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 and television industries recently witnessed cases of media consolidation, with Sony Music Entertainment's parent company merging their music division with Bertelsmann AG's BMG to form Sony BMG and TimeWarner's The WB and CBS Corp.'s UPN merging to form The CW. In the case of Sony BMG, there existed a "Big Five" (now "Big Four") of major record companies, while The CW's creation was an attempt to consolidate ratings and stand up to the "Big Four" of American network (terrestrial) television.
There may also be some large-scale owners in an 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. However, the radio broadcasting industry in the United States and elsewhere can be regarded as 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. In most countries, this system of licensing makes many markets local oligopolies. The similar market structure exists for 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.
In the United States, data on ownership and market share of media companies is not held in the public domain. Academics, for example at MIT Media Lab and NYU, have struggled to find data that show reliably the concentration of media ownership.
It is important to elaborate upon the issue of media consolidation and its effect upon the diversity of information reaching a particular market. Critics of consolidation raise the issue of whether monopolistic or oligopolistic control of a local media market can be fully accountable and dependable in serving the public interest. If, for example, only one or two media conglomerates dominate in a single market, the question is not only that of whether they will present a diversity of opinions, but also of whether they are willing to present information that may be damaging to either their advertisers or to themselves.
If it is in the best interests of the media conglomerates not to run a story or allow a particular opinion, but in the best interests of the public interest to run it, it arguably makes better business sense to opt for the former over the latter. On the local end, reporters have often seen their stories refused or edited beyond recognition, in instances where they have unearthed potentially damaging information concerning either the media outlet's advertisers or its parent company. For example, in 1997, the Fox Broadcasting Company O&O in Tampa, Florida fired two reporters and suppressed a story they had produced about one of the Fox network's major advertisers, Monsanto, concerning the health effects of Bovine Growth Hormone (BGH). Monsanto took action after Fox and threatened to sue over the story.
Another example would be the repeated refusal of networks to air "ads" from anti-war advocates to liberal groups like MoveOn.org, or religious groups like the United Church of Christ, regardless of factual basis. A recent famous case was Super Bowl XXXVIII wherein CBS refused to air an ad criticizing the growing federal budget deficit but aired a spot celebrating the Office of National Drug Control Policy.
Consequently, if the companies dominating a media market choose to suppress stories that do not serve their interests, the public suffers, since they are not adequately informed of some crucial issues that may affect them. If the only media outlets in town refuse to air a story, then the question becomes, who will?
Concern among academia rests in the notion that the purpose of the first amendment to the US constitution was to encourage a free press as political agitator evidenced by the famous quote from US President Thomas Jefferson, "The only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. It is necessary, to keep the waters pure."
Critics of media deregulation and the resulting concentration of ownership fear that such trends will only continue to reduce the diversity of information provided, as well as to reduce the accountability of information providers to the public. The ultimate consequence of consolidation, critics argue, is a poorly-informed public, restricted to a reduced array of media options that offer only information that does not harm the media oligopoly's growing range of interests.
For those critics, media deregulation is a dangerous trend, facilitating an increase in concentration of media ownership, and subsequently reducing the overall quality and diversity of information communicated through major media channels. Increased concentration of media ownership can lead to the censorship of a wide range of critical thought.
Another concern is that consolidated media is not flexible enough to serve local communities in case of emergency. This happened in Minot, North Dakota, in 2002, after a train filled with anhydrous ammonia derailed. None of the leading radio stations in Minot carried information on the derailment or evacuation procedures, largely because they were all owned by Clear Channel Communications and received automated feeds from the corporate headquarters in San Antonio, Texas. 1600 people were injured and one died
Some typical counter-arguments to the criticisms above include the following:
On the other hand, a massive diversification of media, thanks to the Internet, materialized by millions of websites, forums, blogs and wikis is taking place. That evolution, often labeled citizen journalism or citizen media, makes it possible for practically everybody to be a media creator, owner and actor, instead of a passive user.
Citizen media gradually take audiences out of the traditional media and weaken the role of information professionals. Traditional media are slowly trying to adapt by becoming more "participative", asking their readers or watchers to send their own news.
Citizen media cannot however function with the same kind of in depth reporting that brick-and-mortar organizations have, in the form of funded research and expert analysis.
