CHAPTER NINE: CONCENTRATION OF OWNERSHIP.

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.

During the past decade, it has become a trend for media businesses to merge and create new,
more powerful corporations. So much merging has accorded that the number of global media
companies has gone from 50 to about six to ten major media corporations. The goal of this
concentration of ownership is still unknown. Many think for the benefit of the people and
others think for the benefit of the owners themselves. The outcome however of these mergers
has been good and bad for society. More innovation in media has taken place because of the
mergers but the mergers have led to a delocalization in media and created several media bias
among owned news groups.
The media itself has nothing but benefits from merging. They will be the ones who control the
media and control the information that we receive. If we have so many channels owned by a
few corporations, than where‟s the room for diversity of opinion?

9.1. Reasons for concentration of media ownership

1. Scarcity.
A media house is costly to set up and run successfully. Few individuals or organizations have
enough finances, resources and man power to own a media house. As a result, the few who
have the resources dominate the scarce market. E.g The Nation Media House or the Standard
Media stands a better chance in terms of resources to set up and run more radio stations
compared to an individual without the adequate resources.

2. Need to attract and maintain new and expert talent.

Expert talents are more likely to be drawn to a giant media house as opposed to a single
entity. E.g, John Allan Namu would be more likely drawn to The Nation Media Group as
opposed to GBS.
 3. Ego and Glamour
The bigger the media house, the more royal it stands in society and the more the owners,
managers and employees pride themselves in that media house.

4. Need for profit

Like any other business, the media industry does more than just entertain, educate and
disseminate information. It is also a business entity that needs to provide the owner with
profit. As a result, the bigger the media house, the more profits generated. E.g the Royal
Media Group stands a better chance at profits than Kass TV. Advertisers are drawn to media
houses that reach the audience they target as well, because it ensures they get their money‟s
worth of airtime.

Advantages and Disadvantages of Media Consolidation

Pros of Media Consolidation

Media for the Consumers: What works for the consumers, works in the media. Like any
other business, the purpose of the media is to earn profit and the only way they can do so, is
by providing the viewers with whatever they want. So something that is popular in media
stays on, while others are just chucked out. Since people are responsible for what appears in
the media, it is assumed that quality media wins.

Minimal Government Control: If the media is consolidated, and it is people who make
choices of what they want to see, the government control is minimal.

The Advantage of Converging Technologies: According to pro consolidation arguments, due

to converging technologies the media houses are fueled by the desire to reach consumers in
different and often innovative ways. This allows the user to get a phone, TV and internet from
a single company, and pay a single competitively priced bill, instead of three different bills.
The competition among the few media houses also ensures better and lower prices for the
consumers.

Diversification: The diversification argument by the media houses says that with
consolidation there is lesser investment risk. Therefore, a bad phase by a subsidiary of the
media conglomerate can be counterbalanced by more profitable ventures. Meanwhile, the pro
consolidation voice also argues that with diversification there are a number of TV channels,
movie productions, newspapers, radio or the Internet offered by companies. Thus every niche
is catered for, and every voice is heard.

Cons of Media Consolidation

Lack of Competing Viewpoints and Perspectives: One of the biggest fears in the minds of
those opposing media consolidation is that the large media houses will silence alternate
views, which can then lead to a decline in democratic viewpoints. It is staggering to imagine
that only a handful of media houses cater to billions of viewers. They are responsible for
controlling all aspects of the industry, from creation and production to delivery. This has led
to lack of meaningful content and alternate viewpoints in the media. So, every channel you
tune into expresses the same opinions. There is marked censorship of content, especially if it
is too controversial. The lack of diversity is a direct result of monopoly in the market, and
little or no healthy market-based competition.

Money Vs. Public Interest: The lack of adequate competition also means that media houses
now, run after money instead of serving public interest. Since every media house is now
ensured of a large global audience, the focus shifts from providing quality services to getting
more money. Innovative or risky ideas are now squelched in favor of 'tried and tested'
methods. Moreover, with less competition, the media houses charge more and, due to the lack
of alternatives, the consumer has to pay.

