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Subject: The Global Media Dominators
Date: Sun, 05 Dec 1999 18:15:47 -0500
From: enrique <[EMAIL PROTECTED]>
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The Global Media Giants
The nine firms that dominate the world
by Robert McChesney
from Extra the magazine of FAIR, Nov/Dec 1997
A specter now haunts the world: a global commercial media system dominated
by a small number of super-powerful, mostly U.S.-based transnational media
corporations. It is a system that works to advance l the cause of the
global market and promote commercial values, while denigrating journalism
and culture not conducive to the immediate bottom line or long-run
corporate interests. It is a disaster for anything but the most superficial
notion of democracy-a democracy where, to paraphrase John Jay's maxim,
those who own the world ought to govern it.
The global commercial system is a very recent development. Until the 1980s,
media systems were generally national in scope. While there have been
imports of books, films, music and TV shows for decades, the basic
broadcasting systems and newspaper industries were domestically owned and
regulated. Beginning in the 1980s, pressure from the IMF, World Bank and
U.S. government to deregulate and privatize media and communication systems
coincided with new satellite and digital technologies, resulting in the
rise of transnational media giants.
How quickly has the global media system emerged? The two largest media
firms in the world, Time Warner and Disney, generated around 15 percent of
their income outside of the United States in 1990. By 1997, that figure was
in the 30 percent-35 percent range. Both firms expect to do a majority of
their business abroad at some point in the next decade.
The global media system is now dominated by a first tier of nine giant
firms. The five largest are Time Warner (1997 sales: $24 billion),
Bertelsmann ($15 billion), Disney ($22 billion), Viacom ($13 billion), and
Rupert Murdoch's News Corporation ($11 billion).
Besides needing global scope to compete, the rules of thumb for global
media giants are twofold: First, get bigger so you dominate markets and
your competition can't buy you out. Firms like Disney and Time Warner have
almost tripled in size this decade.
Second, have interests in numerous media industries, such as film
production, book publishing, music, TV channels and networks, retail
stores, amusement parks, magazines, newspapers and the like. The profit
whole for the global media giant can be vastly greater than the sum of the
media parts. A film, for example, should also generate a soundtrack, a
book, and merchandise, and possibly spin-off TV shows, CD-ROMs, video games
and amusement park rides. Firms that do not have conglomerated media
holdings simply cannot compete in this market.
The first tier is rounded out by TCI, the largest U.S. cable company that
also has U.S. and global media holdings in scores of ventures too numerous
to mention. The other three first-tier glob al media firms are all part of
much larger industrial corporate powerhouses: General Electric (1997 sales:
$80 billion), owner of NBC; Sony (1997 sales: $48 billion), owner of
Columbia & TriStar Pictures and major recording interests; and Seagram
(1997 sales: $14 billion), owner of Universal film and music interests. The
media holdings of these last four firms do between $6 billion and $9
billion in business per year. While they are not as diverse as the media
holdings of the first five global media giants, these four firms have
global distribution and production in the areas where they compete. And
firms like Sony and GE have the resources to make deals to get a lot bigger
very quickly if they so desire.
Behind these firms is a second tier of some three or four dozen media firms
that do between $1 billion and $8 billion per year in media-related
business. These firms tend to have national or regional strongholds or to
specialize in global niche markets. About one-half of them come from North
America, including the likes of Westinghouse (CBS), the New York Times Co.,
Hearst, Comcast and Gannett. Most of the rest come from Europe, with a
handful based in East Asia and Latin America.
In short, the overwhelming majority (in revenue terms) of the world's film
production, TV show production, cable channel ownership, cable and
satellite system ownership, book publishing, magazine publishing and music
production is provided by these 50 or so firms, and the first nine firms
thoroughly dominate many of these sectors. By any standard of democracy,
such a concentration of media power is troubling, if not unacceptable.
But that hardly explains how concentrated and uncompetitive this global
media power actually is. In addition, these firms are all actively engaged
in equity joint ventures where they share ownership of concerns with their
"competitors" so as to reduce competition and risk. Each of the nine
first-tier media giants, for example, has joint ventures with, on average,
two-thirds of the other eight first-tier media giants. And the second tier
is every bit as aggressive about making joint ventures. (See chart below
for the extent of joint ventures between media giants.)
We are the world
In some ways, the emerging global commercial media system is not an
entirely negative proposition. It occasionally promotes anti-racist,
anti-sexist or anti-authoritarian messages that can be welcome in some of
the more repressive corners of the world. But on balance the system has
minimal interest in journalism or public affairs except for that which
serves the business and upper-middle classes, and it privileges just a few
lucrative genres that it can do quite well-like sports, light entertainment
and action movies-over other fare. Even at its best the entire system is
saturated by a hyper-commercialism, a veritable commercial carpet bombing
of every aspect of human life. As the C.E.O. of Westinghouse put it
(Advertising Age, 2/3/97), "We are here to serve advertisers. That is our
raison d'etre."
Some once posited that the rise of the Internet would eliminate the
monopoly power of the global media giants. Such talk has declined recently
as the largest media, telecommunication and computer firms have done
everything within their immense powers to colonize the Internet, or at
least neutralize its threat. The global media cartel may be evolving into a
global communication cartel. But the entire global media and communication
system is still in flux. While we are probably not too far from
crystallization, there will likely be considerable merger and joint venture
activity in the coming years. Indeed, by the time you read this, there may
already be some shifts in who owns what or whom.
What is tragic is that this entire process of global media concentration
has taken place with little public debate, especially in the U.S., despite
the clear implications for politics and culture. After World War II, the
Allies restricted media concentration in occupied Germany and Japan because
they noted that such concentration promoted anti-democratic, even fascist,
political cultures. It may be time for the United States and everyone else
to take a dose of that medicine. But for that to happen will require
concerted effort to educate and organize people around media issues. That
is the task before us.
This article is based on The Global Media: The New Missionaries of
Corporate Capitalism (Cassell, 1997), co-authored with Edward S. Herman.
Respectfully,
Jay Fenello,
New Media Relations
------------------------------------
http://www.fenello.com 770-392-9480
"We are creating the most significant new jurisdiction
we've known since the Louisiana purchase, yet we are
building it just outside the constitution's review."
-- Larry Lessig, Harvard Law School, on ICANN
