIT
Titel der Magisterarbeit
„Concentration of Media Ownership in Europe“
Verfasserin ODER Verfasser
Bakk. phil. Lukas Wiesboeck
angestrebter akademischer Grad
Magister ODER Magistra der Philosophie (Mag. phil.)
Wien, 2009
Studienkennzahl lt. Studienblatt: A 066 841
Studienrichtung lt. Studienblatt: Publizistik- und Kommunikationswissenschaft
Betreuerin / Betreuer: Ao. Univ.-Prof. Dr. Hannes Haas
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CONCENTRATIONOFMEDIAOWNERSHIPINEUROPE
Perspectivesoflegalregulationsofmediaownershipandthe
safeguardingofmediapluralismintheEuropeanUnion
basedoncasestudiesofGermany,UnitedKingdomandFrance
Isthereaneedtoreconsidersupranationalmeasures?
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Summary
InthispaperIwillshowthatasupranationalapproachbasedonharmonizationof
nationalrestrictionsofmediaownershipinordertosafeguardmediapluralism,as
proposedbytheEUCommissioninits1992GreenBookisstillnotapplicabletoday,
despitethefactthatthemedialandscapeisundergoingconsiderablestructural
changes.Thereasonsforthisareofpolitical,legalandpracticalnature.Myanalyses
arebasedonanextensiveevaluationoftheeconomicconditionsandthelegal
frameworkofEuropeanmedia,whichIwillapplytocasestudiesofGermany,United
KingdomandFrance.MoreoverIwillconsiderthedefinitionofmediapluralismand
thepreconditionsforthetechnologicalchangesEuropeanmediawillbesubjectedto
inthenextcoupleofyears.AnewandrevisedEuropeanlegalframeworkshould
allowthesechanges–toacertainextent–tohappeninsteadofprotectingoutdated
businessmodelsof“oldmedia”.
Zusammenfassung
IndieserArbeitzeigeich,dasseinaufsupranationalereuropäischerRechtssetzung
beruhenderAnsatzderHarmonisierungvonnationalenRegelungenzurSicherung
derMeinungsvielfaltindenMedien,wieervonderEUKommission1992
vorgeschlagenwurde,auchheute,ineinervölligveränderteneuropäischen
Medienlandschaftnichtanwendbarist.Politische,rechtlicheundpraktischeGründe
sprechendagegen.MeineAnalyseberuhtaufeinerausführlichenEvaluierungder
ökonomischenundrechtlichenRahmenbedingungenvoneuropäischenMedien,die
ichanhandvonFallstudienausDeutschland,GroßbritannienundFrankreich
veranschauliche.DarüberhinauswerdenauchdieBedingungenvonMedienvielfalt
sowiedieVoraussetzungenfürdiestrukturellenVeränderungen,deneneuropäische
MedienaufgrundvontechnischenEntwicklungenindenkommendenJahren
unterworfenseinwerden.EineventuellerneuereuropäischerRechtsrahmensollte
dieseVeränderungenbiszueinemgewissenGradunterstützen,anstattüberholte
GeschäftsmodellevonMediender“altenOrdnung”zuschützen.
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TABLEOFCONTENTS
PREFACE ................................................................................................................ 7
1 INTRODUCTION................................................................................................ 9
2 THEFUNCTIONSOFMASSMEDIA....................................................................132.1 SOCIALFUNCTIONS .............................................................................................. 142.2 POLITICALFUNCTIONS .......................................................................................... 162.3 ECONOMICFUNCTIONS ........................................................................................ 17
3 MEDIAPLURALISMANDTHEPUBLICSPHERE ..................................................203.1 DEMOCRATISATIONOFMEDIA–THEONLINEREVOLUTION? ......................................... 26
4 CONCENTRATIONOFMEDIAOWNERSHIP .......................................................304.1 ECONOMICENVIRONMENT.................................................................................... 304.1.1 Competitioninamarketmodeleconomy ............................................... 304.1.2 Characteristicsofmediaeconomics ........................................................ 39
4.2 IMPACT............................................................................................................. 574.2.1 Evaluation................................................................................................ 574.2.2 Effects ...................................................................................................... 60
4.3 MANIFESTATION ................................................................................................. 644.3.1 Germany .................................................................................................. 654.3.2 UnitedKingdom....................................................................................... 764.3.3 France ...................................................................................................... 854.3.4 Europe ..................................................................................................... 92
5 CURRENTREGULATIONSOFMEDIAOWNERSHIP.............................................945.1 NATIONALREGULATIONS ...................................................................................... 975.1.1 LegislationinGermany ............................................................................ 975.1.2 LegislationintheUnitedKingdom......................................................... 1015.1.3 LegislationinFrance.............................................................................. 107
5.2 LEGISLATIONBYTHEEUROPEANUNION ................................................................. 1125.2.1 Existinglegislation................................................................................. 1125.2.2 Proposals ............................................................................................... 117
5.3 MEDIAGOVERNANCE ........................................................................................ 124
6 NECESSITYANDOFSUPRANATIONALREGULATIONS.....................................1266.1 TRANSNATIONALLEVEL....................................................................................... 1276.2 MEMBERSTATELEVEL ....................................................................................... 129
7 CONCLUSION.................................................................................................132
8 BIBLIOGRAPHY .............................................................................................134
9 APPENDIX .....................................................................................................145
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ABBREVIATIONS
ABC AmericanBroadcastingCompany/AuditBureauofCirculation
AG Aktiengesellschaft
AGOF ArbeitsgemeinschaftOnline‐Forschung
ALM ArbeitsgemeinschaftderLandesmedienanstalten
APA AmericanPsychologicalAssociation
APN AppointedNewsProvider
ARD Arbeitsgemeinschaftderöffentlich‐rechtlichenRundfunkanstaltenderBundesrepublikDeutschland
BaFin BundesanstaltfürFinanzdienstleistungsaufsicht
BARB Broadcasters’AudienceResearchBoard
BBC BritishBroadcastingCorporation
bn billion
BSkyB BritishSkyBroadcasting
BVerfGE Bundesverfassungsgerichtshof
CC CompetitionCommission
CEO ChiefExecutiveOfficer
CLT‐UFA CompagnieLuxembourgeoisedeTélédiffusion–UniversumFilm
CME CentralEuropeanMediaEnterprises
CNN CableNewsNetwork
CSA ConseilSupérieurdel’Audivisuel
DSPS DigitalSoundProgrammeServices
EBRA EstBourgogneRhôneAlpes
ECHR EuropeanConventiononHumanRights
EIAA EuropeanInteractiveAdvertisingAssociation
EU EuropeanUnion
ISP InternetServiceProvider
ITV IndependentTelevisionCommission
KDG KabelDeutschlandGesellschaft
KEK KommissionzurErmittlungderKonzentrationimMedienbereich
KG Kommanditgesellschaft
KiKa KinderKanal
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KKR KohlbergKravisRoberts&Co
LLC loidelalibertédecommunication
m million
NRCO NouvelleRepubliquedeCentreOuest
NRE nouvellesrégulationséconomiques
Ofcom OfficeofCommunications
OFT OfficeofFairTrade
OJD OfficedeJustificationdelaDiffusion
PBS PublicBroadcastingStations
RTL RadioTelevisionLuxembourg
SBS ScandinavianBroadcastingSystem
SCP Structure‐Conduct‐Performance
TIME Telecommunication/Information/Media/Entertainment
TNT TélévisionNumériqueTerrestre
UNESCO UnitedNationsEducational,ScientificandCulturalOrganization
WAZ WestdeutscheAllgemeineZeitung
XML eXtensiveMarkupLanguage
ZDF ZweitesDeutschesFernsehen
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Preface
“Ihaveyettoseeanyproblem,however
complicated,which,whenlookedatintheright
waydidnotbecomestillmorecomplicated.”
(PoulAnderson)
TheworkdescribedinthisthesiswascarriedoutbetweenJanuary2008andJuly
2009attheUniversityofViennaunderthesupervisionandguidanceofDr.Hannes
Haas.Asdescribedinthesummary,thispaperanalysestheeconomicandlegal
environmentofEuropeanmediacompaniesinordertoevaluatepotential
supranationalmodelsofregulatorymeasures.Theintroductionprovidesmuchofthe
generalbackground.
Sincetheeconomicanalysisisacorepartofthispaper,Iwouldliketopointoutthat
Iadoptapoliticaleconomypointofview,particularlywhenassessingthefunctioning
ofmarketsandthewaytheyinfluencesocietyandlaw.ThereforeIwillbuildmy
analysisontheneoclassicaltheoryofthefirm,whichcentresroundtheprincipleof
profitmaximizationandthenotionofperfectcompetition.Iamawarethatother
concepts,whichchallengethesimplificationsoftheneoclassicalassumptions,have
beenintroduced.Therearemanyalternativeandmuchmorecomplextheoriesof
themarketandthewayitworks,forexampletheStructurePerformanceConduct
(SCP)model.DespitethefactthatIwillprovidebriefexplanationsofthese
alternativetheoriesIwillnotgointodetailonthismatterbecauseitwouldgofar
beyondthescopeofthispaper,whichgenerallyfocusesonregulatorymeasures
fromamediaandcommunicationsciencesperspective.Besides,thewaymarkets
andcapitalismingeneralareanalyseddoessometimeshavemoretodowith
philosophythaneconomics.Wheneverhumansarethekeyplayers,anyassumptions
oflinearityaretobequestionedcarefully,especiallywiththeoriesofdecision‐
making.
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MoreoverIadopttheAPA‐styleofcitationdevelopedbytheAmericanPsychological
Association(Harvey,2008).Ithoroughlycomplywiththerulesofintegratingsources
outlinedbyHarveytoavoidanyformofplagiarismorothermisuseofsources.Ihave
triedtogetthepermissionsofallrightsholderofimagesandillustrationsusedin
thispaper.However,incaseanyinfringementofcopyrightsisnoticedIaskthe
readertocontactme.
FurthermoreIcomplywiththeUNESCOguidelinesongender‐neutrallanguageas
outlinedbyPavlic(Pavlic,1999).If,howeverIstilluseanambiguousorstereotyping
termIaskthereadertoconsiderthatnodiscriminationwhatsoeverisintended.
IwouldliketothankHaraldFidlerforinitiallysparkingmyinterestontheproblems
ofmediaownershipandmyparents,mysistersandmygirlfriendfortheirloveand
supportduringtheprocessofwritingthispaper.
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1 Introduction
InthelastcoupleofyearsthemedialandscapenotonlyintheEuropeanUnion,but
inthewholeworldhasbeendramaticallytransformed.Theevolutionofdigital
technologieshasledtoavastexpansionofonlinemedia,whichmarkstheadventof
anewparadigmofmediaproductionthatisnolongertiedtonationstates.
However,someofthenewdigitalplayershavebeenincorporatedintomedia
conglomeratesofthe“oldworld”inordertoexploitsynergiesofconvergence1.For
similarreasonscompetitors,suppliersandpartnersofnewspaperandtelevision
companieshavebeensubjecttoongoingconsolidation.MediacompaniesinEurope,
theUnitedStatesandelsewherearekeentotakepartinthechangesand,if
possible,attempttoemergeattheforefrontofanincreasinglytransnationaland
competitiveglobalcommunicationsmarketplace.Thechallengeforregulatorsinthe
wakeofareshapingindustry,whichisabouttobecomemoreandmoreglobal,isto
allowstructuralchangestohappenwithoutprotectingoutdatedbusinessmodelsof
thepast,whileatthesametimeensuringthatduringtheprocessoftransformation
mediapluralismisguaranteed.TheEUanditsMemberStates,whilecommittingto
safeguardingmediapluralismontheonehand,areverykeentopositionsomeof
theirplayersintheglobalmarketplaceontheotherhand,whichiswhytheyhave
retainedastrictlyeconomicapproachtoregulatingmediaownership.Moreoverthe
competencefordealingwiththeissueofmediapluralismtraditionallylieswiththe
MemberStates.
Citizenstodayaremorethaneverimmersedinamediasaturatedworld(Croteau&
Hoynes,2006).Duetothesheervolumeofmediaoutputitcanbedifficulttokeep
trackofrecentdevelopmentsinmediamarkets,whichhavebecomeverycomplex
andlesstransparentascompaniesattempttocircumventnationalrestrictionsand
morechannelsandoutletsarebeingcontrolledbyfewercompanies(Curran,2002,
1TheacquisitionofMyspacebyRupertMurdoch’sNewsCorporationin2005ortheacquisitionoftheGermansocialnetworkstudivzbyHoltzbrinckpublishersin2007arewellknownexamples.
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p.8).Thismight,inpart,provideanexplanationforthelackofbroadpublic
discussiononissuesofconcentrationofmedia.Infactpublicmediagovernancehas
beenratherfocusedoncontentthanonownership.
Myaiminthispaperistoassesstheregulationsofmediaownershipandotherlegal
instrumentsthatservetosafeguardmediapluralisminGermany,UnitedKingdom
andFranceandtoevaluatethenecessityofnewregulatorymodelsandframeworks,
whichcouldbeappliedtoallEUMemberStatesonasupranationallevelinorderto
acknowledgethechangesofthemedialandscape.Myresearchquestioniswhether
anysupranationalmeasures,beitaharmonizationoflegalinstrumentsoranyother
actioninsupportofpluralismacrosstheEUwouldbefeasible,effectiveand
expedient.
In1992theEuropeanCommissionhadalreadyproposedanapproachbasedon
harmonizationinitsGreenPaper“Pluralismandmediaconcentrationontheinternal
market”(EuropeanCommission,1992;EuropeanComission,2007;European
FederationofJournalists,2005;TheGuardian,2008).Theactionssuggestedinthis
report,howeverwereneitherconsideredappropriate,norattainableinthebroad
consultationprocessensuingthepublicationofthepaper,whichtolargepartswas
duetotheCommission’sapproachtoensureafunctioninginternalmarketrather
thantoguaranteepluralismanddiversityofopinionsintheEU.Morethan15years
later,theconditionshavechanged:Therehasbeenintensereorganisationand
deregulationoftheEuropeanmediamarketwhichhasledtoanincreasing
internationalandglobalscopeofmediacompanies.Moreoverwehavewitnessed
theformationofmultimediaconglomeratesandtheevolutionofonline‐media.Due
totheseandotherframeworkconditionsthathavechangedsincethepublicationof
theGreenPaper,Ishallre‐evaluatewhetherasupranationalapproachwouldstill
proveimpracticable.IchosetoanalyseGermany,UnitedKingdomandFrance,not
onlybecausetheyarethethreebiggestEUMemberStates,butalsobecausethey
regularlyconvenetripartitemeetingsofofficialsfromtheirregulatorybodiesto
discussissuessurroundingmediaandpluralism.
InordertoevaluatethisresearchquestionIwillfirstlyprovideanoverviewabout
theconceptsofmediaconcentrationandpluralism,includinganassessmentofthe
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currentsituationofthemediasectorsinthetripartitecountriesaswellasinthe
EuropeanUnionasawhole.Themediaconglomeratesoftodayofferavery
diversifiedportfolioofmediaproductsandareofteninvolvedinawiderangeof
non‐mediabusinesses.Thisdevelopmentcanbeexplainedbyanalysingthe
economicsofthemediaindustryandtheunderlyingconditionsofthestatusquo.I
willgoverymuchintodetailsinthissegmentsinceitisessentialtounderstandthe
specificeconomicconditionsrelevanttomediacompaniesbeforeanyregulatory
measurescanbetaken.Moreover,myanalysiswillshowthatthemarketitselfis
responsibleformanyproblemsrelatingtomediapluralism.
SecondlyIwillanalyzethecurrentregulationsofmediaownershipinthetripartite
countriesandtheEUutilizingacomparativelawapproach,which,incombination
withtheaforementionedcountrylevelevidence,shouldallowabasicassertion,
whichregulationsworkforwhichmarketstructures.Thehugevarietyofregulatory
measuresthroughouttheEUhascontributedtotheperceivedneedofsupranational
measuresinordertobetteraddresstransnationalmediaconcentration.
Finally,drawingfrommyassessmentwhichregulationsareinplaceforwhichkinds
ofmarketstructures,Iwillevaluatewhetherasetofregulations,oranyother
measurewhichcouldsuitthewholeEuropeanmediamarketwouldbeattainable
andwhichconditionsneedtobemetinordertoguaranteesuccessful
implementation.Iwillscrutinizethefeasibilityofthesemeasuresbymeansof
opinionsgatheredfromdiscussionswithEuropeandecisionmakers.
ItisimportanttonotethataftertheproposalsoftheGreenPaperhadbeenrejected
bytheMemberStates,theEuropeanCommissionhasturneditsbackona
harmonisation‐basedapproach.However,addressingthreatstothediversityof
opinionsintheEUbeyondensuringthefunctioningoftheinternalmarkethavebeen
declaredofficialpolicyCommissionersVivaneRedingandMargotWallström.In2007
astudywaslaunchedtofindoutaboutindicatorsofpluralisminallEUMember
States.PreliminaryresultshavebeenpublishedinJune2009.Thefullreportisdueat
theendofsummer2009.Theresultsofthisstudywillbeadecisivefactorforthe
decisionwhichapproachthenextCommissiontobeelectedinautumn2009will
takeregardingmediapluralism.AtthispointIwanttostressthatduetothe
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temporalproximity,evenuponavailabilityofanyresultsIcouldnotincorporatethe
outcomeofthisstudyinmythesis.
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2 Thefunctionsofmassmedia
Inthecontextofcommunicationscience,functionreferstoacertainstandardof
performanceandmerits,whichagivensocietyrequiresmediatoprovide(Burkart,
Kommunikationswissenschaft,2002,p.379).Theprincipalfunctionofmediafroma
systemtheoryperspective(Wallner,2007,p.57)ispublicity.Inacademicliterature
(Burkart,Kommunikationswissenschaft,2002;Ronneberger,1978;Münch,1991),a
setof(sub‐)functionsofmediahasbeenidentified.Theyaredividedinthree
categories:social,politicalandeconomical.
FUNCTIONSOFMASSMEDIA
social political economical
Information
Socialisation Enablingpublicdiscourse
Orientation Articulation
Circulation(knowledgetransfer,socialtherapy,
validation)
Recreation/Entertainment Politicalsocialisation/education
Regeneration
Integration Criticism&control Domination/manipulation
SOCIETY
Figure2‐1Thefunctionsofmassmedia,Source:Burkhard,2002,p.382
Thequalityandthedegreeoffulfilmentofthesefunctionsdiffersaccordingtowhat
Burkartdefinesasthe“frameofreference”(Burkart,Kommunikationswissenschaft,
2002,p.382)toagivenenvironmentorsociety.Thisframe,whichmirrorsthe
expectationsandrequirementsofthemembersofagivensociety,determines,
whichfunctionsarenecessary,required,acknowledgedortolerated.Thereforethe
analysisofthefunctionsofmediahastobecloselylinkedtotheaudienceand
(social)environmentthemediacontentisaimedat.
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2.1 Socialfunctions
Socialisationiswidelyseenasoneofthemainmeritsofmassmedia,particularlyin
industrializedsocieties.Duetothecomplexityoforganisationonsocietallevel,many
people,especiallychildren,areunabletoacquirefromfirsthandexperienceallthe
knowledgeandintellectualskillsnecessarytofilltherolesthattheyaresupposedto
fill.Mediacanbasicallyprovidetheadditionalknowledgeneededandcommunicate
valuesandculturalstandardsaswellaspatternsofthoughtandconduct.However,
Burkart,followingRonneberger,pointsoutthatthelatterrequiresintellectual
reflectionandcannotbeobtaineddirectlyfromthemedia(Burkart,p.385).
Somescientistsarguethattheimportanceofmediasocialisationhasbeen
overstated.Hurrelmann(1980)statesthatthereislittleempiricalproofofthe
influenceofmedia.Inhisview,mediasocialisationis,unlikefamilysocialisation,
easiertoreversesinceindividualsusuallytakeamoreactiveroletotheirownmedia
socialisation(Hurrelmann&Ulich,1980,p.603).Hurrelmann,therefore,seesthe
roleofmediaasanamplifierofvaluesabsorbedfromotheragenciesofsocialisation
(ie.parents,school).„Thedefiningquestion[...]isnot,whatisshownonTVhow
often,butinwhichcontextandunderwhichcircumstancesitisreceived,“
(Hurrelmann&Ulich,1980,p.610).
Closelylinkedwiththetheoryofsocialisationisthenotionoforientation.Inaddition
torisingcomplexityofsocietalorganisation,trendsofindividualisationandafloodof
dataavailabletoeveryoneininformationsocietieshavesparkedaneedforguidance
andtogetherness.Mediaassistinfilteringandsortingtheinformationthrustupon
theaudience(gatekeepingtheory).Atthesametimetheybalancethelackofsocial
encountersbyprovidingcommonexperienceseveryonecanrelatetoandthey
communicatepatternsofthoughtdifferenttotheoneswhichareencountered
conventionallyineverydaylife.Inconjunctionwithintegration,theformerisoften
referredtoas„thewater‐coolereffect“(seealsochapter4.1.2.4).
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Moreovermediaprovideameansofrecreationandentertainment.Recipientsare
offeredapossibilityofescapingtheworriesofeverydaylifeiftheyneedsome
distraction.
Finally,mediaaresupposedtoprovideintegration.Akintoorientation,thisfunction
takesthesenseoftogethernessonestepfurtherandaimsatmanufacturingtheglue
thatholdssocietytogether.Themorespecializedandindividualizedsociety
becomes,thelessweareabletorelatetoeachotherandthemoreneedthereisfor
thevariousunits(sociologicalgroupswithinsociety)ofthesystemtoworktogether
inordertopreventthewholesystemfromimploding.ForBurkart,thistaskcanonly
befulfilledwiththehelpofmassmedia(Burkart,2002,p.387)sincepeopledepend
ontheirabilitytocommunicatecommonvaluesandpatternsofbehaviourwithina
society.However,ifthemassmedia’sefforttoprovideintegrationisdysfunctional
disintegrationoroverintegrationmayoccur.Burkartmentionsdisintegration
particularlyinconnectionwithdigitaldivideandknowledgegapissueswhichbenefit
theformationof(media)elitesandbroadensthegapbetweenthesociologicalunits.
Overintegrationmayoccurwhenpluralismdeclinesandopinions/valuesoutsidethe
mainstreamtendtobeignoredorsupressed.Aclassicexampleofoverintegrationis
propagandaduringthesecondworldwar.
Figure2‐2Integrationthroughmedia,Source:ownillustration
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Bothdysfunctionalmanifestationsofintegrationareassociatedwithscenariosof
commercializedandconcentratedmediasectors(seechapters4.1.2.2and4.1.2.3)
whereassuccesfullintegrationisamongthetypicalmeritsofpublic(broadcast)
media.However,Burkartstresses,thatamediamarketeconomydoesnot
necessarilyexcludethesocialfunctionofintegrationandthatthereisnoevidence
mediahaveabandonedintegrationforthesakeofprofitandshareholdervalue
(Burkart,2002p.389).
2.2 Politicalfunctions
Thepoliticalfunctionsdefinedhererefertothefunctionsofmediainademocracy
theyarethecoreoftheconceptofpluralismoutlinedinchapter3.Firstlymedia
servetogeneratepublicityforpoliticaldiscussion.Theyprovidea(virtual)public
spacefordeclaration,clarification,elaborationandcontroversy,whichiscrucialto
thedemocraticprocessofdecision‐making.Inordertoallowasmanypeopleas
possibletofollowand/orjointhediscussion,massmedianeedtoestablishan
applicableplatform2.Severalcriticsclaimthatmediahavebecomemerelyaplatform
forpoliticaldebatebutaplatformfortheatricalstagingofpoliticalprocesses.Münch
(1991)arguesthatpoliticsisdeterminedbydramaturgyofpublicrepresentation
(Münch,1991,p.95).Successfulpoliticalmeasuresaredeterminedbythewaythey
arediscussedratherthantheirunderlyingidea.ForMünch,thisdefiestheconcept
ofpoliticaldiscussionsinceitischarmingrepresentationsinsteadofcompelling
argumentsthatincreasinglyshapethefaceofpolitics–aprocess,whichisvery
muchfacilitatedanddeterminedbymassmedia(seechapter3onHabermas).
Nevertheless,themediahavethepowertomakevoicesheard,whichconstitutes
thefunctionofarticulation.Articulationrequiresmediathatactasamouthpiecein
ordertoechothepluralismofpoliticalopinionswithinasociety.Thisisa
prerequisiteforpublicdiscourseinthefirstplace.
2Wallneradds,thatpoliticalfunctionsofEuropeanmediaalsoneedtobeviewedinaEuropeancontextandcannotbeanalysedintheirnationalenvironmentonlysince,duetopoliticalandeconomicintregration,nationshavelosttheirstatusasprincipalpoliticalbenchmark(Wallner,2002,p.45).
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Thefunctionofpoliticalsocialisationandeducationisablendbetweenthegeneral
functionofsocialisationdiscussedaboveandthefunctionofinformation.Naturally
mediaaresupposedtoinformaboutthepoliticalsystemandreportonthevarious
formsofpoliticalparticipation.
Finallymediaaremeanttocriticizeandexaminethepoliticalprocess.Criticismand
examinationcanattimesbeverysimilartoarticulation,sinceattimestheygivea
voicetoandexpressthepositionofthosewhodonothaveaninstitutionalized
representationunitsuchascitizens’groupsandinitiatives,smalltradeunions,
commercialinterestandpressuregroups,etc.(Ronneberger,1978,p.229).
Thecombinationofpoliticalfunctionsofmassmediacanbeseenhere:
Figure2‐3Politicalfunctionsofmassmedia,Source:ownillustration
2.3 Economicfunctions
Theeconomicfunctionsrefertothebenefitsmassmediacontributetothemarket
economy.Firstlytherearedirectoptionsofinvestment,sincemostmediacompanies
areeconomicentitieswhichcanbeboughtorwhichneedtobuysupplies.Secondly,
andmuchmoreimportantlymediaprovideindirectoptionsofinvestmentthrough
advertisement.Theyservetostimulateindustrialproductionbyboostingdemand
forconsumergoodsandservicesandallowsupplierstosellsomeoftheirproductsat
apremium.Thisconstitutesthefunctionofcirculation.Apartfromstimulating
demand,mediaalsoserveasameanstostrengthenmarketeconomyideasand
capitalistideologiesinsocietyandstabilizetheeconomicsystem(Burkart,2002,p.
399).Knowledgetransferaimsatpreparingpeopleforeconomicchangesand
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informsthemaboutpossibilities(i.e.ofconsumption)theyhave,socialtherapyhelps
themcopewithinequalities,deficienciesandotherunpleasanteffectsofamarket
economy,andvalidationservestolegitimizeandanalysetheirpersonalsituation.At
theendofthedayitallservesthepurposeofstrengtheningexistingpatternsof
resourceallocation(Burkart,2002,p.401).
Thisfunctionisintertwinedwiththeideaofdominationandmanipulationin
capitalistsocieties,whichhadbeenintroducedmorethan150yearsagobyKarl
MarxandFriedrichEngels.Marxstatesthatcapitalismcreatesideologies,which
servetocoverupcontradictionsbetweenwhatpeoplearepromisedandwhatthey
actuallyget,betweensubjectiveandobjectiveneeds.Assumingthatthebaseof
societyiseconomicproductionanddistribution,Marxidentifiedahierarchicalsocial
systemofbaseandsuperstructure.Thosewhoownproductioncapacities(base)are
membersoftherulingclassandthereforeshapeanddeterminesociety’sideas,
meaninglanguage,arts,religionandrituals(superstructure)
“Theclasswhichhasthemeansofmaterialproductionatitsdisposal,hascontrolat
the same time over the means of mental production, so that thereby, generally
speaking,theideasofthosewholackthemeansofmentalproductionaresubjectto
it.”(Marx&Engels,1995)
InthemidnineteenthcenturywhenMarxandEngelsexpressedtheseideasin“The
GermanIdeology”,economicproductionwasmainlybasedonmaterialgoodssince
theindustrialsectorwasabouttoreplacetheagrariansectorasthemostimportant
factorofproductionandthereforesourceofwealthandgrowth.Nowadaysthemost
important economic good is information, as the information economy forms the
most important factor of production within the service sector – the constitutive
element of the information society. Due to the crucial positionmedia hold in the
processofallocationofinformation,whoeverinfluencesand/orcontrolsmediamay
exertthesameorgreaterpowerastheownersofresourcesofproductionMarxand
Engels had in mind (see also chapter 4.1.1.1). Based on this analogy media is
sometimes regarded as the capitalism’s most powerful tool of “manufacturing
consent”,anexpressionestablishedbyNoamChomsky.
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Following the idea of domination in a Marxian (class structure) understanding, it
could be furthermore seen as obvious trend that recreation in the socialmeaning
changestoregenerationintheeconomicarea.Theeffectsmaybethesame,butthe
goal isdifferent.While recreation intends toprovideentertainmentandqualityof
privatelife,regenerationaimsatmaintainingthemoraleoftheworkforce.
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3 Mediapluralismandthepublicsphere
Mediapluralismreferstothequalityofmediaservicestothepublic.Theterm
embodiestheprovisionofabroadrangeofwell‐balancedopinionsreportedinfullin
ordertoguaranteeindividualfreedomofinformationandadequatearticulationof
minoritiesinthepublicsphere.Habermastracesthedevelopmentofthepublic
spherebacktothe18thand19thcenturieswhenthemiddleclass(bourgoisie)started
tocultivatereasonedargumentinordertoforma“zoneofmediationbetweenstate
andprivateindividuals”(Crossley&Robert,2004,p.2).Individualizationand
differentiationofsociety,aswellasseparationofchurchandstateandcentralization
ofstatepowerwithrespecttoindividualcitizen’severydayroutinehadleadtoa
collectivedemandofaccountabilityandtherebycontributedheavilytotheevolution
ofthepublicsphereandtheprincipleofrationalpublicdebate.Accesstothepublic
sphereshouldinprinciplebeopentoallcitizens(Habermas,2000,p.92)sinceit
servestoshapepublicconsensus.CriticshavesuggestedthatHabermas
underestimatedpersonaleconomicandsocialconstraintslimitingtheparticipation
inthishistoricpublicsphere.
