Making Sense of Merger Mania

Ben Bagdikian would be happy if events had proved him a crank rather than a prophet. When he wrote his now-classic critique of the news-and-information industry, The Media Monopoly, in 1983, he reported that 50 corporations controlled most of the country's daily newspapers, television and radio operations, book publishers, and movie studios.By 1992, when he put out the most recent edition of his book, that number had shrunk to 20. And, he wrote, business analysts were predicting that within a few years "a half-dozen large corporations will own all the most powerful media outlets in the United States."Bagdikian's timetable, it would appear, was right on target. Last summer and fall, a virtual hurricane of mergers and acquisitions swept across the mediascape, altering it beyond recognition.The word of the moment is "synergy," and it's bandied about by moguls such as Disney chairman Michael Eisner and Time Warner chairman Gerald Levin to describe how their television shows and movies, networks, TV and radio stations, magazines, and books can be used to increase their powers of promotion exponentially.Critics, though, are more likely to invoke the phrase "vertical integration," a system reminiscent of John D. Rockefeller's Standard Oil Company, which until it was broken up in 1911 controlled the economics of oil from the ground to the consumer.Foremost among those critics is Bagdikian, a former national editor of the Washington Post and former dean of the Graduate School of Journalism at the University of California at Berkeley.It's that complete control of every step of the process, from creation to distribution to consumption, that Bagdikian says represents something qualitatively new rather than simply a continuation of past trends. Among the more pernicious consequences, he adds, is "enormous political power" for big media corporations, since elected officials are terrified to offend people who control such a huge proportion of what their constituents watch, hear, and read.The results: a telecommunications-deregulation bill, now pending before a House-Senate conference committee, that would, among other things, allow almost unlimited single-ownership of newspapers, cable systems, and radio and TV stations in a given market, and that Bagdikian calls "a horror"; an unwillingness to use existing antitrust laws to prevent megamergers; and political favors such as the decision by the Federal Communications Commission (FCC) to allow Australian media baron Rupert Murdoch (now plotting to launch a conservative competitor to Cable News Network) to evade foreign-ownership prohibitions.In an essay in the latest issue of Extra!, the magazine of the media-watch group Fairness & Accuracy in Reporting (FAIR), Johns Hopkins University's Mark Crispin Miller calls 1995 "the Year of the Great Meltdown," and says the recent mergers "indicate the onset of a new kind of 'China syndrome' -- i.e., the same bright garbage forever broadcast, published and/or released the whole world over with dissident views and original voices simply disappearing from mainstream culture."Consider: -- Walt Disney Company's proposed $19 billion acquisition of Capital Cities/ABC brings together perhaps the premier producer of movies and television shows with the leading television network, not to mention that network's first-rate news division. Also in the mix are Disney theme parks and stores, cable networks such as the Disney Channel and ESPN, television stations, radio stations, and newspapers. -- Time Warner's pending $7.5 billion purchase of Turner Broadcasting restored the former's status as the country's largest media company -- a status it had briefly lost following the Disney-Cap Cities/ABC deal. The new corporation will control influential voices such as Time magazine and CNN, as well as cable-TV systems, book publishing, music, and movies. -- Westinghouse's $5.4 billion acquisition of CBS, recently approved by the FCC, has generated less excitement, since both companies are regarded as lackluster, and CBS's once-proud news division had already been gutted by Laurence Tisch, the bottom-feeding financier who bought the network from the late William Paley. But there's a nasty twist to this deal: Westinghouse is a major defense contractor and builder of nuclear power plants, which means that CBS's journalists must now deal with the same potential conflicts of interest as their counterparts at NBC, which has been owned by General Electric since the mid 1980s.BUTTING OUT Certainly the giants' behavior in the immediate post-merger environment offers little encouragement. ABC settled a libel suit by apologizing for a Day One segment that claimed cigarette manufacturers "spike" their products with nicotine, even though independent lawyers said ABC's case appeared to be eminently winnable. CBS's lawyers forced 60 Minutes to cancel an interview with a former tobacco-industry researcher on the flimsy grounds that the network could be sued for encouraging the researcher to break a non-disclosure agreement with his former employer. Critics say these two examples of self-censorship are typical of the extreme caution exhibited by megacorporations, especially those in the midst of acquisitions."It's a common denominator of mergers that your attorneys tell you that attorneys for the other side don't want lawsuits happening. I don't remember two such events happening in sequence ever before," says Victor Navasky, publisher and editorial director of the Nation, a