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Concentration of media ownership (also known as media consolidation or media convergence) is a process whereby progressively fewer individuals or organizations control increasing shares of the mass media. Contemporary research demonstrates increasing levels of consolidation, with many media industries already highly concentrated and dominated by a very small number of firms.
Globally, large media conglomerates include Viacom, CBS Corporation, Time Warner, News Corporation, Bertelsmann AG, Sony, Comcast, Vivendi, Televisa, The Walt Disney Company, Hearst Corporation, Organizações Globo and Lagardère Group.
In nations described as authoritarian by most international think-tanks and NGOs, media ownership is generally something very close to the complete state control over information in direct or indirect ways.
Media mergers are a result of one media related company buying another company for control of their resources in order to increase revenues and viewership. As information and entertainment become a major part of our culture, media companies have been creating ways to become more efficient in reaching viewers and turning a profit. Successful media companies usually buy out other companies to make them more powerful, profitable, and able to reach a larger viewing audience. Media mergers have become more prevalent in recent years, which has people wondering about the negative effects that could be caused by media ownership becoming more concentrated. Such negative effects that could come into play are lack of competition and diversity as well as biased political views.
An oligopoly is when a few firms dominate a market. When the larger scale media companies buy out the more smaller-scaled or local companies they become more powerful within the market. As they continue to eliminate their business competition through buyouts or forcing them out (because they lack the resources or finances) the companies left dominate the media industry and create a media oligopoly.
Net neutrality is also at stake when media mergers occur. Net neutrality involves a lack of restrictions on content on the internet, however, with big businesses supporting campaigns financially they tend to have influence over political issues, which can translate into their mediums. These big businesses that also have control over internet usage or the airwaves could possibly make the content available biased from their political stand point or they could restrict usage for conflicting political views, therefore eliminating Net Neutrality.
Concentration of media ownership is very frequently seen as a problem of contemporary media and society. When media ownership is concentrated in one or more of the ways mentioned above, a number of undesirable consequences follow, including the following:
It is important to elaborate upon the issue of media consolidation and its effect upon the diversity of information reaching a particular market. Critics of consolidation raise the issue of whether monopolistic or oligopolistic control of a local media market can be fully accountable and dependable in serving the public interest.
On the local end, reporters have often seen their stories refused or edited beyond recognition. An example would be the repeated refusal of networks to air "ads" from anti-war advocates to liberal groups like MoveOn.org, or religious groups like the United Church of Christ, regardless of factual basis. Journalists and their reports may be directly sponsored by parties who are the subject of their journalism leading to reports which actually favor the sponsor, have that appearance, or are simply a repetition of the sponsors opinion.[unreliable source?]
Consequently, if the companies dominating a media market choose to suppress stories that do not serve their interests, the public suffers, since they are not adequately informed of some crucial issues that may affect them.
Concern among academia rests in the notion that the purpose of the first amendment to the US constitution was to encourage a free press as political agitator evidenced by the famous quote from US President Thomas Jefferson, "The only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. It is necessary, to keep the waters pure." Freedom of the press has long been combated by large media companies, but their objections have just as long been dismissed by the supreme courts.
One explanation for the cause of the concentration of media ownership is a shift to neoliberal deregulation policies, which is a market-driven approach. Deregulation effectively removes governmental barriers to allow for the commercial exploitation of media. Motivation for media firms to merge includes increased profit-margins, reduced risk and maintaining a competitive edge. In contrast to this, those who support deregulation have argued that cultural trade barriers and regulations harm consumers and domestic support in the form of subsidies hinders countries to develop their own strong media firms. The opening of borders is more beneficial to countries than maintaining protectionist regulations.
Critics of media deregulation and the resulting concentration of ownership fear that such trends will only continue to reduce the diversity of information provided, as well as to reduce the accountability of information providers to the public. The ultimate consequence of consolidation, critics argue, is a poorly informed public, restricted to a reduced array of media options that offer only information that does not harm the media oligopoly's growing range of interests.
For those critics, media deregulation is a dangerous trend, facilitating an increase in concentration of media ownership, and subsequently reducing the overall quality and diversity of information communicated through major media channels. Increased concentration of media ownership can lead to the censorship of a wide range of critical thought.
Another concern is that consolidated media is not flexible enough to serve local communities in case of emergency. Some say that the Minot train derailment was exacerbated by consolidation of media, but an EOU study cited by Radioworld notes that even though Minot's media was under the same ownership, the Emergency Alert System (EAS) - which is completely automated - should have been activated by emergency management officials (media personnel are not necessary for EAS activation) but was not. So it is shown that consolidated media did not play a significant role in this incident.