Nor is the internet immune to media consolidation. The largest telephone and cable companies which own the infrastructure of the internet have been accused of attempting to control the speed in which users can access various websites. The debate surrounding the independence and public control of the internet is called "net neutrality".
Controls over media ownership in Australia are laid down in the Broadcasting Services Act 1992, administered by the Australian Communications and Media Authority (ACMA). Even with laws in place Australia has a high concentration of media ownership. Ownership of national and the newspapers of each capital city are dominated by two corporations, Rupert Murdoch's News Corporation, (which was founded in Adelaide) and John Fairfax Holdings.These two corporations along with West Australian Newspapers and the Harris Group work together to create Australian Associated Press which distributes the news and then sells it on to other outlets such as the Australian Broadcasting Corporation. Although much of the everyday main stream news is drawn from the Australian Associated Press all the privately owned media outlets still compete with each other for exclusive Pop culture news. Rural and regional media is dominated by Rural Press Limited which is owned also by John Fairfax Holdings, with significant holdings in all states and territories. Daily Mail and General Trust operate the DMG Radio Australia commercial radio networks in metropolitan and regional areas of Australia. Formed in 1996, it has since become one of the largest radio media companies in the country. The company currently own more than 60 radio stations across New South Wales, Victoria, South Australia, Queensland and Western Australia.
There are rules governing foreign ownership of Australian media and these rules were being considered for loosening by the former Howard Government.
According to Reporters Without Borders in 2004, Australia is in 41st position on a list of countries ranked by Press Freedom; well behind New Zealand (9th) and United Kingdom (28th). This ranking is primarily due to the limited diversity in media ownership. The problem has even created a show in it self Media Watch on a government funded station Australian Broadcasting Corporation (ABC) which is one of two government administered free to air channels the other being Special Broadcasting Service (SBS).
Apart from the public Canadian Broadcasting Corporation and community broadcasters, media in Canada are primarily owned by a small number of companies, including CTVglobemedia, Canwest Global, Rogers, Shaw, Astral, Newcap and Quebecor. Each of these companies holds a diverse mix of television, cable television, radio, newspaper, magazine and/or internet operations. Some smaller media companies also exist. In 2007, CTVglobemedia, Astral Media, Quebecor, Canwest Global and Rogers all expanded significantly, through the acquisitions of CHUM Limited, Standard Broadcasting, Osprey Media, Alliance Atlantis and Citytv, respectively.
Due to Canada's smaller population, some types of media consolidation have always been allowed. In small markets where the population could not adequately support multiple television stations competing for advertising revenue, the CRTC began permitting twinstick operations, in which the same company operated both CBC and CTV affiliates in the same market, in 1967. This model of television ownership was restricted to smaller markets until the mid-1990s, when the CRTC began to allow companies to own multiple television stations in large markets such as Toronto, Montreal and Vancouver.
As of 2007, almost all Canadian television stations are owned by national media conglomerates. Most, in fact, are directly owned and operated by their associated networks, although even private affiliate stations are mostly owned by non-network conglomerates rather than local companies. These acquisitions have been controversial; stations in smaller markets have frequently had their local news programming cut back or even eliminated. For instance, CTV's stations in Northern Ontario and in Atlantic Canada are served by a single regional newscast for each region, with only brief local news inserts for headlines of purely local interest. This, in turn, has contributed to the rise of independent local webmedia such as SooToday.com, The Tyee and rabble.ca.
Many, though not all, Canadian newspapers are also owned by the same media conglomerates which own the television networks. Companies which own both television and newspaper assets have strict controls on the extent to which they can merge the operations. The issue of newspaper ownership has been particularly controversial in Canada, especially in the mid-1990s when Conrad Black's Hollinger acquired the Southam chain. Black's 1999 sale of the Hollinger papers resulted in an increase in the diversity of newspaper ownership, with new ownership groups such as Osprey Media entering the business, but was even more controversial because the CRTC, waiving its former rules against broadcasting companies acquiring newspaper assets, permitted Canwest Global to purchase many of the Hollinger papers. The Toronto Star is a partial exception to this — it is owned by an independent company, but is itself a part owner of CTVglobemedia.