However,assessingtheconditionofthepublicsphereinacontemporary
environment,Habermasidentifiesotherfactorsresponsibleforthefactthatthe
currentrealityofpoliticalandpublicdiscourseismerelyapaleimitationoftheideals
thatsurroundedthehistoricalzoneofmediation.Heattributesthedeteriorationto
threeelements.Firstly,theconstitutionofmodernEuropeanwelfarestates,which
hasraisedmutualdependencyofstateandindividualsandhasleadtoa
transformationofcitizenstoconsumers.Secondly,accordingtothepropositionof
thenewpoliticaleconomymembersofgovernment,partiesandbureaucraciesas
wellasrepresentativesfirstandforemostpursueindividualgoalswhichmeansthat
politiciansdonotseektoengageinpoliticalargumentsforthebenefitofdemocratic
decisionmakingbutrather,attempttomaximizevotes,inaverysimilarwayto
entrepreneursmaximizingprofits(Benderet.al.,2007,p.300).Sinceviewsofparty‐
‐21‐
basedorganizationstendtobestucktointhelongrun,inordertowinless
organizedorlessinformedvoters,politicaldebatesshiftto“tricksandtreats”and
becomemoreandmorestaged(Crossley&Robert,2004,p.5)(seealsochapter2.2).
Thirdlyandmostimportantlyinthecontextofthispaper,Habermasholdsthemedia
responsibleforadeclineofthequalityofargumentsinthepublicsphere.Inhisview,
allowingpubliccommunicationtobemoderatedbydemandsofbusiness,leadsto
mostofthecontentbeingplayedto“thelowestpossibledenominator”(Crossley&
Robert,2004,p.7).Subsequentlythehistoricalpurposeofthepublicsphere,tolevel
upthequalityofarguments,isreversed.
Criticsofmediaregulationandpluralismwatchdogssometimesarguethat,itisnot
profitmaximizationthatleadstoadeclineoftheamountofpublicvalue
programmesbutasimplelackofdemandtowhichmediacompaniesrespond.When
concurrent,themassofpeoplewillchooseBigBrotheroverapoliticaldebate,or
TheSunovertheGuardian.Thequestioniswhetherlesseducationoflowerclasses
canexplaintheunpopularityofpublicvalueprogrammes.Thepublicchoicetheory
providesananswertothisdilemma.Thismodelassumesthatpeoplehaveamulti‐
levelsetofgoalsandpreferenceswhichstandsincontraststothesinglesidedhomo
oeconomicusconcepttraditionallyfavouredbyneoclassicaleconomics(seechapter
4.1).Thegoalschangeaccordingtotherolethepersontakesatagivenmoment.
Thisexplainswhyaperson,asacitizen,somemayvaluephilosophicaldiscussionson
BBCveryhigh,whileasaconsumer,mayprefertowatchBigBrother.Thismirrorsa
conflictofinterest.Democracyserveseveryone,eventhosewhodonotwantto
participateinpoliticalwillformationorelections.Thisraisestheincentiveofbeinga
“freerider”onpoliticalinformation–thevalueoftheseprogrammesiscommonly
acknowledgedforsociety,however,theconsumerssetsasideparticipationand
pursuesothergoalssuchasentertainmentandrecreation(Lange,2008,p.172).
Habermas’assessmentofthepublicsphereneedstobeviewedincloseconnection
withhistheoryofcoercion‐freediscourse.Whenappliedtoapublicsetting,this
theorystipulatestwoprerequisitesforanideal,non‐coercivediscourse.Firstly,
generalaccesstoinformationandopinionshastobeensured,which,dueto
practicalimpossibility,Burkartseesasanaccentuationofthedutiesofjournalismto
‐22‐
providetransparentandbalancedreporting(Burkart,2002,p.518).Thesecond
stipulationistheprincipleofrationaldiscussionbasedexclusivelyonthepowerofa
superiorargument.
Inordertoretainazoneofmediationinashape3thatmeetscontemporary
technologicalandsocialchallengesthesestipulationsneednottobeentirelyfulfilled
butaclearefforttocomeclosetotheirfulfilmenthastobemade.Mediapluralismis
crucialtothiseffortasitisverycloselyconnectedtothedemocraticvalues
underlyingHabermas’conceptionofthepublicsphereandcoercion‐freediscourse.
Generally,pluralismreferstotheacceptanceofdiversityinagivensociety,which
permitstheharmoniouscoexistenceofdifferentideologies,schoolsofthoughtand
ideas.Pluralismislinkedwiththedemocraticprinciplesofequalityandfreedomof
expression.ForRagerandWeber(1992)athoroughlypluralistsocietymeansthatno
ultimatejudgementonwhattothinkofanygivenmattershalleverbeaccepted
sincethedemocraticmajorityonlyhasthepowertodecideonapoliticalcourseof
actionratherthanaboutwhatisrightorwrong(Rager&Weber,1992,p.8).Media
pluralisminthisunderstandingisareflectionofdiversityonsocietallevelandfirst
andforemostaidsandfacilitatestheprocessofdemocraticwillformation.Baker
(2007)holdsasimilarpositionandarguesthat“anormativeconceptionof
democracyrequiresthatthestructureitselfembodyoratleastbeconsistentwith
respectforcitizensequalclaimtoberecognizedaspartoftheselfdetermination
process”(Baker,2007,p.6).SinceBakerseesmediaasthe“mostcrucialinstitutional
structureofthepublicsphere”,theapplianceoftheegalitarianprincipleonmedia
requiresthemtoprovidecapacitiesforpeopletoexpressabroadrangeofopinions
andultimatelyinfluencepublicwillformation.Forthisreason,Bakerconcludes,“a
countryisdemocraticonlytotheextentthatthemedia[…]arestructurally
egalitarianandsalient”(Baker,2007,p.7).
Legally,thecallformediapluralismisrootedintherighttofreespeechandfreedom
ofexpression,whichinturnisshapedbytheaforementionedargumentfor
3Whethertheevolutionofonline‐mediafacilitatetheprocessofmovingtowardspublicdiscourseofaHabermasianconceptionshallbediscussedinchapter3.1.
‐23‐
participationinademocracy.Fenwick&Philippson(2006)callthisargumentoneof
themostinfluentialtheoriesoffreespeech(Fenwick&Phillipson,2006,p.14).
Uninhibitedpubliccriticism,whichencompassesalsothefunctionofexposing
abusesofpower,hasa“specialprotectedstatusinmostWesterndemocracies”
(Fenwick&Phillipson,2006,p.16).Theyalsoacknowledgethatfreespeechclaimsof
(mass)mediaareoftenindistinguishablefromthoseofindividualspeakers,whichis
whypressormediafreedomisprotecteddistinctivelytofreespeechprotection.
AlthoughpressfreedomisnotmentionedinthetextofArticle10ECHRwhich
providesthat“Everyonehastherighttofreedomofexpression.thisrightshall
includefreedomtoholdopinionsandtoreceiveandimpartinformationandideas
withoutinterferencebypublicauthorityandregardlessoffrontiers”,theStrasbourg
Courthasdefactoassignedprioritytomediaspeechincomparisontotheexpression
ofindividuals(Fenwick&Phillipson,2006,p.25).Fenwick&Phillipsonperceivethe
dangerthatthepossibilitiescreatedbymediaownershipmaybeintensionwith
generalguaranteesoffreespeechsincetheproprietorofamediaoutletcould
exploittherightofdeterminingitscontentandtherebydamagetheconsumer’s
interestinpluralismofinformationwhichtheyrefertoasavalueunderlying
freedomofspeech.Fromalegalpointofview,theyconcludethatmediashouldnot
beallowedanyblanketspecialprivilegesincomparisonwithindividualspeakers.
Rather,anyclaimhastobethoroughlyscrutinizedandassessedagainstthebasic
principlesandvaluesoffreespeech.Alternativelyspecialanti‐privilegesorburdens
suchasmustcarryobligationstoprovideapluralityofculturalandpoliticalmaterial
couldbeintroduced(Fenwick&Phillipson,2006,p.28).4Theygoontostatethatan
infringementintoeditorialfreedomshouldbeweighedoffagainsttheaimof
enhancingthebenefittotheaudiencesincethereareseveralexamplesthat
unrestrainedfreespeechinthepresswillnotconsistentlypromotethevalues
underlyingfreedomofspeechitself(seechapter4.2.2.3).Thereforetheyarguethat
content‐basedcontrolsareinaccordwithfreespeechrationalessincetheyenhance
mediaspeechincomparisonwiththatofindividualspeakers.
4SofartheStrasbourgCourthasonlyfoundrighttoreplyprovisionstobeinalignmentwitharticle10(Fenwick&Phillipson,2006p.28)
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Lange(2008)differsbetweenfunctionalpluralism,formalpluralismandpluralismof
content.Functionalpluralismmeanstherangeofmediafunctionscoveredbyany
mediaoutlet(Information,Education,Entertainment,Socialisation,seechapter2).
Formalpluralismmeanstherangeofjournalisticstylesanddisplayformatswhichis
supplementedbythepluralismofsourcesofinformation.Pluralismofcontent
meanstherangeofissues,opinionsandstakeholders(Lange,2008,p.187).The
morediversethisrangeis,themorelikelypluralismisrealized.Thisformisthemain
typeofpluralismreferredtoinacademicandpoliticaldiscussion.
Therearetwoconceptsofhowtoattainthedesiredoutcome,firstlybydiversifying
theeconomicentitiesofcontentproductioninordertoachieveapluralismof
providersorexternalpluralism,secondlybyimplementingcertainstandardsof
contentproductionsoasbroadentherangeofopinionswithinanyeconomicentity
ofcontentproduction,referredtoasinternalpluralism.
There is dissent whether the notion of an independent provider of information
corresponds with the concept of a self‐determining economic entity. For Lange
(2008) the number of independent providers does not sufficiently determine
pluralismbutitisanecessaryprecondition(Lange,2008,p.188).Langdisagreesand
argues that independentmedia companies do not guaranteemedia pluralism. On
the contrary, Lang has found that on markets, which to some extent rely on
advertising, “strategic clustering of content” will take place, which does not
representtheoutcomedesiredfromasocialpointofview(Lang,2004,p.111).
The current regulations in place to safeguard media pluralism mostly aim at a
pluralism of providers. One of the most important expected outcomes of the
IndicatorsStudybytheEuropeanCommissionwillbeamoresophisticatedapproach
tothedefinitionofmediapluralism,whichpermitstheintroductionofnewmethods
ofregulation.However,Never (2002)hasclaimedthatanyattemptstoquantifyor
validatemediapluralismaredestinedtofailsincemediacontentbeforeanyclaims
regarding diversity and balance can be made will always be subject to consumer
demand and taste. The element of subjective judgement impedes the accuracy of
any objective definition (Never, 2002, p. 167). While that may apply strongly to
‐25‐
entertaining content (Never gives the example of TV feature films) it remains
doubtfulwhethertasteplaysaconsiderableroleinotherformsofcontent.
‐26‐
3.1 Democratisationofmedia–theonlinerevolution?
TheevolutionoftheWeb2.0,aterminventedbyTimO’Reilly,markedtheadventof
anewframeworkforonlinemedia.Fromaninitiallystaticconcept,theWorldWide
Webgraduallytransformeditselfintoadynamic,socialtoolfor“harnessing
collectiveintelligence”(O'Reilly,2005).Theusergeneratedonlineencyclopedia
Wikipedia,personalweblogs,andsocialnetworkingwebsitessuchasFacebookor
Twitterarewellknownexamplesofthisdevelopment.Web2.0notonlychangedthe
waypeoplecommunicateontheInternet,movingpublicdiscourseclosertothe
idealoutlinedbyHabermas,italsoservedtointroducetheconceptofcollaboration
asanewparadigmformedia,business,government,politics,scienceandthe
generationofideasingeneral5.Inthecontextofmediapluralismthepromotionof
citizenjournalism6,whichwasstronglyfacilitatedbyWeb2.0isparticularly
interesting.Inthelate1920’sBertoldBrechtlaidthetheoreticalfoundationsof
citizenjournalism,askingauthoritiestomakenewlydevelopedradio“truly
democratic”(Haas&Langenbucher,2002,p.2)andallowaudienceparticipationin
ordertoexpanditsintendedpurposefrommeredistributiontocommunication.
Unlikefreeradiooropentelevisionchannels,whichstartedtoemergeinthe1950’s
andthe1960’srespectively,therearepracticallynobarriersofentryforonline
media,thecostsassociatedwithsettingupaWeblog,Vlog(VideoBlog)oraTwitter
accountforexampleareverylow.
Bowman&Willislistarangeofchangestriggeredbyonlinecitizenjournalism,
particularlychangesinthedegreeoftrustextendedbytheaudiencetotraditional
mediaandchangesintheorganizationalcultureofmedia(journalistswriteblogs,
5InhisbookTheWisdomofCrowds,JamesSurowieckiprovidesmanyexamplesthatgroupsofpeoplearesignificantlybetteratdecisionmakingthanindividuals,regardlessoftheirexpertise(Surowiecki,2004)6Thereissomedisagreementwhethercitizenjournalismisqualifiedtobereferredtoasaviableformofjournalism.ForNeuberger,alackofprofessionalresearchandmethodsofqualityassurancestandagainstit(Neuberger,2009).However,Daviesarguesthatduetotheconstraintsofcommercializationtraditionaljournalismhasbecomeincreasinglyunprofessionalitself(Davies,2008).
‐27‐
theaudienceisaskedtoparticipateinonlinediscussions)7(Bowman&Willis,2003).
WhileBowman&Willisdonotsuggestthatcitizenjournalismmayeliminateor
replacetraditionalmedia,theynotethatthe“notionoftheinstitutionalpressasthe
exclusive,privileged,trusted,informedgatekeeperandintermediaryofthenews”is
moreandmorechallenged.Webcommunitiesandsearchenginesarebecoming
valuedoutletsofnews,whichguideanddirecttheirreaderstoinformationof
interest.Therolethesesitesplayasfilters,simplifiers,clarifiersoramplifiersofnews
isaddinganewintermediarylayer(Bowman&Willis,2003).AxelBrunsdevelopsa
similarargumentandstatesthatcitizenjournalismispositionedasanalternative
andacorrectivetothemainstreamtierofnewsmediaandplaysavalidroleinpublic
debate.8Insteadofsimplystandinginopposition,itengagestheperspectivesof
mainstreammediaand“debunksthemastheviewsofindividualpoliticalorlobby
groupsratherthanasrepresentativeforamorediverserangeofsocietalvalues”
(Boler,2008,p.40).Moreover,citizenjournalistsplayaconsiderableroleincreating
hypeandtherebyweakentheabilityofmainstreammediatosetagendas(Boler,
2008,p.177).9Ononehand,citizenjournalismmayserveasasourceofinspiration
forprofessionaljournalists,ontheotherhanditfilterstheirveryoutput.
7Thischangeintheorganisationalcultureisthemainreasonwhyitissometimesdifficulttodistinguishbetweentraditionaljournalismandcitizenjournalism–i.e.professionaljournalistswriteaweblogfortheiremployerandoneforprivatepurposes.8InUSnewsmediathistieriscommonlyreferredtoas“blogosphere”9SusannD.Moellerreferstothisathe“tickleupeffect”(Boler,2008p.177)
‐28‐
Figure3‐1Therelationbetweenmainstreammediaandcitizenjournalism,Source:ownIllustration
Wegnerarguesthatfilteringandamplifyingofinformationincreasestheneedand
demandforqualityjournalism.Heobservesthatmanycitizenjournalists/bloggers
basetheirargumentonreportspublishedandbroadcastbytraditional,often
prestigiousmediasourcestheytrust.Insteadofmutualexclusivityhepredictsa
peacefulcoexistenceofcheapmicromediaandexpensivelyproducedcontent
(Wegner,2005,p.3).
Onlinemediaprovideavaluablemeansonparticipationincontentproduction,
howeverthedemocraticvalueofthisparticipationhastobeanalysedinconnection
witheconomicandsocialconstraints(similartothecriticismofHabermas’historic
conceptofthepublicsphere,seealsochapter3).Eveninmodernwesternsocieties,
digitaldivideandalackofmedialiteracyhavesofarpermittedonlyarelativelysmall
portionofthepopulationtoparticipateinchallengingthestrongholdoftraditional
media.Moreovertheoutreachofonlinecitizenmediaisverylimited.AsJenkinsand
Thorburnacknowledge,“theabilityofmainstreammediatospeaktoavastpublicis
immenselygreaterthanthediffusedreachofthenewmediathroughwhichmany
messagescanbecirculatedbutfewcanensureahearing”(Jenkins&Thorburn,
2003,p.11).Despitethisfacttheyareoptimistic,that“thenewcyberculture”would
beabulwarkagainsttheconcentrationofcommercialmedia,ensuringaccessto
‐29‐
alternativeperspectives.(Jenkins&Thorburn,2003,p.12).Moellerconcludesina
similarway:“TheproliferationofnewvoicesontheWeb[…]meansthatthe
opportunityexistsfordemocracy‐building,evenifthatopportunityisonlyfitfully
seized”(Boler,2008,p.185).
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4 Concentrationofmediaownership
Thischapterisdividedinthreeparts.Firstly,Iwillshow,thatoncemediacompanies
adheretotheimperativesofthemarketandprofitmaximization,theyhaveno
alternativebuttoaimatconcentrationandcooperationinordertosustain
profitability.Thereasonsforthisareplentifulandincludethestructureofthe
markettheyarein,theirpositioninthismarket,theirspecificcoststructureand
externalinfluencessuchasderegulation,privatisationandtheevolutionofnew
technologies.SecondlyIwillassesstheconsequencesthatmediaconcentrationhas
orcanhaveonsociety,politicsandthepublicingeneral.FinallyIwilloutlinethe
levelofconcentrationalreadyestablishedinthetripartitecountriesandthewhole
EUandprovideanoverviewofthecurrentsituationintheaforementionedregions.
4.1 Economicenvironment
4.1.1 Competitioninamarketmodeleconomy
Anyeconomyhastosolvethethreebasicproblemsofwhichandhowmanygoods
andservicesaretobeproduced,howtheyareproducedandwhoistoreceivethem
(Hoskins,McFadyen,&Finn,2006).Thedominatingideaofhowtosolvethese
problemsisthemarketmodeleconomy.Thisreferstoasystemofexchangebased
onsupplyanddemand.Inthisconcept,priceservesasameansofcoordinationin
ordertoachieveanequilibriumsituationwheresupplymeetsdemand.Itisassumed
thateachparticipantaimsatmaximizingutilityforhimself10.Thisassumptionis
crucialtotheneoclassicaltheoryofthefirm,whichhasgainedwidespread
approbationandwhichimpliesthat“thedesiretomaximizeprofitsisassumedto
motivatealldecisiontakenwithinafirm”(Lipsey&Chrystal,1995,p.183).The
ChicagoSchooleconomistMiltonFriedmanputsitmoreboldly:“Inafreeeconomy,
10Thisconceptiscommonlyreferredtoas“homooeconomicus”.
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participantshavethesoleresponsibilityofallocatingdisposableresourcesas
efficientlyaspossibleand,underthisimperative,makefirmsasprofitableas
possible”(Friedman,2002).Thisideaisrootedinthemarketdeterminationthesis
(Baker,2007,p.90)whichconstitutesthatacompetitivemarketstructureforces
participantstogenerateenoughrevenuetocovertheircosts.Thereforethe
participantshavetofindcheapwaysofsatisfyingmoneybackedconsumerdemand,
therebydenyingtheenterprizeanyfreedomexepttryingtobeasprofitableand
responsivetoconsumerdemandaspossible.
Whilethisisthedominantpurposeofmanycompaniestoday11,somefewhave
startedtoincludeother,non‐monetarygoalsintheirbusinessplans.Theconceptof
CorporateSocialResponsibility(CSR),forexample,providesaframeworkfor
companieswillingtoconsidertheimpactoftheirbusinessonsociety(moreon
criticismandthelimitsofprofitmaximizationinchapter4.1.1.1).
Theneoclassicaltheoryofthefirmmakeseconomicactionshighlypredictable,asit
isassumedthatwhenpresentedwithachoiceofmultiplealternatives,companies
willselectwhateveralternativeproducesthelargestprofits.Thisassumption,
however,isveryself‐centredandmayleadtounfairundruthlessbusinesspractices.
Inordertopreventstrongereconomicentitiesfromsubduingweakerentitiesbased
onpowerinsteadofperformance,marketsthereforedependonasufficientlevelof
competition.
Thenotionofbeneficialcompetitionisapproximately250yearsoldandwas
introducedbyAdamSmith.Hestatedthatcompetitiondoesnotonlyensurea
certaindegreeoffairnessitalsoprovidesarangeofotherdesiredoutcomesfor
consumersandsociety,themostimportantbeinglowprice.“Thenaturalprice,or
thepriceoffreecompetitionisthelowestwhichthesellerscancommonlyaffordto
take,andatthesametimecontinuetheirbusiness.”(Smith,1986)Lowprices
increasetheconsumer’ssurpluswhileproductdifferentiationstrategies,adoptedby
11Doylenotesthat“verymany”mediacompaniescomplywiththeclassicaltheoryofthefirm,meaningtheyareprimarilygearedtowardsmaximizingprofitsandsatisfyingshareholders.
‐32‐
companiesinordertogainmarketshare,allowconsumerstochoosebetween
severallevelsofproductquality.
Apartfromlowprices,CroteauandHoynesnamethepromotionofefficiency,
responsiveness,flexibilityandinnovationascrucialbenefitsderivingfrom
competitivemarket‐basedeconomies(Croteau&Hoynes,2006).Inordertostay
competitiveandsuccessful,allcompanieshavetotakethesedimensionsinto
accountandarerequiredtobevigilantoftheircompetitors’actions,afeaturewhich
servesasacontrolfunctionofthemarketsystem.
Generally,thereisbroadconsensusamongeconomiststhatcompetitionensures
thatconsumerdemandismetandthatresourcesareallocatedeconomicallyduring
theprocessofproduction(Hanusch&Kuhn,1994),(Woll,1996,p.135).Thesetasks
areperformedatbestwhenthelevelofcompetitionisatmaximum.Thisideallevel,
alsoreferredtoasperfectcompetition,isinreality,apartfromfewexceptions12,not
feasible.Thetheoryofperfectcompetitionbuildsonfiveassumptions(Woll,1996)
• Manybuyersandmanyvendors
• Ahomogeneousproduct
• Perfectmarkettransparency(informationonproducts)
• Nosignificantbarriersofentry(anyonecouldbecomeaproducer/vendor)
• Firmswanttomaximizeprofits(asopposedtoquality,imageormarket
share,etc.)
Theimplicationoftheassumptionsisthateachfirmhaszeromarketpower(Doyle,
Understandingmediaeconomics,2002).Thisisthedirectoppositeofamonopoly
wherejustonesellerisabletooperatewithoutanycompetitionwhatsoeverandis
abletocreatehighbarriersofentry.Sinceitisveryunlikelythatalloftheconditions
ofperfectcompetitionareperfectlymetinonescenario,theaimisgenerallyto
attempttocomeascloseaspossible.
12LipseyandChrystalgivetheexampleofwheatfarmers,whooperateinaperfectlycompetitivemarketbecauseneitherofthemcanchangethemarketpriceofwheatbyalteringhisownbehaviour.Eachfarmerisjustoneofmanyproducerswhoallgrowthesameproduct.Therefore,variationsintheoutputofonefarmerhavenosignificanteffectontheoverallpriceofwheat.
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Inreactiontotheunrealisticassumptionsofperfectcompetitiontheconceptof
workablecompetitionwasdeveloped,whichassessescompetitioninrelationto
marketstructureandfirmbehaviour.TheSCP(StructureConductPerformance)
paradigmimpliesthattheamountofcompetition,requiredtomakethemarket
workatitsmostefficientlevelcannotbeanalysedseparatelyfromthemarket
structureandthedecisionstakenbyrivalcompanies.Underthisassumption,
marketswithonlythreecompaniesbutlowbarriersofentryandinhomogeneous
productsmaybemorecompetitivethanmarketswithsixcompaniesbuthigh
barriersofentryandhomogeneousproducts(Benderet.al.,2007,p.379).TheSCP
modelactsonamulti‐goalapproachandassumes,thatfirmsnotonlyseekto
maximizeprofitsbutalsowanttoincreasetheirmarketshare,stimulateinnovation,
etc.Empirically,theinterrelationbetweenmarketstructureandmarket
performancehasbeendifficulttoprove.Severalindependentstudieshaveyielded
contradictingresults(Benderet.al.,2007,p.380).DespitethefactthatSCPhasbeen
declaredsuitableformediamarketanalysis(Heinrich,2001),(Wallner,2007),it
cannotbeanalysedindepthinthispaper.
Amongeconomists,thereisdissentwhethergovernmentinterventionand
regulationisrequiredinordertoensureasufficientlevelofcompetitionanda
functioningmarket.
LiberalandneoclassicadvocatesofafreemarketmodelinthetraditionofAdam
Smith(i.e.MiltonFriedmanandFriedrichHayek)claimthatcompetitionderivesfrom
thefreeplayofforcesonthemarketandthatthemarketofitsownvolitionguided
byan“theinvisiblehand”tendstoproduceanoptimumequilibriumstate.They
favouralaissez‐faireapproachandcallfortheleastpossibleamountofintervention.
Others,followingthetraditionofJohnMaynardKeynes(i.e.PaulKrugman,Joseph
Stiglitz)rejectthenotionsoftheinvisiblehandandthequasi‐automaticmarket
equilibrium.Instead,theyemphasizetheriskofmarketfailure(i.e.depressioninthe
‐34‐
marketcycleortheestablishmentofmonopolies)andadvocategovernment
interventiontoensurecompetition13andstability.
Thequestionofhowtomakesurethereisasufficientlevelofcompetitionarises,
becausefromacompany’spointofviewcompetitionequalsrisk.Thereason,they
wanttoavoidcompetitionisthestructureofthemarketstheycompetein.Inmost
casesfewconsiderablylargemediacompaniesrivalfortheattentionofmany
customers.Thisformofcompetitionisreferredtoasoligopolyanditisthedominant
marketstructureforconsumergoodsandinparticularmediaservices(Lipsey&
Chrystal,1995)14.Adistinctfeatureofanoligopolymarketistheinterdependence
amongdecision‐makersandthecross‐priceelasticityofdemand.Forexample,ifone
mediacompanysignificantlylowersthepriceofitsproductinordertogainmarket
share,thethreemaincompetitorsareforcedtoengageincompetitiveactionand,
mostlikely,willdecreasetheirpricetoo(Hoskins,McFadyen,&Finn,2006).
However,inanoligopoly,profitmaximizationandtheextensionofmarketshareare
compatibleonlytoaverylimitedextent.Atleastintheshortrun,thedecreasein
pricesthatmayleadtohighermarketsharewillresultinsubstantialforegoneprofits
(Henrichsmeyer,Gans,&Evers,1983).
Duetothishighlevelofinterdependence,competitorshavetoactstrategically
whichmeanstheyhavetoattempttoforeseetheircompetitors’actions.Thegame
theory,awidelyusedapproachtodecisionmakingineconomicsandsocialsciences
basedonthestudyofefficientallocationbyVilfredoParetoprovidesfurther
explanationonthenotionofstrategicactingintermsofwhethertocooperateor
compete(i.e.out‐price)withcompetitors(Hanusch&Kuhn,1994),(Woll,1996).
LipseyandChrystallistseveraltypesofcooperativeandcompetitivebehaviourin
oligopolymarkets.Firmscaneithermakeanexplicitcollusionoratacitagreement
nottoengageincompetition.Ontheotherhandtheymightagreeonapriceor
agreetomaximizeprofitsjointlybutcompeteformarketsharesthroughotherforms
13Theongoingdebateaboutgovernmentregulationandintervention,notonlyintermsofcompetition,hasrapidlygainedsignificanceintheaftermathoftheglobalfinancialcrisis,whichevokedintheendof2008.TheFrenchnewspaperLeFigarowentasfarasproclaimingKeynestobethe“manoftheyear2009”(Robin,2009).14LipseyandChrystalarguethatbecause,mediaareabletoexploitcostadvantagesofsize(economiesofscale)theindustryisdictatedtobecomeanoligopoly.
‐35‐
ofcompetitionsuchasadvertisingandsuperiorproductqualityorofferingsecret
discounts.Themostobviousformofcompetitivebehaviourisloweringprices(Lipsey
&Chrystal,1995).
Ifacompanychoosestoactcompetitively,orisforcedtodoso,itsprofitabilityis
seriouslythreatened.Thenecessitytoforeseestrategicmovesofcompetitorsandto
remainflexiblereducespredictabilityandtheaccuracyoflongtermplanning.
Althoughanecessaryconditionforafunctioningmarket,competition,for
companies,meanseconomicinstability.Therefore,asMcAllisternotes,businesses
strivetoeliminatecompetitionthroughintegration(orcooperation)inorderto
controllargesectorsofthemarket,ifnottheentiremarket(McAllister,1996).
Wheneverpossibletheyavoidcompetitioninordertoreduceriskandensure
profitability.
Ifcompaniesdonotwanttoengageincompetitionanddonotoptforcooperation
therearethreeformsofgrowingattheexpenseofrivalcompanies(Lipsey&
Chrystal,1995).Firstlytakeovers(acquisitions),whichoccurwhenacompanybuys
anothercompany,secondlymergers,whichoccurwhentwocompaniesjoinforces,
andthirdlydrivingrivalsintobankruptcythroughpredatorypractices(Hanusch&
Kuhn,1994).Inordertobenefitfromtheeffectsofreducedcompetition,the
remainingfirmsneedtoestablishbarriersofentrytothemarket.Inthecaseof
mediacompanies,aswillbeoutlinedinthenextchapter,highsetupcostsforthe
productionofcontentworkinfavouroffirmsattemptingtopreventnew
competitorsfromenteringthemarket.
4.1.1.1 Criticismofthemarketmodel
Undisputablythemediaholdauniquepositioninmodernsocieties.AsCroteauand
Hoynesnote,mediainform,entertain,influencehowweunderstandourselvesand
ourworldandprovideameansofspendingleisuretime(Croteau&Hoynes,2006).
Indemocraticsocietiesmediaserveasavehicleofreflectingthediversityofculture
andideasandtheyprovideindependentinformationwhereasintotalitariansystems
mediaareamouthpieceoftheviewsofthoseinpower.
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Becausethemediaholdssuchgreatpoliticalandculturalpowertheirrightto
freedomofexpressionisprotectedbyArticle10oftheECHR,signedbytheCouncil
ofEurope(CouncilofEurope,1950),whichservestoguaranteefreedomof
expression.ThisideaislegallystipulatedintheconstitutionsofmostEuropean
MemberStates(seechapters3and5).
Butwhatifthereisarestrictionoffreedomofexpressionanditisnotcausedbya
totalitariangovernmentbutbyanopaquesystemofmarketandprofitorientation,
wheremediacompaniesthemselvespreventanyreportingthatcouldbenegativeor
merelycriticalabouttheirowners,theirbusinesspartnersortheiradvertisers?What
ifsomesubjectsarenotdeemedworthreportingaboutbecausetheywillnotattract
abigenoughaudience?Canthepublicsphereeverbeweighedoffagainstthe
requirementsofthemarket?
