Concentration of Media Ownership in Canada: Trends and Concerns

1. REVIEW CMNS 130

2. Concentration • The communication business tends ‘naturally’ to concentration • Effort to become bigger: control larger markets • Cross media ownership: mergers and acquisitions • Ie. Concentration of firms • But also Concentration of.. • Products • Media formats • Markets CMNS 130

3. Trends to Concentration of Media Ownership in Canada • Before WW1: 138 dailies with different owners • By 1992: only 18 independents remaining– now even fewer • Mostly owned by CanWest-Global who bought Hollinger…42% of dailies • Hollinger takeover of Southam in 1995 was appealed by Council of Canadians but failed in lower courts. CMNS 130

4. Canadian Media Concentration of O Bell Canada Enterprises • February 2000 bought CTV for 2.3 b • Acquired Globe and Mail • Also own Expressvu: satellite • Also own Telco in Ont/Quebec • Owns Sympatico: Canada’s largest internet portal CMNS 130

5. Canadian Concentration of O • Canwest ( Global) bought Southam Inc 2000 • Now owns most of the National Post • Over 12 markets the major papers and major TV stations ( eg: Canwest owns Sun, Province and Tony Parsons) • Quebecor owns TVA Videotron • Rogers owns Maclean Hunter mags • Electronic players buy out the print • Made in Canada media moguls: Conrad Black, Thompson, Seagrams/Vivendi now MNCs ( most sales off shore) CMNS 130

6. Advantages to Concentration • Vertical integration • When one company controls all of its production, distribution and sales • Time Warner can show Warner movie on HBO, promote it on AOL, then sell it to its cable franchises later in distribution chain ( second and third windows on release) • Or, Sony acquires software for the hardware companies ( See Lorimer and Gasher “Vertical Integration Today” p 184) • Horizontal integration • Disney sells products across different media ( theatre, ABC etc) or forms marketing alliances: MacDonalds CMNS 130

7. Disadvantages • Debt structure • Inertia or incompatible structures • Inability to effect the ‘grand design’ • An “eternal Peter Pan industry”: Economist’s • thesis of failing to live up to responsibilities • Abuse of market power: risk of block booking, windowing as a form of price discrimination- tied selling or other anti-competitive practices CMNS 130

8. Conglomerate Defense • Only size can offset risk: aggregate economies of scale to afford stars/innovation • Retaliatory market behavior will ‘trim the sails’ of aggrandizing companies: Murdoch bought Fox, then 20th Century Fox, then other studios ganged up by signing with rivals • ‘self righting’: no conglomerate can tell subsidiaries what to buy • No harmful intent CMNS 130

9. LORDS AND THE LIBERALS • Structural Political Economy • A study of interlocking elites: • Political and media elites • Corporate and media elites • A study of elite influence, censorship and control over news manufacture CMNS 130

10. Market Concentration Test • Measured by subs, or audiences reached by ownership group • Assessed by decision about effective competition ( between TV and news outlets) • Now over 60% of Canadians receive their newspaper from the same co as one of their TV stations • Fall out: Quebecor takeover followed by Cuts, and CanWest takeover followed by cuts of 1/3 news staff at the Post, and closure of websites CMNS 130

11. Basis for Public Policy Concern • Impact on channels for editorial diversity ( Vancouver: Sun,Province and BCTV, the most viewed news source in Lower Mainland all owned by Izzy Asper) • Concern that Daily Newspapers have become bland: unlikely to disturb the status quo due to market pressures • After takeovers there are layoffs, in search to reduce costs, and shrink reportage • Rural areas without news bureaus, replicating centre periphery dominance CMNS 130

12. The Criticisms of Commercial Ownership and Control • Examples: Ben Bagdikian “Lords of the Global Village’– Mosco, Schiller, Murdoch, Clement, Hannigan, Babe, Mansell other authors • Look at the interlocks and interpenetration of media and corporate or state elites: 40 to 60% overlap on Boards and other networks of power • Social and structural interlocks between powerful economic and media and political elites CMNS 130

13. Criticisms from an O & C perspective • Assume either direct economic censorship or indirect censorship through ideological limits on the manufacture of news– either through reinforcing professional norms, organizational cultures, or other systemic controls • Point to instrumental examples of economic censorship: GE is the US’ largest weapons manufacturer but NBC has pulled stories on arms trade ( Anderson: 26) or focuses solely on Saddam Hussein’s ‘weapons of mass destruction’, not asking what is the US role in build up of arms, norwhat the military industrial complex gains when Bush pushes to war CMNS 130

14. Critical Studies • Like Project Censored, or Newswatch • Look for the stories which do NOT make the news: • The biggest power of the press is to ignore • Examples: • Environmental impacts of the Olympics • Problems with salmon farming • Weaknesses of the Access to Information Act CMNS 130

15. The Myth of Consumer Sovereignty • Consumers can refuse to buy, but cannot directly control the cultural products available CMNS 130

16. Myth of Public Media Transparency • webs of relationships: public information on these private consortia is weak • There is no ‘access to information act’ which controls the private sector boardroom • Even if a • No legal protections for journalists or creators against economic censorship • Journalists are gagged: • In an MA study ( Ian Ross) of NDP and press, BC journalists afraid to express an opinion • Cannot protest coverage ( eg. Mad Cow Disease scare) • Some professional unions ( eg CEP) wonder if it is necessary to pass status of the journalists legislation in Canada CMNS 130

17. The Corporate Propaganda Model • Not crude conspiracy theory • Instead, argues, like Noam Chomsky, that the media delimit the bounds of expression, exclude dissent from entrenched, official positions, serving the interlocking interests of state and corporate power • Media reflect and entrench the status quo CMNS 130