In radio, a company is normally restricted to owning no more than three stations in a single market, of which only two can be on the same broadcast band. (That is, a company may own two FM stations and an AM station, or two AMs and one FM, but may not own three FMs.) Under certain circumstances, local marketing agreements may be implemented, or the ownership rule may be waived entirely. For example, in Windsor, Ontario, CTVglobemedia owns all of the city's commercial broadcast outlets, due to the city's unique circumstances — being in the immediate environs of the Metro Detroit market in the United States, Windsor has historically been a difficult market for commercial broadcasters, so the CRTC waived its usual ownership restrictions to help protect the Windsor stations' financial viability.
When licensing a new broadcast outlet, the CRTC has a general (but not strict) tendency to favour new and local broadcasters. However, in the modern media context such broadcasters often struggle for financial viability, and are often subsequently acquired by larger companies. The CRTC rarely denies the acquisition applications. Canada also has strict laws around non-Canadian ownership of cultural industries; a media company in Canada may not be more than 20 per cent foreign-owned.
Under new rules announced in 2008, the CRTC limited companies to two types of media in a given market — a company may, for example, own television and radio assets in one city, or radio and newspaper, or television and newspaper, but may not own all three simultaneously. As well, with the ownership of cable specialty channels increasingly consolidating under the same few media conglomerates that own most of the country's conventional television stations, the CRTC also imposed a market share cap: no company can own broadcasting assets holding more than 45 per cent of the country's total television viewership.
Independent News & Media (CEO: Tony O'Reilly) owns many national newspapers: the Evening Herald, Irish Independent, Sunday Independent, Sunday World and Irish Daily Star. It also owns 29.9% of the Sunday Tribune.
Bertelsmann is one of the world's largest media companies. It ownes RTL Group, which is one of the two mayor private TV companies in both Germany and the Netherlands and also owning assets in Belgium, France, UK, Spain, Czech and Hungary. Bertelsmann also ownes Gruner+Jahr, Germany's biggest popular magazine publisher, including popular news magazine Stern and a 26% share in investigative news magazine Der Spiegel. Bertelsmann also ownes Random House, a book publisher, #1 in the English-speaking world and #2 in Germany.
The Communications Act of 1934 refined and expanded on the authority of the FCC to regulate public airwaves in the United States, combining and reorganizing provisions from the Federal Radio Act of 1927 and the Mann-Elkins Act of 1910. It empowered the FCC, among other things, to administer broadcasting licenses, impose penalties and regulate standards and equipment used on the airwaves. The Act also mandated that the FCC would act in the interest of the "public convenience, interest, or necessity. The Act established a system whereby the FCC grants licenses to the spectrum to broadcasters for commercial use, so long as the broadcasters act in the public interest by providing news programming.
Lobbyists from the largest radio broadcasters, ABC and NBC, successfully petitioned to attach a cost to the license required to broadcast, and were thus able to "price out" many amateur broadcasters that had previously existed. Such was the precedent for much of the following regulatory decisions, which have mostly focused on the percentage of a market deemed allowable to a single company.
The Telecommunications Act of 1996 set the modern tone of "deregulation," a relaxing of percentage constrictions that solidified the previous history of privatizing the utility and commodifying the spectrum. The legislation, touted as a step that would foster competition, actually resulted in the subsequent mergers of several large companies, a trend which still continues.
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.
On June 2, 2003, FCC, in a 3-2 vote under Chairman Michael Powell, 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.
The decision by the FCC was overturned by the U.S. Third Circuit Court of Appeals in the decision Prometheus Radio Project v. FCC in June, 2004. The Majority ruled 2-1 against the FCC and ordered the Commission to reconfigure how it justified raising ownership limits. The Supreme Court later turned down an appeal, so the ruling stands.
Supporting Media Deregulation:
Opposing Media Deregulation:
Diversity within democracy at stake in Senate vote today ; An FCC rule allowing for greater concentration of media ownership should be blocked.
Sep 15, 2003; 00-00-0000 Diversity within democracy at stake in Senate vote today ; An FCC rule allowing for greater concentration of media...
Revenge of the indies: looking for the next Netflix; new technologies can work against the growing concentration of media ownership. (DisContent).
Aug 01, 2002; Optimists such as I look for countertrends in content and distribution--ways that new technologies can work against the growing...