Thesequestionshavequitealongtradition.Inthemid19thcenturyMarxandEngels
suggestedthatthefirstandforemostfreedomofthepressisnottobeabusiness
(Trappel,Meier,Schrape,&Wölk,2002).“Beingabusiness”inthiscontextmeans
complyingtotheideaofprofitmaximizationstipulatedbytheneoclassicalmodelof
thefirm.
Fromaneconomistpointofviewtherearetwopointsofcriticismofthismodel.
Firstlythemotivationofthefirm,secondlytheorganizationalstructure(Lipsey&
Chrystal,1995,p.184).Thefirstargumentisthatprofitmaximizationisnottheonly
motivationforbusinesses,sincesomeownersmaypursuepoliticalpower,others
maybeinfluencedbyratherphilanthropicurgessuchastheconceptofCSR.ACSR‐
frameworkallowsbusinessestomonitorandensuretheiradherencetoethical
standardsandenablesthemtoembraceresponsibilityfortheimpactoftheir
activitiesontheenvironmentandthepublicsphere.Lipsey&Christalnotethatthe
assumptionofamulti‐goalapproachdoesnotprovetheneoclassicaltheoryentirely
wrongsinceprofitmaximizationwithalllikelihoodremainsanimportant
considerationformostbusinessowners‐importantenough,thatthepredictions
derivedfromtheneoclassicalmodelofthefirmaresubstantiallycorrect.
Thesecondargumentisthattheorganizationalstructurecannotbecompletely
neglected.Theneoclassicaltheorydoesnotdifferentiatebetweenahuge
‐37‐
multinationalcorporationandasingleproprietorbusiness.Duetothecommon
diversificationofownershipamongmanyshareholders,decisionmakingisfarmore
complexforlargecompaniesthanforsmallbusinesses.Forexampleshareholders
mayordermanagersnottomaximizeprofitsbutshareholdervalueorthevalueof
thecompany’sbrand,whichleadsusbacktothefirstargument.
Despitethelimitsoftheprofitmaximizationmodelanddespitethenatureofmedia
andthevalueofitsgoodsforthepublicsphere,mediacompaniesarepredominantly
viewedasprofitmaximizingentities.Thisleadstoastrongconflictofinterest.In
1947AdornoandHorkheimer,followingthetraditionofMarxandEngelsdeveloped
theratherpessimistictheoryoftheculturalindustryinordertoexposehowthe
businesscenteredviewofmediaproductionhassetoffaregressionfrom
enlightmenttoideology.TurningtotheexamplesofTVandradiotheyarguethat:
“Hereenlightmentconsistsofthecalculationofeffectivenessandofthetechniques
ofproductionanddistribution;inaccordancewithitscontent,ideologyexpendsitself
intheidolizationofgivenexistenceandofthepowerwhichcontrolstechnology.”
(Adorno&Horkheimer,1979).
AdornoandHorkheimerinsinuatethatratherthanprofitmaximizationthe
underlyingproblemofmediacompaniesisthattheyareboundtooperateina
marketenvironment.Arguingthatdiversityandsubstancearemoreimportantthan
profitabilityispointlessonceyouareforcedtoadheretothelogicofthemarketin
thefirstplace.
Themarketmodeleconomyhasbeensubjecttoalotofcriticism,particularlyfrom
thepoliticalleft,yetthereisbroadconsensusthatthereisnoapplicablealternative.
Themostcommonpointsofcriticismare:
• Marketsareundemocratic‐Thosewhohavethemostresourcesarethemost
successful,thereforethesystemtendstobehighlyreproductive
• Marketsareamoral‐GüntherDuxsuggests,thatpeoplehavebecomeso
interdependentthroughtheirvariousrelationsonthemarket,–the
consumermarkettoobtaingoodsandthefactormarkettobeabletopayfor
them–thattheydonotmeetaspeoplebutaslegalentities(Dux,2005,
‐38‐
p.56).Therefore,apartfrombasicmoralprerequisitesthattouchcriminallaw
(i.e.prohibitionoffraud),allmoralcommitmentsonlyservethepurposeof
thecontractstheyenterwitheachother.Duxconcludesthatparticipantsina
marketbasedeconomyonlycareabouteachothertotheextentoftheirown
economicinterest(homooeconomicus).Underthispremiseitispointlessto
addressissuesofmoraleorpublicvalueinamarketeconomyandthePareto
Optimum(asituationofperfectlybeneficialallocationofgoods)canneverbe
achieved.Duxrejectstheideaofthemarketsolvingtheproblemsithelped
createinthefirstplace.
• Marketsdonotvaluesocialneeds‐Publicbroadcastingprogrammesfor
minoritiesaretypicalexamplesofservicesprovidedoutsidethemarketplace
becausethemarketisunableorunwillingtomeetthedemands(othersare
publichealthcare,pensions,statesupportededucation).Ontheotherhand,
evenpublicbroadcastingcompaniesneedtocomplywiththeruleofthe
market(i.e.BBC).Thisdilemmamakestheassessmentofthechanging
businessofmediaanditssignificancefordemocraticsocietiesverydifficult
(Croteau&Hoynes,2006).Canbothmissionsbesimultaneously
accomplishedoraretheymutuallyexclusivegoals?
Atthemomentmediacompanieshavenochoicebuttocomplywiththe
requirementsofthemarket.Particularlynewspapers,someofwhicharestruggling
tosurviveduetodecliningnumbersofreadersandincreasedcompetitionfrom
onlinesourceshavebeensubjectedtoanongoingdiscussionwhetheralterative
businessmodelsfornewspaperscanbeestablished.Settingupnon‐profitholding
organizationsorfoundationsweresomeoftheideassofar.Itremainstobeseen,
whetheranyrealalternativetothelogicofprofitmaximizationprovestobeviablein
themediamarketplace.
‐39‐
4.1.2 Characteristicsofmediaeconomics
4.1.2.1 Interrelatedmarkets–theroleofadvertisement
Mediacompaniesgenerallyoperateintwomarkets,therecipientmarketandthe
advertisementmarket.Theyrivalattentionofrecipientsonone,andrival
advertisementsontheother.Thedecidingfeatureistheinterrelationand
interdependencyofthosetwomarkets.Dewenteruseseconometricalanalysisto
showthat“anincrementofthedemand[ofmediaproducts]resultsinanincreasing
demandforadvertising”(Dewenter,2004,p.1).WhileDewenterdenysthe
symmetryofthereverserelation15,Heinrichmaintainsthatsuccessononeofthe
marketsusuallytriggerssuccessontheotherone.Hepointsoutthatcompanies
benefitingfromtheeffectsofincreaseddemandareabletoreinvesttheirincreased
profitsintotheirproductinordertoattractevenmorerecipients,furtherpropelling
theirmarketposition.Hereferstothismodelasthespiraleffectofadvertisingand
circulation(Heinrich,2001).Fromthispointofview,mediacompaniesmaysucceed
atsimultaneouslyachievingbothprofitmaximizationandanincreaseofmarket
share,thusconfutingtheeconomictheorythatthisisnotpossibleonalong‐term
basisinanoligopolymarket.However,thismodelstillrequirescompetitiontobe
reducedtoaminimuminordertounfoldamaximumofbenefitingeffectsforthe
company.
15Incasetherearenegativevaluationsoftheamountortheshapeofadvertisementthereareasymmetricrelations.Moreover,theconsumersofmediacontentandadvertisementarenotcompletelyidentical(Dewenter,2004,p.1)
‐40‐
Figure4‐1:Theexpansionofmarketpowerstimulatedbyadvertisement,Source:ownillustration
Theviabilityofthismodelisprovenespeciallybytheexampleofnewmedia
companiesorfreedailynewspapers,whichrelyonadvertisingasasolesourceof
funding.Theirprofitsriseinproportiontothenumberofuniqueusersorcirculation
perday16.
Wallnernotesthatthismodelshowsthateconomicconsiderationsmayinfluence
contentinordertoincreaseprofitabilityandmarketshare(Wallner,2007)as
traditionalmediacompaniesseektoattractthoseconsumers,whicharemost
attractiveforheavyspendingadvertisers.Thisisbecausethesheersizeofthe
audienceisnottheonlydeterminantofthevalueofspaceortimetoadvertisers.
Thepriceadvertisersarewillingtopayalsodependsontheconsumers’demographic
characteristics(Hoskins,McFadyen,&Finn,2006).Generallyadvertisementsare
16ForGustafsson(2006)thisconfirmsthatthereisanincreasingroleofadvertisinginmediadevelopment.Manyrecentmediacreationshaveusedadvertisingfromtheirverybeginning(televisionintheUS,orfreedailynewspapers),afactthat,inahistoricalcontext,appearstobetheexception.Gustafssonsuggeststhatintheongoingprocessofmediaexpansion,moreemphasisshouldbelaidonalternativesourcesoffunding,suchason‐demandfees.
Increasingdemandandmarketshare(ie.throughdecreaseinsubscriptionprice)
moreattractiveforads
Increasingpro9its
Reinvestmenttofurtherstimulatedemand
Increasingmarketshare/buildingupadominantposition
‐41‐
aimedatthosedemographicgroups,whichcommandthehighestdisposableincome
(agegroupbetween14and49years)andhaveastronginterestinhigh‐endleisure
activities.Thisexplainstrendstowardsuniformityofcontentbecauseallmainstream
mediacompaniesrivaltheattentionofthesegroups17.
Curran(2002),aswellasBaker(1994)elaborateonthisrelation,arguingthat
advertisementdistortsmediaproductionbecauseadvertisersareonlyinterestedin
howmanyconsumersareattractedbycontent,nothowmuchtheconsumersenjoy
it.Thisgeneratessubstantialpressureonmediacompaniestosupplycontentwith
wideappealtoasmanyconsumersaspossible.Content,whichprovidesindepth
insightsandgeneratesintenseinterestamongminorities,however,isdiminished
whichleadsto“advertiser‐inducedbiasinfavourofcorporateproductsandvalues
[…]tostimulatebuyingmoodsratherthancriticalthought”(Baker,1994,p.76).In
additiontothat,newcontentmaybecreatedinclosealignmentwithadvertiser’s
commercialmessage,whichbearstheriskofunderminingtheintegrityofthe
editorialproduct(Hoskins,McFadyen,&Finn,2006,p.257).
Ontheotherhand,onecouldarguethatadvertisementhasarangeofpositive
effectsonmediatoo.Firstly,itsfinancialsupporthasenabledtheprovisionof
contenttopeoplewhowouldnothaveaccesstocertaincontentotherwisebecause
theycouldnotaffordpayingforit.Forexample,Baker(1994)notesthatthepriceof
newspaperswithoutadvertisingwouldbeasmuchasfivetimesthecurrentprice
andconcludesthat“advertisinghaspaidalargeportionofthecostsofsupplyingthe
publicwithnewspapers”(Baker,1994,p.8).Theconceptofadvertisingasanindirect
subsidyforpoorconsumers,however,contradictswiththeadvertisementindustry’s
goaltoaimprimarilyatthosedemographicgroups,whicharevaluabletothem
(generallyratherwealthierconsumers).Bakeracknowledgesthatifanymedia
productattractsalargeenoughportionofconsumersfromthedesireddemographic
groups(i.e.middletouppermiddleclass)itmaygainsufficientstrengthto
17Hoskins,McFadyenandFinnnamecomputingandtechnology,travelandhealth&fitnessasrangingamongthemostlucrativeareasofinterestintermsoftheCPM(costperthousand)priceforadvertisersintheUnitedStates.
‐42‐
subsequentlyattempttodriveoutcompetition(Baker,1994,p.26).Thisagainleads
tothespiral‐effectoutlinedabove.
Secondlyonecouldmentionadvertisement’sroleintheprovisionofnichecontent
toahighlysegmentedconsumerenvironment.Themedialandscapehaslongbeen
claimedtograduallychangefromamassmedia‐oligopolysome‐to‐many‐structure
intoadiverseniche‐basedprovisionofcontent,resemblingthemany‐to‐many‐
modelofperfectcompetitionmarkets18(Burkart&Hömberg,2004).Pay‐TVand
onlinemediaarewellknownexamplesofthisapproach19.Here,advertisersare
alreadypresentedtotheconsumerstheyseektoaddress,becausetherangeof
editorialtopicsislimitedaccordingtospecialinterestortargetgroup.Onlinemedia
handadvertisersevenmoreprecisemethodsofreachingexactlytheconsumersthey
want.Google’s“AdWords”and“AdSense”markedthebeginningofhighlycontent
specificandcontentsensitiveadvertising.Furthermore,theevolutionofsocial
networksiteshasleadtoashiftfromcontextualtopersonaladvertisingdesignedto
matchnotonlycurrentbutalsopreviouspatterns(revealedpreferences)ofmedia
consumption(i.e.“thingsyoumaylike”recommendationsbasedonprevious
purchases).Whilemicroadvertising,asthisphenomenonisgenerallyreferredto,
raisesseriousissuesofprivacyprotection,Doyle(2002)expressesdoubtsaboutits
overallefficiencybecause“thecostofattractinglargeaudiencesviatailoredone‐to‐
one‐marketingissignificantlyhigherthanviaacampaignconveyedacross
conventionalmassmedia”(Doyle,2002,p.55).However,advocatesofmicro
advertisingarguethatitislesswasteful20andthecapitalinvestedyieldsmore
return.Furthermore,theEIAAprojectsgrowthratesrangebetween15%and20%in
theonlineadvertisementexpenditureinEuropefrom2008to2010(European
InteractiveAdvertisingAssociation,2008).Thequestionthereforeisnotwhether
18Onlyinthesenseofthestructureofcontentprovision,notintermsofownership19Inthisunderstanding,theconsumerissupposedtotakeamoreactiveroleandisnotjustsubjecttothecontentheisservedbutinteractingwiththemedia(ie.choosingindividualcameraangels).This,however,raisesthequestionwhetherconsumerscaneverbetruthfullyempoweredif,followingGustafsson’s(2006)implications,utilitymaximizingadvertisershaveplayedacrucialpartinsettingupthenewmediaoutletsinthefirstplace.20onacostpercapitabasis
‐43‐
microadvertisingisefficientornotbutwhetheritwillbeincrementaltoora
substitutefortraditionalmass‐marketadvertising(Doyle,p.55).
ForDoyletheanswersliesinthecreationofbrandloyalty.Personalized
advertisementsforfragmentedgroupsofmediarecipientsarenotanefficient
meansofcreatingstrongbrandswhosepowerderivesfrombroadrecognition
(Atkin,2004).Theerosionofmassmediaandmassaudiencesinfavourofspecial
interestnichesasdescribedbyBurkart&Hömberg(2004)makesconsumersmore
difficulttoreach.Forsomeindustries,forexamplebeveragemanufacturers,this
mighthinderthecreationofbrandloyalty.
Itisstillunclearwhichdirectionadvertisementwillheadto.Forthemomentonline
advertisingenjoysheavygrowthrates.
4.1.2.2 Economiesofscale
Thetheoremofdecreasingmarginalcostsapplieswithstrongevidencetomost
mediaproducts.Growingvolumeofoutputpermitsareductionofcostsperunitof
outputifthefixedcostsremainconstantorgrowmuchslowerthantheoutput.This
neoclassicaltheoremisgenerallyreferredtoaseconomiesofscale.
Mediaproductscanbereproducedinnumerabletimeswithoutbeingusedupor
losingquality.Inmostcases,hugefirstcopycostsarefollowedbyasteadydeclineof
averagecostsbecausethemarginalcostofprovidingcontenttooneadditionaluser
isnegligible.Newspapercompaniesforexamplehavetopaytheiremployees,
offices,etc(whichequalstheirfixedproductioncosts)regardlessifoneor100,000
newspaperscopiesareprintedanddistributed.Thecostsofprintingthesecondcopy
aredramaticallylowerthanthecostofmakingthefirstcopy.Thedeclineofaverage
costspercopyinthiscasedependsonthecirculation.Anevenmorecompelling
argumentcanbemadeforbroadcastmedia.Theincrementalcostofrerunningor
tradinganadditionalcopyofatelevisionprogramisextremelylowinproportionto
productioncosts(Hoskins,McFadyen,&Finn,2006).Evenonlinemediacanbenefit
fromeconomiesofscale,astheyareabletosplitruntheirestablishedplatformsin
othercountries.Thecostsofsettingupgoogle.co.ukforexampleweresignificantly
‐44‐
lowerthanthedevelopmentcostsoftheoriginalgoogle.complatformandalgorithm
inthefirstplace.Theprospectofreturnstoscaleisanimportantmotiveformany
mergersandacquisitionsinvolvingfirmsproducingthesameclassofproducts
(Hoskins,McFadyen,&Finn,2006).
Economiesofscale:spreadingoffixedcosts:
Thefixedcostsofproductionareaveragedonthenumberofcopiesproduced
causingthetotalcostsofeachunittodeclineinproportiontotheincreasein
production.Thereforeamonopolistisabletoproducecheapest.AsHeinrich
exemplifies,thecostperunitofamonopolistisatlevelc0whereasinaduopoly,two
producersofequalsizehavetofaceacostperunitofc1.Thisshowsthatefficiency
ofproductionformanymediacompaniesdoesnotonlydependonscalebutontheir
marketposition21.Thissituationpromotesconsolidationandconcentrationasfirms
seektoreducecompetitionasmuchaspossible(Heinrich,1994).
Moreover,anotherfeatureofhavingtofacesignificantfirstcopycosts,furtheradds
tothepromotionofconcentration:theriskofbearingsunkcosts,whichcannotbe
21SeeremarksabouttheSCP‐modelinchapter4.1.1
avg.cost/unit
quantity
price,costsperunit
c1
c0
K0Figure4‐2Economiesofscale,Source:ownillustrationadaptedfromHeinrich,1994
‐45‐
recoveredoncetheyincurred.Sunkcostsdescribeexpensesthathavebeeninvested
inaprojectinthepast,whichdidnotturnouttomeet(corporate)expectations(ie.
theinvestmentinthepilotepisodeofatelevisionseriesthatturnedouttobea
flop).Thebiggeracompany,thelessseverearetheconsequencesofinvestingina
projectwithoutgeneratinganensuingrevenuestream.
4.1.2.3 Economiesofscope
I’moptimisticthatoneandoneaddsuptofour
MichaelEisner,Disney’sCEOshortlyafterDisneytookoverABC
Theconceptofeconomiesofscaledescribestheadvantagesofsizewhenitcomesto
asingle,homogenousproduct.Inreality,largemediacompaniesnotonlyspecialize
ononeproduct,rathertheyofferawiderangeofdiversifiedformsofcontent.
Moreovertheyaredependentonexternalinputfromsuppliersandpartners.Thus
theyareabletoexploitanothersourceofsize‐dependentefficiency.Bydefinition,
“economiesofscopeexistifthetotalcostofproducingtwoormoreproductswithin
thesamecompanyislessthanproducingthemseparately”(Hoskins,McFadyen,&
Finn,2006,p.100).
Thedegreeofcompany‐internalvalue‐adddescribestowhatextentafirmrelieson
internalresourcesandtowhatextentitemploysexternalcontractorsandsuppliers.
Inacademicliteraturethisisreferredtoas“realnetoutputratio”ofacompany
(Karmasin&Winter,2006,p.95),(Heinrich,1994,p.27)22.Iftherealnetoutputratio
increasesinthecourseofamergeroracquisition,thenthecompanyinquestionis
likelytobenefitfromeconomiesofscope.Inordertodothis,mediacompanieshave
todeveloptheirbusinesseithervertically(withintheirownsupplychain)or
diagonally(outsidetheirsupplychain).
22Forexample,a60%realnetoutputratiomeansthat60%ofthevalueoftheproductwasgeneratedbythecompanyitself,whereas40%werecreatedbyexternalsuppliersandpartners.
‐46‐
Oneofthemainadvantagesderivingfromverticalintegrationisareductionof
transactioncosts.InitiallyidentifiedbyRonaldCoase,transactioncostsaredefined
as“thecostsofusingthepricemechanism”(Coase,1937,p.390).Thesecosts
includecostsofinformation,insuranceandcoordinationandariseassoonasthe
conditionsofperfectcompetitionarenotentirelymet.Throughverticalintegration
transactioncostscanbeloweredsignificantly.23
Theadvantageofdiagonalintegrationcan,similartothephenomenonofeconomies
ofscale,beexplainedbytheverynatureofmediaoutput.Contentwillnotbeused
up,nomatterhowoftenitisreproducedandthesamecontentmayalsobereused
inotherforms(i.e.anewspaperarticlewillbeturnedintoaradiobroadcast)ata
cheapercostthanproducingtwoseparatemediaproductswiththesamecontent
independently.Oncethecoreworkofresearchandcreationisdone,contentis
simplyreformattedaccordingtothefirm’sportfolio.Doyledefineseconomiesof
scopethereforeasthesavingsthatmayarise“ifspecialistinputsgatheredforone
productcanbereusedinanother”(Doyle,Understandingmediaeconomics,2002,p.
14).Inotherwords:“Maximizingsynergy[…]istakingadvantageofmultiplemedia
holdingstodeveloporpromoteasingleprojectwithmanyfacets”(Croteau&
Hoynes,2006,p.116).Forexampleifatelevisionreporterworkingforalarge,
integratedmediacompanyisgrantedanexclusiveinterview,itmaybeusedinthe
company’sTV‐news,newspapers,radiostationsandonlinewebsiteallatonce,ata
muchcheaperpricethanhavingfoureditorialteamsdevotingtheirtimetothesame
outcomeindependently.Itisnocoincidencethatmanyofthemostsuccessfulonline
mediawebsitesareoperatedbytraditionalmediaplayerssuchasCNN,BBCandthe
NewYorkTimes.Themorerevenuestreamsacompanyisabletogeneratefroma
singleinput,themoreitislikelytobenefitfromeconomiesofscope.Thereforelarge
multi‐mediaconglomeratesareabletoexploiteconomiesofscopeonaveryhigh
level.Inthisregard,Karmasin&Winter(2006)refertotheconvergenceoftheTIME
industries,meaningTelecommunication,Information,MediaandEntertainment,
whichhavesuccessfullysubstitutedimportantfeaturesoftheirownmangement,
23Verticallyintegratedcompaniesmayalsobenefitfromadvantagesintaxationbecausemarketpricescanbesubstitutedwithinternalprices(Karmasin&Winter,2006,p.97).
‐47‐
innovationanddevelopmentwith“inhomogeneousintegration”ofvariousaspects
ofvaluechainsfromotherindustries(Karmasin&Winter,2006,p.23)24.With
respecttomediathismeansthatcontentbecomesmoreandmorehybrid,often
simplybeingreducedtoabrand(DonaldDuckorStarWars)inordertobemarketed
inasmanyformsaspossiblebycollaborativedivisionsofsinglecorporate
conglomerates.ForexampleabookoraTVseriesmaybeturnedintoamovie(or
theotherwayround)whichthenwouldbepromotedbytheconglomerate’snews
mediasection.Lateron,actionfigures,ringtones,soundtracks,DVDandvideogames
allbuildonthesameidea.
Digitalisationandtechnologicaldevelopmentshavefacilitatedtheexploitationof
economiesofscopedramatically.“Newmediatechnologieshaveenabledthesame
contenttoflowthroughmanydifferentchannelsandassumemanydifferentforms
atthepointofreception”(Jenkins,2006,p.11).Trappel(2002)seesdigitalisationas
themaindriverofconvergenceofwhatonceusedtobecompletelyseparated
marketsofinformation,communicationandmedia(Trappel,Meier,Schrape,&
Wölk,2002,p.94).TheTIMEconvergencesignificantlychangestheconditionsof
competition,developmentandmanagementforalltheindustiresinvolved.New
formsofcompetitionandcooperationandco‐opetitionevolvefromthis
developmentasthenumberofavailablepartnersisincreased.Innovationnolonger
stemsfrominternaldevelopment,ratherthemeaningoftheterminamediarelated
contexthasbeentransformedto“takingwhatevermaysuitourbusinesspurpose
fromotherindustries”.Inconsequence,managersactaccordingtonetworklogic
insteadofbasingtheirdecisiononinternalressources.
24AnexamplefortheresultofTIMEconvergenceistheXMLprogramminglanguagewhichisauniversalcodefordatadescription(Karmasin&Winter,2006),(Zerdick,Picot,Schrape,Burgelmann,&Silverstone,2005)
‐48‐
Figure4‐3):TIMEConvergence,Source:ownillustration(inspiredbyFreienstein,2002,p.123)
TIME‐convergencehastobeunderstoodasatemporary,project‐basednetwork
system.Insteadofasingularprocess,theinhomogeneousintegrationKarmasinand
Winterreferto,isthusanaccumulationofmultipleprocesseswhoredefinethe
boundariesbetweenbranchesandindustries(Karmasin&Winter,2006,p.23).
Economiesofscope,asabenefitresultingfromTIMEconvergencethereforehaveto
beconsideredasoneofthemainmotivationsformergers,acquisitionsand
cooperationsthatreducethelevelofcompetition.Fromacompany’spointofview,
economiesofscope,apartfromtoimprovingoverallefficiency,andhelpingto
streamlinedepartments,generallyservetoreducerisk.CroteauandHoynes(2006)
basetheirapproachontheformationofconglomeratesandco‐operationsonthe
reductionofriskandattributetheongoingconsolidationofmediacompaniestoan
industrywhoseformerbusinessmodelsarenolongeradequate.
“Theconcentrationofmediaownership[…]isthenaturalbyproductofamaturing
industry,asyoungstartupsandolder,underperformingfirmsareconsolidatedinto
thebusinessplansofmaturebutinnovativefirms”(Croteau&Hoynes,2006,p.111).
Intheprocessofeconomicgrowthandinnovationitisinherentthatsomeindustries
declinewhileothersgrow.Ifafirmoperateswithinaframeworkofanindustryin
decline,thereislittleitcandotostemitsowndownfall,nomatterhowprogressive
‐49‐
itsmanagementis(Lipsey&Chrystal,1995).Ifacompany,however,managesto
combineseveralbusinessesinseveralindustriesandformaconglomerate,itisable
tospreadtheriskamongthem.Thesamewaymergersandacquisitionsaswellas
co‐operationsachievesharingorspreadingenterprisetherisk.
4.1.2.4 Habitsandnetworkeffect
Dewenter(2004)alsomentionshabitsofconsumptionandtheexistenceofa
networkeffectasspecialfeaturesofmediacompaniesandmediaproduction.Under
theconditionsoutlinedbelowtheymaybeanothersourceofscale‐related
advantages.
Hedetectsevidenceofthe“habiteffect”inthe“relativelyrareswitchingof
[consumers]tosubstitutionalproductsinspiteofrelativelowswitchingcosts”
(Dewenter,2004,p.46).Forexamplenewspaperreadersmaybereluctanttoswitch
toanotherpaperoncetheyhavegrownaccustomedtoonenewspaper’sformatand
recurringthemesandtopics.Companiesontheotherhand,strivetotransform
simplehabitsofconsumingcertainmediaintocustomerloyalty(Atkin,2004).They
wantconsumersbuyingtheirproductsnotbecausetheyareusedtoit,butrather
becausetheyarecommittedtothem.Commitmentyieldsarangeofpositiveeffects
forthecompany,forexamplewordofmouthadvocacyorthecreationoffurther
barriersofentryfornewcompetitors25.
Apossibleexplanationfortheformationofconsumerhabits,whichlateronmaybe
fosteredtobecomecommitment,istheexistenceofanetworkeffect.Thenetwork
effectreferstotheimpactoneadditionaluserofaproductorservicehasonthe
valueoftheproductforanotheruser.Themoreinterestingpeopleonecanpossibly
interactwithonaparticularnetwork,themorevaluablethemembershipisinthat
networkwillbeyou.Forexample,afterNewsCorporationhadacquiredthesocial
networkingwebsiteMySpace,therewerecontroversiessurroundingallegationsof
25Ifthecommitment,however,isnotmatchedbyanequivalentreward(ie.networkbenefits),includingthefeeling,thatleadershipisascommittedthentheresultscanbedisastrousas“commitmentmaybefiercebutnotblind(Atkin,2004,p.121)
‐50‐
corporatecensorship(Whitehead,2006).Still,veryfewpeopleleftMySpaceafter
thetakeoverbecausethesocialcostsofloosingthebenefitsoftheMySpace
networkprovedtohighformostusers.
However,Dewenter(2004)touchesuponthenetworkeffectnotexclusivelyin
referencetotheobviouscaseofonlinemediabutalsowithbroadcastandprint
media.Fromaconsumer’spointofview,thevalueofconsumingaspecificmedia
productincreasestoacertainextentinproportionwithoutputbecausethenumber
oflike‐mindedconsumersincreasesaswell,whichraisesthechancesofsharing
commongroundwithotherpeople.Reversely,aproductwhichisalreadyconsumed
byahighnumberofpeoplefromthesocialenvironmentofapotentialconsumer,
appearsmoreattractivetohim/herthanothers.Thistheorybuildsontheconceptof
socialidentity,which“placesapersoninrelationtootherindividualswhoshare
[similar]attributes(Giddens,2001,p.29).Inanagewheresymbolsrelatedto
consumptionplayagreatroleintheconstructionof(social)identity(Giddens,2001,
p.296),mediaconsumptionhastobeconsideredanimportantfactorinsplittingor
unitingpeople.Formanyyears,theSaturdaynightprimetimeshow“Wetten,dass?”
inGermanyusedtobeaperfectexample.Itwasashowmostpeoplecouldtalk
aboutwiththeirco‐workersandfriendsbecausenearlyeveryonehadseenit.
Colloquiallyreferredtoasthe“water‐coolereffect”,somemediaproductsmay
attainahighlevelofsignificancewhenitcomestosettingagendas(mostlywithin
certaindemographicorsocialgroups).Usedtherightway,thisfeaturemaypermit
mediacompaniestosuccessfullycreatebarriersofmarketentryaccordingtothe
editorialscopeoftheirproduct26(seealsochapter2.1onsocialorientation).
4.1.2.5 Deregulationandprivatization
Inthe1980snearlyallindustrializednationsstartedtoreducegovernmentcontrol
overindustry.Stateownedactivitiesthroughouttheworldweretransferredto
26Althoughmodernwesternconsumersocietiestendtobemasssocietieswheredifferencesofsocialclassesareoverriddentoacertainextent,classdifferencesmayalsobecomeintensifiedthroughvariationsintasteandconsumption(Giddens,2001,p.296).Seealso4.1.2.1onnichecommunication.
