Ted Turner on the media oligopoly
In an excellent piece in Washington Monthly ("My Beef With Big Media", July/August 2004), CNN founder and (former) media mogul Ted Turner deplores the current state of the media, He notes t6hat the barriers to entry to entrepreneurs has been drastically raised since he put together his own upstart media group, Turner Broadcasting, in the 1960s and ''70s. That company he later sold out to Time Warner simply because it couldn't compete as a mid-sized player against the oligopoly. Now the US government has been co-opted to rewrite the rule book to protect the status quo for the sake of a handful of media giants. Turner states out loud, and with authority, exactly what we have been saying on this site. Bravo!
Some of his points (I recommend strongly that you check out the article in full):
Lack of innovation: "But without the proper rules, healthy capitalist markets turn into sluggish oligopolies, and that is what's happening in media today. Large corporations are more profit-focused and risk-averse. … Their managers are more averse to innovation because they're afraid of being fired for an idea that fails. They prefer to sit on the sidelines, waiting to buy the businesses of the risk-takers who succeed. "
Vertical integration and control of the supplier: " To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks--ABC, CBS, NBC, and Fox--fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent."
Horizontal and vertical concentration: "The only way for media companies to survive is to own everything up and down the media chain--from broadcast and cable networks to the sitcoms, movies, and news broadcasts you see on those stations; to the production studios that make them; to the cable, satellite, and broadcast systems that bring the programs to your television set; to the Web sites you visit to read about those programs; to the way you log on to the Internet to view those pages. Big media today wants to own the faucet, pipeline, water, and the reservoir. The rain clouds come next."
The myth of cable competition: "First, the "competitive presence of cable" is a mirage. Broadcast networks have for years pointed to their loss of prime-time viewers to cable networks--but they are losing viewers to cable networks that they themselves own. Ninety percent of the top 50 cable TV stations are owned by the same parent companies that own the broadcast networks….The FCC says that we have more media choices than ever before. But only a few corporations decide what we can choose."
Friendly competitors: "These big companies are not antagonistic; they do billions of dollars in business with each other. They don't compete; they cooperate to inhibit competition."
Freedom of speech: "Consolidation has given big media companies new power over what is said not just on the air. Disney recently provoked an uproar when it prevented its subsidiary Miramax from distributing Michael Moore's film Fahrenheit 9/11. As a senior Disney executive told The New York Times: "It's not in the interest of any major corporation to be dragged into a highly charged partisan political battle." Follow the logic, and you can see what lies ahead: If the only media companies are major corporations, controversial and dissenting views may not be aired at all."
The article has more to say about all these issues, and has a major attack on oligopoly-friendly FCC deregulation.
