May 12 Who Owns the Media?
Introduction to Political Economy of Media
m.metykova@sussex.ac.uk
32153@mail.muni.cz

Media systems
lWe have already discussed some characteristics of media systems, the underlying principles that
guide the roles that media play (Siebert et al., Hallin and Mancini)
lToday we will look at how the media systems operate in more detail

Western European media markets
lDual markets that consist of public service and commercial media
lPublic service media: BBC, ZDF, France Television, RTV Slovenija, RTVE
lVs. Fox News and other commercial players only
lJohn Stewart's rally to restore sanity:
lhttps://www.youtube.com/watch?v=7KgrYWn7ALM

Broadcasting as a public good
Broadcasting in the public interest should guarantee universally accessible quality service,
diversity as well as national political and/or cultural interest. In Great Britain broadcasting was
from the onset considered a public good due to the limited nature of the broadcasting spectrum, a
public good can be defined as
an item whose  consumption  is not decided by the  individual  consumer  but by the society as a
whole, and which is financed by  taxation. A public good (or  service) may be consumed without
reducing the  amount  available for others, and cannot be withheld from those who do not  pay  for
it. Public  goods  (and  services) include economic  statistics  and other  information,  law
enforcement, national defense, parks, and other things for the use and  benefit  of all. No
market  exists for such goods, and they are provided to everyone by  governments (Business
Dictionary, 2015).

In Europe the understanding of broadcasting as a public good was also underpinned by a series of
philosophical and political arguments (among them the need to have a channel that provides
information for citizens and a  forum for discussion which enables full participation in the
political process).
Off-air broadcasting has always been classified as a public good in the lexicon of economics, since
unlike a commodity such as a cinema seat, access is potentially universal and everyone can enjoy it
at the same time without interfering with anyone else. As we have seen however, from the outset
public broadcasting was also thought out of as a ‘public good’ in a more general, philosophical
sense, as an activity that aimed to contribute to the quality of communal life and the development
of democratic culture. Although other publicly funded institutions shared this ideal the limits
imposed on them by space and location prevented them from matching broadcasting’s universality
(Murdock, 2004).

Public service broadcasting takes into account that we are not only consumers but also citizens
living in democratic societies who have a right to be adequately informed about matters of public
importance. A right, Curran argues, that is best guaranteed by public service broadcasting because
‘it gives due attention to public affairs, and is less dominated by drama and entertainment than
market-based broadcasting generally is’ (Curran, 1998, p. 190). Indeed, this focus on news and
current affairs results in ‘higher levels of political information in their [European] nightly TV
programs and foster greater knowledge of public affairs among viewers. The more market-driven and
entertainment-centred television system of the United States, on the other hand, was shown to offer
smaller amounts of hard news and to trigger less awareness of public affairs in the audience’
(Esser et al. 2012, p. 248).

lPSB – crucial to be independent of the market as well as the government
lA bit of research on how they are funded/organized/regulated


A competition approach to the media market
In the United States the metaphor of the marketplace of ideas has been used to justify the first
amendments of freedom of speech and freedom of press.
Although this classic image of competing ideas and robust debate dates back to English philosophers
John Milton and John Stuart Mill, Justice Holmes first introduced the concept into American
jurisprudence in his 1919 dissent to Abrams v. United States: ‘the best test of truth is the power
of thought to get itself accepted in the competition of the market’. This theory assumes that a
process of robust debate, if uninhibited by governmental interference, will lead to the discovery
of truth, or at least the best perspectives or solutions for societal problems. A properly
functioning marketplace of ideas, in Holmes's perspective, ultimately assures the proper evolution
of society, wherever that evolution might lead (Ingber, 1986, p. 3).

In the case of the United States ensuring freedom of speech and freedom of press was entrusted to
market forces and the government was expected only to intervene in exceptional cases when
competition was threatened. The premise that the free market involves no government intervention is
false, ‘all media systems are the result of explicit government policies, subsidies, grants of
rights and regulations. ... Indeed, to have anything close to competitive markets in media requires
extensive government regulation in the form of ownership limits and myriad other policies’
(McChesney, 2003, p. 126).  Doyle explains that ‘perfect competition exists when there are many
sellers of a good or a service that is homogeneous (i.e. exactly the same or not differentiated)
and no firm(s) dominate(s) the market. In such a situation economic forces operate freely. … It is
very rare to find an example of perfect competition in the real world’ (2002, p. 8).