18. News Watch Canada: Hackett, Gutstein and Zhao • Top 30 stories in Project Censored focus on reluctance of media to cover business misconduct • In US: complicity of business press in Enron and other scandals CMNS 130

19. Studies on the Economic Effects of Concentration • Ad rates rise ( proven after takeover of Tribune by Southam in 1980) • Positive: economies of scale • Negative: loss of local control, job loss • Kent Commission (1980): proposed limiting ceiling on Chain growth, ordering divestiture, exempting papers from taxes, shield laws for editors in chief, press riths panel in the Human Rights Commission • All rejected except Press Councils CMNS 130

20. Cases of Direct Owner Censorship Hard to Find • Irving: New Brunswick Oil Spill • Winnipeg Free Press: owner directed papers to attack the Income Tax Act in 1965 • Analysis of systemic/ideological factors growing • See Lorimer and Gasher: What Won’t You Do? Pages 112-113. CMNS 130

21. Content Effects • Before and after study of front page, editorial, features,sources of content,areas of interest, revealed changes in Windsor Star ( Winter study) • Evaluation of whether these changes are positive or negative depends on one’s ideological position. • But increasing commodification of the news, in search for profits • Emergence of ‘lifestyle’, tabloid news, blurring ‘reality’genres • More wire imports from AP/etc. globally. Less local coverage • Reduced editorial pages CMNS 130

22. Partisan Effects • Some owners write editorials ( Asper: Shawinigate) • Editorial Pages sometimes come out for parties • But, study of elections does not suggest a consistent pattern concluding that these patterns of editorial support swing votes CMNS 130

23. Commercial Reductionism • See Lorimer and Gasher text, pp. 116-118 • Sometimes called the Lowest Common Denominator of taste effect: need to maximize audiences and profits, drive to ‘dumb down’ news and current affairs, slant to violence and sex as non-verbal, universal global formulae entertainment with high export value • Also called LOP– least objectionable program ( see Grossberg et al, p 112) CMNS 130

24. Global versus National Tensions • Trends to concentration are now global • ‘six’ large multinational mega companies • Sole defense against international agglomeration: foreign investment rules • Now Canadian owners are arguing they want access to more foreign capital: want to make more investments abroad • Currently under review by Senate CMNS 130

25. History of Economic Organization • Until 1980 predominantly within National Borders • Most countries had local ownership rules ( no more than 20 % foreign media control, and indigenous boards, reporting if publicly traded companies) • Entertainment markets begin to globalize through film, videogames and TV series: increasing trade in all media sectors CMNS 130

26. MultiNational Giants • AOL Time Warner: larger than the GDP of most countries ( US $29 b) • Disney ( US $ 17 b) • Bertelsmann ( German) • Sony ( Japan) • Viacom ( US) • Fox(Australia) • Thomson • GE/NBC • AT&T and Liberty CMNS 130

27. Trade • Growth in world trade in last 20 years has been 7 times the average growth of GNP • Canada’s Open Economy among the most trade dependent of the G-8 • 30% of GNP derived from exports • Most of the trade still in resources but for new exporters: Northern Telecom, Spar, Telcos • Canada has a persistently high deficit in tech trade deficit, and high trade deficit in media hardware and software CMNS 130

28. US dominance of World Trade • Controls 75% of world trade in audio visual media • If look at top ad agencies, takeovers of American MNCs, see growing foreign (non American) share • Still a dominant market power: after defense, entertainment is the US biggest export CMNS 130

29. Ways to Measure Trade Dominance • Share of Domestic Markets ( individual nation basis) • Share of total world trade CMNS 130

30. US Share of Canadian Domestic Market • 80% of books and magazines consumed in Canada are American • 66% of viewing time to English TV is to US • 97% of movies are US • Comparison: less than 2% of US TV is foreign CMNS 130

31. US Share of World Trade • Estimated in Burnett, Global Jukebox, 1995: • Broadcast and cable 75% • Film: 55% • Video/sound recordings:55% • Books: 35% • (caution: difficulty of source checking) CMNS 130

32. Why the Dominance • US products can recover up to 80% of their costs in their home market due to size of their market and consumer preference for US made media • Thus can afford to sell abroad more cheaply • Costs of foreign licensing of US product are between 1/6 to 1/10th the cost of original production • thus there are strong incentives to buy US fare and repackage it to maximize profits • There is a huge large market advantage ( and small market disadvantage) in the ‘block buster’ media and entertainment market CMNS 130

33. Conclusion: • As the number of corporate owners drops, more content is controlled by fewer companies. Oligopoly describes this condition. • Journalists find themselves in a conflict of interest situation in reporting on the malfeasance of their owners • Societies debate whether the media are public or private goods every generation– Ideological pendulums shifts • Should governments regulate competition? How? • States are concerned about world market dominance of US—call for fair trade not free trade • An International Movement led by Canada now is trying to protect smaller countries against overwhelming US global dominance CMNS 130

34. Other Sources • Jim Winter, Democracy’s Oxygen, 1995 • Ben Bagdikian, “Lords of the Global Village” • Robert McChesney, Global Media • Lorimer and Gasher, pp. 203-218;222-232 CMNS 130

35. Study Guide: State, Media Politics and Market • What are the major questions posed by capitalist organization of the media? • How does capitalism relate to ideology, and what are the accepted roles of the state? CMNS 130

36. Other Major Questions • Why do people take for granted that the media should operate within and as a part of the capitalist economy? • How does the organization of the media as private, profit making ventures influence the kind and quality of media available to audiences/ consumers/citizens? CMNS 130