Focus on Advertisers: The commercially driven media is loyal to their sponsors and
advertisers, not to the viewers. There is minimal interest in journalism and public affairs, and
more concentration of lucrative genres that do quite well. As the CEO of Westinghouse put it
aptly "We are here to serve advertisers. That is our raison d'être."
Biased Political Views: Large media houses are also blamed for their biased political views.
Media companies are known to support candidates and political parties. When big donations
from a political party or candidate are made for example, it affects and influences the content
in the media as well.

Less Local News: With the monopoly of large media businesses, the local news takes a
backseat. With cross-owned media there was a marked production of total news produced
locally. Despite the proponents trying to push it, media consolidation has definitely had a
negative impact on journalism and the ability of news to provide important democratic
information to its citizens. The control of the large media houses on the information we see,
including the information in newspapers and other sources, is staggering. Although this does
not mean that they are out to spread evil or do bad, it is the deprivation of actual facts and
varied opinions that irks people when they hear the word media consolidation.

9.2 Media ownership patterns

State media or state-owned media is media for mass communication which is ultimately
controlled and/or funded by the state. These news outlets may be the sole media outlet or may
exist in competition with privately controlled media.

PRIVATELY OWNED MEDIA HOUSES

9.2.1 Joint stock media companies

A joint-stock company is a business entity which is owned by shareholders. Each
shareholder owns the portion of the company in proportion to his or her ownership of the
company's shares (certificates of ownership). This allows for the unequal ownership of a
business with some shareholders owning a larger proportion of a company than others.
Shareholders are able to transfer their shares to others without any effects to the continued
existence of the company.
9.2.2 Sole proprietorship companies

Sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of
business entity that is owned and run by one individual and in which there is no legal
distinction between the owner and the business. The owner receives all profits (subject to
taxation specific to the business) and has unlimited responsibility for all losses and debts.
Every asset of the business is owned by the proprietor and all debts of the business are the
proprietor's. It is a "sole" proprietorship in contrast with partnerships. A sole proprietor may
use a trade name or business name other than his or her legal name.

Advantages

 It is easy to organize the needs only small amounts of capital needs to

start and run a business.
 It permits a high degree of flexibility for the owner since he/she is the
boss of the business establishment.
 Due to the owner's unlimited liability, some creditors are more willing
to extend credit.
 The owner receives all the profit of the business.

Disadvantages

Raising capital for a proprietorship is more difficult because an unrelated investor has less
peace of mind concerning the use and security of his or her investment and the investment is
more difficult to formalize; other types of business entities have more documentation. The
enterprise may be crippled or terminated if the owner becomes ill. Since the business is the
same legal entity as the proprietor, it ceases to exist upon the proprietor's death. Because the
enterprise rests exclusively on one person, it often has difficulty raising long-term capital.

 Has limited resources. Banks are reluctant to grant loans to single

proprietorship considering its small assets and high mortality rate.
 Unlimited liability for business debts. The single owner is responsible
for paying all debts and damages of their business.
  If the firm fails, creditors may force the sale of the proprietor's
personal property as well as their business property to satisfy their
claim.
 When the owner dies, the continuation of the business is difficult,
because a new owner must typically accept all liabilities of the
business.

9.2.3 Partnerships
Definition: A legal form of business operation between two or more individuals who share
management and profits. The federal government recognizes several types of partnerships.
The two most common are general and limited partnerships.

If your business will be owned and operated by several individuals, you'll want to take a look
at structuring your business as a partnership. Partnerships come in two varieties: general
partnerships and limited partnerships. In a general partnership, the partners manage the
company and assume responsibility for the partnership's debts and other obligations. A
limited partnership has both general and limited partners. The general partners own and
operate the business and assume liability for the partnership, while the limited partners serve
as investors only; they have no control over the company and are not subject to the same
liabilities as the general partners.

If you decide to organize your business as a partnership, be sure you draft a partnership
agreement that details how business decisions are made, how disputes are resolved and how to
handle a buyout. You'll be glad you have this agreement if for some reason you run into
difficulties with one of the partners or if someone wants out of the arrangement.

The agreement should address the purpose of the business and the authority and responsibility
of each partner. It's a good idea to consult an attorney experienced with small businesses for
help in drafting the agreement. Here are some other issues you'll want the agreement to
address:

 How will the ownership interest be shared? It's not necessary, for
example, for two owners to equally share ownership and authority.
However, if you decide to do it, make sure the proportion is stated
clearly in the agreement.
 How will decisions be made? It's a good idea to establish voting
rights in case a major disagreement arises. When just two partners
own the business 50-50, there's the possibility of a deadlock. To avoid
this, some businesses provide in advance for a third partner, a trusted
associate who may own only 1 percent of the business but whose vote
can break a tie.
 When one partner withdraws, how will the purchase price be
determined? One possibility is to agree on a neutral third party, such
as your banker or accountant, to find an appraiser to determine the
price of the partnership interest.
 If a partner withdraws from the partnership, when will the money
be paid? Depending on the partnership agreement, you can agree that
the money be paid over three, five or 10 years, with interest. You don't
want to be hit with a cash-flow crisis if the entire price has to be paid
on the spot on one lump sum.
CHAPTER TEN: VISION AND MISSION STATEMENTS OF
ORGANISATIONS
10.1 Vision Statements

Vision Statements also define the organizations purpose, but this time they do so in terms of
the organization's values rather than bottom line measures (values are guiding beliefs about
how things should be done.) The vision statement communicates both the purpose and values
of the organization. For employees, it gives direction about how they are expected to behave
and inspires them to give their best. Shared with customers, it shapes customers'
understanding of why they should work with the organization. A vision statement is a
declaration of a company's goals for the midterm or long-term future. Ranging from one line
to several paragraphs, a vision statement identifies what the company would like to achieve or
accomplish. A good vision statement provides the inspiration for the daily operations of a
business and molds its strategic decisions. A high-quality and inspiring vision statement for a
small business should have two key characteristics: It needs to state where the company wants
to be in the near future, and it also must have a level of excitement and motivation to it.

A vision enables an organisation to move forward with clarity. It links the business' specific
objectives and targets with the core values that govern how the business will operate in order
to meet those targets. It therefore goes further than a mission statement.

A mission statement sets out the purpose of an organisation. For example, for Virgin Trains,
this is to run a high quality, efficient and cost-effective rail service. A vision goes further. It
paints a picture in clear language of where the organisation is going, linked to the behaviours
it expects of everyone in the organisation.

Virgin Trains' vision is: “To become the most safe, consistent, reliable and profitable of the
train operating franchises in a climate that respects different views and people need not be
afraid to be open and honest”.

This is a very clear vision:

  It sets out the values of the company, e.g. safety and reliability.
 It sets out clear commercial targets profitability.
 It sets out the relationship between the organisation and its people
respecting different views and encouraging openness and honesty.

Aspirational in nature, vision statements lay out the most important primary goals for a
company. Not to be confused with business plans, vision statements generally don't outline a
plan to achieve those goals. But by outlining the key objectives for a company, they enable
the company's employees to develop business strategies to achieve the stated goals. With a
single unifying vision statement, employees are all on the same page and can be more
productive.

10.2 Mission Statements

A Mission Statement defines the organization's purpose and primary objectives. Its prime
function is internal – to define the key measure or measures of the organization's success –
and its prime audience is the leadership team and stockholders.

Mission Statement Creation

1. To create your mission statement, first identify your organization's "winning

idea".
2. This is the idea or approach that will make your organization stand
out from its competitors, and is the reason that customers will come to
you and not your competitors (see tip below).
3. Next identify the key measures of your success. Make sure you choose
the most important measures (and not too many of them!)
4. Combine your winning idea and success measures into a tangible and
measurable goal.
5. Refine the words until you have a concise and precise statement of
your mission, which expresses your ideas, measures and desired
result.
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