small, independent, left-wing weekly.Navasky has an additional beef with media concentration: in a recent Nation editorial, he wrote that Time Warner, Dow Jones, and other big publishers are pushing for a change in postal rates that would favor large operations that can afford to pre-sort their mail. Such a change would penalize small journals of opinion such as the Nation, the New Republic, and National Review.But lobbying for favorable postal rates is hardly the only step media giants have taken to stamp out dissenting voices.Take the case of Jim Hightower, the Texas populist whose ABC Radio show was killed shortly after the Disney deal -- and shortly after Hightower began criticizing the deal on the air. Hightower had also reported on the poor working conditions of some Disney theme park employees, hardly endearing himself to his new corporate bosses. ABC executives insisted the show, one of the few alternatives to right-winger Rush Limbaugh and his numerous wanna-bes, was canceled because of poor ratings, but Hightower believes the decision had more to do with his anti-corporate agenda. As evidence, he notes that ABC refused to accept lucrative advertising from unions on the grounds that it has a policy against "advocacy" ads."Just as there is a real market for my message, so there is a real money base for that message," Hightower says. "But you have to go beyond the conventional corporate thinking of what the world is."Or take the case of the 90's Channel, a cable operation based in Boulder, Colorado, that specializes in progressive political programming. On October 31 the 90's Channel withdrew from seven cable systems operated by Tele-Communications, Inc. (TCI), after the FCC refused to reject a rate increase that channel president John Schwartz charged was improperly aimed at forcing his channel off the air. (The 90's Channel continues to supply programming to 44 public-access stations across the country under the moniker "Free Speech TV.")TCI's chairman is John Malone, a predatory capitist widely known within the communications industry as "Darth Vader." As a major investor in Turner Broadcasting, Malone will become an eight percent owner of Time Warner when that merger is approved. Time Warner is the country's second-largest cable operator -- after TCI."Our problem at the moment," says Schwartz, "is not how big TCI is, but the particular degree of control that it exercises over its facilities, which is absolute control."Indeed, a number of reformers say one of the principal impediments to diversity is that cable operators are allowed to control both the distribution system and what is carried on it. By contrast, telephone companies by law must act as "common carriers," allowing full, equal access to the phone lines. It is common-carrier status, as much as anything, that has fueled the growth of the Internet. NET DIVERSITY Which brings us to a potentially monopoly-shattering countertrend. Because if this is the worst of times for those of us who see democratic, decentralized media as a necessity, this is also the best of times. Even as television, movies, newspapers, magazines, and books congeal into Media, Inc., the Internet is putting more power into the hands of more people than any development since the 1430s, when Gutenberg invented movable type.Browse the World-Wide Web, the fast-growing, much-hyped segment of the Internet that allows for electronic self-publishing complete with graphics and sound, and you'll find everything from the self-indulgent natterings of college students with too much time on their hands to low-cost projects with serious political and philosophical content.The Internet has given rise to such phenomena as CyberWire Dispatch, a free newsletter that brought to national prominence its writer and publisher, Brock Meeks; the Cambridge Town Crier, a free daily compendium of listings that could serve as a rough draft for a new generation of locally owned newspapers; and what the cyberspace philosopher Howard Rheingold calls "communities of shared interests," people scattered geographically who gather in the ether to talk about such subjects as particle physics, gay-and-lesbian politics, or the music of Bob Dylan."The Internet is word-of-mouth on steroids. If you're a know- nothing, people won't pay attention to you. But the Internet has demonstrated that if you have something to say, then people will listen to you," says Miles Fidelman, president of the Center for Civic Networking and co-editor, with Cambridge architect John Altobello, of the Cambridge Town Crier.John Perry Barlow, a co-founder (with Lotus founder Mitch Kapor) of the Electronic Frontier Foundation and an occasional lyricist for the Grateful Dead, openly disdains the mainstream media as irrelevant. He keeps informed about the former Yugoslavia, for instance, largely by communicating via the Internet with people who live and work there."I've had so many different experiences where I allowed myself to develop a set of assumptions about an event based on the media, and then when I had a direct experience I found out that I had been completely misled," Barlow says. "On the Net, you're at least in a position to ask questions about the source. It's an interactive medium, and you can have a conversation with the source and determine the validity of that point of view."Yet Barlow's vision is utopian, to say the least. According to the recently released CommerceNet/Nielsen Internet Demographics Survey, just 17 percent of adults in the US and Canada have Internet