“Within any free market economy, the level of resources available for the provision of media will be constrained principally by the size and wealth of that economy, and the propensity of its inhabitants to consume media.” [Gillian Doyle; 2002:15] Those countries that have a relatively large market, like the United Kingdom, France or Spain have more financial background to support diversity of output and have the ability to keep more media companies in the market (as they are there to make profit). More diverse output and fragmented ownership will, obviously, support pluralism. In contrast, small markets like Ireland or Hungary suffer from the absence of the diversity of output given in countries with bigger markets. It means that “support for the media through direct payment” and “levels of consumers expenditure”, furthermore “the availability of advertising support” [Gillian Doyle; 2002:15] are less in these countries, due to the low number of audience. Overall, the size and wealth of the market determine the diversity of both media output and media ownership.
From the previous paragraph it can be assumed that size/wealth of the market have a very strong relation to the diversity of supplier. If the first is not given (wealthy market) then it is difficult to achieve fragmented supplier system. Diversity of suppliers refers to those heterogeneous independent organizations that are involved in media production and to the common ownership as well. The more various suppliers there are, the better for pluralism is. However, “the more powerful individual suppliers become, the greater the potential threat to pluralism.” [verification needed]
The consolidation of cost functions and cost-sharing. Cost-sharing is a common practice in monomedia and cross media. For example, “for multi-product television or radio broadcasters, the more homogeneity possible between different services held in common ownership (or the more elements within a programme schedule which can be shared between ’different’ stations), the greater the opportunity to reap economies.” [verification needed] Though the main concern of pluralism is that different organization under different ownership may buy the same e.g. news stories from the same news-supplier agency. In the UK, the biggest news-supplier is The Press Association (PA). Here is a quoted text from PA web site: “The Press Association supplies services to every national and regional daily newspaper, major broadcasters, online publishers and a wide range of commercial organisations.” Overall, in a system where all different media organizations gather their stories from the same source, then we can’t really call that system pluralist. That is where diversity of output comes in.
Controls over media ownership in Australia are laid down in the Broadcasting Services Act 1992, administered by the Australian Communications and Media Authority (ACMA). Even with laws in place Australia has a high concentration of media ownership. Ownership of national and the newspapers of each capital city are dominated by two corporations, Rupert Murdoch's News Corporation, (which was founded in Adelaide) and John Fairfax Holdings.These two corporations along with West Australian Newspapers and the Harris Group work together to create Australian Associated Press which distributes the news and then sells it on to other outlets such as the Australian Broadcasting Corporation. Although much of the everyday mainstream news is drawn from the Australian Associated Press, all the privately owned media outlets still compete with each other for exclusive pop culture news. Rural and regional media is dominated by Rural Press Limited which is owned also by John Fairfax Holdings, with significant holdings in all states and territories. Daily Mail and General Trust operate the DMG Radio Australia commercial radio networks in metropolitan and regional areas of Australia. Formed in 1996, it has since become one of the largest radio media companies in the country. The company currently own more than 60 radio stations across New South Wales, Victoria, South Australia, Queensland and Western Australia.
There are rules governing foreign ownership of Australian media and these rules were loosened by the former Howard Government.
According to Reporters Without Borders in 2004, Australia is in 41st position on a list of countries ranked by Press Freedom; well behind New Zealand (9th) and United Kingdom (28th). This ranking is primarily due to the limited diversity in media ownership. By 2013, Australia had risen to 26th on the Press Freedom Index.
Media Watch is an independent media watchdog televised on the public broadcaster Australian Broadcasting Corporation (ABC), which is one of two government-administered channels, the other being Special Broadcasting Service (SBS).
Independent Newspapers Limited (INL) formerly published the Wellington-based newspapers The Dominion and The Evening Post, in addition to purchasing a large shareholding in pay TV broadcaster Sky Media Limited in 1997. These two newspapers merged to form the Dominion Post in 2002, and in 2003, sold its entire print media division to Fairfax New Zealand. The remainder of the company officially merged with Sky Media Limited in 2005 to form Sky Network Television Limited.
When INL ceased publishing the Auckland Star in 1991, the New Zealand Herald became the Auckland region's sole daily newspaper. The New Zealand Herald and the New Zealand Listener, formerly privately held by the Wilson & Horton families, was sold to APN News & Media in 1996. As of April 2011, Fairfax New Zealand and APN News & Media have a near duopoly on newspapers and magazines in New Zealand, with Fairfax announcing the closure of the long-running news agency NZPA.