Latest developments in the television industry
Questions about the future growth of companies like Netflix are raised on a regular basis because
they do not have control over Internet access and the speed of streaming, in the words of a
Washington Post writer: ‘the world of television is dominated by big, entrenched players:
broadcasters such as ABC and CBS, and cable companies such as Comcast that run the piping of the
Internet and hope to get even bigger’ (Kang, 2014).
Some barriers to entry that exist in television broadcasting, namely government policy (through the
granting of licenses); the presence of dominant existing broadcasters; availability of suitable
programming (‘access to and reasonable prices for desirable programming in film and program
libraries and to studios, directors, writers, actors, and technical personnel needed to produce
attractive programming are necessary for successful entry’); audience behaviour and ‘the necessity
for entrants to overcome long-established uses of television and set patterns of viewing and
channel choice’ (Picard and Chon, 2004, p. 170) also apply to video-on-demand producers.

Media regulation - justifications
—Feintuck, M. (1999). Media Regulation: Public Interest and the Law. Edinburgh: Edinburgh
University Press.
Regulation is justified on the grounds of:
—enabling effective communication. This notion is closely related to the freedom of speech ideal,
as reflected, for example, in the First Amendment to the US Constitution or in Article 10 of the
“European Convention on Human Rights”
—diversity which Feintuck relates specifically to political debate and cultural identities
—economic interest - benefits of undistorted competitive markets
—public interest - broadcasting in the public interest should guarantee universally accessible
quality service (defined differently in the different national systems of public service
broadcasting), diversity as well as national political and/or cultural interest.

Economic justifications for regulation
—Media – prone to ‘market failure’ (any failure by the market system to allocate resources
efficiently OR a failure of the market to advance socially desirable goals such as preserving
democracy and social cohesion)
—Media concentration or media integration is defined as an increase in the presence of one
(monopoly) or a few media companies (oligopoly) in any market as a result of acquisitions and
mergers or the disappearance of competitors
—Types of concentration:
—Horizontal media concentration refers to concentration within one and the same industry section
(an example can be the merger of two newspapers in the same geographical market).
—Vertical media concentration is involved when a media enterprise gains control over some steps
necessary for the production and distribution of a given media (for example, distribution,
promotion etc.).
—Cross-media concentration refers to a situation when a media enterprise gains cross-ownership of
different media products (respectively outlets) in different media markets and industries.
—Diagonal media concentration includes not only cross-media concentration but also activities of an
enterprise from a different industrial sector in media markets.

Media markets – prone to market failure
 James Curran summarizes the impact of media concentration in the following way, ‘the first is that
private concentration of symbolic power potentially distorts the democratic process. ... The second
… is that the power potentially at the disposal of media moguls tends to be exerted in a  one-sided
way. ... The third … is that the concentration of market power can stifle competition’.
And this is a very short segment with James Curran on why media concentration is a problem:
https://www.youtube.com/watch?v=ZWz2QSloFrw
Some research on EU competition policy; The Media Programme
http://eacea.ec.europa.eu/media/index_en.php

Media moguls
lOn the Forbes' list of richest media owners:
lOprah Winfrey
lRupert Murdoch
lMartha Ingram
lCharles Dolan
lSteven Spielberg
lDavid Geffen
lLocal ones exist, of course: Silvio Berlusconi, Mathias Dopfner, Vincent Bollore, Jaume Roures

Media regulation - techniques
—Feintuck – 3 types: structural, behavioural and content regulation
—In shorthand, “content regulation” refers to limitations being imposed on what cannot or must be
broadcast or published, while “structural regulation” refers to limits on the extent of that which
can be owned within any market by any one corporate entity, and, in effect, “behavioural
regulation” generally serves to limit how property held can be used in relation to its impact on
actual or potential competitors.

Media regulation – trends
—1990s liberalization and deregulation (minimalist regulatory intervention by governments) in North
America and Europe
—Some consequences of the trend – McChesney, R. (2003). "Theses on Media Deregulation." Media,
Culture and Society, 25(1):
—US 1996 Telecommunications Act had most impact on US radio; it changed the restriction on the
ownership of radio stations (prior to the 1996 Act a single company could own 28 stations
nationally and 4 in a single community) by completely removing the restriction on the number of
national radio stations owned by a single firm and increasing the number of those owned in
a community to 8. “Since 1996 well over half of US stations have been sold, and a stunning
consolidation has hit the industry. One firm, Clear Channel, now owns nearly 1,200 stations. Every
market is dominated by two to three firms that own nearly all the stations between them”
(McChesney, 2003: 129). What McChesney finds worrying about this concentration of radio ownership
is the decrease in the diversity of radio content as well as in the diversity of voices presented
on the radio as well as increased commercialization.

Self-regulation of media
—Set up by the industry itself
—E.g. advertising, Press Complaints Commission
—Concerns arise about the accountability, transparency and efficiency of self-regulatory bodies.
The question always is to what extent the interests of the industry overlap with the interests of
consumers, respectively citizens, and to whom the self-regulatory bodies are made accountable.
—UK case: the Press Complaints Commission was set up in 1991 following a government report on its
self-regulatory predecessor the Press Council. The report of the Calcutt committee recommended the
introduction of privacy laws and the replacement of the Press Council by a statutory regulator. The
industry reacted by establishing the Press Complaints Commission.
—Frost, C. (2004). “The Press Complaints Commission: The Study of Ten Years of Adjudications on
Press Complaints.” Journalism Studies, 5(1):
—Analyzed complaints handled by PCC during the first ten years of its existence to show whether the
commission works effectively in obliging newspapers to behave more responsibly (PCC obviously
claims that this is what it achieved). Already the fact that PCC received more than 20,000
complaints in those ten years and adjudicated only 707 and upheld 321 of them is telling. However,
Frost is not interested only in statistics, rather he looks at various areas that the complaints
related to and shows that PCC’s record is particularly poor in regulating complaints about
discrimination, during the ten years that Frost analyzed only 6 complaints were upheld. The reasons
behind this have to do with PCC’s code itself as the Commission decided not to take complaints from
third parties thus only those named in an article could complain.

Assessments
A commodity analysis (2,000 words) and a corporation profile (1,000 words)


1. Commodity Analysis (2,000 words)
For this assessment you will select a particular media commodity and explore how it fits within a
broader system of production. For example, you may be interested in Star Wars and you will explore
the franchise, these are questions that you will need to answer in relation to your chosen
commodity (please note that it is not always possible to answer all these questions or they may be
others that you will want to include):
Historical/contextual information for the commodity.
Who or what company holds the copyright or patent for the commodity?
What company or companies produced the commodity? Who owns that company?
How was/is the commodity distributed?
What company or companies distribute the commodity? Who owns that company?
How much does the commodity cost to produce?
How/where is the commodity consumed?
What is the role of advertising in this commodity’s chain?
Is the commodity available in other forms?
Is this commodity distributed locally, regionally, nationally, and/or internationally?
Please note that you will be expected to make some references to the readings/discussion that we
have on this course, for example, in relation to the role of advertising or globalization.

2. Corporation Profile (1,000 words)
For this assessment you need to research a corporation, company or other organization associated
with communications or media/cultural industries. You should gather as much information as possible
about your chosen organization and analyze it in light of the readings and discussions that we have
done.
Your profile should include (if available):
brief history or background information
discussion of organization, operations, policies
basic financial information (revenues, assets, income, number of stockholders, stockholder equity,
share of industry revenue, etc.)
internationalization
an outline, map, or other visual representation of the organization's structure (its parent
company, divisions, subsidiaries, and any major partnerships). This will be discussed further in
class.
At the end of your analysis, you should be able to answer the question, “what is the primary
business of this organization?”
Your profile should include the written account (1,000 words) and appendices that provide an
illustration of your organization's structure and relationships with other organizations (possibly
also outside the fields of media/communications/cultural industries). Please note that you need to
provide references and while you can use Wikipedia and company websites as your starting point, you
should also use other sources.

Sources
lWikipedia – ok but corroborate what it says
lhttp://www.telegraph.co.uk/technology/wikipedia/6250515/Wikipedia-20-articles-earmarked-for-deleti
on.html
lMagazines, newspapers – established ones with a good reputation
lAnnual reports, corporate information
lUniversities – studies, reports, analyses

Examples
lThe New York Times
lHulu, Prime, Now TV
lAdele's album 25
lBBC
lStudio Ghibli
lWPP
lHarlequin romances