‐51‐
privateownership(privatization)andgovernmentrestrictionsonbusinesspractices
weregraduallyreduced(deregulation).Oneofthemaincausesforthissituation
identifiedbyLipseyandChrystal(1995)wasthefadingbeliefthatindustriesunder
governmentcontrolwouldoutperformprivatelyheldcompaniesintermsof
efficiency,productivityandgrowth.Inotherwords,theprevailingviewwasthat
privateenterprisesaremoreefficient,moreresponsiveandlesscostlythanpublic
bureaucraciesandthattheseprivateagencieswouldperformbestwhenconfronted
withonlyaminimumofgovernmentrestrictions.Furthermore,privatizationand
deregulationwerealsopreferredbecausethe(free)marketsystemwastrustedto
fosterfreedomandself‐reliance(Curran,2002).Thisideologicalshiftcannotsolely
beattributedtothepoliticalagendasofconservativeandneo‐liberalgovernmentsin
poweratthatperiod(i.e.MargretThatcherintheUnitedKingdom,HelmutKohlin
Germany,JacquesChiracinFranceandRonaldReaganintheUnitedStates)since
governmentsofwidelydifferingideologieshavecontinuedmostofthesepolicies(ie.
TonyBlairintheUnitedKingdom,GerhardSchröderinGermanyandBillClintonin
theUnitedStates)27.Moreover,theEuropeanUnionhaspushedrepeatedlyfor
internationalderegulationinordertoenablethefreeflowofgoodsandserviceson
thecommonmarket(Albarran&Chan‐Olmsted,1998,p.100).
Generally,the80’sgaverisetoastrongmovementadvocatingareductionof
governmentinterferenceleadingtotheprivatisationofformernationalized
industriesandthederegulationofprivatesectorbusinesses(Lipsey&Chrystal,
1995).Thesepolicieshadconsiderableeffectsonmedia.
Theexampleofbroadcastmediaperfectlyillustrateshowderegulationinfluenced
andchangedawholesectorofmediaproduction.Before1980,nosignificantradio
ortelevisionserviceinEuropewasfundedbyprivatecapitaloroperatedprimarily
forprofit,only13%ofEuropeanTVChannelsreachingmorethan50%ofhouseholds
(intheirdomesticmarket)wereheldprivately.17yearslater,thesituationhad
dramaticallychanged.From13%twodecadesbefore,thenumberofcommercial
27Curranpointsoutthattheideologicalshiftdidnotreflecttheattitudesofthepublicbutofapoliticalelite.
‐52‐
channelswentupto55%,withSatellite‐,Cable‐,andPay‐TVaswellascommercial
regionalchannelsnotincluded(McQuail&Siune,1998,p.26).
Figure4‐4:Ownershipofbroadcastmedia,Source:adaptedfromMcQuailandSiune,Table3.1,1998
Thissituationhasincreasedcompetitiontheremainingpublicchannelsarefacing
fromforeigncompetitorsandsparkedadeclineinviewers.Furthermoreithaslead
toacertaindegreeofimitationofcommercialtelevisionbypublicbroadcasters,with
culturalprogrammesbeingmoreandmorepushedoutsideprimetimeinfavourof
lightentertainment(McQuail&Siune,1998,p.29).
Amongpolicymakersatthattime,however,commercializationandensuing
concentrationorconsolidationprocesseswerenotconsideredathreatbutratheran
opportunityfordomesticmediacompanies.Inpart,thiscanbeexplainedby
referringtothebeginningofglobalizationtrendsintheworldeconomy.Although
competitionondomesticmarketscouldsufferinthelongrun,regulatoryauthorities
chosetoremainreluctantonregulationinordertoallowtheirdomesticplayersto
positionthemselvesfavourablyintheglobalmarket.Theiraimwastogrant
economicopportunitiesforplayersaheadofinternationalrivals.“Anapparent
monopolyintheUnitedKingdommaywellbeoperatinghighlycompetitiveina
87%
45%
13%
55%
0%
20%
40%
60%
80%
100%
1980 1997
Ownershipofbroadcastmedia
private
public
‐53‐
marketthatincludesGerman,FrenchandevenJapanesefirms,”(Lipsey&Chrystal,
1995).However,Doyle(2002)argues,thattheideaofforsakingcompetitiononthe
home‐markettoacertaindegreeinordertoallowdomesticplayerstogrowinto
globalplayersworksbetterinairlinesandtelecomindustrieswhereregulationshave
falleninothercountriesaswellandwherecompaniesarefacedwitharealglobal
marketwithaglobalcustomerbaseandrealinternationaltransactions.ForTVand
newspapersthisisnotthecaseDoylearguesandpointsoutthatbothtelevisionand
newspapersarestronglyrootedintheirlocalenvironment(Doyle,MediaOwnership:
TheEconomicsandPoliticsofConvergenceandConcentrationintheUKandthe
EuropeanMedia,2002).Still,sheacknowledgesthatliberalizationandderegulation
couldindirectlyhaveanimpactontheexpansionoffirmsinoverseasmarketsinthe
fieldofnewlyemergingcommunicationinfrastructuresuchasInternet,andmobile
communicationmarkets.
Albarran,ontheotherhanddoesnotseethemediaindustrydiffersignificantlyfrom
industrialproductionintermsofglobalization.“Themediaarenoexceptiontothis
trend”,whichheseesreflectedbythe“expansionofconglomerates”(Albarran&
Chan‐Olmsted,1998,p.3).Asoutlinedin4.1.2.3mediacompanieshavedramatically
increasedcorporateactivitiesoutsidetheirdomesticmarketsaswellasoutsidetheir
corebusinesses.Sowhileit’struethatonlyasmallportionofmediaproducts28are
distributedglobally,mediaconglomeratesmaystilloperateonaglobalscale.The
questiontowhatextenttheyinfluencecontentwillbeconsideredin4.2.
Anothercauseforderegulationistherelationshipbetweenpolicymakersandthe
industryitself.Asmentionedinchapter3theirinterestistomaximizeelectoral
votes.Therefore,theyseektoholdfriendlyrelationshipswithmedia,whoplayan
importantpartinshapingandinfluencingpublicopinion.Doylealsonotes,that
policymakerstendtoperceivewhatisofeconomicinterestasofwhatcorporations
sayisintheirinterest.Inmostcasescorporateaspirations,howeverdonotconform
withwidereconomicobjectivesofsociety(Doyle,2002,p.11).
28ItismainlyHollywoodmoviesandtelevisionproductionswhichcomeclosetoaglobaldistributionnetwork,seealso(Miller,Govil,McMurria&Maxwell,2001)
‐54‐
McQuailandSiune(1998)givetwoexamplesfromthenewspaperindustry.Inthe
UK,whichhastobeconsideredaleaderofworldwidederegulationandprivatization
(Albarran&Chan‐Olmsted,1998,p.100)29,RupertMurdoch,whoseNews
Corporationranksamongthefivebiggestmediaconglomeratesintheworldwas
supportedbyMargretThatcher’sconservativegovernmentandallowedtotakeover
TheTimes,TheSundayTimesandTodayinadditiontomarketleadersNewsofthe
WorldandTheSunwhichhealreadyowned(McQuail&Siune,1998,p.12).Thereby
Murdochwasabletoaccumulateajointshareofcurrently35%oftheBritish
newspapermarket(TheGuardian,2008;Miller,Govil,McMurria,&Maxwell,2001),
seealso4.3.2.3.InFranceontheotherhand,RobertHersantwasbackedbyJacques
Chiraquetoenlargehisgroup’sshareofFrenchnewspapercirculationto30%
comingclosetobeingsubjecttothelegalrestrictionsofFrenchmedialaw(see
chapter5.1.3.2.).
4.1.2.6 Commercializationofmedia
AsprofitisthesolereasonforinvestingprivatecapitalInmarketmodeleconomies
profitsarethedrivingforceofmostentrepreneurialactions.Thegoalofprofit
maximisationhastobeconsideredthebeallandendallofthemarketplacewith
littledisagreement.Whiletherearetendenciestopromotetheimportanceofnon‐
corporategoals(seechapter4.1.1.1),economistMiltonFriedmansumsupthe
dominatingideaofcapitalistsocieties:
“Therearefewtendencies,whichunderminethefundamentalsoffreeeconomiesas
radicallyastheassumptionofanyothersocialresponsibilitythanacorporations’
purposeofmaximizingreturnsforitsshareholders.”(Friedman,2002)
Thisexclusiveorientationonprofitsgenerallyfades,assoonasthetraditional
economicrealmisleft,noteMeier&Jarren(2001).Thatissupposedtobethecase
formediacompanieswhicharemeanttoprovidepubliclyvaluedmeritgoodsand
29Between1979and1984morethan£7bnwereraisedbytransferringgovernmentrunbusinessesinoil,aerospace,transportation,shipping,automobileandtelecommunicationstoprivateownership.
‐55‐
arethereforenotonlycorporationsfromaneconomicpointofviewbutsocial
institutions.Thisnotion,however,appearstohavechanged(Meier&Jarren,2001).
Itisimportanttonotethatincontemporarymediastudiesthecommercializationof
theprocessofmediaproductionisseenasanaturalconditionofoperatingina
marketdrivenenvironment.AccordingtoKieferactingundereconomicprinciplesis
amatterofcourseinordertostayinbusiness(Kiefer,2001).Historically,asMcQuail
andSiune(1998)pointout,marketfreedominthefirsteraoftheprintingpresseven
hadapositiveconnotation,asitwascloselylinkedtofreedomofexpressionata
timewhenstatepowersoughttomaintainexistingpoliticalcontrol(McQuail&
Siune,1998).Whatraisespluralityconcerns,however,isthepriorityassignedto
profitmaximizationandeconomiccriteriaofproductionovermedia‐specificgoals
suchasprovidingunbiasedinformationandstimulatingpublicdiscussion.The
pursuitofprofitsisaboveallelseasthefocusofapublicutilityprovidinginformation
shiftsfromthepublicsectortobusinessentitiesofmediacompaniesandtheir
owners.InthisunderstandingHeinrichdefinescommercializationastheextensionof
monetaryandegoisticmotivesintheutilityfunctionofmediacorporations,which
goesalongwithanincreaseinthelevelofdeterminationtomaximizethisfunction
(Heinrich,ÖkonomisierungauswirtschaftswissenschaftlichterPerspektive,2001).In
otherwords,commercialisationreferstothechasteningofpubliclyvalued,merit
outputinfavourofmarketable,profit‐inducingoutput(Kiefer,2001).
Indicatorsandcausesofcommercializationinclude(Heinrich,Ökonomisierungaus
wirtschaftswissenschaftlichterPerspektive,2001),(Meier&Jarren,2001),(McQuail
&Siune,1998),(Trappel,Meier,Schrape,&Wölk,2002):
onamacroeconomiclevel
• theadventoftheinformationagewhereinformationandknowledgehave
becomethemostvaluableresources,andfactorsofproduction
• governmentderegulation
• (global)marketsbeingtheprimaryinstitutionofcoordinationandcontrol
onasocietallevel
‐56‐
• alossofcontentdiversityamongmarketleadersandanincreasein
specializedproductionofnichecontentamongsmallercompanies
• marginalizationoflesspopularculturalandinformationalcontent
• anincreaseinthenumberofmediaoutlets
• imitationofsuccessfulstrategiesinsteadofinnovation
onamicroeconomiclevel
• measuringsuccessintermsofshareholdervalue
• anapproximationofcostprices
• adecreaseofcross‐subsidisationofunderperformingmediaproducts
• anincreasingconsiderationofrecipientpreferences
• coremediacompetencestransformingfromresearch/reportingto
marketing/sales
Infact,commerciallogicisnowthenorm,ratherthantheexceptionforEuropean
media,statesMcQuailanddrawsonevidencefromtheEuropeanbroadcastsector
wherethesuccessofthefirstcommercialoperatorswhoappearedinthe1980shas
largelytransformedtheshapeofthemedialandscape(McQuail&Siune,1998).
Commercialization,however,isnotarecentphenomenon.Alreadyinthe1930s,
MaxHorkheimerandTheodorAdorno,bothcoretotheFrankfurtSchoolofsocial
thoughtexpresseddeepconcernsoverwhattheycalled“thecultureindustry”.
Mediaandtheentertainmentindustry,theyargue,promoteacapitalistideology
whichunderminesthecapacityofindividualsforcriticalandindependentthought
andensuresobediencetomarketinterests(Horkheimer&Adorno,2001).
‐57‐
4.2 Impact
4.2.1 Evaluation
Mediaconcentrationdoesnotnecessarilyhavetocauseadeclineinpluralism,in
somecasestheremaybenoimpactatall.Theconceptsofpluralism/publicvalue
andmediaeconomicsdiscussedabovemayimplyanincompatiblepairofmutually
exclusiveopposites‐publicbenefitversuseconomiclogic.However,sometimes
profitorientationandconcentrationofownershipcontributepositivelytomedia
companies’goalstofulfilpublicserviceandsometimespublicservicemedia
programmesyieldhigheconomicrewards.Knoche(1996)drawsfromempirical
evidencetobackthisviewandstatesthatconcentrationofmediaownershipand
pluralismareneitheridenticalnorlinkedinalinearproportion.Althoughmany
theoriessuggest(seechapter4.3,andLange,2008,p.188)someformofreciprocal
influence,therearecaseswhereafruitfulbalancebetweenpublicsphereand
economicreasoningcanbefound.
Basedonthisidea,Heinrich(1994)classifiedthreetypesofmediaconcentration
(Heinrich,1994,p.49):
• Positiveconcentration–competitionisimprovedandmarketpowers
becomemorebalanced,forexample,manysmallfirmsjoinforcesinorderto
competeagainstaverybigrival.
• Concentrationwithoutanyimpact–competitionisnotaffected,forexample,
numbersevenandnumbereightonthemarketmerge.
• Negativeconcentration–competitiondecreases,barriersofentryfornew
competitorsarecreated,forexample,themarketleadertakesoverthethird‐
rankedcompetitor
Thuseconomicconcentrationandpluralismhavetobeevaluatedseparately,since
priortoanyinquiryintotheregulationofanygivenactionofconcentrationofmedia
ownership,ithastobeconsideredwhichofthetypesappliestothecase.
‐58‐
Therearetwomethodsofmeasuringtheeconomicimpactofconcentrationon
competition(Trappel,Meier,Schrape,&Wölk,2002,p.56),seealso(Robinson,
1996).
• TheConcentrationRatio(CR)isacalculationofthecombinedrelativemarket
sharesoftheleadingfour(CR4)orfive(CR5)companies.ACR4above50%is
alreadyconsideredaconcentratedmarket
• TheHerfindahl‐Hirschmannindex(HHI)involvescalculatingthesumofthe
squaredrelativemarketsharesofallmarketparticipants.Theresulthastobe
multipliedby10,000.Theresultingnumberisanalysedinrelationtothe
boundaries0(perfectcompetition)and10,000(monopoly).
Inthispaper,onlytheCRwillbeappliedtomeasureeconomicconcentration.
Crucialtobothmethodsisadiligentdefinitionoftherelevantmarket(Kiefer,2001,
p.87),(Knoche,1996,p.109).Thedefinitionofthemarketstronglyinfluencesthe
outcomeofanyevaluationofconcentration.Aninaccuratedefinitiontherefore
bearstheriskofover‐orunderestimatingactualconcentrationratios.30Formedia
markets,nostandardofmarketdefinitionhasbeenestablishedduetohuge
differencesbetweennationalmedialandscapes.Heinrichconsidersthedefinitionof
therelevantmediamarket“oneofthemostcomplicatedproblemsofcompetition
policy”(Heinrich,2001,p.55),whichisalsoduetotheinterrelationofaudienceand
advertisingmarket.Inadditiontothatthevarietyofmethodsofmeasuring
audiences/consumersusedinmarketresearchenhancedthecomplexityofthetask
ofdeterminingtheactualconcentrationanditsimpact31.Generallymediamarkets
canbedefinedby
• typeofproduct(i.e.radio,television),
• typeofcontentorrangeoftopics(i.e.qualityvs.tabloidorspecialinterestvs.
generalorprimetimevs.morningshow),
• regionorothergeographicalindicators,
30ForexampleBaker(2007)clearlyrejectsCompaine’sdefiningoftherelevantmarketasthemediaasawhole,forthesegmentsofthisbroadmarketareincoherentandlackinterchangeability.Bakerlikensthisapproachtodefiningthecarmanufacturingmarketwithinclusionofcardealershipsandsteelcompanies(Baker,2007,p.60)31SiegertelaboratedonthisprobleminAltmeppen&Karmasin,2003,p.103
‐59‐
• typeofaudience(i.e.menvs.women,buyersvs.readersoragegroups)
• time(i.e.months)
Wallner(2007)hasproposedtheapplicationoftheSCPmodelofmarketanalysis
(seechapter4.1.1),whichevaluatesmarketactionsnotsolelyintermsofprofit
maximizationbuttakesCSRfactorsandpublicbenefitintoaccountaswell(Wallner,
2007,p.210).Thisapproachappearstobeparticularlysuitableformediamarkets
wherepublicvaluerequirementsarecloselylinkedwitheconomicreasoning.
Inthispaperonlytheaudience/viewermarketwillbeconsidered,definedbytotal
buyers/consumersofacertainmediaproduct,despiteadifferentapproachbythe
EuropeanCommission(seechapter5.2.1).
Regardless of the method of market definition, the economic impact of
concentrationof ownership is only one sideof theproblem.Due to thenatureof
mediagoods,issuesofmediapluralismanddiversityhavetobetakenintoaccount
as well. However, prior to any new regulative approach, there have to be clear
definitionsofpublicbenefitagainstwhichmarketdevelopmentscanbemeasured.
Unfortunately, no convincing model/theory of evaluating pluralism or defining
quantifiablesocio‐politicalconcernsrelevanttothismatterhasbeenintroducedyet
‐afactthathasbeencriticisedheavilyby(Knoche,1996,p.113)and(Just&Latzer,
2001,p.13)andwhichhas ledtheEUCommissiontoconducttheaforementioned
studyonindicatorsofpluralism.ForKnoche,theshortcomingofmostapproachesto
measuring pluralism is the misuse of parameters and indicators for example
circulation, whichmay serve as an indicator for both concentration of ownership
(marketshare)andpluralism(numberofmediaproductswithacertaincontent).He
findsthatthepoorselectionof indicators influencestheevaluationverynegatively
andultimatelyplaysdowntherealextentof theeffectsofconcentrationofmedia
ownership,thelattergenerallytendtobe“systematicallyunderestimated”inpublic
discussion(Knoche,1996,p.116).Anotherpointofcriticismistheexclusivefocuson
measurementofpluralismofprovidersinsteadofopinions(seechapter3.)Inorder
to overcome this divergence he, as well as Just & Latzer (2001), proposes an
approachbasedoncomparativecontentanalyses.
‐60‐
For Lange (2008) the operative point to this problem is the definition of media
power.Traditionallymediapower isrealizedwhenthemediaactsaccordingtothe
agendasettingtheory32.Attemptsofputtingforwardamoresophisticateddefinition
have included themeasurementof substantial influenceon consumeropinionson
different media markets, which had been ranked according to their persuasive
power(Lange,2008,p.188).Othermethodsalsoincludedfactorssuchassuggestive
power,massappealandactualityandrelevancyofmediacontent.Inordertodraft
efficient legislation, a European consensus on indicators of pluralism has to be
reachedassoonaspossible.WhetherthestudybytheEUCommissionismorethan
justafirststeptowardsthisgoalremainstobeseen.
4.2.2 Effects
Suprisingly little empirical research has been conducted on the actual effects of
accomplishedmedia concentration, aggravating thedifficultiesofpredicting future
outcomesoutlinedabove.Manydescriptionsoftheoutcomeofmediaconcentration
are largely based on theories and models. This may be due to the fact that the
subjectisofverycomplexanddynamicnatureandchangesveryquicklyaccordingto
consumerdemandandtechnologicaldevelopment.JosefTrappel,alongwithWerner
A.Meierisoneofthefewleadingresearchersontheimpactofmediaconcentration.
I will adopt his categorization of effects of concentration of ownership. (Trappel,
Meier,Schrape,&Wölk,2002,p.112).
4.2.2.1 Media
Obviouslymediaarethefirstinstitutiontobeaffectedbymediaconcentration.
Usuallyafteramergerortakeovertookplace,reorganizationofthecorporate
structureandrepositioningonthemarketwillensue(Carpenter&Sanders,2009,p.
330)
32seeBurkart,R.(2002)forfurtherelaborationonthistheory
‐61‐
Regardlessofthetypeofmedia,Heinrichdefinedseveralaspectsofthisprocess,
whichareverysimilartotheeffectsofmediacommercializationoutlinedinchapter
4.1.2.6.(Heinrich,2001,p.210)
• Thepossibilityofsubsidizingandstrengtheningcertainopinionswithinthe
companyrisesasthepoweroftheownersisincreasedwhilereportingon
sometopicsisdiscouraged(i.e.unethicalbusinesspracticesofparent/sister
companieswithintheconglomerate).Trappel(2002)perceivesthedanger,
thatjournalistsmayfollowtheseruleseveniftheyhavenotbeenoutspoken
bymanagementinordertoretaintheirchancesofsucceedingina
environmentwhereemployersbecomemoreandmorelimited(Trappel,
Meier,Schrape,&Wölk,2002,p.114).
• Reuseofcontentisfacilitated(economiesofscope)
• Barriersofentryarecreatedandpoweronthesupplymarket(i.e.news
agencies)isincreased
• Competitionandcontrolbymarketforcesdecline
• Cateringtoadvertisementpartnersbecomesmoreimportant
• Contentbecomeshomogenizedanduniform.Intheexampleofamergerof
twonewspapers,exchangeoneditorialmatterswillincreaseeveniftwo
separateeditorialteamsaremaintained(i.e.throughintegratedarchives).
Whileenhancedcooperationmayservetoincreaseeditorialoutputofboth
teams,itismorelikelythattherewillbe“moreofthesame”.However
Trappelacknowledges,that,inanattempttoseparatethemarketthe
companymayalsoseektodiversifytheirportfolioandhavethenewspapers
runonoppositepositions,cateringtodifferentaudiences.Apartfromcausing
poorcredibilitythispositiononlyholdsaslongasbothpapersareprofitable.
Intheeventofonefallingbehind,thecreationofsynergiesmaybeadvisable
fromaneconomicpointofview,whicheffectivelywillrequirethepapersto
movecloserintermsofcontent(Trappel,Meier,Schrape,&Wölk,2002,p.
115).
‐62‐
4.2.2.2 Economy
Fromaneconomicpointofview,concentrationofmediaownership isexpectedto
deteriorate market conditions and competition in most cases. However, as
mentioned above, no direct correlation can be assumed. Heinrich defines the
economic impact of concentration of ownership similar to the effects of reduced
competition(Heinrich,1994,p.124):
• Slowdowninpricecompetition
• Declininginnovation
• Reducedadaptationtomarketconditions infavourofattemptingtodictate
favourableconditions
• Barriersofentryforcompetitors
• Aimingatmonopolisticmarket
Trappel alsomentions external effects on supplymarkets and advertisingmarkets
where a decreasing choice of business partners may lead to higher (unhealthy)
competition and lower profits. The same applies to the labour market where
journalistshavetocompeteforfewerjobopportunities(Trappel,Meier,Schrape,&
Wölk,2002,p.117).This isparticularlytrueforcasesofcrossmediaconcentration
whereeconomiesofscopeallowmediacompaniestorealizestaffsavings.
4.2.2.3 PoliticsandLaw
Baker, referring to thepolitical functions ofmedia claims that,media constitute a
“crucialsluice”betweenpublicopinionformationandpoliticalwillformationunder
democraticprinciples(Baker,2007,p.7).Sincethecoreprincipleofdemocracyisthe
egalitarian distribution of control, Baker adopts the view, that, when applied to
media ownership this democratic principle can only be interpreted as requiring a
“maximumdispersalofmedia“ownership”.Concentrationofprivatelyheldmedia,
therefore puts the democratic principle in danger and threatens democratic
diversity.
• Oneeffectofconcentrationofmediaownershipmaybeinfactthatparticular
interestsofmediaowners and/or elites associatedwith themareeasier to
‐63‐
givepublicityto(Trappel,Meier,Schrape,&Wölk,2002,p.119).ForBaker,
this creates the possibility of “an individual decision maker exercising
enormous,unequal […], largelyunchecked,potentially irresponsiblepower”
(Baker,2007,p.16).
• Greaterpowerofenforcingopinionsandcampaigns– Inorder to influence
public opinion big, integrated media companies are able to launch and
sustainhugecampaigns,i.e.TheSun’scampaignagainsttheEUtreaty.
Figure 4‐5The
Sun’s
campaignagainsttheEUConstitution,Source:TheSun24thSeptember,2007
• Decreaseofoptionstostimulatepublicdiscourse,which,inturn,ismoreand
moreimpoverished.
• Lessimportanceisassignedtonewsandpoliticalinformation
• Blockingmedia policymeasures – Larger companies aremore successful in
pushing for favourable legislation,subsidiesandstate investments inmedia
infrastructure,sincepoliticiansneedtheirsupporttostayinpower
‐64‐
4.3 Manifestation
InthissegmentIwillprovideanoverviewofthemediamarketsinGermany,UKand
France.FollowingthelegislativeprinciplesinGermanyandtheUKandforreasonsof
simplificationIadopttheshareoftheaudience/circulationastherelevantmarket
only.Asoutlinedabove,duetotheinterrelationofmediamarkets,aconcise
evaluationofmediamarketsneedstoconsidertheshareoftheadvertisingaswell.
However,myanalysesfocusonthepotentialinfluenceonopinion,whichiswhythe
advertisingmarketwillnotbeconsideredinthefollowingsegment.Thenumbersfor
magazinesareestimatesduetodifferingpublishingcycleofweeklybiweeklyor
monthlypublications.
‐65‐
4.3.1 Germany
Germany,themostpopulousandstrongesteconomyintheEUisrankedasoneof
Europe’smostpowerfulmediamarkets(Albarran&Chan‐Olmsted,1998,p.119),
whichischaracterisedbyastrongregionalismofallmediasectors.Bertelsmannthe
biggestmediacompanyinEurope,isofGermanorigin.
4.3.1.1 Television
TheGermantelevisionmarketisthebiggestinEurope,consistingofmorethan140
televisionstations(whicharepredominatelycommercial).Intermsofadvertisement
revenue,TVstilltrailsthewrittenpressbytwopercent.In2007,45%of
advertisementspendinginGermanywenttoTV,whichequalsasumofslightlyless
than€10bn(ArbeitsgemeinschaftFernsehforschung,2008).Germanyhastwomain
publicservicetelevisionbroadcasters,ARDandZDF.ARDisanationwidechannel
operatedbyaconsortiumofallregionalpublicservicechannels.Thejointmarket
shareoftheseregionaloperatorsiscommonlyreferredtoasARD3(thirdchannels).
Apartfromthattherearefourminorpublicservicechannelsforspecialinterest,the
children’schannelKiKa,theculturalprogramme(incooperationwiththeFrance)
Arte,thepoliticalinformationbroadcasterPhoenixandtheculture/politicschannel
3sat.Forhistoricalreasons,theGermanbroadcastingregulationfallsunderthe
authorityofthefederalstates(Bundesländer).Therefore,changesinpublic
broadcastinghavetobenegotiatedthroughinterstatetreaties(Albarran&Chan‐
Olmsted,1998,p.123).TherevenuesofARD,ARD3andZDFconsistoflicensefees
andadvertisements.Thereare,however,strictregulationsonthenumberof
minutes,timeofdayandtimingduringaprogrammewhencommercialsmaybe
shown(Albarran&Chan‐Olmsted,1998,p.130).In2008,thepublicbroadcasters
controlled43,6%ofthetelevisionmarket(ArbeitsgemeinschaftFernsehforschung,
‐66‐
2008).Thisrepresentsastarkdeclinefromthe47.5%,measuredbytheEuropean
AudiovisualYearbookfouryearsearlierin2004(EuropeanComission,2007,p.47)33.
Figure4‐6–GermanTVmarketshare(public),Source:AGF/GfkFernsehforschung2008
ThevastmajorityofGermantelevisionchannelsarecommerciallyoperated.Private
televisionwasintroducedin1984.By1996therewerealreadytenestablished
channelsinfiercecompetitionformarketshares(Albarran&Chan‐Olmsted,1998,p.
130).Todaytwomajorgroupsdominatethecommercialmarket:theRTLGroup
(24.1%)andtheProsiebenSat.1MediaAG(21.6%).Awholerangeofsmallchannels
competesfortheremaining10.3%oftheaudience.
33Thecontrastmayalsobeexplainedbyadifferingmethodofcalculatingdailysharesofaudiencesinceanothersource,theEuropeanFederationofJournalists,assumedmuchlowernumbersfor2004andnamedajointshareof40.9%(EuropeanFederationofJournalists,2005,p.61).They,however,mayhaveonlyincludedthethreemainoperators.
ARD14%
ZDF13%
ARD313%
3sat1%
KiKa1%
Phoenix1%
Arte1%
Commercial56%
GermanTVmarketshare(public)
‐67‐
Figure4‐7–GermanTVmarketshare(commercial),Source:AFG/GfkFernsehforschung2008
TheProsiebenSat.1MediaAGiscurrentlyco‐ownedbyPermiraandKKR,two
internationalprivateequityfirms.MediainvestorHaimSaban,whohadacquiredthe
groupafteratakeoverdealbyKirchMediahadcollapsed,soldPermiraandKKR
50,5%oftheshares,whichallowedthemtoseizecontrolofProsiebenSat.1Media
AGandmergeitwithSBS,abroadcastinggroupfromLuxembourg(Kurp,2006).
PermiraandKKRhadbeenabletobuyProsiebenSat.1becauseatakeoverby
publishinggroupAxelSpringerhadnotbeengrantedpermissionbytheGerman
regulatoryauthorityKEK(seealsochapter5.1.1.)
TheRTLGroupisownedbyBertelsmann.ThegroupholdsseveralinvestmentsinTV
channelsalloverEurope(particularlyintheNetherlands,Belgium,FranceandUK)
andisEurope’sbiggestoperatorofcommercialtelevision.InGermanyithasreached
itsmostdominantnationalmarketposition.TheRTLGroupemergedfromamerger
ofLuxembourg‐basedCLT‐UFAandtheBritishPearsonGroupin2000.
44.6%ofGermanhouseholdsreceiveanalogueTVthroughcable,23.5%usesatellite
broadcasting,and3.9%receiveitthroughterrestrialtransmission.Themajorityof
householdswithdigitalTVusedsatellitetransmission(19.5%),(KEK,2006).