Commercial radio stations are largely divided up between MediaWorks New Zealand and the APN/Clear Channel-owned The Radio Network, with* MediaWorks also owning TV3 and C4. Television New Zealand, although 100% state-owned, has been run on an almost entirely commercial basis since the late 1980s, in spite of previous attempts to steer it towards a more public service-oriented role. Its primary public-service outlet, TVNZ7, ceased broadcasting in 2012 due to non-renewal of funding, and the youth-oriented TVNZ6 was rebranded as the short-lived commercial channel TVNZ U. In addition, the TVNZ channels Kidzone and Heartland are only available through Sky Network Television and not on the Freeview platform.
Sky Network Television has had an effective monopoly on pay TV in New Zealand since its nearest rival Saturn Communications (now part of TelstraClear) began wholesaling Sky content in 2002. However, in 2011, TelstraClear CEO Allan Freeth warned it would review its wholesale agreement with Sky unless it allowed TelstraClear to purchase non-Sky content.
Broadcasting and telecommunications in Canada are regulated by the Canadian Radio-television and Telecommunications Commission (CRTC), an independent governing agency that aims to serve the needs and interests of citizens, industries, interest groups and the government. The CRTC does not regulate newspapers or magazines.
Apart from a relatively small number of community broadcasters, media in Canada are primarily owned by a small number of companies, including Bell Canada, Rogers Communications, Shaw Communications, Astral Media, Quebecor, and the government-owned Canadian Broadcasting Corporation (Radio-Canada). Each of these companies holds a diverse mix of television, cable television, radio, newspaper, magazine and/or internet operations. In 2007, CTVglobemedia, Rogers Media and Quebecor all expanded significantly through the acquisitions of CHUM Limited, CityTV and Osprey Media, respectively. In 2010, Canwest Global Communications, having filed for bankruptcy, sold its television assets to Shaw (through a new subsidiary, Shaw Media) and spun off its newspaper holdings into Postmedia Network, a new company founded by the National Post's CEO Paul Godfrey. Later that year, Bell also announced that it would acquire the remaining shares of CTVglobemedia (which was originally majority owned by Bell when it was formed in 2001; Bell had reduced its stake in the following years), forming Bell Media.
Between 1990 and 2005 there were a number of media corporate mergers and takeovers in Canada. For example, in 1990, 17.3% of daily newspapers were independently owned; whereas in 2005, 1% were. These changes, among others, caused the Senate Standing Committee on Transport and Communications to launch a study of Canadian news media in March 2003. (This topic had been examined twice in the past, by the Davey Commission (1970) and the Kent Commission (1981), both of which produced recommendations that were never implemented in any meaningful way.)
The Senate Committee’s final report, released in June 2006, expressed concern about the effects of the current levels of news media ownership in Canada. Specifically, the Committee discussed their concerns regarding the following trends: the potential of media ownership concentration to limit news diversity and reduce news quality; the CRTC and Competition Bureau’s ineffectiveness at stopping media ownership concentration; the lack of federal funding for the CBC and the broadcaster’s uncertain mandate and role; diminishing employment standards for journalists (including less job security, less journalistic freedom, and new contractual threats to intellectual property); a lack of Canadian training and research institutes; and difficulties with the federal government’s support for print media and the absence of funding for the internet-based news media.
The report provided 40 recommendations and 10 suggestions (for areas outside of federal government jurisdiction), including legislation amendments that would trigger automatic reviews of a proposed media merger if certain thresholds are reached, and CRTC regulation revisions to ensure that access to the broadcasting system is encouraged and that a diversity of news and information programming is available through these services.
In Brazil, the concentration of media ownership seems to have manifested itself very early. In this regard, Dr. Venício A. de Lima noted in 2003:
It must be noted that in Brazil there is an environment very conducive to concentration. Sectorial legislation has historically been timid, by express intention of the legislator, by failing to include direct provisions that limit or control the concentration of ownership, which, incidentally, goes in the opposite direction of what happens in countries like France, Italy and the United Kingdom, which are concerned with the plurality and diversity in the new scenario of technological convergence (Lobato, Folha de S.Paulo, 10/14/2001)".
Lima also points to other factors that would make media concentration easier, particularly in broadcasting: the failure of legal norms that limit the equity interest of the same economic group in various broadcasting organizations; a short period (five years) for resell broadcasting concessions, facilitating the concentration by the big media groups through the purchase of independent stations, and no restrictions to the formation of national broadcasting networks. He cites examples of horizontal, vertical, crossed and "in cross" concentration (a Brazilian peculiarity).
