Time to break up the mass media

| May 9, 2012 | 9 Replies

At Reader Supported News, Carl Gibson makes a good case for breaking up the six big enterprises that constitute most of our media:

The reason the bulk of the most important information won’t ever reach the exact people the Occupy movement is reaching out to is because 90% of all media Americans consume is owned by six corporations. To put that in perspective, 232 executives at GE, NewsCorp, Disney, Viacom, Time Warner and CBS are deciding what 277 million Americans will watch, read and listen to every day. That’s one media executive for every 850,000 subscribers.

There’s an easy fix that doesn’t involve new legislation or Constitutional amendments: make the government do its job. Since 1995, the FCC forbade any company from owning more than 40 stations. Currently, Clear Channel owns 1,200 radio stations. We have antitrust laws already in place that broke up colossal monopolies like the kind Standard Oil had in its heyday. Why should big media monopolies be exempt from those laws?

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Category: Media

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich and his wife, Anne Jay, live in the Shaw Neighborhood of St. Louis, Missouri, where they are raising their two extraordinary daughters.

Comments (9)

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  1. Adam Herman says:

    Anti-trust laws apply mainly to monopolies. Six is not a monopoly, nor even close to a monopoly. I’m also very suspicious that six companies are responsible for 90% of the media Americans consume, since there’s no consistent way to measure such a thing.

    I think you bring up a valid concern, but we have to figure out exactly what the problem is that we’re trying to solve and look around the world at how other countries handle the same problem. From what I see, they just don’t. Most European countries would probably love to have six choices of private media that reach the masses. Is there a country whose model you think works better than ours as far as news media goes? I think Britain has better media, but it’s not due to having a variety of sources, British journalists are just more cynical, while our White House Press Corps is made up either of kiss-asses or people who are disagreeable just to be disagreeable(Helen Thomas, Jake Tapper).

  2. Niklaus Pfirsig says:

    Adam,
    Anti trust laws are concerned with ensuring competition in markets. While obviously monopolies are anticompetitive, but so are cartels and pretty much any multifaceted business organization large enough to create barriers to honest competition through self-subsidy, litigation as a business strategy and even through regional monopolies, as is the case in many communications markets.

    There are a small number of large companies that dominate broadcast radio, and in places all broadcast radio stations within the listening range of medium and small towns are operated by Clear-Channel(for example). There are many urban areas with only one cable provider, and areas in the US where even satellite tv service is limited.

    If you look at the six mega media companies, three are mainly involved with cable (viacom, Time-warner, and NewsCorp) and three are mainly involved with national terrestrial broadcast tv (GE, Disney and CBS).

    It is also interesting that you should mention British TV. British TV is dominated by satellite services, digital phone/cable and the BBC’s public TV service. BBC viewer pay a license fee to the government to pay for TV which is enforced by the government with specially outfitted vehicles that can detect TV receiver usage.

  3. Adam Herman says:

    Can’t have a TV without a license? Pretty radical, if you ask me, and the enforcement mechanism is pretty crazy.

    Anyway, there’s no cartel and there’s no barrier to entry. So no anti-trust problem. The 90% figure comes from measuring what people actually pay attention to. The sources people have access to is nearly unlimited. What people choose to watch or read, not so much. The anti-trust laws were never meant to prevent companies from gaining huge market share due to consumers voting with their dollars. Coke and Pepsi are allowed to dominate the cola market because their dominance is based on consumer preference, not by keeping other cola makers out of the market. If Coke and Pepsi colluded to destroy RC and prevent grocery stores from selling their generic sodas, then the government would have an issue. The same goes for the news. Why would the government act in 2012, when there are more sources than ever? I still remember a time when news wasn’t just controlled by one company, but nearly by one MAN, Walter Cronkite. If the government thought that was peachy then, how could they in good conscience interfere when the average cable customer has six or more choices? Including BBC on most system, which means seven.

  4. Niklaus Pfirsig says:

    As for the 90 percent figure, it comes from ownership records. http://www.londonrelocationservices.com/blog/london-relocation-moving-to-london-tips/living-in-london-–-pay-your-tv-licence.html This is not the same as market share, which, for cable is monitored through the set-top boxes in some locations, and through random sampling surveys, in others. That’s what Arbitron and Nielson do.

    The ownership of media outlets is a part of public record, not an estimate, but a tabulation of those public records.

    Barriers to entry-

    On broadcast media, there are several barriers to entry. These are basically limited resources, and infrastructures. In over the air services, there are technical limits to the coverage areas of broadcasters, and the proximity of broadcasters in the same area.

    Cable is a different animal, dominated by regional monopolies. still within those regions,

    Dollar democracy, is the oft touted euphemism for payola. The huge national and multinational corporations can self subsidize. This is a corporation when drastically reduce prices (sometimes below cost) in one locality and compensate by raising prices in other places. Self subsidies are a formidable barrier to competition.

    Adam, you seem bent on arguing that a variety of choices between specialized programming channels as proof of competition. This is not the case. Entertainment and news are not the same thing.

    As an example, while the major networks focused their news on Romney's heroics, and Obama's "evolution", none made mention of the Fed's approval for the buyout of an American bank by a Chinese bank ( the is owned by the Chinese government). http://ca.news.yahoo.com/3-big-chinese-banks-enter-us-banking-market-185200086.html

  5. Adam Herman says:

    I count Dangerous Intersection as a news outlet. And even if I agreed that 90% of the media is controlled by six companies, six is not even close to an anti-trust situation, and more importantly, a) it was worse 30 years ago, and b) find any other country with six companies sharing 90% market share. You’ll be lucky to find two companies plus state media anywhere else.

  6. Adam Herman says:

    Dangerous Intersection may not do much original reporting, but opinion journalism is very important. Since we’re on the subject, what’s up with the big time bloggers not linking to the little guys anymore? Used to be they wanted to build up the blogosphere but today it seems like most of them are now with big sites and don’t want to pass readers along. If you want to talk about an anti-trust issue, there ya go.

    • Erich Vieth says:

      Adam: I wish I could give you a good answer. I write my heart out, and my of my incoming links are from smaller sites, many of them commercial sites. I suspect that with umpteen new websites being created every day, it’s numerically difficult to be noticed no matter how well you present issues. I sometimes imagine the end result of our trajectory, with everyone out there having a blog or at least a presence on social networking like Twitter or Facebook. If everyone spent lots of time writing, who would have any time to read, even if it were all quality material? In my gut, this is the “problem,” though it’s not really a problem, since what the little blogs do are sometimes/often picked up by bigger sites and given the coverage they deserve. Yes, that leaves us with gatekeepers, but hopefully a LOT more gatekeepers than in the old days of Walter Cronkite. And many little blogs catch fire even without the help of the gatekeepers, thanks to social media.

      I think we have many advantages over the good old days, except for the fact that very few of the little passionate websites have the resources to penetrate and effectively present big stories. There are exceptions . . .

  7. Niklaus Pfirsig says:

    England has 10 broadcast networks view by 47 percent of the people, with BBC and ITV as the most popular. About half of the population have cable provided though one of three providers, and there are several competing satellite, IPTV, and mobile providers.

    France has 6 or 7 main TV providers, including 2 public networks.

    Since the fall of Saddam Hussein in 2003, Iraq has grown from 2 govt sanctioned broadcasters to 14 independent broadcasters

    In addition to numerous state run broadcasters, Russia has 18 private business run tv networks.

    The 6 major Mexican TV networks are owned by two companies.

    Adam, I’ve explained the anti competitive nature of corporate consolidation, But I realize there is something you don’t understand. The customers of American commercial tv are not the viewers, the customers are the advertisers.

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