Public44%
RTL12%
RTLII4%
SuperRTL2%
VOX5%
ntv1%
Sat.110%
Pro77%
Kabel14%
N241%
neunlive0% other
10%
GermanTVmarketshare(commercial)
‐68‐
Figure4‐8AccesstoGermanTV,Source:KEK2006
CableisthemostimportantformoftelevisiontransmissioninGermanywithajoint
marketshareof51.8%(analogueanddigitalcombined).Thelargestcablenetwork
operatorisKDG(ownedbyProvidenceequitypartnerInc.),whichholdsamarket
shareof42%ofcablehouseholds.KDG,togetherwithitsmaincompetitorUnity
MediaGmbH(majorityofsharesownedbyBCPartnersbasedinUKandApollo
ManagementLPbasedintheUS)controls66%ofthemarket(KEK,2006).Bothhave
beenrepeatedlycriticisedbytheALMforhesitatingtomigratetodigitalTV
(GemeinsameStelleDigitalerZugang,2007,p.27).KDGoperatesseveralspecial
interestchannelssuchasBibel‐TV,Games‐TVandWein‐TV.TheKEKhasrepeatedly
issuedconcernthatverticalIntegrationofcableoperatorswithbroadcastingstations
couldleadtoconsiderablebarriersofentryfornewcompetitors.
Thefigurealsoshows,that35%(14.8m)ofGermanTVhouseholdsareequippedto
receivedigitaltelevision.TheAGFpanelfoundthatinthefirstquarterof2009the
actualuseofdigitalTVissignificantlylower,at27%ofthetelevisionmarket.
Howeverthesenumbersrisesteadilyasthegovernmentplanstomakebroadcasting
exclusivelydigitalby2010.ThiscouldprovetobeaboostforPremiere,thebiggest
digitalsubscription/payperview‐basedbroadcasterinGermany.3.5mhouseholds
(23.6%)ofoverall14.8mdigitalTVhouseholdssubscribetoPremiere.Inthose
44.6
3.9
23.5
7.2
5.3
19.5
0
10
20
30
40
50
60
Cable Terrestrial Satellite
%ofh
ouseho
lds
AccesstoGermanTV
digital
analogue
‐69‐
households,Premiereholdsa23.7%marketshareofTVconsumption.Thatmakesa
shareofroughly1.5%oftheoveralltelevisionmarketshare.HoweverifonlyPay‐TV
subscribersareconsideredonly(5.23mhouseholds),Premiereholdsa66%market
share.Inlate2008,theNewsCorporation,whichcurrentlyholdsa29%stakein
Premiere(KEK,2006),askedtheGermanfinancialregulatoryauthorityBaFinfor
permissiontobefreedfromacompulsorypublicoffertootherPremiere
shareholdersinordertofurtherraiseitsPremierestakebeyond30%(Wiesmann,
2008).Asof2009thepermissionwasgrantedandNewsCorpisexpectedtolauncha
takeoverbidandsubsequentlyturnPremiereintoSkyDeutschland.Premiere’smain
competitorsarechannelsoperatedbycablenetworkoperatorsKDGandUnity
Media.
Figure4‐9GermanPayTVmarketshare,Source:GSDZ2007,p.57
4.3.1.2 Radio
TheGermanradiomarketentirelymirrorsthefederalstructureandtheregional
organisationofGermanbroadcastmedia.Thereareonlyfewnationalbroadcast
programmessincemostradiostationsoperateregionallyorlocally.Duetothis
situation,nocommercialbroadcastinggrouphasbeenabletoattainadominant
marketposition.ThepublicARDbroadcastersaccountfor65regionalprogrammes
Premiere66%
UnityMedia17%
KDG13%
other4%
GermanPayTVmarketshare
‐70‐
andtwonationalprogrammes,accumulatingajointmarketshareof27.5%ofthe
nationalradioaudience(EuropeanFederationofJournalists,2005,p.64).
Commercialoperatorsaccountfor24nationalprogrammes,56regionalprogrammes
and140localprogrammes(ArbeitsgemeinschaftderLandesmedienanstalten,2008,
p.199),ofwhichtheregionalprogrammesarethemostprofitable.Thebiggest
commercialradiobroadcastersaretheRTLGroup(6.6%),AxelSpringerAG(~1%),
HubertBurdaMediaHoldingGmbH&Co.KG(~13.6%),MadsackGmbH&Co.KG
(~6.7%)34,(KEK,2005)
Figure4‐10Germanradiomarketshare,Source:KEK2005/EFJ2005
4.3.1.3 Writtenpress
TheGermannewspaperandmagazineindustrystillcommandsthelargestsegment
oftheGermanmediamarketwith49%ofadvertisementspendingwhichequalsjust
above€10bnfromadvertisementalone(ArbeitsgemeinschaftFernsehforschung,
34Springer,BurdaandMadsackholdmostlyminoritystakesbelow25%invariousradiobroadcasters,thereforeoverallnumbersofmarketshareareestimationsandmayvarygreatlyaccordingtothemethodofcalculation.
ARD27%
RTL6%
Springer1%
Burda14%
Madsack7%
Other45%
Germanradiomarketshare
‐71‐
2008).Thereare377dailynewspaperswithacombinedcirculationof27.2m,27
weeklynewspaperswithacirculationof2m,900magazines,whichdistribute115m
copies(numberofactuallypurchasedmagazinesisnotavailable)and1,159special
interestperiodicals,whichdistribute13.9mcopies(Informationsgesellschaftzur
FeststellungderVerbreitungvonWerbeträgern,2009).
In2005thetoptenGermannewspaperswere(regionalnewspapersshadedgrey):
Title Publisher Circulation(in1,000)
BILD AxelSpringer 3,867
WestdeutscheAllgemeine
Zeitung
WAZMediengruppe 1,001
ZeitungsgruppeKöln DuMontSchauberg 628
SüddeutscheZeitung SüddeutscheZeitungVerlag 442
RheinischePost Rheinisch‐BergischeDruckerei
undVerlagsgesellschaft
405
ZeitungsgruppeThüringen ZeitungsgruppeThüringen 398
FrankfurterAllgemeineZeitung FrankfurterAllgemeineZeitung
Verlag
380
FreiePresse FreiePresseChemnitzerVerlag 358
AugsburgerAllgemeine/
AllgäuerZeitung
Presse‐DruckundVerlagshaus 353
NürnbergerNachrichten MitteldeutschesVerlagshaus 310
Figure4‐11TopTenGermannewspapers,Source:EuropeanComission,2007p43
Thenewspapermarketisratherdiverse.Thetopfivepublishersaccountfor44.8%of
themarketshare,thetoptengroupsaccountfor58.5%(Röper,2008,p.420).Axel
Springer,whopublishesthemarketleaderBILD,controlsnearlyonequarterofthe
market.
‐72‐
Figure4‐12Germannewspapermarketshare,Source:Röper,2008p.420
Röper(2008)dividesthenewspapermarketintoqualitypapers(subscriptionbased)
andtabloidpapers(basedonstreetselling)thelattershowinganapparent
dominationofthebigfivepublishers:96.1%ofthetabloidmarketshareiscontrolled
bythetopfivepublishers,79.3%bySpringeralone(Röper,2008,p.421).Springer’s
dominationinthissegmentwasoneofthemainreasonsfortherejectionofthe
group’sbidtotakeoverProsiebenSat.1Mediain2006.
TheGermanmagazinemarketisalsofairlyconcentrated.Thetopfivepublishers
controlmorethantwothirds,68.5%,ofthemarket:
AxelSpringer22%
VerlagsgruppeStu~garterZeitung/DieRheinpfalz/
SüdwestPresse9%
VerlagsgruppeWAZ6%
DuMontSchaubert4%
Ippen‐Gruppe4%
other55%
Germannewspapermarketshare
‐73‐
Figure4‐13Germanmagazinemarketshare,Source:Vogel,2008p.468
VogelgoesontodividethemagazinemarketinacomparablewaytoRöper.He
distinguishesbetweenmagazinespublishedweeklyoreverybiweekly,and
magazinespublishedatlongerintervals.Intheweeklytobiweeklysegment,thebig
fivehaveamarketshareof87.3%,BauerandSpringeralonecontrol53.2%(Vogel,
2008,p.468).
4.3.1.4 Online
In2008thetoptenGerman‐basedwebsiteswere:
Website Marketer/Provider UniqueClientspermonth
(averageinmillions)
T‐Online InteractiveMediaCCSPGmbH 14.39
Web.de UnitedInternet 12.80
Yahoo!Deutschland Yahoo!DeutschlandGmbH 11.13
MSN.de MicrosoftAdvertising 10.75
GMX UnitedInternet 8.7
AxelSpringer15%
HubertBurdaMedia16%
Gruner+Jahr11%
WAZZeitschri�enMarke�ng
7%
HeinrichBauerVerlag19%
other32%
Germanmagazinemarketshare
‐74‐
MyVideo SevenOneInteractiveGmbH
(Prosiebensat.1Media)
7.35
RTL.de IPDeutschlandGmbH(Bertelsmann) 6.62
studiVZ HoltzbrinckNetworksGmbH 5.41
SPIEGELONLINE SPIEGELnetGmbH 5.26
CHIPonline HubertBurdaMedia 5.26
Figure4‐14TopTenGermanbasedwebsites,Source:AGOF2008/Companyprofiles
InthisrankingtheAGOF(ArbeitsgemeinschaftOnlineforschung)consideredwebsites
operatedbyGermanbasedmarketers/providersonly.NielsenOnlineprovidesdata
forinternationalprovidersinFebruary2009(Germanbasedmarketers/providers
shadedgrey):
Propertyname Uniqueclientspermonth Reach/marketcoveragein%
Google 30,009 83.21
Microsoft 23,894 66.25
Ebay 20,319 56.34
DeutscheTelekom 16,181 44.87
UnitedInternet 15,484 42.93
Bertelsmann 13,866 38.45
AOL 13,137 36.43
Wikimedia 12,892 35.75
HoltzbrinckNetworksGmbH 12,262 34
Prosiebensat.1 11,995 33.26
Figure4‐15TopTeninternationalbasedwebsites,Source:NielsenOnline2009
‐75‐
AlookattherankingofdomesticInternetmarketers/providersshowsarather
competitivemarket.CalculationsbyNielsenandAGOFdifferslightlyduetodissimilar
calculationsoftheuniversalset.ThetopGermanInternetproviders/marketersenjoy
marketcoverageratiosofaround40%permonth(41mGermansareonlineona
regularbasis).However,thereare15companiesthatcoveratleast25%ofthe
marketandtheAGOFlists61marketers/providersthatreachmorethan500.000
people.
Figure4‐16TopGermaninternetmarketersandproviders,Source:AGOF2008,companyprofiles
Incasecross‐mediaownershipistakenintoaccount,itshows,thatthreeofthefive
biggestInternetmarketers/providersare“oldmedia”giantsthathavesuccessfully
managedtobroadenthescopeoftheiroperations.TheothertwoplayersareISPs.
19.75 18.98 17.52 17.4612.61
0
5
10
15
20
25
Unitedinternet
SevenO
neInterac�veGmbH
(Prosieb
enSat.1Med
ia)
Interac�veMed
iaCCSPGmbH
TOMORR
OWFOCU
SAG
(Hub
ertB
urdaM
edia)
IPDeu
tschland
GmbH
(Bertelsmann)
marketcoverage(n=41million)
TopGermanInternetmarketers/providers
‐76‐
4.3.2 UnitedKingdom
UKhasmaturenationalandregionalnewspapermarkets,whichhavebeensubject
tosubstantialconsolidationinrecentyears.Thebroadcastmediasectoris
dominatedbytheBBC,whichremainsakeyplayerintheBritishTVandradio
markets(Ward,2004,p.197).
4.3.2.1 Television
TelevisionintheUnitedKingdomisa£11.2bn(€12.1bn)industry(Ofcom,2008,p.
147).26.8%ofadvertisingexpenditureisallocatedtotelevision,whichmakesup
aboutonethirdofTV’soverallrevenue–publicfunds(23%)andsubscriptions(38%)
providethegreaterpartofothersourcesofrevenue.Atthemomentthereare470
channelsbroadcastingintheUK,however,onlyfivechannelsareavailablenationally
onterrestrialanddigitaltelevision,allofthemhavepublicserviceduties.Duetothe
highlevelofdigitalisedTVhomesof87.3%,nearlyallUKchannelsaredigital.
Moreover,theUKhasthelargestPay‐TVmarketinEurope.UnlikeinGermany,
marketsharesofUKchannelsvarygreatlydependingonwhichplatformof
transmissionistakenintoaccount.
Thefivenationalchannels,BBC1andBBC2,ITV(Channel3),Channel4andFiveare
commonlyreferredtoasPBS–PublicBroadcastingStations.Togethertheycontrol
60%oftheoveralltelevisionmarket.BBC1andBBC2arefinancedbylicensefeesand
arenotallowedtobroadcastadvertisementsatall.TheremainingthreePBS
channelsarecommerciallyfunded(withtheexceptionofChannel4),however
programmingminimumsarespecifiedfornews,currentaffairsandeducational
programmes(Albarran&Chan‐Olmsted,1998,p.103).ITV,aBritishversionofthe
ARD3conceptinGermany,isaconglomerateof15operators,whicharelicensedto
provideregionalprogrammes,althoughelevenofthemareownedbytheparent
companyITVplc.ITVplchasbeensubjecttotakeoverrumoursbyPay‐TVmarket
leaderBSkyB,cableoperatorNTLandRTL/Bertelsmann(Oatts,2006).Inlate2008
BSkyBwasorderedtoreduceits17.9%stakeinITVplcduetocompetitionconcerns.
TheCompetitionCommissionreportedthatfourothershareholdersholdmorethan
‐77‐
3%inITV.Channel4ontheotherhandispubliclyownedwhileFivebelongstothe
Bertelsmanngroup.Botharenationalsingleservices.
AsofFebruary2009,theBBCchannelsaccountedfor28.8%oftheoverallTVmarket
share,whiletheotherthreeoperatorsaddupto30.9%(Broadcasters'Audience
ResearchBoardltd.,2009).
Figure4‐17BritishTVmarketshare,Source:BARB2009
Atthemoment,only13%ofTVhouseholdsuseterrestrialanalogueTV,wherethe
PBSbroadcastershaveajointmarketshareof100%duetolackofcompetition.The
majorityofBritishTVhouseholdsusedigitalterrestrialtelevision(DTT)(38%)and
DigitalSatelliteTV(34%),whichisdominatedbyPay‐TV.
BBC121%
BBC28%
ITV19%
Channel47%
Five5%
Other40%
BrimshTVmarketshare
‐78‐
Figure4‐18AccesstoBritishTV,Source:OfcomCommunicationsreport2008,p.211
Itisimportanttonote,thatthesenumbersrefertothemainTVinahousehold.
AmongallTVsetsintheUK,theuseofsatelliteTVisabout10%lowerwhile
analogueterrestrialtransmissionisup10%.
With87%ofTVhouseholdsequippedtoreceivedigitaltelevision,PBSbroadcasters
aresteadilylosinggroundinmultichannelhomes.Aspointedoutabove,theycontrol
100%oftheanalogueterrestrialmarketand60%oftheoverallmarket.Insatellite
andcablehomeshowever,PBSprogrammesaccountfor47%ofthemarket.Their
strongestcompetitorisBSkyB.ItsportfolioalreadyoutperformsFiveat7.6%market
shareinmultichannelhomes(Ofcom,2008,p.222).
ThedominatingplatformoftransmissiononDTTisFreeview.ApartfromthePBS
channelsandsomespecialinterestchannelsassociatedwiththem,Freeview
broadcastsentertainment,newsandchildren’schannels,aswellasinteractive
channelsandradiostationsfreeofcharge.FreeviewisrunbyDTVServicesLtd.,
whichisownedbyfiveshareholders:BBC,BSkyB,ITV,Channel4andNationalGrid
Wireless/Arqiva(formerlyknownasNTLbroadcastitbelongstoaconsortiumledby
AustralianinvestmentbankMacquarie).FreeviewhasnodirectrivalsontheDTT
marketsinceTopUpTVandSetantaofferPayTVservicesonly(Ofcom,2007,p.2).
Analogueterrestrial
13%
Digitalterrestrial
37%
PaySatellite34%
FreeSatellite3%
DigitalCable13%
AccesstoBrimshTV
‐79‐
BSkyBisthemainplayeronthesatellitemarket.BSkyBoffersawiderangeofPay‐TV
Services(ie.SkySports,SkyMovies)andsomefreetoair(FTA)programmes.BSkyB
has9msubscribers,whichrepresentsonethirdoftotalUKTVhomes(26m).Sky’s
extraordinaryperformancewasacrucialfactorinmakingsubscriptionthemost
importantsourceofrevenue(38%oftotalrevenues)fortelevisionintheUK,even
surpassingadvertisement(32%oftotalrevenues).SomeofSky’schannelsarealso
includedintheVirginMediacableTVportfolio.NewsCorp.currentlyowns39%of
BSkyB(Ofcom,2007,p.29)
DigitalcableTVintheUKisprovidedbyregionalpayTVretailers.VirginMediaisthe
largestproviderofcableTVservingabout47%ofcablehomes,withSmallworldand
Wightcablethemostimportantcompetitors(Ofcom,2007,p.2).VirginMedia
emergedfromamergerofntl:TelewestwithVirginMobile.Shortlyafterformer
rivalsNTLandTelewesthadjoinedforcestobecomethedominantplayerincable
TV,VirginMobilesteppedinandanevenbiggercompanywasformed.Thisallowed
VirginMobiletooffer“quadruple”services(TV,Internet,fixedandmobile
telephony),providedbyonesingleverticallyintegratedcompany(Ofcom,2007,p.
42).VirginMediaTVservicescanonlybesubscribedinpackagewithabroadbandor
landlinetelephonyservicetoo.VirginMediaisownedbyavarietyofinvestors,the
threebiggestbeingFidelityManagementandResearchLLC,aUSbasedinvestment
group(13.4%),VirginEntertainmentInvestmentHoldingsLtd.(10.4%)andFranklin
MutualAdvisorsLLC,anotherUS‐basedinvestmentfirm(10%),(VirginMedia,2009).
4.3.2.2 Radio
TheBritishradiomarketisaboutonetenththesizeoftheTVmarketintermsof
overallrevenue.Radio’sshareofadvertisingexpenditureisjust2.9%.Thereare397
radiostationsintheUK,mostofthem(336)arelocalcommercialstations.Thereare
onlyfournationalcommercialstations,versuselevennationwideBBCstations.Local
BBCstationsmakeuptheremaining46(Ofcom,2008,p.243).TheBBC’stotalshare
ofaudienceis57%.ThebiggestcommercialoperatorsofradiostationsareGlobal
Radio(15%)andBauerRadio(10%).
‐80‐
Figure4‐19Britishradiomarketshare,Source:OfcomCommunicationsreport2008,p.253
ThedominationofpubliclyfundedBBCstationsintheshareoflisteninghoursleads
toadominationofcommercialleaderGlobalRadioontheadvertisementmarket.
Thegroup,whichisownedbyaconsortiumofIrishinvestors,controlsapproximately
44%oftheadmarket(Piasecka,2008).TheothermajorplayerisBauer,aGerman
company,whichalsoholdssharesinregionalradiostationsinnorthernGermanybut
ismorerenownedforitspublishingactivities.Interestingly,digitalandonlineradio
broadcastsmakeupalmost18%ofthetotalUKradioaudience(Ofcom,2008,p.
238).
4.3.2.3 Writtenpress
Thereare30nationaldailynewspaperswithanoverallcirculationof22.5mcopies.A
strikingfeatureoftheBritishnewspapermarketisthehighperformanceofSunday
papers.TheFinancialTimesandTheEveningStandardaretheonlynational
newspaperswithoutaSundayedition.
BBCna�onwide
47%
BBClocal10%
GlobalRadio17%
BauerRadio10%
GuardianMedia5% other
11%
Brimshradiomarketshare(listeningh)
‐81‐
Inadditiontothat,668Britishmagazinesdistributeabout100mcopiesonaweekly
ormonthlybasis.46mofthosecopiesareactivelypurchased.
Inthefirstquarterof2009thetoptenBritishdailynewspapers(withoutSunday
papers)were(regionalnewspapersshadedgrey):
Title Publisher Circulation(in1,000)
TheSun NewsInternationalLtd 2,954
TheDailyMail AssociatedNewspapersLtd 2,218
TheDailyMirror TrinityMirrorplc 1,326
TheDailyTelegraph TelegraphMediaGroupLtd. 822
TheDailyStar ExpressNewspapers 781
DailyExpress ExpressNewspapers 715
TheTimes NewsInternationalLtd 608
FinancialTimes FinancialTimesLtd. 421
DailyRecord TrinityMirrorplc 349
TheGuardian GuardianMediaGroup 340
Figure4‐20TopTenBritishnewspapers,Source:AuditBureauofCirculations2009
TheBritishnewspapermarketishighlyconcentrated.Thetopfourpublisherscontrol
morethan80%ofthenewspapermarket(includingSundaypublications),withNews
InternationalLtd.(NewsCorp.)accountingforonethirdofthemarketsharealone.
‐82‐
Figure4‐21Britishnewspapermarketshare,Source:owncalculationsbasedABC2009data
SimilartothesituationinGermany,thetopfourpublishers’dominationisallthe
moreobviousifthemarketisdividedintotabloidandqualitypapers.Inthetabloid
segment,thebigfourcontrol96%ofthemarket.However,NewsInternational’s
sharedoesnotchangesignificantlyincomparisontotheoverallmarket,sincethey
publishthequalitymarketleaderTheTimes.Thegrowingimportanceoffreesheet
newspapers,inparticularinmetropolitanareasmarksasignificanttrendoftheUK
newspapermarket.TherearecurrentlyfourfreesheetpapersinLondon,twoof
whichbelongtothebiggestpublishersAssociatedNewspapers(LondonLite)and
NewsCorp.(TheLondonPaper).
Theconsumermagazinemarketisnotconcentratedasintensely.However,thefour
largestpublishersholdajointmarketshareof46%.Thetwolargestpublishing
groupsaretheGermanBauergroup(16.6%marketshare)andIPCMedia(15.9%),a
memberoftheUS‐basedTimeWarnerconglomerate.Theirsmallercompetitorsare
NatMags(NationalMagazineCompanyLtd.,6.7%),whichbelongstotheoldUS
mediagiantHearstCommunicationsandBBCMagazines,thecommercialpublishing
subsidiaryoftheBBC(6.4%).
AssociatedNewspapers
20%
ExpressNewspapers
11%
NewsInterna�onalLtd.35%
other17%
TrinityMirrorplc
17%
Brimshnewspapermarketshare
‐83‐
Figure4‐22Britishmagazinemarketshare,Source:owncalculationsbasedonABC2009data
Althoughthereisnodataavailableonthemarketshareintheweekly/bi‐weeklyand
themonthlysegment,itisfairlysafetoassumethatthejointmarketshareofthebig
publishersincreasesinproportiontodecreasingpublishingintervals,similarto
GermanandFrenchmarkets.
4.3.2.4 Online
InFebruary2009thetoptenproviders/marketersintheUnitedKingdomaccording
toNielsenOnlinewere(domesticplayersshadedgrey):
Propertyname Uniqueclientspermonth Reach/marketcoveragein%
Google 24,251 87.08
Microsoft 22,090 79.32
BBC 14,601 52.43
Yahoo! 14,518 52.13
eBay 14,277 51.26
BauerMediaGroup17%
IPCMedia16%
BBCMagazines6%
NatMags7%
other54%
Brimshmagazinemarketshare
‐84‐
Facebook 13,630 48.94
Amazon 10,194 36.6
HMGovernment 8,665 31.11
AOL 8,628 30.98
WikimediaFoundation 8,232 29.56
Figure4‐23TopBritishinternetmarketers,Source:NielsenOnline2009
ThedominationofUS‐basedonlineservicesisstriking.TheABCe,theonline
departmentoftheAuditBureauofCirculationpublisheduniqueuserclients
rankings,whichcontradictheavilywithNielsen’sfiguresbecausetheABCe
measurementincludesworldwideusersoutsideoftheUK.
AccordingtotheABCe,guardian.co.uk,theTelegraph,Timesonline,MailOnlineand
TheSunonlineallmanagedtogobeyondthe20muniqueclientspermonthmark,
withguardian.co.ukclosetobreaking30m.MoreoverTheIndependentandthe
MirrorGroupreached10mand6mvisitorsrespectively(AuditBureauofCirculation
electronic,2009).
‐85‐
4.3.3 France
TheFrenchmediasectorischaracterisedbyastrongregionalpressandhighly
competitivetelevisionandradioindustries.DespitetheemergenceofVivendiasa
globalplayerintheaudiovisualindustry,theFrenchtelevisionmarkethasbeenvery
stable,whiletheradiosectorisoneoftheleastconcentratedinEurope(Ward,2004,
p.43)
4.3.3.1 Television
Televisionaccountsfor36%ofmediaadvertisingexpenditurewhichequalsslightly
morethan€4bn(ConseilSuperieurdel’Audivisuel,2009).Advertisingistheprincipal
sourceoffundingforFrenchtelevision.
Therearesevennationalchannelsofwhichfourarepublicservicebroadcasters
(France2,France3France5andArte)andoneisapartiallyencryptedPay‐TV
channel(Canal+).TheremainingTF1andM6arecommerciallyoperated.These
sevenchannelstogetherhold77%oftheoverallaudienceshare.Oftheremainder,
11%isaccountedforbyfreetoviewchannelsavailableontheTNTdigitalterrestrial
platform.Otherspecial–interestchannelsmakeup12%.
Amongthenationalchannels,TF1istheclearmarketleader,accountingfor27.2%of
theaudienceshare.TF1’slargestshareholderisBougyes(43%),alargeFrench
industrialandtelecomgroup.Theremaining57%arefreefloatingshares.Second
placedFrance2trailsTF1bynearly10%.Together,publicbroadcasterscontrol
35.5%ofthemarket.Statetelevisionreceiveslicensefees,governmentsubsidies
andisallowedtoadvertiseindifferentproportionsdependingoneachchannel
(Albarran&Chan‐Olmsted,1998,p.189).WhileCanal+isownedbymedia
conglomerateVivendi,44%ofthesharesand33%ofthevotingrightsofM6belong
totheRTLGroup.
‐86‐
Figure4‐24FrenchTVmarketshare,Source:Médiametrie2008,p.2
Ithastobementionedthatonanalogueterrestrialplatforms,France5andArte
haveatime‐sharingagreement.France5broadcastsbefore7pm,Arteafterwards.
OndigitalTV,however,bothareavailable24hours.
TheoverallFrenchtelevisionaudienceis57mpeople.33%accessTVthroughthe
TélévisionNumériqueTerrestre(TNT)platform,adigitalterrestrialtelevision
platform,whichiscomparabletoFreeviewintheUK.Theportfolioofchannels
carriedonTNTissubjecttoselectionbytheCSA.Atthemoment18freetoview
channelsandninePay‐TVchannelsarebroadcastonTNT(Thepaychannelsare
drawnfromthemostpopularofferingsofsatelliteandcableoperators).
24%oftheFrenchtelevisionaudiencehaveaccesstosubscriptionbasedsatellite
channels.TherearetwomainoperatorsofsatellitePay‐TV.Thedominantplayeris
NouveauCanalsat,ownedbyVivendi(65%),pubishinggroupLagardère(20%)and
commercialTVoperatorsTF1(9.9%)andM6(5.1%),whichcarriesthepopular
Canal+portfolio.Canalsat’ssolecompetitorisBisTélévision,whichisownedbythe
founderofitsholdingcompanyABGroupe,ClaudeBerda(66.5%)andTF1(33.5%).
(Médiametrie,2008,p.5).
Approximately6%usesubscription‐basedcable‐servicesasameansofaccessingTV.
TheonlyprovideronthecablemarketisNuméricable,whichisownedbyBritishand
TF127%
France219%
France313%France5
3%
Arte2%
other23%
Canal+3%
M611%
FrenchTVmarketshare
‐87‐
AmericanprivateequitygroupsCinvenandCarlyle(bothhold35%)andfellowcable
operatorAltice(30%)basedinLuxembourg.
20%stilluseanalogueterrestrialtransmission,while16%useDSLbasedonline
services,offeredbymosttelecomproviders,includingtheIliadGroup(Alice,Free),
BouyguesTélecom,SFR(controlledbyVivendi)andOrange.
Figure4‐25AccesstoFrenchTV,Source:Médiametrie2008,p.5
4.3.3.2 Radio
RadioisahighlypopularmediuminFrance,Morethan98%ofthepopulationownat
leastonereceiver.Afterbeingstateownedfornearly40years,radiowasliberalized
intheearly1982.Shortlyafterwards,advertisementwasauthorizedasaviable
sourceoffundingforprivateradiostations.Todayradioreceivesabout7%oftotal
mediaadvertising(€0.7billion).PublicradiobroadcasterFranceRadiocarriesa
portfolioofgeneralandspecialinterestchannelsandattainsacombinedaudience
shareof21%.RTListhelargestcommercialradiogroupandonlyslightlybehind
publicradiointermofaudienceshare(19.2%).MoreoverRTLhasthemostpopular
radiostationRTLradio,which13%oftheFrenchpopulationlistenstoregularly.
DigitalTerrestrial
34%
AnalogueTerrestrial
20%
PaySatelite24%
Cable6%
DSL16%
AccesstoFrenchTV
‐88‐
OthersignificantcommercialoperatorsareNRJGroupandLagardère(Médiametrie,
2008).
Figure4‐26Frenchradiomarketshare,Source:Mediamétrie2008
TogetherthefourlargestcommercialoperatorsattractmorethanhalfoftheFrench
radioaudience(54.4%).
4.3.3.3 Writtenpress
ComparedtoGermanyortheUK,theFrenchnewspapermarketissmallandconsists
oftennationalnewspapersand62regionalnewspapers.Thedailycirculationofall
Frenchnewspaperstotals8mperday,whichisonethirdofGermanyandhalfofthe
UK.Thissituationissometimesattributedtothetightcontrolexercisedbythe
Frenchworkers’unionLeLivre,whichhassetrigidworkinghoursandstrict
protectionsfortheproductionofprintworks.Thismakesproducinganewspaperin
FrancemoreexpensivethaninotherEuropeancountries(Chrisafis,2008).Another
strikingfeatureofthemarketistheabsenceofabigdailytabloidnewspaper.The
biggestsellingtitleistheregionalnewspaperOuestFrance(OJD,2008).In2008the
toptennewspaperswere(regionalnewspapersshadedgrey):
Localsta�ons14%
Publicradio21%
RTL19%
NRJ16%
Lagardère14%
NextRadio5%
other11%
Frenchradiomarketshare
‐89‐
Title Publisher Circulation(in
1.000)
OuestFrance GroupeOuestFrance 772
LeParisien/Aujourd’hui GroupeAmaury 512
LeFigaro Socpresse/GroupeDassault 320
L’Equipe GroupeAmaury 311
SudOuest GroupeSudOuest(Lemoine) 308
LeMonde GroupeLaVie‐LeMonde 300
LaVoixduNord GroupeLaVoixduNord 282
LeDauphineLibéré GroupeEBRA 239
LeProgres GroupeEBRA 214
LaNouvelleRepubliquCentreOuest GroupeNRCO 208
Figure4‐27TopTenFrenchnewspapers,Source:OJD2008
DuetothespecificstructureoftheFrenchnewspapermarketandthestrong
positionofregionalandlocalpublishers,thereisnodominatingplayeronthe
newspapermarketandtheaudiencesharesaremoreorlessevenlydistributed.The
fivebiggestpublishersaccountforslightlymorethan50%ofthenewspapermarket,
noneofthemexceeds15%marketshare.