The UNESCO office in Brasilia has expressed its concern over the existence of an outdated code of telecommunications (1962), which no longer meets the expectations generated by the Brazilian Constitution of 1988 in the political and social fields, and the inability of the Brazilian government to establish an independent regulatory agency to manage the media. Attempts in this direction have been pointed by the mainstream media as attacks on freedom of expression, the trend of the political left in the entire Latin American continent.
After concerns raised in the European Parliament and by NGOs about concentration of media ownership in Europe, and its repercussion on pluralism and freedom of expression, in 2007 the European Commission released a three phase plan. The plan is supposed to produce an official communication to state members by the end of 2010.
In October 2009, a European Union Directive was proposed to set for all member states common and higher standards for media pluralism, right to information and freedom of expression. The proposal was put to a vote in the European Parliament and rejected by just three votes. The directive was supported by the liberal-centrists, the progressives and the green party, and was opposed by the European People's Party. Unexpectedly, the Irish liberals made exception by voting against the directive, and later revealed that they had been pressured by the Irish right-wing government to do so.
In the Czech Republic about 80% of the newspapers and magazines are owned by German and Swiss corporations.
The two main press groups (Vltava-Labe-Press and Mafra) are (completely or partly) controlled by the German group Rheinisch-Bergische Druckerei- und Verlagsgesellschaft (Mediengruppe Rheinische Post).
Czech governments, anxious not to be seen as placing any obstacles in the way of the country's path to EU membership, have defended foreign newspaper ownership as a manifestation of the principle of the free movement of capital.
The centre-left newspaper Právo is currently the only non-foreign owned Czech newspaper.
The weekly Respekt is published by R-Presse, the majority of whose shares are owned by former Czech Minister of foreign affairs Karel Schwarzenberg.
The national television market is dominated by 4 terrestrial stations, two public (Czech TV1 and Czech TV2) and two private (NOVA TV and Prima TV), which draw 95% of audience share.
Concerning the diversity of output, this is limited by a series of factors: the average low level of professional education among Czech journalists is compensated by "informal professionalization", leading to a degree of conformity in approaches; political parties hold strong ties in Czech media, especially print, where more than 50% of Czech journalists identify with the Right, while only 16% express sympathy for the Left; the process of commercialization and "tabloidization" has increased, lowering differentiation of contents in Czech print media.
Axel Springer AG is one of the largest newspaper publishing companies in Europe, claiming to have over 150 newspapers and magazines in over 30 countries in Europe. In the 1960s and 1970s the company's media followed an aggressive conservative policy (see Springerpresse). It publishes Germany's only nationwide tabloid, Bild and one of Germany's most important broadsheets, Die Welt. Axel Springer also owns a number of regional newspapers, especially in Saxony and in the Hamburg Metropolitan Region, giving the company a de facto monopoly in the latter case. An attempt to buy one of Germany's two major private TV Groups, ProSiebenSat.1 in 2006 was withdrawn due to large concerns by regulation authorities as well as by parts of the public. The company is also active in Hungary, where it is the biggest publisher of regional newspapers, and in Poland, where it owns the best-selling tabloid Fakt, one of the nation's most important broadsheets, Dziennik, and is one of the biggest shareholder in #2 private TV company, Polsat.
Bertelsmann is one of the world's largest media companies. It owns RTL Group, which is one of the two major private TV companies in both Germany and the Netherlands and also owning assets in Belgium, France, UK, Spain, Czech and Hungary. Bertelsmann also owns Gruner+Jahr, Germany's biggest popular magazine publisher, including popular news magazine Stern and a 26% share in investigative news magazine Der Spiegel. Bertelsmann also owns Random House, a book publisher, #1 in the English-speaking world and #2 in Germany.
In Ireland, the company, Independent News & Media (CEO: Tony O'Reilly), owns many national newspapers: the Evening Herald, Irish Independent, Sunday Independent, Sunday World and Irish Daily Star. It also owns 29.9% of the Sunday Tribune. Broadcast media is divided between state owned RTE which operates several radio stations and television channels and has started digital radio and television services in the early 2010s; TG4 and Irish language broadcaster, and TV3 a commercial television operator. Denis O'Brien an Irish billionaire with a fortune partly accumulated through the Esat Digifone licence controversy, formed Communicorp Group Ltd in 1989, with the company currently owning 42 radio stations in 8 European countries, including Ireland's Newstalk, Today FM, Dublin's 98 (formerly 98FM), Spin 1038 and Spin South West. In January 2006, O'Brien took a stake in Tony O'Reilly's Independent News & Media (IN&M). As of May 2012, he holds a 29.9% stake in the company, making him the largest shareholder. This compares to O'Reilly's family stake of around 13%.
