The Big Business

of Media:
The Growth of Media Monopolies
 Conglomerations, Buyouts, & Mergers
• Prior to 1960, hundreds of independent, family owned
companies produced mass media for the nation
– Anti-trust laws prohibited these companies from owning too much
– Everyone knew the danger of giving too much power to too few
• By 1980, it was down to 50

• In 2002, 7 firms control

American media
– And there are more and more anti-trust laws being overturned
everyday
 The Big 7
(and the MEN that run them)

• The Big American 4

– 1) AOL-Time/Warner—Steve Case
– 2) News Corp—Rupert Murdoch
– 3) Disney—Michael Eisner
– 4) Viacom—Sumner Redstone
• The Big International 3
– 5) Sony (Japan)—Sir Howard Stringer
– 6) Bertelsmann (German)—Thomas Middelhoff
– 7) V-Universal (French)—Jean-Marie Messier
 How did this happen?

• Question: What happened to Anti-Trust

Laws?
• Answer: The systematic repeal of laws &
policies to protect the public from big
business and media monopolies
• Not surprisingly, the Media Industry is a
top lobbying contributor to politicians
 The Big
American 4
 Viacom
• National TV: CBS (purchased for 36 Billion), MTV, UPN (new emerging
network), Nickelodeon, Showtime, CMT, TNN, VH1, BET (2.3 billion)
• Affiliates (#2): 38 Stations in the Biggest Markets!
• Radio: CBS (21 FM/18 AM), Infinity 181 FM (H. Stern), Westwood
• Film: Paramount Pictures (#2)
• Video: Blockbuster Video (# 1)
• Publishing: Simon & Schuster (#1), Scribners
• Cinema: United Cinemas International (joint w/ U.V.) (big 3)
• Internet: New Alliance with AOL, Jobs.com, Medscape
Marketwatch.com, SportsLine, Wrenchead.com, StoreRunner
• Others: 7 theme parks (including part Universal Studios)
 Disney/Capital Cities
• TV: ABC, ESPN (all), A & E, Lifetime, History Channels (w/ GE),
SoapNet, E! (w/ ATT), Fox Family Channel (5.3 Billion)
• Affiliates (#5): 24.5% of U.S. households
• ABC Radio: 42 Stations reaching 13 Million
• Motion Pictures (#3): Touchstone, Buena Vista, Walt Disney, Miramax
• Internet: Go Network, Disney, ESPN, ABC News, Toysmart, infoseek,
NASCAR.com, NFL.com, NBA.com
• Entertainment: Theme Parks (creates 30% of revenue)in FL, CA, Paris,
Tokyo, Hong Kong (with MGM), Mighty Ducks, Cal. Angels, Cruise Line,
ESPN Zones
• Others: Crude Petroleum, Natural Gas, Berkshire Hathaway Inc
(insurance), State Farm, and 700 Disney retail stores
 New Corp. (AKA Fox)
• Reaches 3 billion people--2/3 of world
• TV: 22 Different Channels (most in US) including Fox (#3), fx,
Fox Sports, Fox News, and Fox Sports (specialized focal areas);
Fox Production--#1 (selling show to other networks)
• Affiliates (#1): 32 in Biggest Cities
• Satellites: DirecTV (#1 in America), Europe, US, Asia, & Latin
America
• Movies: 20th Century (#1)
• Newspapers (#3): 132--London Times, NY Post, The Sun (UK)
• Magazines (#2): TV Guide (#1) and 24 Others
• Books: Harper Collins (#5)
• Internet: Healtheon/Web MD (1 billion $)
• Sports: Los Angels Dodgers (#2), 20% of NY Knicks &
Rangers, 40% of LA Kings, 10% of Lakers
 AOL-Time-Warner-Turner #1
• Cable Entertainment: WB, Sega, E!, CNN, HBO, Comedy Central,
Cinemax, TBS, Cartoon Network, WB (new emerging network)
• Cable Companies (the pipes): Time Warner Cable w/ 13 million
customers (2nd Largest)
• Books: Time-Life Publishing (# 2), BOMC
• Studios: Warner Brothers, Castle Rock, MGM, New Line Cinema
(total #1)
• Vault (#1): 6,000 Films, 25,000 TV Programs, Cartoons!
• Music (#2): Warner/Chappel, Atlantic, Elecktra, Reprise, (new)=
EMI, Capitol, Virgin, Columbia House (50% w/ Sony)
• Programming: ER, Friends, Buffy, Sopranos, etc.
 AOL-Time-Warner-Turner
• Mags (#1): Time, Fortune, Life, SI, People, Money
• Others: PrimeStar, Six Flags, Atari, Hasbro, DC Comics,
Braves, Hawks, Retail Stores, Hanna-Barbera, 1,000
oversea theaters, 100 cable and TV stations outside US
• Internet (#1): AOL w/ 20 million customers (a new user
every 3.5 seconds), Netscape, Compuserve, MovieFone,
Instant Messenger--Worth about 200 Billion
• Joint Ventures: Hughes Electronics, 3 Com, Kodak,
General Motors, Hewlett-Packard
 General Electric
(#1 Forbes for Overall Holdings)