‐90‐
Figure4‐28Frenchnewspapermarketshare,Source:owncalculations
Incontrasttothenewspapermarket,theFrenchmagazinemarketisoneofthe
biggestinEurope.About40mcopiesareactivelypurchasedeveryweek,fivetimes
asmanyasnewspapers(OJD,2008).Althoughtherearenonumbersavailableon
marketsharesofthebiggestpublishersitisunderstoodthatHachetteFilipacci
publishers(whichbelongtotheLagardèregroup)areundisputedmarketleaders,
followedbythePrismaGroupandMondadoriGroupcontrolledbytheItalian
Fininvest,whichbelongstoSilvioBerlusconi.(Albarran&Chan‐Olmsted,1998,p.
188).
4.3.3.4 Online
InMarch2009thetoptenFrenchonlinecontentproviderswere(domesticplayers
shadedgrey):
Propertyname Uniqueclientspermonth Reach/marketcoveragein%
Google 25,445 84.98
GroupeOuestFrance13%
GroupeEBRA12%
GroupeAmaury11%
GroupeSudOuest8%
GroupeHersantMedia8%
other48%
Frenchnewspapermarketshare
‐91‐
Microsoft 24,718 82.55
FranceTelecom 18,077 60.37
Iliad 12,817 42.8
PagesJaunes 12,197 40.74
eBay 12,065 40.29
Yahoo! 11,979 40.01
GroupeTF1 11,582 38.68
GroupeLagardere 11,572 38.65
BenchmarkGroup 11,277 37.66
Figure4‐29Topteninternetmarketersandproviders,Source:NielsenOnline2009
TheOJDalsopublishesonlinerankings,however,nodataonuniqueclientsis
available.AccordingtotheOJD,thewebpresenceoftheprivateradiostation
Skyrock,whichbelongstotheOrbusgroupownedbyinsurancecompanyAxa,had
byfarthemostvisitspermonthin2008(OJD,2008).
‐92‐
4.3.4 Europe
Duetostructuralandculturalreasons,(forexampletechnicalandlinguisticbarriers,
seechapter6)mediamarketshavebeenstronglytiedtonationstateswhichiswhy
thereareonlyafewtransnationalEuropeanmediacompanies(seeFigure9‐1).
Governmentderegulationandconvergenceofmediasectors,however,have
facilitatedtheformationofpan‐Europeancorporationsandhaveledtonon‐EU
investorsenteringtheEuropeanmediamarkets.InparticularEasternEuropean
countries,manyofwhicharestillinaperiodofeconomictransitionhavebeen
persistenttargetsforcrossborderinvestment.
Theonlyrealconglomerate,operatinginallmediasectorsistheGerman‐based
Bertelsmann,theworld’sthirdlargestmediagroupwitharevenueofmorethan
€15bn,whichownsEurope’sbiggestTVoperatorRTLandEurope’sbiggestpublisher
ofmagazinesGruner+Jahr.TheyhavebeenactiveinanumberofEuropean
countries,mainlyinGermanyandtheUK.
ThenumbertwoinEuropeisFrench‐basedVivendigroup,whichhastaken
convergencefurthestandintegratedfilm,music,mobilecommunication,publishing,
themeparksandarangeofnon‐mediaactivitiesintheirportfolio.However,only
42%ofVivendi’srevenueofmorethan€20bnisaccountedforbymediaoperations.
ThirdrankedGroupeLagardèreisalsobasedinFranceandmainlyactiveinthe
publishingsector.Itsrevenuecomescloseto€14bn,58%ofwhichisaccountedfor
bymediaactivities.
TheCouncilofEurope(2004)listedotherconsiderabletransnationalmedia
businesses:
• PublishersSpringer,WAZandRingierfromGermanyandSwitzerlandhave
achievedinfluentialpositionsonCentralandEasternEuropeanmarketsin
thepublishingandpresssegmentsrespectively.
• RupertMurdoch’sNewsCorp.,alreadyactiveinthepressandtelevision
marketsofAustrialia,theUSandtheUnitedKingdomexpandedtotheItalian
marketandannouncedplanstoacquireGermanpayTVoperatorPremiere
‐93‐
(seechapter4.3.1.1)
• AftermergingwithScandinavianbroadcastingGroupSBStheGerman
ProsiebenSat.1MediaholdsinterestsacrossvariousEuropeancountries.
• CME(CentralEuropeanMediaEnterprises)ownsseveraltelevisionstationsin
sevenCentralandEasternEuropeancountries.Inearly2009US‐basedTime
Warner,inc.,theworld’sbiggestmediacompany,announcedthatitintends
toacquireastakeof31%inthecompany(Tomasova,2009).
OveralltheEuropeanmediamarketsarestillverymuchdominatedbydomestic
players,withexceptionsinsomeEasternEuropeancountries.However,thereallevel
ofcrossborderinvestmentissometimesconcealedbycomplexlegalconstructions
whichraisestheneedfortransparencyonthismatterinordertoassessthetrue
extentoftransnationalmediaconcentration.
‐94‐
5 Currentregulationsofmediaownership
Therearemanywaysinwhichsocietylimitsbusinesspracticesforthesakeofthe
publicinterest‐fromthebroadinstitutionalizationoflabourlawsinEuropeinthe
mid19thcenturytotheinternationalintroductionofenvironmentallawsatthe
beginningofthe20thcenturytonewlyestablishedfinancialregulationsinthewake
theglobaleconomiccrisisattheendof2008,thereisalonghistoryofregulatory
measures.Regardlessoftheirbusiness,companieshavetooperatewithinadynamic
frameworkofsocialandpoliticalconstraints(Croteau&Hoynes,2006).Regulations
arebasedonthebroadconsensusontheconceptonthepossibilityofmarketfailure
andtheincreasinglyimportantideathatsuccessofcompaniescannotbeassessed
solelybytheirprofits,whichmeansthatotherfactorsneedtobeincorporatedinthe
evaluationinordertosee“thebiggerpicture”.Thereisavarietyofstakeholders
whohaveaninterestintheactionsofamediacompanyandparticulartheshapeof
theregulationitisfacedwith.
Figure5‐1Stakeholdersofmediaregulation,Source:ownillustration
mediacompany
employees/journalists
owners/investors
partners/advertisers
competitors
consumerssociety
government
lobbyists/publicrelations
politicians
‐95‐
Theinterestsofthevariousstakeholdersareveryheterogenous.Forexample,
journalistmaybeworriedabouttheirjobs,whilepoliticianwanttohaveastrongally
inacampaignandcompetitorsseektogainmarketshareattheexpenseofother
mediabusinesses.Touniteallthesedifferentinterestswithinoneregulatory
framework(spanningacrossdifferentnationsincaseoftheEU)isverydifficultand
requiresconsiderablecompromises.Theconceptofmediagovernance(seechapter
5.3)providestheoreticalbackgroundonthisissue.
InthispaperIwillfocusonlegalmethodsofregulationcarriedoutbynationaland
internationalauthorities.Theymaychoosebetweendifferenttoolsofregulation
suchasrulesandregulations,publicownership,expenditure(subsidies)andtaxation
(Lipsey&Chrystal,1995,p.425).LipseyandChrystalcallinterventionstoprevent
firmsfromengaginginanti‐competitivepracticessuchascolludingormerging
unnecessarilythe“leaststringentfromofgovernmentregulation”,asopposedto
fixingparticularpricesordefiningtheconditionsofentryandexittoamarket.Laws
andotherinstrumentsthatareusedtoencouragecompetitionanddiscourage
monopolypracticesmakeupcompetitionpolicyandareusedtoinfluenceboththe
marketstructureandthebehaviouroffirms(Lipsey&Chrystal,1995).Antitrust
measures,regulationsofownershipandlimitsontheexertionofmarketpowerare
someoftheseconstraintstobeanalysedmorecloselyinthischapter.
Inacademicliterature,themajorityofassessmentsoftheimpactofconcentrationof
mediaownershipfocusexclusivelyoneconomicaspects.Someauthors(forexample
Compaine,2000)defendthisapproachfortwomainreasons.One isthealignment
withmethodsofevaluationusedbycurrentantitrust legislationwhichiscombined
with the persistent view that historically, antitrust law is bound to embody socio‐
political values in addition to the mere restriction of monopolistic pricing power
(Baker, 2007, p. 65). Secondly an economic approach employs “criteria that are
relatively identifiable, quantified and validated” (Compaine, 2000, p. 555). This
providesaquickoverviewof thenumberand strengthof forcesatplay inagiven
market.
‐96‐
Forothers(forexampleBaker2007)theassumption,thatcompetitionlawprovides
appropriatemeasurement(andremedy)formediaconcentrationiswrong,sincethe
mere act of preventing an “entity fromamassing sufficient economic power […] is
certainly a legitimate goal by itself but is has no necessary correspondence to
avoidinganobjectionabledistributionofinfluenceoverpublicopinion”(Baker,2007,
p.56)whichwouldconstituteathreattomediapluralism.Therefore,theycallfora
multi‐valueapproach,whichalsoincludesrelevantsocio‐politicalconcerns.35
35 Knoche adds that an exclusive focus on economic aspects further establishes the role of communicationssciencesasameredocumentorofcompanyrankings.Ineffectmoreandmoreresearcheskeeptodescribingthesymptomsoftheproblemratherthananalysingthecausesandconsequences(Knoche,1996,p.103).
‐97‐
5.1 Nationalregulations
5.1.1 LegislationinGermany
GermanyhasprotectedthefreedomofthepressinthesecondsentenceofArt5Par
1GGinitsconstitution.Thislegitimizeslegislatorstoconfinebusinessinterestsfrom
threateningmediapluralismandobligesthemtoconsiderthenatureofmediaupon
regulatingcompetition(BundesministeriumfürJustiz,2004,p.38).However,the
GermanFederalConstitutionalCourtBVerfGEhasrepeatedlyproddedtothe
reciprocationbetweenmarketcompetitionandpluralism.Germanlawdifferentiates
betweenprintmediaandbroadcastmedia.ThefederalcartellawGesetzgegen
Wettbewerbsbeschränkungen(GWB)withitsspecialprovisionsformediacompanies
appliestoboth.Additionally,broadcastmediahavetocomplywiththe
Rundfunkstaatsvertrag(RStV),whichestablishesfurtherlimitsonmarketpower.The
scarcityoffrequenciesandthehighsetupcostsofbroadcastmediaweretwo
argumentstojustifythenecessityoftreatingbroadcastmediadifferentlyandto
applytighterregulationthanforprintmedia.Moreimportantlyhowever,the
BVerfGEhasclearlystatedtheneedforprecautionarymeasuresinordertoprotect
broadcastmediafromanyeffectsofmarketfailure,sinceabasicsupplyof
informationandothercontenthastobeguaranteedregardlessofeconomic
constraints(KEK,2000,p.49).Duetothecoexistenceofpublicandprivate
broadcasters,theBVerfGEregardsspecialregulationforbroadcastmedianotasan
infringementinthefreedomofthepressbutasanecessarymeasuretoguarantee
thisfreedom(Lehrke,2006,p.173).
5.1.1.1 Competitionlaw
Mergersareregulatedin§§35‐41GWB.Thelawdefinesamergerin§37GWBasany
acquisitionofassets,controloverofrightsorcontractsorsharesexceeding50%of
thecapitalor25%ofthecapitalandthevotingrights.Thelawwillalsobeappliedto
anyattemptstoavoidandbypassthelegaldefinitionofamerger(i.e.acquiring
‐98‐
24.9%)whilegainingthesamefactualpower.Governmentapprovalhastobegiven
formergersofcompanieswithcombinedworldwideturnoverexceeding500mEuro
andcombineddomesticturnoverexceeding25mand5mEuro.Incaseboth
conditionsarefulfilledapprovalwillonlybegrantedwhentheFederalMonopolies
Commissionaccordingto§36Par1GWBdecidesthatthenewentityhasno
potentialofmarketdominanceorthecompaniesprovethatthebenefitsto
competitionresultingfromthemergeroutweightheillsofmarketdominance.
Marketdominanceisdefinedin§19GWBwhichcontainsavarietyofhorizontaland
verticalcriteriatobeapplieddependingontheindividualcase,suchasmarketshare,
accesstosupplymarkets,abilitytoerectbarriersofentry,levelofcompetition.The
relevantmarketisdefinedbythenatureofgoodsproducedortradedandby
geographicalfactors.Formediacompanies(producersanddistributorsof
newspapers,magazinesandbroadcastedcontent,aswellassellersofairtimefor
advertisement),§38Par3codifiesmuchlowerlevelsofturnoverinorderto
constitutethenecessityofgovernmentapproval.Exceedingonetwentiethofthe
turnoverlimitofotherindustriesissufficient,whichmeansthebarriersformedia
companiesareworldwideturnoverof€25manddomesticturnoverof€1.25m.
TheregulationoftheGWBisviewedaseffectivebyGermanpolicymakers,however
bigpublishinggroupssuchasAxelSpringer,BauerandHoltzbrinckhaverepeatedly
pushedforaliftofthestrictregulationforthesakeofcompetitivenessofthe
Germanpressinthewakeofglobalisation.SomeBundesländerhavesuggestedthe
introductionofmeasuresinordertostrengthenthepluralismofopinionswithin
mediacompanies,themajorityofwhichhavenotprovedpracticableyet
(BundesministeriumfürJustiz,2004,p.53).
5.1.1.2 Lawforbroadcastmedia
Forhistoricalreasonsbroadcastingregulationfallsundertheauthorityofthe
Bundesländerwhichhaveagreedonamultilateralcontracttoaddressthelegal
issuessurroundingbroadcastmedia.Thesafeguardingofpluralismisregulatedin
§§25‐34RStV.Anindependentregulatoryauthority(KEK)andtheassemblyofthe
‐99‐
mediaauthoritiesoftheBundesländer(KDLM)areinchargeofmonitoring
concentrationofbroadcastmediaandtakingactionifnecessary.Private
broadcastersneedtobelicensedandareobligedtoadequatelyconsiderthemost
importantpoliticalandideologicalforcesinthecountryintheirprogrammes.The
numberofprogramme‐licencesforacompanyisunlimitedunlessitattainsa
dominantinfluenceovertheexpressionofopinions.Havingadominantinfluenceis
definedas
• reachingmorethan30%ofviewers36inoneyearor
• reaching25%ofviewersinoneyearwhilstholdingadominantmarket
positioninarelatedmarketor
• takingallotherrelevantactivitiesintoaccount,achievingastatussimilarto
reaching30%ofviewers.
Programmesofothercompaniesofwhich25%ormoresharesareheld,or
significantcontrolsimilartothatcanbeexercisedareattributeddirectly.
Thethirdpointiscrucial,sincetheachievementofadominantpositionmaybe
realizedwellbelowthe30%markthroughmeansofverticalintegrationandthe
creationofbarriersofentry(KEK,2000,p.56).Forexamplein2005theKEK
prohibitedAxelSpringerfromtakingoverProsiebenSat.1Mediabecause,although
thenewgroupwouldeffectivelynotcrossthe25%audiencesharemarkonthe
televisionmarket,itsdominantinfluenceonthepresswouldhanditthesame
influenceonpublicopinionasamediagroupwitha42%TVaudienceshare.
TheRStVdoesnotprohibitanylegallyspecifiedcrossmediaconcentrationactivities
butwillconsiderothermediamarkets,whicharerelatedtotelevision.Related
marketsmaybeadvertisement,radio,printmedia,rightsdistribution,production,
online‐mediaorelse.Ultimately,uponevaluationofarelatedmarket,theBVerfGE
ruledthatcomparablefeatureswithregardtoinfluencingandshapingopinionsbe
assessed.Thesecomparablefeaturesincludesuggestivepower,massappealandup‐
36Insomecasesadominantinfluencemaybeachievedatalowermark,however,theKDLMhasdefineda28%audienceshareasthelowestlevelatwhichadominantinfluencemayeffectivelyberealizedandtheregulationofthebroadcastingactmaybeapplied(KEK,2000p.58)
‐100‐
to‐dateness.Theaveragetimespentonconsumptionisnotrelevantinthismatter,
sincethemodeofconsumptiondiffersheavilybetweenvarioustypesofmedia
(press,radio,TV)intermsofattention,activityandeffort.Whetheradominant
positioninanyoftheserelatedmarketsisachievedisassessedthroughthecriteria
of§19GWBoutlinedabove.Itisessentialtodifferentiatebetweentherelevant
marketwithregardtotheevaluationwhetheradominantpositionhasbeen
establishedandtherelatedmarketwithregardtothenatureofmediagoodsand
services.
Interestingly,theRStVnotonlyprohibitsexternalgrowthsuchasmergersand
acquisitionsbutalsointernalgrowth,incaseacompanyexceedsthemarkof30%
audienceshare.Ifnoagreementbetweentheregulatorandthecompanycanbe
achievedtoaddresssuchasituationthestatemediaauthorityinchargemaytake
awayasmanyprogrammesasnecessarytorevokethedominantinfluence.
‐101‐
5.1.2 LegislationintheUnitedKingdom
Theconstitutionalfoundationofpressfreedomandmedia‐relatedregulationinthe
UKisdifferentfromotherEuropeancountriesduetotheBritishtraditionofcommon
law.Commonlawreferstoalegalsystem,whichisbasedondecisionsofcourts
ratherthanwrittenstatutes.Britaindoesnothaveacodifiedconstitutionbuthas
safeguardedthefreedomofopinion,informationandpressintheCivilLiberties.
However,thesearenotlegallybindingfortheUKlegislators,who–deiure–could
defythemanytime37.Yet,duetotheUK’sintegrationinthelegalframeworkofthe
EU,BritishlegislationhastocomplywithECandEUtreatiesandissubjecttorulings
oftheEuropeanCourtofJustice.Moreover,theUKissignatorytotheECHRandhas
included,amongmostotherprovisions,thefreedomofexpressioninSection12of
theHumanRightsAct1998.
In2003theUKintroducedarevisedandliberalizedlegalframeworktoaddress
concentrationofmediaownership.Atthattimethegovernmentsoughttoretaina
toughstanceonjointownershipofnewspapersandmassappealpublictelevision
stationswhilerelaxingmostotherrulesinordertoattain“healthycompetition”
throughderegulation(Ofcom,2006,p.9).Insteadofspecifiedlimitsformedia
mergers,moreauthoritywashandedtotheCompetitionCommission.Accordingtoa
regulatoryassessmentbyOfcom,theoverallaimwastopromotepluralityofnews
sourcesratherthandiversityofmediaentities(Ofcom,2006,p.6).However,dueto
theabsenceofagenerallyacceptedwaytomeasureviewpointplurality,ownership
pluralitywasretainedasthebestapplicableproxy.
Therearecurrentlyfourmainpiecesoflegislationgoverningtheregulationofmedia
ownershipintheUK:
37ThisstemsfromthetraditionalwaytheunwrittenEnglishconstitutionwasunderstoodtooperate.Thefreedomofindividualactionispresumednottobebasedonideasofpositivehumanrightsbutonnegativeliberties–subjectsareentitledtodowhateverisnotforbiddenbylaw.ThisnotionturnedouttobeparticularlyproblematicwhenlinkedwiththesovereigntyofParliament,whichineffectwouldbefreetorestrictindividuallibertiesanytimebypassingthenecessarylegislation(Slapper&Kelly,1999p.23)
‐102‐
• theCommunicationsAct2003,whichhasestablishedstatutoryduties
regardingthesafeguardingofmediapluralismfortheregulatoryauthority
Ofcomandupdatedsomeprovisionsof
• theBroadcastingAct1990,whichstipulatesrestrictionsoneligibilityfor
holdingabroadcastlicence
• theEnterpriseAct2002whichappliestogeneralcompetitionissuesand
allowstheSecretaryofStatetoorderapublicinteresttestformediamergers
• theMediaOwnershipOrder2003,whichintroducedapointsystemto
addressownershipoflocalradiostations
EverythreeyearstheOfcomisrequiredtorevisetherulesonmediaownershipand
reporttotheSecretaryofState,givingrecommendationswhethertoamendor
repealcertainmeasuresofregulation.Ofcomwasestablishedasabodycorporateby
theOfficeofCommunicationsAct2002.ItistheregulatorfortheUK
communicationsindustries,withresponsibilitiesspanningacrosstelevision,radio,
telecommunicationsandwirelesscommunicationsservices.
5.1.2.1 CompetitionLaw
MergersareregulatedinPart3oftheEnterpriseAct2002Thelawrequiresthe
OfficeofFairTrade(OFT)tomakeareferencetotheCompetitionCommissionif,
accordingtoSection23(1),twoormoreenterpriseshaveceasedtobedistinct
enterprises(i.e.theyarebroughtundercommonownershiporcontrol)andthe
valueoftheturnoverintheUnitedKingdomoftheenterprisebeingtakenover
exceeds£70m(€80m)orthenewlyformedenterprisecontrolsatleast25%ofthe
relevantmarket.Thereareexceptionsifthemergerisnotofsufficientimportanceto
justifythemakingofareferenceortheconsumerbenefits(lowerprices,better
quality,greaterchoice)outweighthesubstantiallesseningofcompetition.The
SecretaryofState,however,hasthepowertogiveaninterventionnoticetotheOFT
andorderapublicinterestconsideration(Section42(2))andsubsequently,referthe
casetotheCompetitionCommissionevenifthelegalthresholdsofSection23would
notbemet.ThepublicinterestconsiderationwouldrequireaconsultationofOfcom
andanassessmentoftheaccuratepresentationofnews,thefreeexpressionof
opinionandthepluralityofviews.
‐103‐
Thelawisgenerallyappliedtoallmediamergers.Inthepast,duetospecific
provisionsforbroadcastmediaitwasmostlyappliedtonewspapermergers,noneof
whichwereprohibited.
Priorto2003allnewspapermergersweresubjecttoapublicinteresttest(underthe
FairTradeAct1978).DuetothedeminimisrulesofSection23inplacenow,thetest
willbeconductedforlargermergersonly.
5.1.2.2 Lawsforbroadcastmedia
Schedule2oftheBroadcastingAct1990namesarangeofinstitutions,whichare
disqualifiedfromholdingabroadcastlicenceinthefirstplace.
Generallydisqualifiedare
• localauthorities
• politicalorganisations
• theBBC(whichobtainsitslicenceunderadifferentlegalprovision)
• theWelshAuthority;
• advertisingagencies
• personswhoaresubjecttoundueinfluencebyadisqualifiedpersonsuchas
toactagainstthepublicinterest.
Disqualifiedforcertainbroadcastlicences(particularlynationalradioandChannel3
andChannel5licences)are
• religiousbodies
• publiclyfundedbodies,whichreceivemorethan50%offundingfromthe
public
• BBCandChannel4/S4Csubsidiaries
• nationalpublictelecommunicationsoperatorswithannualturnoverinexcess
of£2bn
Thosewhoareeligibletoholdabroadcastinglicencehavetocomplywithasetof
crossownershiprestrictions.Mostnotably,Par1ofSchedule14ofthe
CommunicationsActstipulatesthatnoproprietorofanationalnewspaper,which
‐104‐
hasamarketshareof20%(measuredbycirculation),mayobtainaChannel3(oneof
15regionalITVstations)TVlicense.Thesameappliesincasearegionalnewspaper
reachesthe20%thresholdinthecoveragearea.Holdingsharesinabodycorporate
thatobtainedaChannel3licenseispermittedforthesenewspaperproprietorsonly
uptoa20%limit.Similarly,theholderofaChannel3licencemaynotacquirean
interestof20%ormoreinabodycorporaterunningoneormorenational
newspaperswithanaggregatemarketshareof20%ormore,orinabodycorporate
runningoneormoreregionalnewspapersreachingthesamethresholdinthe
coveragearea.
Section9oftheMediaOwnershipOrder2003specifiesanothercrossmedia
ownershipprohibition.Nopersonmayholdalocalradiolicenceandanda
localChannel3TVlicencewhilebeingadominantlocalnewspaper(50%market
shareormoreinthecoverageareaoftheradiolicence)providerin
thesamearea.Whetheranewspaperistobeconsiderednationalorregionalis
determinedbyOfcom.
TheChannel3licenseholdersarealsoobligedtoappointanAppointedNews
Provider(ANP),whichprovidesnationalnewsonallITVbroadcastingstationsand
hastobeindependentfromtheBBC.ThejustificationforthisobligationisthatITV,
asthelargestcommercialtelevisionchannel,hasanespeciallyimportantroletoplay
inensuringpluralityintheprovisionofnews(Ofcom,2006,p.24).Itisimportantto
notethatthesamerestrictionsapplyinrespectoftheChannel3appointednews
providerasforholdersofChannel3licences,assetoutinSchedule14ofthe
CommunicationsAct2003.
Forradiobroadcastersother,morecomplexrulesapplydependinguponwhether
thelicenceisananalogueordigitallicenceand,inthecaseofdigitallicences,
whetheritisamultiplex38orasoundprogrammeservicelicence.
TheMediaOwnershipOrder2003introducedapointssystemtobeapplied
prospectivelyinordertomeasuretheinfluenceonpublicopinionofoverlapping
38amultiplexreferstoasystemwheremultipleaudiostreamsarecombinedbymeansofcompressionwhichallowsconsumerstoautomaticallytunetoalltheavailablestations,choosingfromalistofallstations
‐105‐
radiobroadcasters.Section8providesanexample:
Descriptionoflicence Numberofpoints
Thelicenceinquestion 4pointsEachlocalsoundbroadcastinglicenceunderwhichisprovidedaservicewhosepotentialaudienceincludes75%ormoreofthepotentialaudienceoftheserviceinquestion
4points
Eachlocalsoundbroadcastinglicenceunderwhichisprovidedaservicewhosepotentialaudienceincludesatleast25%of,butlessthan75%of,thepotentialaudienceoftheserviceinquestion
2points
Eachlocalsoundbroadcastinglicenceunderwhichisprovidedaservicewhosepotentialaudienceincludesatleast5%of,butlessthan25%of,thepotentialaudienceoftheserviceinquestion
1point
Figure5‐2UKradioownershippointssystem,Source:MediaOwnershipOrder2003
Underthissystemapersonwhoholdsatleasttwolocalradiolicensesmaynotbe
permittedtoobtainanotheroneifthatwouldmovehisshareofthetotalpoints
availableintheregionpastthe55%mark.Themarkisloweredto45%incasethe
holderwouldbeapersonwhoisthedominantlocalnewspaperprovider,orthe
holderofalocalChannel3televisionlicence,regardlessofwhetherheownsthe
otheroverlappingradiostationsornot.
Comparablerulesapplyforlocaldigitalsoundprogrammeservices(DSPS)and
multiplexes.Thebasicrulestatesthatnopersonmayprovideanadditional
DSPSincasehealreadyholdsholdmorethanfourlicencesonarelevantmultiplexor
anoverlappingmultiplexand,asaresultoftheadditionalDSPSlicencehewould
holdmorethan55%ofthetotalpointsintherelevantarea.
Centraltothenewlegislationwastheunderlyingconceptofthreemediavoicesin
eacharea.Whetherthisconceptisapplicableforverysmallregionalmarkets
ortheallowanceofsynergiesoflocalnewsprovidersmightinducebetterservice
withoutconstitutingathreatforpluralityremainstobeseen.Initslatest
consultationin2006Ofcomproposednochangestotheregulations.
Non‐nationalrestrictionsonmediaownership,particularlythedistinctionbetween
Europeanandnon‐Europeanownershipweredroppedin2003.
‐107‐
5.1.3 LegislationinFrance
TheFrenchconstitutiondoesnotcontainabillofrights,whichmeansthereisno
codifiedrighttofreedomofexpression,opinionandpress.Initsrulingsonmedia
concentration,theFrenchSupremeCourtConseilConstitutionnelhastherefore
resortedtoArt11oftheDéclarationdesdroitsdel'hommeetducitoyende1789
whichismentionedinthepreambleoftheFrenchconstitution.
Art11reads:“Lalibrecommunicationdespenséesetdesopinionsestundesdroits
lesplusprécieuxdel’Homme:toutCitoyenpeutdoncparler,écrire,imprimer
librement,saufàrépondredel’abusdecetteliberté,danslescasdéterminésparla
Loi.”
TheConseilConstitutionnelinterpretsthisrulingastoalsoembodyfreedomof
disseminationofcontentbymediainstitutions(Holznagel,1996,p.106).Ina
decisionregardingaudiovisualcommunicationtheConseilConstitutionnelhas
adjudgedthatoneofthedutiesofthelegislatorwithrespecttoArt11istoprotect
andguaranteethepluralityofopinions(Loisurlacommunicationaudiovisuelle,
1982),whichlateronwasdefinedasrequiringaholisticapproachtoregulation
beyondtheaudiovisualmediasector(KEK,2000,p.398).
Therearethreepiecesoflegislationgoverningtheregulationofmediaownership.
• TheLoin°2001‐420du15mai2001relativeauxnouvellesrégulations
économiques(NRE)ofthecommercialcode,whichlaysoutgeneral
regulationsforcompetitionbutdoesnotincludespecificprovisionsformedia
andisthereforerarelyappliedtomediamergers
• TheLoin°86‐1067du30septembre1986relativeàlalibertéde
communication(LLC)whichdefinesacomplexsetofrulesrestricting
ownershipbasedonshareofcapitalorvotingrightsofamediainstitutions
ratherthanmarketshareoftheinstitutions(contrarytoGermanyandUK).
• TheLoin°86‐897du1août1986portantréformedurégimejuridiquedela
pressewhichregulatesmediaownershipofthepress
‐108‐
5.1.3.1 Competitionlaw
UnderthepresumptionofArtL430‐1ofthecommercialcodeaconcentrationis
deemedtoariseunderFrenchlawwhentwoormorepreviouslyindependent
undertakingsmergeoroneormorepersonsalreadyholdingcontrolofatleastone
undertakingacquirecontrolofallorpartofoneormoreotherundertakings,directly
orindirectly,whetherbytheacquisitionofaholdinginthecapitalorbypurchasing
assets,acontractoranyothermeans.Theacquisitionofcontrolmaybeconstituted
byrights,contractsorelseandisdefinedasanycourseofactionleadingtoa
situationwhichconfersallthepossibilityofexercisingdecisiveinfluenceonan
enterprise.AlegaldefinitionisprovidedbyArtL233‐3.
Incasethemergerconstitutesa
• combinedaggregateworldwideturnoverofallofthecompaniesorofallof
thenaturalpersonsorlegalentitiesinvolvedinthemergergreaterthan
€150mora
• combinedaggregateturnoverachievedinFrancebyatleasttwoofthe
companiesorgroupsofnaturalpersonsorlegalentitiesconcernedgreater
than€50m
theMinistryofEconomyhastobenotifiedpriortocompletionofthemerger
accordingtoArtL431‐3.Failuretodosomayleadtoasubstantialfinancialpenalty
ofupto5%oftheannualturnover.IftheMinistryconsidersthemergertoadversely
affectcompetition,thematterhastobereferredtotheCouncilonCompetitionfor
anopinion.TheCouncilmaythenproposespecificmeasuresinordertoremedy
adverseeffectsoncompetition.
5.1.3.2 Lawsforprintandbroadcastmedia
Forprintmedia,Art11oftheLoin°86‐897du1août1986prohibitsanyperson,
grouporbodycorporatefromobtainingcontroloverageneralinterestnationaldaily
newspaperincasethiswouldhandtheperson,grouporbodycorporatecontrolof
over30%ormoreofthetotalcirculationofFrenchgeneralinterestdaily
newspapers.Art7ofthesamelawprohibitsforeignersfromobtainingmorethan
‐109‐
20%ofsharesorvotingrightsofamediacompanyinvolvedinpublishingFrench
languagecontent.Foreigninthiscontextreferstonon‐EUnationalitiessincethelaw
issubjecttotheinternationalcommitmentsundertakenbyFranceinordertoensure
conformitywithECtreaties.
AccordingtoParaschos(1998)therearetwojustificationsforthisrule.Firstlyafear
ofdilutionofculturalvaluesunderpowerfulforeignownership,secondlythe
opportunitytoincreasethechancesofsurvivaloffailingnewspapersandthus
maintainpluralism,whichiswhytheFrenchgovernmenthasbeensubsidizingdaily
newspaperssince1974(Paraschos,1998,p.188)39.
Theregulationofownershipforbroadcastmediadiffersaccordingtotheplatformof
transmission.ItisimportanttonotethataccordingtoArt29LLCalicencemayonly
beawardedtoabodycorporate(société)intheformofacompany,afoundationor
anassociation.Art39Par1LLCprovidesthatnoshareholdermustholdmorethan
49%ofcapitalsharesorvotingrightsinasociétéauthorizedforanationalterrestrial
broadcastserviceiftheaverageannualaudienceexceeds2.5%ofthetotaltelevision
audience,whicheffectivelyrequiresaminimumofthreeshareholdersforlargerTV‐
stations.Amaximumof50%ofsharesorvotingrightsispermittedforregional
terrestrialTVstations(servicingbetween200,000and6mpeople).Shareholders
whoholdmorethan15%inasociététhatholdsanationalterrestriallicenceare
prohibitedfromholdingmorethan15%inanothernationallicenceholdingsociété.
Similarly,shareholderswhoholdmorethan5%intwosuchsocietiesareprohibited
fromobtainingmorethan5%ofathirdone.SimilarlytoArt7oftheloin°86‐897du
1août1986noforeignnationalmaymakeapurchasethatdirectlyorindirectly
causestheshareofcapitalownedbyforeignerstoexceed20%ofthesharecapital
orvotingrightsofacompanythatholdsanauthorisationterrestrialbroadcasting
serviceprovidedintheFrenchlanguage40.
Ontopofthat,accordingtoArt41Par1LLCnoonemayholdtwoauthorisations
eachforaterrestrialnationaltelevisionservicebroadcastorsimultaneouslyhold
39Infact,inearly2009,thegovernmentannounceda€600mfinancialaidplanforthenewspaperindustry,whichincludesfreedistributionofnewspapercopiestothenation’s18‐yearoldsforoneyear(Chrisafis,2009).40Itisindisputewhetherthislimitalsoappliestocableoperators
‐110‐
authorisationforaterrestrialnationaltelevisionservicebroadcastandan
authorisationforaserviceofthesamekindotherthananationalservice(aserviceis
considerednationalifitpotentiallyreachesmorethan6mpeople).Concerningradio,
Art41Par1providesthataphysicalorlegalpersonmayonlyholdasmany
terrestrialradiolicencesasthetotalrecordedaudienceintheareasserviceddoes
notexceed150mpeople.
Forsatellitebroadcasterstherulesareslightlydifferent.Aphysicalorlegalperson
mayholduptotwolicenses.However,Art39Par2LLCprovidesthatshareholders
areallowedtoholdupto50%ofanauthorizedsociété.Incasetheyholdmorethan
onethirdofcapitalsharesorvotingrightstheyareprohibitedfromobtainingmore
thanonethirdinanothersociété.Iftheyownmorethan5%intwosocietiestheyare
prohibitedfromobtainingmorethan5%ofathirdone.
Cablelicencesarenotsubjecttoanylimitations.However,Art41Par6LLCprovides
thatitisprohibitedtoobtainanewauthorisationforacablestationifthetotal
recordedpopulationoftheareasservicedexceeds8mpeople.
InAdditiontotheprovisionsformonomedia,therearearangeofcrossmedia
ownershiprestrictions,whicharereferredtoastwooutoffourrule,since,according
toArt41LLCnonationaltelevisionauthorization(analogueordigital)mustbeissued
toacompanywhichwouldineffectholdmorethantwooutofthefollowingfour
positions:
• Beaholderofoneormoreauthorisationsfortelevisionservicesbroadcastby
terrestrialradiolinkthatallowsservicingofareaswhoserecordedpopulation
standsatfourmillionpeople;
• Beaholderofoneormoreauthorisationforradiobroadcastingservicesthat
allowsservicingofareaswhoserecordedpopulationstandsatthirtymillion
people;
• Beaholderofoneormoreauthorisationsfortheoperationofnetworksthat
distributeradioandtelevisionbroadcastingservicesbycablethatallow
servicingofareaswhoserecordedpopulationstandsatsixmillionpeople;
• Produceorcontroloneormoredailyprintedpublicationsofpoliticaland
generalinformationrepresentingmorethan20%ofthetotalcirculationon
‐111‐
thenationalterritoryofprinteddailypublicationsofthesamekind,
consideredoverthelasttwelvemonthsknownpriortothedateonwhichthe
applicationforauthorisationwassubmitted.
Similarprovisionsapplyonalocallevel.Noregionaltelevisionauthoriziationmustbe
issuedtoacompanywhichwouldineffectholdmorethantwooutofthefollowing
fourpositions:
• Beaholderofoneormoreauthorisationsfortelevisionservices,whether
nationalornot,broadcastbyterrestrialradiolinkintheareainquestion;
• Beaholderofoneormoreauthorisationsforradiobroadcastingservices,
whethernationalornot,whosetotalpotentialaudienceintheareain
questionexceeds10percentofthetotalpotentialaudiencesinthesame
areaofallpublicorauthorisedservicesofthesamekind;
• Beaholderofoneormoreauthorisationsfortheoperationofnetworksthat
distributeradioandtelevisionbroadcastingservicesbycablewithinsaid
area;
• Produceorcontroloneormoredailyprintedpublicationsofpoliticaland
generalinformation,whethernationalornot,circulatedinsaidarea.
TheLLCestablishedtheConseilsupérieurdel’audivisuel(CSA)asanindependent
bodyofregulation,which,amongotherduties,hastheresponsibilitytomonitorthe
developmentofmediaownershipinFranceandtosafeguardmediapluralism.
‐112‐
5.2 LegislationbytheEuropeanUnion
5.2.1 Existinglegislation
Duetotheprincipleofsubsidiarity,thelegislativepoweroftheEUislimited.TheEU
canonlyactonissuesassignedtotheCommunities.Art5ECTreaty(consolidated
version,formerlyArt3b)stipulates:
“TheCommunityshallactwithinthelimitsofthepowersconferreduponitbythis
Treatyandoftheobjectivesassignedtoittherein.Inareaswhichdonotfallwithinits
exclusivecompetence,theCommunityshalltakeaction,inaccordancewiththe
principleofsubsidiarity,onlyifandinsofarastheobjectivesoftheproposedaction
cannotbesufficientlyachievedbytheMemberStatesandcantherefore,byreasonof
thescaleoreffectsoftheproposedaction,bebetterachievedbytheCommunity“.
Currentlynocompetenceregardingtheintroductionofalimitofmediaownershipin
ordertoensurethesafeguardingofpluralismhasbeenassignedtotheEU.Thereis
oneprovisionunderArt151ECTreatywhichstatesthat„TheCommunityshall
contributetothefloweringofthecultureoftheMemberStates[...].[It]shalltake
culturalaspectsintoaccountinitsactionsunderotherprovisionsofthisTreaty,in
particularinordertorespectandtopromotethediversityofitscultures.“However:
Art151Par5explicitlyexcludesanyharmonizationoflawsinMemberStatesandis
limitedtoincentivemeasures.
InnearlythesamewordsinArtIII‐181oftheConstitutionalTreaty,theUnionshould
takeculturalaspectsintoaccountinitsactionunderotherprovisionsofthe
Constitution,inparticularinordertorespectandpromotethediversityofits
cultures.ThismeansthattheUnionshouldforexampletakemediapluralisminto
considerationwhenitisabouttoapplyEUcompetitionlawtothemediasector.
However,nocomplementarycompetencehasbeenconferredtotheUnion(Council
ofEurope,2004,p.16).
‐113‐
AlthoughEUcompetitionlawdoesnotincludeanymediarelatedprovisionsit
contributestosecuringcompetitionintheEuropeanmarket,albeitonlyfroman
economic/marketpointofview.Mergersandacquisitionsofmediacompaniesor
companiesinanyotherindustryaretreatedequally.Art81and82ECTreatyboth
providegeneralprinciplesregardingtheapplianceofcompetitionlaw,prohibiting
collusionsandtheexploitationofdominantmarketpositions.However,these
Articlesdidnotpermitasystematicandholisticapproachtocompetition,whichis
whytheCommissionintroducedtheCouncilRegulation(EEC)No4064/89of21
December1989onthecontrolofconcentrationbetweenundertakingstomakethe
ArticlesoftheECTreatyapplicabletomergersof“communitydimension”.
Communitydimensionisconsideredtobe(EuropeanCommission,2005):
• thecombinedaggregateworldwideturnoverofallthecompaniesismore
than€5bnand
• theaggregateCommunity‐wideturnoverofeachofatleasttwoofthe
companiesismorethan€250m,unlesseachofthecompaniesachievesmore
thantwo‐thirdsofitsaggregateCommunity‐wideturnoverwithinoneand
thesameMemberState.
AnymergerthatdoesnotmeetthesethresholdsneverthelesshasaCommunity
dimensionwhere:
• thecombinedaggregateworldwideturnoverofallthecompaniesismore
than€2.5bnand
• ineachofatleastthreeMemberStates,thecombinedaggregateturnoverof
allthecompaniesismorethan€100mand
• ineachofatleastthreeMemberStates,theaggregateturnoverofeachofat
leasttwoofthecompaniesismorethan€25mand;
• theaggregateCommunity‐wideturnoverofeachofatleasttwoofthe
companiesismorethan€100m;unlesseachofthecompaniesachievesmore
thantwo‐thirdsofitsaggregateCommunity‐wideturnoverwithinoneand
thesameMemberState.
MergerswithaCommunitydimensionmustbenotifiedtotheCommissionnotmore
thanoneweekaftertheagreement.Itthenmaydecidetoinitiateproceedings,ask
‐114‐
thecompaniesinvolvedtomakeadjustmentsandchangestothedealordeclarethe
mergercompatiblewiththecommonmarket(EuropeanCommission,2005).
Art21Par4ofthemergerregulationallowsMemberStatestotakeappropriate
measurestoprotectlegitimateinterestsincasesofmergersofcommunity
dimension.Thepluralityofthemediaisexplicitlymentionedasbeingalegitimate
interest.Sofartherehasonlybeenonecasewherethisprinciplehasbeenapplied
(NewspaperPublishing,1994).
SomeimprovementsweremadeinthefollowupCouncilRegulation(EC)No
139/2004of20January2004whichcameintoeffectshortlyaftertheenlargement
oftheEUandduetoincreasedcomplexityofindustrialconcentration;itadoptedthe
principleofsubsidiarity,wherebyamergerisexaminedbythejudicialauthoritybest
placedtodoso.
ThecriteriawhichmergersmustbenotifiedtotheCommissionremainedthesame
inthe2004regulation,whichmeansthatinternalgrowthsuchassettingupa
subsidiaryevenbeyondthelimitsdefinedbythemergerregulationarenotcovered.
Basedonthemergerregulation,theDGCompetitionhasdecidedonalargenumber
ofmediarelatedmergers(DGCompetition,2009),mostofthemhavebeendeclared
compatiblewiththeinternalmarketaccordingtoArt6Par1litbofthemerger
regulation.However,fivemajorcasessofarhavebeendismissed,allofthem
between1994and2000:theGermanregulatoryauthorityKEKacclaimedthatasa
“contributiontotheindirectprotectionofmediapluralism”(KEK,2000,p.75).The
fivecaseswere
• ThefoundationofMSGMediaServicebyBertelsmannandDeutscheTelekom
(MSGMediaService,1994)
• AjointventurebyNorskTelekomandTeleDanmark(NordicSatellite
Distribution,1995)
• Holland,MediaGroup,ajointventurebetweenRTL,VeronicaandEndemol
(RTL/Veronica/Endemol,1996)
• TheacquisitionofPremierebyCLT‐UFA(Bertelsmann)andTaurus(Kirch)
(Bertelsmann/Kirch/Premiere,1998)
‐115‐
• TheacquisitionofBetaResearchbyBetaTechnikandDeutscheTelekom
(DeutscheTelekom/BetaResearch,1998)
Regardingthedefinitionoftherelevantmarket,theCommissionhasrepeatedly
appliedthecriterionofapossiblesubstitutionofservicesandgoodsfroma
consumer’spointofview.Withregardtothetelevisionmarketthismeansthe
commissionfocusesprimarilyontheadvertisingmarket,itconsidersthepositionof
atelevisionbroadcasterontheviewermarketsinglyasanindicatorofthe
advertisingpowerduetothelackofeconomicexchangebetweenbroadcastersand
viewers41(KEK,2000,p.78).IngeneraltheCommissionhasattemptedtoabidebya
rathernarrowdefinitionofthemarket,whichbearstheriskoffailingtocapture
crossmediaconcentration.However,verticalintegrationofmediacompanies,which
spreadsacrossdifferentmarkets,hasbeenconsideredintheBertelsmann/CLTCase
(Bertelsmann/CLT,1996).ByandlargetheEuropeanCommissionhasconsidered
thatthreatstopluralism,arisingasaconsequenceoflargemediacompanies
extendingtheiractivityinotherStates,wouldnotraisecompetitionconcernsatthe
EUlevelbecause,beingindifferentnationalmarkets,themediacompanieswould
notbeconsideredtohaveadominantposition(CouncilofEurope,2004,p.16).
Thereforeitremainsdoubtful,whetherEUcompetitionlawinsufficientlydealing
withthethreatstopluralismwhichcross‐countryandcross‐ownershipconsolidation
ofsourcesofopinioncouldpose.
Inadditiontocompetitionregulationstherearespecificprovisionsforbroadcast
mediaintheCouncilDirective89/552/EECof3October1989onthecoordinationof
certainprovisionslaiddownbylaw,regulationoradministrativeactioninMember
Statesconcerningthepursuitoftelevisionbroadcastingactivities,commonly
referredtoastheTelevisionwithoutFrontiersDirective.Thisdirectivelaiddowna
minimumstandard,whichallEuropeanbroadcastershavetocomplywith.Ithas
beenimprovedandupdatedin1997andwasfinallyamendedintotheAudiovisual
MediaServicesDirectivein2007whichisduetobeimplementedinthenationallaw
41“Attention”isnotregardedasadequatelyquantifiableineconomicmonetaryterms
‐116‐
oftheMemberStatesbytheendof2009.Art19litboftheTelevisionwithout
FrontiersDirectiveallowsMemberStatestolaydownstricterrulesforbroadcasters
totakeaccountof“theprotectionofpluralismofinformationandofthemedia”.In
addition,severalprovisionsofthedirectiveactivelypromotepluralism:theaimof
Art4,5and6istofacilitatethecirculationofaudiovisualworksfromothercountries
andtosupportindependentproducers(EuropeanComission,2005,p.3).
IntheAudiovisualMediaServicesDirectivetheCommissionalsorequiresthe
MemberStatestochooseappropriateinstrumentstotransposeandimplementthe
legislationwithconsiderationgiventothepromotionofmediapluralism.
Moreover,theEUintroducedaregulatoryframeworkforelectroniccommunications
(Directive2002/21/ECoftheEuropeanParliamentandoftheCouncilof7March
2002onacommonregulatoryframeworkforelectroniccommunicationsnetworks
andservices),whichcomprisesaseriesoflegaltextsandassociatedmeasuresthat
applythroughouttheEUMemberStates,promotingcompetitioninordertoachieve
economicefficiencyintheinterestsofusers.Theframeworksupportsmedia
pluralismintwoways:
• Firstlythroughaccessremedies,whichlimitsthemarketpowerofthosewho
controlaccesstonetworksorassociatedfacilities.
• Secondlythroughsafeguardstoensurebasicuserintereststhatwouldnotbe
guaranteedbymarketforces,forexamplemust‐carryrules(European
Comission,2005,p.4).
OveralltheCommissionhasbeenactiveonmediaownershipmostlythroughcalling
ontheMemberStatestoconsidertheissueintheirnationalframeworks.Duetothe
limitsofitslegislativepoweritmaynotgobeyondthatstageunlessitislegitimized
todosobyaresolutionoftheMemberStates,which,however,areunwillingto
handawaycompetenceonthatmatter.
‐117‐
5.2.2 Proposals
Intheearly1990stherewereseveralattemptstointerveneontheissueof
concentrationofmediaownership.FollowingtheratificationofthefirstTelevision
withoutFrontiersdirectivein1989(whichrequiredthatatleasthalfofthe
programmingofbroadcastersbeofEuropeanorigin)theEuropeanParliamentput
outtworesolutionsandtwoworkingpapersbetween1990and1992adressingthis
issue.Moreover,theCouncilofEuropeexpressedconcernovermediaconcentration
inresolution1ofthethirdEuropeanMinisterialConferenceonMassMediaPolicyin
1991.Althoughtheyrecognizedthepositiverole,mergersplayinenablingmediato
competeinnationalandinternationalmarkets,theyfoundthepaceofconcentration
tobeprejudicialtofreedomofinformationandpluralismofopinion(Paraschos,
1998,p.182).TheycalledontheCounciltomonitorthedevelopmentof
transnationalmediaconcentrationandtheproblemsthisphenomenonmightraise
forsmallerEuropeancountries.
Inresponse,theEuropeanCommissionreleaseditsfirstGreenPaperonPluralism
andMediaConcentrationin1992(Harcourt,1998).TheGreenPaperproposedthe
optionofaharmonizationofnationalregulations,withrespecttotheprincipleof
proportionalitylaidoutintheECTreaty.Itbasedthisproposaleitheron
• adirectivelegitimatedbyArt57Par2oftheECTreaty,whichprovidesthat
“[…]theCouncilshallissuedirectivesfortheco‐ordinationoftheprovisions
laiddownbylaw,regulationoradministrativeactioninMemberStates
concerningthetakingupandpursuitofactivitiesasself‐employedpersons.”
or
• aregulation,legitimatedbyArt100aoftheECTreaty,whichprovidesthat
[…]“theCouncilshall[…]afterconsultingtheEconomicandSocial
Committee,adoptthemeasuresfortheapproximationoftheprovisionslaid
downbylaw,regulationoradministrativeactioninMemberStateswhich
haveastheirobjecttheestablishingandfunctioningoftheinternalmarket.”
Thismeansthatmediaconcentrationwouldnotbeaddressedforthesakeofmedia
‐118‐
pluralismbutratherinorderensureafunctioninginternalmarket–therewould
havebeennotcompetencetoharmonizenationallegislationsotherwise.
Theharmonizationwouldfocussolelyonnational,mediaspecificanti‐concentration
rulesinordertofirstlyfacilitateaccesstomediaactivitiesandsecondlyguarantee
pluralityofmediacontrollers.IneffecttheMemberStateswouldbeunabletogrant
anylicences,authorizationsorconcessiontomediacompaniesincasethe
harmonizedconditionswerenotmet(EuropeanCommission,1992,p.107).The
Greenpaperproposedtwovariants,onefocusingonbroadcastmediaandcross
mediaactivites(comparabletoGermany),theotheronealsoincludingmonomedia
pressactivitiesontopofthat(comparabletoFrance).
TheCommissionputthreeoptionsupfordiscussion(EuropeanCommission,1992,p.
9)withoutissuinganypreference:
I. takingnoactionincasethesituationisassessedasnottojustifycommunity
action
II. proposingarecommendationtoenhancetransparency.TheCommission
consideredthatmoretransparencyofmediaownershipandcontrolcould
facilitatethetaskofnationalregulatorsandservetocreatesolidarity
betweenauthoritiesofMemberStates.Thisactionwouldbecompletely
independentfromanyharmonization.
III. proposingaharmonizationofnationalrestrictionsofmediaownershipby
directive,regulationoreitherofthetwoinconjunctionwithaindependent
committeeintheformofaEuropeanmediacouncilcomprisedof
representativesfromtheindependentregulatoryauthoritiesofeachMember
States(whichwouldhavetobesetupincasetheydonotexist).
TheunderlyingproblemoftheGreenPaperwithregardtothesafeguardingof
pluralismwasthatitdefinedthemassmediaaspartoftheservicesindustries,which
accordinglysubjectedittoregulationbytheEuropeanUnionorgansinchargeof
ensuringagainsteconomicconcentration.Underthispremise,theEU’sintervention
onmediaownershipwaseffectivelyalwaysgoingtoberestrictedtosimply
promotingefficiencyinthedomesticmarkets.ContrarytotheEUParliament’s
‐119‐
resolution42,whichprecipitatedtheGreenPaperandwhichclearlystressedthat
“restrictionsonconcentrationareessentialinthemediasector,notonlyfor
economicreasonsbutalso,andaboveall,asameansofguaranteeingavarietyof
informationandfreedomofthepress”,pluralismwasnotthefocussinceiswas
primarilyregardedbytheCommissionasamatterfortheMemberStates.The
Commissionstatedthat“therewouldnotappeartobeanyneedforactionat
communitylevel,sincenationalmechanismsforprotectingpluralismcanbeapplied
tosituationswithacommunitydimension”(EuropeanCommission,1992,p.7).The
Commissionwouldonlyproposetotakeactioninsofarasnationalregulationswould
leadtoanyinterferewithintheareawithoutfrontiersandtheestablishmentofthe
internalmarketprovidedbyArt7aoftheECTreaty.Thiswouldincludelimitingthe
numberofmediacontrollers,whichmayhaveindirectpositiveeffectsonmedia
pluralism.Ultimatelyhowever,pluralismcannotbeconflatedwithcompetition
policy(seechapter4.2.1).
InitsintroductorystatementtotheGreenPaper,theCommissionmadeclearthatit
viewedthemanydivergentlawsandregulationsconcerningmediaownershipin
placeintheEUMemberStatesasaprobabledangertocompetitionintheinternal
market.
Several,potentiallyharmfulscenarioswereoutlined(EuropeanCommission,1992,p.
8):
• Amemberstatecouldpossiblerestrictthefreemovementofbroadcastsin
theeventofgenuinecircumventionofoneoftheselaws[i.e.abroadcaster
operatesfromaneighbourcountryinordertobypassstricterlegislationin
thecountryheisservicing]
• Theestablishmentofmediacompaniesinanothermemberstatecouldbe
limited
• Restrictionsanddistortionsofcompetitionareintroduced
• Uncertaintyinthelaw,harmfultothecompetitivenessofcompanies,could
42see Resolution on Media Takeovers and Mergers, OJ C 68/137-138, 15 February 1990
‐120‐
resultfromdivergingviewsonwhatconstitutescircumvention
• Suchlawslimitaccesstotheactivitiesandtotheownershipofthemedia,
whenaccessshouldbefacilitatedsoastopermittheestablishmentofa
singlemarketandsecurethecompetitivenessofthemediacompanieswhich
pluralismrequires.
InhisconsultationontheGreenPaperIosifides(1997)hasidentifiedtwoother
objectivesbesidestheestablishmentofasingleEuropeanmarketwhichappearto
standbehindtheapproachproposedbackthen,namelytoraisetheinternational
competitivenessofEuropeanmediacompaniesandtofacilitatetheformationofa
Europeanaudio‐visualpolicytocreateaEuropeanaudio‐visualspace43(Iosifides,
1997,p.94).Bothobjectivesareimpededbyarangeofdivergentnational
restrictions.
ThepublicationoftheGreenBookwasfollowedbyawide‐rangingconsultation
whichlastedmorethanoneyear,withseventyorganisationssubmittingwritten
statements–onefactorthatcontributedtothedifficultyoffindingconsensuson
thisissue.OptionIIIwassupportedbyboth,theEuropeanParliamentandthe
EconomicandSocialCommittee,whichadvocatedEUwidespecificlimitsonmedia
ownershipbothwithinonecountryandonatransnationallevelwithotherUnion
countries(Paraschos,1998,p.198).MostMemberStatesandthemediaindustry44
ontheotherhandfavouredoptionI.Noagreementwasinsight,whichiswhyin
1994theCommissionsubmittedaCommunicationtotheCouncil,whichcalledfor
furtherconsultationsonthematter.
TheParliament,however,continuedtocallontheCommissiontoissueadirective.
Aftermanyconsultations,in1997,theCommissionsubmittedanewtextanddrafted
adirectivetitled“MediaOwnership”,whichsuggestedachangeinthefuturegoalof
regulationbyintroducingthe“flexibilityclause,thatwouldenabletheMember
43seeBundesministeriumfürJustiz,2004p.183forfurtherelaborationonthisissueinconjunctionwithArt6EUTreaty44Theproprietorswereparticularlywaryoftakingapositionwithoutknowingtheexactcontentoftheregulationsinadvance(Iosifides,1997,p.95)
‐121‐
Statestoindividuallysetthethresholdsofconcentration,”(Harcourt,1998).
However,thisdraft45waslaterchangedtoanon‐bindingrecommendation(KEK,
2000,p.80).TheideawastodefineanEUwidestandardofa“mediacontroller”,
whichaccordingtotheconsultationwouldhaverequiredtochangetheenterprise
ownershiprulesofmanyMemberStates,sincethereisnotacommonapproachto
companyownershipacrossEurope(Watson‐Brown,2008).Moreover,thelevelof
transnationalmediaactivitywasnotconsideredsufficienttojustifyCommunity
action.
Recently,anumberofinitiativeswithreferencetoeconomicconcentrationand
mediapluralismhavebeentakenbytheEU,amongthemthe2004Whitepaperof
theEuropeanCommissiononservicesofgeneralinterestbytheCommissionand
severalreportsandresolutionbytheEuropeanParliament
TheCouncilofEuroperecognizedthatintheCommission’sapproachtowards
addressingmediaownershipthestatusquohadbeeneffectivelypreserved,sinceEC
competitionlawcontinuedtobethemaintoolforEUintervention.Howeverthelaw
takesintoaccountnon‐economicfactorsonlytoaverylimitedextent,whichmakes
itinsufficienttodealwiththethreatstopluralismwhichcross‐countryandcross‐
ownershipconsolidationofsourcesofopinioncouldpose(CouncilofEurope,2004,
p.18)
Inearly2007thisstatusquoappearedtochange,whichtolargepartsisowedtoa
newpragmaticapproachbyCommissionersVivianeRedingandMargotWallström.
UponthepresentationoftheReding‐Wallström‐approach,Redingwasquotedas
statingthat
“Whilethemediafaceradicalchangesandrestructuringduetonewtechnologyand
globalcompetition,maintainingmediapluralismiscrucialforthedemocraticprocess
45ThedraftappearedtobemodelledaftertheGermanregulationasitprohibitedbroadcastmediafromobtainingfurtherlicencesoncetheycontrolled30%oftherelevantmarket.Asimilarrulewasintroducedforthepresswiththemarksetat10%(KEK,2000,p.81)
‐122‐
intheMemberStatesandintheEuropeanUnionasawhole(EuropeanComission,
2007).
ThenewapproachcontainsthreestepsandistobeimplementedbytheTaskForce
forCo‐ordinationofMediaAffairsintheDGInformationSocietyandMedia:
1TheCommissionpreparesaworkingpaperonmediapluralism,whichoutlines
effortstopromotepluralismbythirdpartiesandorganisationsandhasabasicfirst
surveyofMemberStates'audiovisualandprintmediamarkets.
2AnindependentstudyonmediapluralisminEUMemberStatesisconductedin
ordertodefineandtestconcreteandobjectiveindicatorsforassessingmedia
pluralismintheEUMemberStates.
3TheCommissionissuesacommunicationonindicatorsformediapluralisminEU
MemberStates,tobefollowedbyabroadpublicconsultation.
Thisnewapproach,whichisnotsolelyfocusedonthefunctioningoftheinternal
marketbutondevelopingaframeworkinordertoassessandevaluatethecondition
ofmediapluralismineachmemberstatecomesmuchclosertomeetingthecallsfor
effectivemeasurestoguaranteemediapluralismbytheEuropeanParliamentand
theCouncilofEuropeinthe90s.Theapproachfollowssuggestionsmadebyatthe
LiverpoolAudiovisualConferencein2005whereaStudyconductedbytheEuropean
InstitutefortheMediaonbehalfoftheEuropeanParliamentwaspresented.This
studyfoundthatduetothevarietyofapproachestoensuringmediapluralismand
thedifferingmeasurestoassessinfluenceonthemarket(circulation,audience
share,numberoflicences,capitalshares,votingrights,advertisingrevenue,
involvementinacertainnumberofmediasectors)“itisdifficulttoproposeanykind
ofharmonizationofrulesbetweentheEUMemberStates.Thesystemshave
developedalongsideandpartlyinresponsetothenationalmarkets,whichineach
countryhavespecificcharacteristics”(TheEuropeanInstitutefortheMedia,2004,p.
222).
Redingjustifiedthenewapproachasbeingrequiredbythechallengesofmedia
convergence,whichasJust&Latzer(2000)havefound,mayfirstandforemostlead
toproblemsregardingthedefinitionoftherelevantmarketwithinnationalborders,
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partlyduetogrowingco‐opetitioninthemediasector(Just&Latzer,2000,p.404).
Thisfacilitatestheerosionofnationalrestrictionsandstrengthensthecallfor
regulatorymeasuresbeyondmemberstatelevel.