Silvio Berlusconi, the former Prime Minister of Italy, is the major shareholder of - by far - Italy's biggest (and de facto only) private free TV company, Mediaset, Italy's biggest publisher, Mondadori, and Italy's biggest advertising company Publitalia (it). One of Italy's nationwide dailies, Il Giornale, is owned by his brother, Paolo Berlusconi, and another, Il Foglio, by his former wife, Veronica Lario. Berlusconi has often been criticized for using the media assets he owns to advance his political career.
In Britain and Ireland, Rupert Murdoch owns best-selling tabloid The Sun as well as the broadsheet The Times and Sunday Times, and 39% of satellite broadcasting network BSkyB. In March 2011, the United Kingdom provisionally approved Murdoch to buy the remaining 61% of BSkyB, however, subsequent events (News of the World hacking scandal and its closure in July 2011) leading to the Leveson Inquiry have halted this takeover.
Daily Mail and General Trust (DMGT) own The Daily Mail and The Mail on Sunday, Ireland on Sunday, and free London daily Metro, and control a large proportion of regional media, including through subsidiary Northcliffe Media, in addition to large shares in ITN and GCap Media.
In Israel, Arnon Mozes owns the most widespread Hebrew newspaper, Yediot Aharonot, the most widespread Russian newspaper Vesty, the most popular Hebrew news website Ynet, and 17% of the cable TV firm HOT. Moreover, Mozes owns the Reshet TV firm, which is one of the two operators of the most popular channel in Israel, Channel 2.
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In Mexico there are only two national broadcast television service companies, Televisa and Azteca. These two broadcasters together administer 434 of the 461 total commercial television stations in the country (94.14%).
Though concern about the existence of a duopoly had been around for some time, a press uproar sparked in 2006, when a controversial reform to the Federal Radio and Television Law, seriously hampered the entry of new competitors, like Cadena Tres.
Televisa also owns subscription TV enterprises Cablevision (Mexico) and SKY, a publishing company Editorial Televisa (es), and the Televisa Radio broadcast radio network, creating a de facto media monopoly in many regions of the country.
In the United States, movie production is known to be dominated by major studios since the early 20th Century; before that, there was a period in which Edison's Trust monopolized the industry. The music and television industries recently witnessed cases of media consolidation, with Sony Music Entertainment's parent company merging their music division with Bertelsmann AG's BMG to form Sony BMG and Tribune's The WB and CBS Corp.'s UPN merging to form The CW. In the case of Sony BMG, there existed a "Big Five" (now "Big Four") of major record companies, while The CW's creation was an attempt to consolidate ratings and stand up to the "Big Four" of American network (terrestrial) television (this despite the fact that the CW was, in fact, partially owned by one of the Big Four in CBS). In television, the vast majority of broadcast and basic cable networks, over a hundred in all, are controlled by eight corporations: News Corporation (the Fox family of channels), The Walt Disney Company (which includes the ABC, ESPN and Disney brands), National Amusements (which includes CBS Corporation and Viacom), Comcast (which includes the NBC brands), Time Warner, Discovery Communications, E. W. Scripps Company, Cablevision, or some combination thereof.
There may also be some large-scale owners in an industry that are not the causes of monopoly or oligopoly. Clear Channel Communications, especially since the Telecommunications Act of 1996, acquired many radio stations across the United States, and came to own more than 1,200 stations. However, the radio broadcasting industry in the United States and elsewhere can be regarded as oligopolistic regardless of the existence of such a player. Because radio stations are local in reach, each licensed a specific part of spectrum by the FCC in a specific local area, any local market is served by a limited number of stations. In most countries, this system of licensing makes many markets local oligopolies. The similar market structure exists for television broadcasting, cable systems and newspaper industries, all of which are characterized by the existence of large-scale owners. Concentration of ownership is often found in these industries.
In the United States, data on ownership and market share of media companies is not held in the public domain.
Over the years there have been many Merger attempts, some successful, others not. Over time the amount of media merging has increased and the amount of media outlets have increased. That translates to fewer companies owning more media sources, increasing the concentration of ownership.
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Supporting Media Deregulation:
Opposing Media Deregulation: