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Concentration of media ownership

From Academic Kids

Concentration of media ownership (also known as media consolidation or media convergence) is a commonly used term among media critics, policy makers, and others to characterize ownership structure of media industries. These individual media industries are often referred to as a 'Media Institution'.

Media ownership is said to be concentrated usually in one or more of the following ways.

First there is a state of oligopoly or monopoly in a given media industry. For example, 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 recording industry in the United States, similarly, is dominated by the major labels.

Second, there may be some large-scale owners in a 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. Radio broadcasting industry in the United States can be regarded oligopolistic regardless of the existence of such a player. Because radio stations are local in reach, each licensed a specific part of airwave by the FCC in a specific local area, any local market is served by a limited number of stations. This system of licensing makes many markets local oligopoly. The similar market structure exists for U.S. 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.

Third, concentration of media ownership often refer to the presence of media conglomerates. When a company owns many different types of media businesses, it is referred to as a media conglomerate. Among the best-known examples are Time Warner, Disney, and Viacom.

Contents

Debates

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 concequences follows, including the following:

  • For the general public, there are less diverse opinions and voices available from media.
  • For minorities and others, smaller opportunities exist to voice their concerns and reach the public.
  • Healthy market-based competition is absent, leading to slower innovation and increased prices.

For those critics, the deregulation of media and communication industries are lamentable trends, causing or helping the increase in such concentration. Also criticized together at times is the commercialism in media.

A typical counter-arguments to those criticisms include the following:

  • Increased competitiveness due to the larger capital of the owners, especially to compete against some of the global, giant media conglomerates
  • Reduced cost of operations as a result of consolidation of some functions
  • More segmented or differenciated products and services to respond to a wider variety of demands better.

Media Ownership Deregulation of 2003

The FCC held one official forum, February 27, 2003, in Richmond, Virginia in response to public pressures to allow for more input on the issue of elimination of media ownership limits. Some complain that more than one forum was needed. [1] (http://www.richmond.com/business/output.aspx?id=2414262) [2] (http://www.american-buddha.com/media.ownership.htm)

On June 2, 2003, The U.S. Federal Communications Commission (FCC), in a 3-2 vote, approved new media ownership laws that removed many of the restrictions previously imposed to limit ownership of media within a local area.

The changes were not, as is customarily done, made available to the public for a comment period. Two commissioners requested this public comment period (the same two who voted against the changes) and their requests were denied without justification.

The news coverage of this event was very low-key.

A few of the points included:

  • Single-company ownership of media in a given market is now permitted up to 45% (formerly 35%, up from 25% in 1996) of that market.
  • Restrictions on newspaper and TV station ownership in the same market were removed.
  • All TV channels, magazines, newspapers, cable, and internet services are now counted, weighted based on people's average tendency to find news on that medium. At the same time, whether a channel actually contains news is no longer considered in counting the percentage of a medium owned by one owner.
(Thus it is now possible for two companies to own all of a city's 2 newspapers, 3 local TV stations, 2 national TV networks, and 8 local radio stations, (up to 45% of the media each) so long as there are other companies owning the shopping channel, the discovery channel, and at least 10% of other non-news outlets.)
  • Previous requirements for periodic review of license have been changed. Licenses are no longer reviewed for "public-interest" considerations.

More information on the new consolidation rules is available from the FCC website. In particular, there are press releases from the commissioners who voted for the changes, and from those who voted against them.

See also

External links

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