Atthemoment,steptwooftheCommission’sactionplanisapproaching
completion.InJune2009apreliminarydraftwaspublished,askingstakeholdersfor
feedbacktobeamendendinthefinalreport.Stepthreeisproposedtobecompleted
by2010.Thatmeansitmighttakesomeyearsbeforeanylegislation,whetheron
Communityormemberstatelevelonthismattercomesintoeffect.Thequestionis
whetherthisisalreadytoolate,sinceconsolidationbetweenoldmedia
conglomeratesandnewmediainstitutionshasalreadystartedtounfold.Asofnowit
alsoremainsunclearwhetherthenextCommissionstartingitsterminautumn2009
willpursuetheissueofsafeguardingmediapluralismonaEuropeanlevelwiththe
sameapproachandthesameintensity.
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5.3 MediaGovernance
Whilethereisnoinstitutionaldefinitionformediagovernance,Donges(2007)
championstheviewthatitiscomposedofelementsofregulation,controlling,
coordinationandcooperationanditsmaingoalisthecollectivesettlementof
societalissuesonalllevelsofinstitutionalhierarchy.Thereisnoconsensusamong
thedisciplinesofsocialscienceastohowthisgoalshouldbeachieved.InthispaperI
willfollowthesuggestionsmadefromapoliticsandpoliciespointofviewwhich
centrearoundtheargumentthatthegovernmentwhenitcomestoregulationand
controlofsocietyandmedia,isjoinedbyarangeofnon‐governmentalorganisations
inamulti‐layersystemofcoordination(manifestedforexamplebytheprocessof
wide‐rangeconsultationsofCommissionproposals).Whenputtoworkproperly,
mediagovernanceshouldthusencouragecitizenstoactivelytakepartintheprocess
ofregulationandcontrolofmedia.46
Therefore,(media)governancecanbedefinedasaguidelineofanalysingcomplex
structuresofcollectiveaction,asnewstakeholdersjointheprocessofpolicymaking
(Donges,2007).Particularlygivenincreasinglevelsofmediaconcentrationand
mediapower,mediagovernancethusservesasameansofdemocratisationbecause
theverynatureofgovernanceisthatmultiplestakeholderswithdiffering
preferencestakepartintheprocess.Dongespointsoutthatpreferences,inthis
context,donotrefertomaximizationofutilityonly,butalsoincludesvaluesand
ideas(Donges,2007,p.20)
Examplesofmediagovernanceputintopracticearemostlyfoundinacontent
relatedcontext:Self‐regulation(i.e.theGermanPressCouncil)andco‐regulation(i.e.
theOfficeofCommunicationintheUK)arewellknownexamplesofthisapproach.
46Schedler&Proeller(2006)havegiventheparticipationofcitizensinpublicadministrationalotofthought,albeitinamoregeneral,qualityofservice‐relatedway.Theconceptofnewpublicmanagementbuildsonindividualresponsibilitybasedonapositiveandoptimisticideaofmanwhichderivesfromtheassumptionthatproblemsolvingcapacities,judgement,imaginationandresponsibilityarenotlimitedtoelitesbutareaninnatefeatureofmostpeoplewhousuallydonotneedexternalrewardstoperformattheirbest.
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Intermsofconcentrationofownershiptherearenoeffectivegovernancemodelsin
placeinEurope.Nationaldiscussionsaside,someinstitutionssuchastheEuropean
Parliament,theTradeUnions,theEconomicandSocialCommitteeandAcademics
andConsumerPlatformshaveaddressedmediaconcentrationanditspossiblethreat
topluralismandhaverepeatedlyissuedtheirconcern.Despitethat,no
institutionalizeddiscoursehasformedalthoughtheCommission’sreportonthe
indicatorsofpluralismissettostimulatepublicdiscussiondecisively.
Interestingly,DongesraisesthequestionwhethertheEuropeanUnionhastobe
seenasonesinglestakeholderofmediapolicy.Inhisviewitisaconglomerateof
stakeholderswithwidelydifferinginterests–culturalvs.economical(Donges,2007,
p.17).FromthispointofviewithastobediscussedwhethertheEUhastospeak
withonevoiceinthismatter,orifitiscapableofconductingactiononthebasisof
multilateralconsensus.WiththeGreenPaperin1992thisapproachhasnot
producedanyagreement(Iosifides,1997),itremainstobeseenwhetherthe
consultationprocessfollowingthestudyontheindicatorsofpluralismwillbemore
successful.
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6 Necessityandofsupranationalregulations
ForalongtimemediaconcentrationinEuropewasclearlyrestrictedtoMember
States.TheCouncilofEurope(2004)hasidentifiedanumberofreasonsforthis:
• lackingsubstitutabilityofculturalproductsduetolinguisticandcultural
barriers
• lackingflexibilityofadvertisements(tailoredtonationalmarkets)
• highsetupcostsorlackofavailablebroadcastinglicencesduetotechnical
limitations
• strongpositionsofdomesticpublicbroadcasters
• governmentregulations
• sufficientpossibilityforgrowthwithindomesticmarket
ThesefactorscontributedtocementingtheroleofMemberStatesaslegal
authoritiesonthismatter,whichwasveryreasonableaslongasmediasectorswere
systematicallyseparatedbytechnology.However,duetorecenttechnological
developmentsandconvergencemediabusinessescannolongerbeseenas
autonomousentitieswith“oneteleologicallineofactions”(Watson‐Brown,2008).
Mediacontenthasgrownincreasinglyundistinguishablewithregardtodifferent
platforms(i.e.websitesofnewspaperscomparedtowebsitesofTV‐stations).With
new,digitalformsofbroadcasting,regulatorymeasuresbasedforexampleonthe
conceptofscarcityoffrequencieswithinonesinglenationseemobsolete.
Newspapers,whichformerlywereveryexpensivetoproducehavebecome
increasinglycommodified(risingfreesheetcirculation)andinsomemarketsare
merelyrecedingassets.Moreover,nationalmarketsarebecomingsaturated,and
legalstipulationslimitgrowthormergersatanationallevel(Malzanini,2007).Atthe
sametime,duetotheestablishmentoftheinternalmarket,mediasectorshave
beenderegulatedandliberalized.Authoritieshavepermittedforeignplayerstospan
theiroperationsacrossmultiplenations(CouncilofEurope,2004,p.7).
Furthermore,thelastcoupleofyearshavebroughttendenciesofhomogenisationof
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contentataEuropeanlevel,acrossdifferentculturalregions.Programmessuchas
"BigBrother”,“Whowantstobeamillionaire”and“X‐Factor”(Malzanini,Media
ConcentrationsinEurope,2007)andadvertisementcampaignssuchasHeineken(in
partnershipwiththeUEFAChampion’sLeague)orNespressoareprominent
examples.
Asmyeconomicanalysesinchapter4.1.2hasshown,mostoftheaforementioned
developmentsstronglypromotetransnationalconcentrationfromtheviewofprofit
maximizingmediacompanies.Forsome,duetoanincreasinglyoutdatedbusiness
model,consolidationisameansofsurviving,forothersitconstitutesanopportunity
tostayontop.However,theempiricalevidencethattransnationalmedia
concentrationisabouttorisecontinuouslyisnotconvincing(seechapter4.3.4),yet
asteadytrendparticularlyinEasternEuropeisapparent.
Ifitisassumedthattransnationalconcentrationwillrise,thequestioniswhetherthe
currentregulationsbytheEUandtheMemberStates,someofwhichweredesigned
foradifferentmedialandscape,aresufficienttodealwiththechallengesthisposes
regardingmediapluralism.
Thisquestionneedstobeevaluatedondifferentlevels:
6.1 Transnationallevel
BesidesthefactthattheCommunitydoesnothaveanylegislativecompetenceto
addressissuesofmediapluralismonCommunitylevelincasethisdoesnot
constituteaninfringementontheprovisionsofECcompetitionlaw,mediapluralism
accordingtoMalzanini(2008)andKleist(2006)mayonlybeatriskwithinagiven
andsufficientlyspecifiedareaofcommunication.Whilethisiscertainlytruefor
nationsandinsomecasesevenlanguageareas,itishighlydoubtfulwhetherthe
multinationalandmultilingualEUconstitutessuchanareaandwhetherthereisa
EuropeanpublicsphereofaHabermasianconception,whichmaybeunderthreat.
Malzaninidoesnotperceivea“subjectofprotection”withregardtomediapluralism
onaEuropeanlevel(Malzanini,2008).NeitherdoesKleist,whopointsoutthat,
whiletherehasbeenasteadyprogressionofeconomicintegration,theEUhas
maintaineditsculturalheterogeneity(Kleist,2006,p.11).TheTVshows,whichare
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broadcastedindifferentlanguagesbutinthesameformatthroughoutEurope
mentionedabove,areafirststeptowardscontenthomogenisation.Pan‐European
broadcasterssuchasEurosportandEuronews(whichisfinancedbytheCommission)
alreadygoonestepfurther.However,notoneofthesebroadcastersattractsmore
thananicheaudienceorisinanyotherwayinapositiontoinfluencepublicopinion
inEurope.
EvenwithouttheexistenceofaEuropeanpublicspheresomeauthorshavepointed
totheriskthatpowerfulownersofmediaconglomeratesmayutilizetheirvarious
mediaoutletstopushcertainpoliticalagendas,whichreflecttheirpersonalviews,
throughdifferentformatsalloverEurope(Baker,2007).Empirically,however,there
isnoprooftothisclaim,whichremainsa“gut‐feeling”(Malzanini,2008).Moreover,
underthepresumptionoftheneoclassicaltheoryofthefirmitappearsunlikelythat
mediacompanieswouldfavouragenda‐settingoverprofit‐maximizationunless
thesegoalshappentocoincideortheformeryieldsothereconomicbenefits
relevanttothecompany.Thispresumptionissupportedbytheongoing
commercializationofmediadiscussedinchapter4.1.2.6,whichismuchmorelikely
toleadtoade‐politisationofmediaconsumersasmediaproducersfocusonthe
massappealoftheircontentratherthanonthepublicvalueitholds.Thisproblem,
however,isnotnecessarilylinkedtomediaownership.Rather,itrepresentsa
distinctstructuralfeatureoftoday’smedialandscape,whichneedstobeaddressed
andcloselyscrutinizedbymediaimpactstudies.
Tosumitup:Duetothe
• lackoflegislativecompetence
• absenceofaEuropeanpublicsphere
supranationalmeasuresofmediaownershipregulationsintheEUarenotworkable.
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6.2 MemberStatelevel
IfthereisnoneedtotakeactiononaEuropeanlevel,whataboutMemberStates
whichhavenotyetintroducedlegislationinordertosafeguardmediapluralismor
whichhaveverylenientregulations?
Theunderlyingtheoryofmanyauthorsadvocatingaharmonizationofmedia
ownershiprulesisthatifeveryMemberStatehasthesamerulesgoverningmedia
pluralism,oratleastsetsthesameceilingsonmediaownership,thiswould
effectivelypreventmediaconglomeratesfromattainingaposition,whichwould
allowthemtoexerciseadominantinfluenceonpublicopinion.
However,myeconomicandlegalanalyseshaveshownthataharmonizationof
mediaownershipregulationsisnotfeasible,evendespiteanongoingtransformation
oftheEuropeanmediamarkets.
Thisisduetoanumberoffactors:
TheEUdoesnothaveanylegislativecompetencetoregulatemediaownershipsolely
forthepurposeofprotectingmediapluralism.UndertheprovisionsoftheECTreaty
theCommunityisboundtoactonlyuponmatters,whichhavebeenexplicitly
conferredonit.Atthemomentthisdoesnotincludetakingregulatorymeasuresto
protectthediversityofopinions.The1992GreenPaperhadbeenpreparedbythe
DGInternalMarketandaimedatensuringafunctioninginternalmarket.Even
thoughtheaimwasdifferentfromwhatisproposedintheresearchquestionofthis
paper,theconsultationfollowingthepublicationoftheGreenPaperrevealedthe
wholevarietyofstakeholdersatplayinthismatterandthefullextentofhowfar
theiropinionsdiverge.TheEuropeanParliamentontheonesidecalledfor
transnationalregulation,whiletheMemberStatesdidnotwanttochangethe
existingrules,unwillingtogiveawaytheirownlegislativecompetenceonthis
matter.
Apartfrombeinglegallyandpoliticallyunacceptableaharmonizationwouldposea
rangeofpracticalproblems.Inchapter4.3Ihaveshownthatatleastamongthe
tripartitecountries,therearecertainsimilaritiesinthemarketstructureofthe
mediasector.Strongpublicservicebroadcastersfaceprivatecompetition
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predominantlyfromafewpowerfulgroupsofTVandradiochannels,whilehighly
concentratednationalnewspapermarketsarecounterbalancedbydiverseregional
printmedialandscapes.Thekeyonlineplayersaremostlyassociatedwith
establishedoldmediacompaniesorbasedintheUS.
Whilethemarketstructuresmaysuggestaharmonizationisattainable,Chapter5.1
hasthenprovidedanoverviewofthedifferencesintheregulatoryapproachesto
thesemarketstructures.Thismadeclearthattheregulatorymodelswhichinclude47
• differentregulatorycompetencies48
• differentmeasuresofregulation(generalcompetitionlaw,audienceshare
model,cross‐ownershipregulation)
• differenttreatmentofnon‐domesticlicensees
• andotherregulatorytrends,influencedbynationaleconomicinterests
aretoodivergenttobeharmonized.
Moreoverthereisnoconciseandgenerallyaccepteddefinitiontomediapluralism
yet.Anyevaluationofthelevelofmediapluralismisverymuchtiedtothe
conditionsoftherelevantmarket.TheestablishmentofSkyItaliaforexamplehas
certainlybenefitedmediapluralismItaly,whichisoneofthemostconcentrated
mediamarketsinEuropewhileatthesametimeservingtoincreasethemarket
shareofatransnationalEuropeanmediaplayer(Watson‐Brown,2008).
Furthermoreaharmonizationofmediaownershipcouldbeusedasatoolof
protectingunderperforming“oldmedia”companiesfromtheemergenceofnew
formsofmedia.Legalregulationshowever,shouldnotpreserveoldstructuresbut
shouldrathersupportanongoingprocessoftransformation,whichwillmost
certainlyincludechangesinthestructureofmediaownershipandsomeamountof
consolidation.ForCroteau&Hoynes,therapidgrowthinmediaoutlets,the
constantshiftsinconsumertastes,andtheever‐changingterrainoftheindustry
itselfmakeanyapparentdominationoftheindustrybyafewcompaniesanillusion.
47SeeGrünwald,H.(2005)foranelaborationonthediverseformsofmediaownershipregulation48InGermanyforexample,broadcastingregulationarealegislativecompetenceoftheBundesländer–theGermanfederationcouldnotpledgethemtocomplywithanyEuropeanlegislation
‐131‐
“Noonecancontrolsuchavastandconstantlyevolvingindustry”(Croteau&
Hoynes,2006).
InitsstudyontheindicatorsofpluralismtheCommissionacknowledgesthisfactby
adoptingarisk‐basedapproachfocusingonthequestiontowhatextentthe
transformationmaybeallowedtounfold(Watson‐Brown,2008).Theyintendtodo
sobyfocusingininternalpluralismandonmediaoutput,ratherthanondiversityof
mediaownership.ThisapproachalsoseemsmuchmoreapplicableforMember
States,whicharetoosmalltodevelopeconomicallyviableindigenousmediaplayers
sinceaharmonizedsetofrulesthatworksforGermanymayeffectivelyerodethe
mediamarketinLithuania.
Tosumitup:Duetoa
• lackoflegislativecompetence
• lackofpoliticalwill
• lackofaconcisedefinitionofmediapluralism
• divergingnationalregulations
• divergingmarketsizes
• apossibleobstructionofstructuraltransformation
aharmonizationofmediaownershipregulationsintheEUisnotworkable.
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7 Conclusion
InthispaperIhaveshownthatdespiteconsiderablechangesintheEuropeanmedia
landscapeanapproachtosafeguardingmediapluralismbasedonsupranational
measuresandaharmonizationofnationalrestrictionasproposedbythe
Commissionintheearly1990’sisstillnotapplicableatpresentday.Eventhoughthe
specificeconomiccharacteristicsofmediapromoteconsolidationinthecurrent
periodofstructuraltransformationfromaparadigmoftechnologicallyseparated
mediasectorstoanageofmulti‐mediaconvergence,thesafeguardingofmedia
pluralismshouldnotbeusedasatoolofprotectingoutdatedbusinessmodelsof
“oldmedia”companies.Moreover,theEUhasnolegislativecompetencetoestablish
regulatorymeasuresonthismatter,whichhastraditionallyliedwiththeMember
States.Althoughmoreandmoreformsofmediawillemergewhichcannolongerbe
tiedtoanynationaljurisdictionintermsofdisseminationofmediacontentthereis
currentlynoEuropeanpublicspherewhichwouldconstitutetheneedtoprotectthe
processofEuropeanwillformationfromanyundueinfluences.
Drawingfrommyeconomicandlegalanalyses,myresearchquestionwhetherany
supranationalmeasures,beitaharmonizationoflegalinstrumentsoranyother
actioninsupportofpluralismacrosstheEUwouldbefeasible,effectiveand
expedienthastobeansweredwithaclearno.However,someaspectsofthis
problemhaveremainedunclearandrequireempiricalresearch.
Inordertogetafullunderstandingoftheissuemoretransparencyaboutthelevelof
transnationalconcentrationinEuropeisneededaswellasadditionalresearchonthe
changingmedialandscapeanditslikelyimpactonmediapluralism.
ThereforeIproposemeasuresmodelledafteroptionIIofthe1992GreenPaper(see
chapter5.2.2)topromotetransparencyaboutmediaownership.OnlyfewEuropean
countrieshaveestablishedindependentbodiessuchastheGermanKEKorthe
BritishOfcom,whichamongotherdutieshavetheresponsibilitytokeeptrackof
changesinmediaownership.Thishasbecomeanincreasinglydifficulttaskas
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ownershipstructuresareconcealedthroughcomplexlegalconstructions.Inthe
GreenPaperTheCommissionconsideredthat“moretransparencyofmedia
ownershipandcontrolcouldfacilitatethetaskofnationalregulatorsandserveto
createsolidaritybetweenauthoritiesofMemberstates”(EuropeanCommission,
1992,p.9).Shortlyafterwards,inDecember1992,theEuropeanAudiovisual
ObservatorywasestablishedinStrasbourgunderthelegalframeworkoftheCouncil
ofEurope.Itsaimistoimprovethetransferofinformationwithintheaudiovisual
industryandtopromoteaclearerviewofthemarket.Inthewakeofongoing
convergenceonthemediamarketsIproposeanexpansionoftheresponsibilitiesof
theEuropeanAudiovisualObservatorytoalsoincludepressandcrossmedia
operations.Theexpansionofdutiesdoesnotconstitutetheneedtoconferany
regulatorypowersonit.However,Malzanini(2007)hascalledforincreased
collaborationbetweentheEuropeanmonitoringagencyandnationalmedia
supervisoryauthorities.
Eitherwaytheenhancementoftransparencysymbolizesanempowermentof
citizens,whichmightservetostimulatenationalandtransnationaldiscussionsabout
mediapluralism.
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TABLEOFAUTHORITIES
Statutes
§19GWB .......................................................................................................................................... 89,91
§36Par1GWB....................................................................................................................................... 89
Art11oftheDéclarationdesdroitsdel'hommeetducitoyende1789............................................... 97
Art11oftheLoin°86‐897du1août1986 ............................................................................................ 98
Art39Par1Loin°86‐897du1août1986.............................................................................................. 99
Art39Par2Loin°86‐897du1août1986............................................................................................ 100
Art41Par1Loin°86‐897du1août1986.............................................................................................. 99
Art41Par6Loin°86‐897du1août1986............................................................................................ 100
Art5Par1GG ........................................................................................................................................ 88
Art7Loin°86‐897du1août1986......................................................................................................... 98
ArtL233‐3Loin°2001‐420du15mai2001 .......................................................................................... 98
ArtL430‐1Loin°2001‐420du15mai2001 .......................................................................................... 97
ArtL431‐3Loin°2001‐420du15mai2001 .......................................................................................... 98
Par1ofSchedule14oftheCommunicationsAct.................................................................................. 94
Schedule2oftheBroadcastingAct1990 .............................................................................................. 93
Section12oftheHumanRightsAct1998 ............................................................................................. 92
Section8oftheMediaOwnershipOrder2003 ..................................................................................... 95
Section9oftheMediaOwnershipOrder2003 ..................................................................................... 94
Treatises
Art100aECTreaty ............................................................................................................................... 107
Art151ECTreaty ................................................................................................................................. 102
Art5ECTreaty ..................................................................................................................................... 102
Art57Par2ECTreaty .......................................................................................................................... 107
Art7aECTreaty ................................................................................................................................... 108
Art81and82ECTreaty ....................................................................................................................... 103
Article10ECHR ................................................................................................................................ 22,32
ArticleIII‐181EUConstitutionalTreaty ............................................................................................... 102
Regulations
CouncilRegulation(EC)No139/2004of20January2004 .................................................................. 104
CouncilRegulation(EEC)No4064/89of21December1989 .............................................................. 103
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Directives
CouncilDirective89/552/EECof3October1989 ................................................................................ 105
Directive2002/21/ECoftheEuropeanParliamentandoftheCouncilof7March2002.................... 106
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TABLEOFFIGURES
Figure2‐1Thefunctionsofmassmedia,Source:Burkhard,2002,p.382 ............................................ 13
Figure2‐2Integrationthroughmedia,Source:ownillustration ........................................................... 15
Figure2‐3Politicalfunctionsofmassmedia,Source:ownillustration ................................................. 17
Figure3‐1Therelationbetweenmediaandcitizenjournalism,Source:ownIllustration .................... 28
Figure4‐1:Theexpansionofmarketpowerstimulatedbyadvertisement,Source:ownillustration... 40
Figure4‐3Economiesofscale,Source:ownillustrationadaptedfromHeinrich,1994 ........................ 45
Figure4‐3):TIMEConvergence,Source:ownillustration(inspiredbyFreienstein,2002,p.123 .......... 48
Figure4‐4:Ownershipofbroadcastmedia,Source:adaptedfromMcQuailandSiune,1998 ............. 52
Figure4‐5TheSun’scampaignagainsttheEUConstitution,Source:TheSun24thSeptember,2007. 63
Figure4‐6–GermanTVmarketshare(public),Source:AGF/GfkFernsehforschung2008................... 66
Figure4‐7–GermanTVmarketshare(commercial),Source:AFG/GfkFernsehforschung2008.......... 67
Figure4‐8AccesstoGermanTV,Source:KEK2006 .............................................................................. 68
Figure4‐9GermanPayTVmarketshare,Source:GSDZ2007,p.57..................................................... 69
Figure4‐10Germanradiomarketshare,Source:KEK2005/EFJ2005 ................................................ 70
Figure4‐11TopTenGermannewspapers,Source:EuropeanComission,2007p43 ........................... 71
Figure4‐12Germannewspapermarketshare,Source:Röper,2008p.420......................................... 72
Figure4‐13Germanmagazinemarketshare,Source:Vogel,2008p.468............................................ 73
Figure4‐14TopTenGermanbasedwebsites,Source:AGOF2008/Companyprofiles ....................... 74
Figure4‐15TopTeninternationalbasedwebsites,Source:NielsenOnline2009................................. 74
Figure4‐16TopGermaninternetmarketersandproviders,Source:AGOF2008,companyprofiles ... 75
Figure4‐17BritishTVmarketshare,Source:BARB2009...................................................................... 77
Figure4‐18AccesstoBritishTV,Source:OfcomCommunicationsreport2008,p.211 ....................... 78
Figure4‐19Britishradiomarketshare,Source:OfcomCommunicationsreport2008,p.253............. 80
Figure4‐20TopTenBritishnewspapers,Source:AuditBureauofCirculations2009........................... 81
Figure4‐21Britishnewspapermarketshare,Source:owncalculationsbasedABC2009data ............ 82
Figure4‐22Britishmagazinemarketshare,Source:owncalculationsbasedonABC2009data ......... 83
Figure4‐23TopBritishinternetmarketers,Source:NielsenOnline2009 ............................................ 84
Figure4‐24FrenchTVmarketshare,Source:Médiametrie2008,p.2 ................................................. 86
Figure4‐25AccesstoFrenchTV,Source:Médiametrie2008,p.5 ....................................................... 87
Figure4‐26Frenchradiomarketshare,Source:Mediamétrie2008..................................................... 88
Figure4‐27TopTenFrenchnewspapers,Source:OJD2008................................................................. 89
Figure4‐28Frenchnewspapermarketshare,Source:owncalculations .............................................. 90
Figure4‐29Topteninternetmarketersandproviders,Source:NielsenOnline2009 .......................... 91
Figure5‐1Stakeholdersofmediaregulation,Source:ownillustration................................................. 94
Figure5‐2UKradioownershippointssystem,Source:MediaOwnershipOrder2003 ...................... 105
Figure9‐1BiggestmediacompaniesinEurope,Source:Nordicom2006,basedoncomp.reports ... 145
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9 Appendix
ThebiggestmediacompaniesinEurope(rankedbyrevenuefrommediaactivities):
Company Domicile
Total
revenue
(Euro
mills)
Media
revenue
(Euro
mills)
Media
shareof
revenue
(%)
New
spap
ers
Magazines
Book
s
Radio
TV
Film
Music
BertelsmannAG Germany 19,297 19,297 100 ✔ ✔ ✔ ✔ ✔ ✔ ✔
Vivendi2 France 20,044 8,494 42 ✔ ✔ ✔ ✔
Lagardère France 13,999 8,092 58 ✔ ✔ ✔ ✔ ✔
ReedElsevier Netherlands/
GreatBritain 7,935 7,935 100 ✔ ✔
ARD Germany 6,161 6,161 100 ✔ ✔
BBC GreatBritain 6,127 6,127 100 ✔ ✔ ✔
BSkyB GreatBritain 6,086 6,086 100 ✔
Pearson GreatBritain 6,068 6,068 100 ✔ ✔ ✔
Mediaset5 Italy 3,748 3,748 100 ✔
WoltersKluwer
The
Netherlands 3,693 3,693 100 ✔ ✔
DailyMail&General
Trust GreatBritain 3,192 3,192 100 ✔ ✔ ✔
ITVPlc GreatBritain 3,171 3,171 100 ✔
FranceTélèvision France 2,853 2,853 100 ✔
RAI‐Radiotelevisione
Italiana Italy 2,839 2,839 100 ✔ ✔
GrupoPrisa Spain 2,812 2,812 100 ✔ ✔ ✔ ✔
TF1‐Société
TélévisionFrancais France 2,654 2,654 100 ✔
EMIGroup GreatBritain 2,652 2,652 100 ✔
SanomaWSOY Finland 2,742 2,386 87 ✔ ✔ ✔ ✔ ✔ ✔
RCSMediaGroup Italy 2,380 2,380 100 ✔ ✔ ✔ ✔
SpringerVerlag Germany 2,376 2,376 100 ✔ ✔
Figure9‐1BiggestmediacompaniesinEurope,Source:Nordicom2006,basedoncompanyreports
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LUKASWIESBOECKDateofbirth:08/10/1983
EDUCATION2008(July)– HarvardUniversity2008(August SummerSchoolcourseonstrategicanalysis(StrategicManagementIn
ADynamicEnvironment)2007(February)– ViennaUniversityofEconomicsandBusinesspresentday Administration LLBBusinessLaw(exp.graduationJune2010)2006(September)– UniversityofVienna2009(November) Mag.phil.MediaandCommunicationwithfocusonmediaeconomics
Masterthesis:ConcentrationofmediaownershipinEurope2006(September)– MiddlesexUniversityLondon2007(January) ERASMUS‐studysemester,mainfocusonfinance2003(March)– UniversityofVienna2006(September) Bakk.philMediaandCommunication(1.9),minorinmedialaw2002(July)– AustrianArmedForces2003(March MilitaryservicewithpromotiontoGefreiter(privatefirstclass)1994(September)– Bruck/Leithagrammarschool(languagefocus)2002(June) A‐Levels:English(A),French(A),German(B),Music(A),Mathematics
(C)[GermanandMathematicsmandatory]WORKEXPIERIENCESince2009(May) ThierryPolitikberatung,Vienna Researcher/PoliticalConsultant Workingparttimeinateamoffour Researchingbackgroundinformation,developingandimplementing
politicalcommunicationstrategies2008(June) EURO2008–EuropeanFootballChampionships,Vienna MediaAssistant Onemonthvolunteerexperienceatalargeinternationalevent
AssistingtheVenueMediaCoordinatorasateamleaderprovidingserviceforaccreditedjournalists
2008(January)– INSETResearch&Advisory,Vienna2009(January) Consultant/ResearchAnalyst Oneyearworkexperiencewithasmallconsultantfirmspecializedon
mobilebusinesssolutions Conductingmarketresearchanddevelopingmarketingstrategiesin
thetelecomsector,preparingcustomerpresentationsandmanagingsmallprojects
‐148‐
2007(July)– Invyte.de,Hamburg2007(October) Marketingassistantandeditor
ThreemonthsworkexperiencewithaGermaninternetstartupspecializingoneventinvitationmanagementVariousmarketingactivities,buildinguponlinemagazine
2006(July)– FrankfurterAllgemeinenZeitung,Frankfurt2006(October) Journalist,reporter
ThreemonthsworkexperiencewithaprestigiousGermannewspaperWritingindependentlyaboutsociety‐,economy‐,andculture‐relatedtopicsinFrankfurtandthesurroundingarea
2006(March)– InstituteofCommunicationScience,Vienna2006(July) Teachingassistant
Fivemonthsworkexperienceoverseeingagroupof20universitystudentsPreparingaseminarforfirstyearstudentsinordertohelpthemunderstandthemainconceptstaughtintheintroductorylectures.
2004(July)– ORFandPro7,Vienna2004(October) Productionassistantand Threemonthsworkexperienceeachyear,firstlywithapublic2005(July) broadcastingTVstation,secondlywithaprivateTVstation
AssistingaseniorreporterproducingTV‐clipsandsegmentsfornewsbroadcasts;independentteletextandonlineservice.
2001(July)– NÖNandBezirksblätter,LowerAustria2005(November) Reporterandphotographer(2001–2005),Editoroftheculturesection
(2004‐2005) Fouryearsworkexperiencewithtwoweeklylocalnewspapers,
workinginteamsfromfivetoeightIndependentlycoveringlocaltopicsandevents,configuringthelayoutofnewspaperpages.
SCHOLARSHIPSANDAWARDS2008(October) StudyTourofJapanforEuropeanYouth–Tendayscholarshipgranted
bytheMinistryofForeignAffairsofJapan2008(May) kwA(kurzfristigewissenschaftlicheArbeitenimAusland)–Onemonth
scholarshipgrantedbytheUniversityofViennaforindependentresearch
2002(October) AustrianArmedForcesServiceMedalawardedbytheAustrian
secretaryofdefenceforthreeweeksserviceinadisasterreliefoperation(flood)