• Entertainment: NBC, CNBC, Bravo, AMC, History

Channel, Independent Film, Prime, Prism, Romance
Classics, MS-NBC (joint venture with Gates), Paxson
Network, Much Music
• Affiliates (#1): 13 NBC, 72 Paxson Stations
• Industrial: Transportation, Nuclear Reactors,
Satellites, Long Distance, Motors, Plastics, Medical
Services, Lighting, Insurance, Aircraft
• Can you say, “Conflict of Interest!”
 Sony (Japan)
• Electronics: Media technology (#1 in home entertainment)
• Music: CBS, Columbia (50% with T-W), Sony, & Epic
Records (#3)
• TV: Cinemax Latin, E! Latin, HBO (Ole, Brazil, Asia, Poland),
Showtime Austrailia
• Movies: Columbia Pictures, Tri-Star, & Sony Pictures
• Theaters: Sony Theaters & Loews Cineplex (#1), IMAX
Theaters
• Games: 25% of video game market (#1), Playstation (#1)
 What the Breakdown Looks Like:
• 3 publishers have most of the nation’s book sales
– Viacom, T-W, Bertelsmann
• 2 major companies own most magazine sales
– T-W, News Corp
• 4 major companies own most music sales
– Universal, Sony, T-W, Bertelsmann
• 5 companies have most of the TV audience
– Disney, T-W, GE, Viacom, News Corp
• 6 major studios produce most movies
– Disney, Viacom, News Corp, T-W, Universal, Sony
• 5 companies own most of the local affiliates
– News Corp, Viacom, GE, Disney, T-W
• 5 companies own the major TV news stations
– Disney, T-W, GE, Viacom, News Corp
 More Bad News:
The Myth of Internet Diversification
• Don’t think the internet is giving us a freer and more
open market for greater choices
• Over 50% of all the internet hits come from only 4 sites:
– AOL Time Warner
– Microsoft
– Lycos
– Yahoo
• With Viacom, New Corp (Fox), & Disney also on the
top-ten list
 Who’s in Bed with Whom?
• AT&T (24 Million Cable Customers #1)
– News Corp & GE (PrimeStar ), New Corp (20% of Fox
News), Time Warner (10% of company), GE (10% of
company), Rainbow Media
• News Corp
– ATT, Rainbow, Time Warner, New York Times,
Rainbow Media, Newhouse
 So What’s The Problem?
• 1) No true competition in the industry
– Competition pushes business to be better and more diverse
(See what others are not doing, and do it better)
• Reach audiences that are being forgotten; Be more innovative;
Become cheaper; Supply better service; Give us less commercials;
Produce better and smarter shows
– With joint ventures, however, there are not 8 separate
corporations battling each other for quality. There are 8 inter-
locked corporations that depend on each other’s mutual
success
– In reality, do we have one big Monolith?
 So What’s The Problem?
• 2) A closed system
– When there were hundreds of small companies, it took far less
money & influence to “start up” a new business and to be
competitive
• For example, how can small businesses compete with Walmart,
Krogers, Gap, Walden Books, or McDonalds?
– The last 60 years has produced virtually no new players
• Spielberg & Microsoft’s Dreamworks
• And even they are getting beat up
– How do smaller, independent individuals compete with Billion $
Corporations?
 So What’s The Problem?
• 3) Media has lost its adversarial/protective role
– The news has been traditionally a watchdog for the American public (make
sure the bad guys get caught)
• They made sure Big Business and Government are clean
– They have become:
• 1) The biggest of Big Businesses with major holdings in nuclear energy, weapons,
chemicals, overseas labor, insurance, computers, health care, etc
• 2) Lobbying and campaign partners with Washington
– The richest one-quarter of 1 % of Americans (this would include the big 8) make 80% of campaign
contributions
– They Control: Today, Meet the Press, Dateline, 20/20, Prime Time, Good Morning
America, Nightline, CNN, Headline News, CNNfn, 60 Minutes, Morning News, Face the
Nation, 48 Hours, and Rather/Jennings/Brokaw Nightly News
– Think about all the stories you’ll never hear about!
 So What’s The Problem?
• 4) Profit is now the only criteria for success
– Before the business of media, people were dedicated to “truth” and “responsible
journalism”
• Like education, there was not a lot of money in the job
– Today we have businesses dedicated to profit
• The Big 8 traded on NYSE and NASDAQ
– A) News agencies focus on entertainment value
• What sells (sex, violence, and graphic photography)
– B) Bold, creative shows/approaches are discouraged
• Want the biggest share possible (think about today’s movies)
– C) Expensive shows/stories are not cost effective
• Give them the cheap stuff--No more “Watergate Investigations”
 So What’s The Problem?
• 5) 8 CEOs control the nation’s thoughts
– If you control the media you control the minds of the people (Hitler knew it)
– The media is the most effective teacher there is!
– Media have the power to:
– A) Keep us in the dark by not reporting certain issues
• NBC’s Nuclear Power, Viacom’s Advertising, News Corp’s Labor Practices, or the Big 8’s hold
on the market!!
– B) Tell us who to love or hate
• Love: White, rich, beautiful, thin, materialists
• Hate: Other cultures, minorities, Southerners, poor, uneducated
– C) Influence elections through favorable coverage
• The big-business candidate
 Possible Solutions
• 2) Break up the media monopolies (anti-trust laws)
– A company can only own one of any medium
– The rest must be sold off (reverse the damage)
– This would give many smaller firms and individuals an opportunity to participate
• 3) Have the Government and/or the Media Giants subsidize viable non-
profit media
– This would give us many more “public stations” to:
• 1) serve the public interest
• 2) aid democracy
• 3) further education
– Their goal would be edification, not profit!
 Possible Solutions
• 4) Implement campaign finance reform
– The richest one-quarter of 1 % of Americans (this would include the
big 8) make 80% of campaign contributions
– This guarantees Washington’s alliance with the rich
• And your powerlessness in politics since you don’t give
– With this level of influence, the Big 8 (and other rich corporations)
guarantee that THEIR best interests will be served
• Favorable tax laws, overturned Anti-Trust laws, etc.
– Question: Do our Representatives vote in our best interest or in
the interest of their million $ contributors?
• Remember, a successful campaign costs 4 to 10 Million $