access, and just 11 percent used the Net in the preceding three months. Optimistic predictions to the contrary, it is likely to be some time before the Net attains even the 60 percent US penetration that cable TV, to cite one example, has achieved.At the same time, the big media companies themselves are investing millions of dollars in exploiting the Internet commercially. One of the more popular Web sites, for instance, is Time Warner's "Pathfinder." A number of observers warn that without federal regulations guaranteeing open access, the Net could go the way of radio in the 1920s, which began as an eclectic medium dominated by amateurs and hobbyists and evolved into a commercial behemoth.Even Barlow concedes that the enormous political and economic power wielded by media conglomerates could at least postpone his dream. Though he believes the Net is an asteroid that will start the monopolies down the road to extinction, he admits these lumbering beasts may continue to thrash around for some time to come."It's like being locked in a closet with a dying dinosaur," he says."Just because you're with a dinosaur doesn't mean you're not at risk."Andy Schwartzman, executive director of the Media Access Project, a Washington-based public-interest group, posits a scenario under which a large corporation such as Microsoft uses its marketing muscle to control access to the Internet, or a popular Internet-searching service such as Yahoo starts charging prohibitive rates in order for sites to be included in its listings, thus shutting out small, alternative voices."The technology offers the potential, but does not guarantee the kind of diversity we're talking about," says Schwartzman. "Technology doesn't operate by itself. Technology operates in a political and regulatory environment."Brock Meeks, who in addition to publishing CyberWire Dispatch is Washington-bureau chief for Inter@ctive Week and a columnist for HotWired, warns that federal regulations are essential if the Internet is to fulfill its promise."I think there absolutely has to be a commitment to maintain low-cost access," he says. "There also have to be some guarantees of no content restrictions." He offers as an example a local newspaper of the future, distributed entirely over a cable-TV operator's interactive wires, that "decides to take on the shabby customer service of the TV provider. Currently, cable systems have the absolute right to allow or disallow whatever content they want. These new systems must be regulated as common carriers, not as cable systems. But so far that's not in the cards."Adds Howard Rheingold, author of Virtual Community (1993), "The people who own the conduits that most of us will have to use to access information and entertainment must be prevented from favoring one flavor of content over another, and especially restrained from favoring the content they own from the content that others might want to distribute over the conduit they control."TIMID ALTERNATIVE If the Internet is one alternative to commercial media conglomerates, another is public broadcasting. Yet with taxpayer funding for the Public Broadcasting System and National Public Radio under attack from the Republican right, public broadcasters have become as ratings-conscious and as careful not to offend their corporate sponsors as any private company."Public television has to take corporate sponsorship now," says Ben Bagdikian. "Corporate sponsors never liked public-affairs programs for good business reasons: half the audience is going to hate the sponsor because they didn't like the program." The result, Bagdikian adds, is a plethora of programs like Masterpiece Theatre, wildlife documentaries, cooking shows, and the like, "which is all fine, but which is not an antidote to the lack of public- affairs broadcasting on commercial television."Former WBCN Radio "news dissector" Danny Schechter, whose New York-based production company, Globalvision, has fought a number of battles with PBS in its efforts to distribute such progressive programs as the human-rights series Rights & Wrongs, accuses public broadcasting of a "pattern of exclusion of other viewpoints." He notes that PBS recently announced a $75 million production deal with Reader's Digest, which, he quips, amounts to "middlebrow meets lowbrow."More seriously, Schechter says, public broadcasting increasingly reflects the values of commercial television. "In our case, specifically, what we find is that you can have the means of production, but if you don't have the means of distribution you can't get out there and compete in the marketplace," says Schechter, who's working on a tell-all book about his days as a producer with ABC and CNN, tentatively titled The More You Watch, the Less You Know: Adventures of a Media Refugee. Among the more pungent anecdotes he plans to include in the book is that of an editor for ABC's 20/20 who refused to handle a fawning profile of Rupert Murdoch. The editor was reduced to the menial task of monitoring the network's feed of the O.J. Simpson trial.Yet if it's nearly impossible to stage a frontal assault on the media monopoly, Douglas Rushkoff, the author of Media Virus! Hidden Agendas in Popular Culture (1994), argues that monopoly has actually made it easier for media activists to subvert the corporate culture from within."When companies get too huge," Rushkoff says, "the 'big boys at the top' lose control over the content as they focus their energies on corporate acquisitions, stock dividends, or, better, conduit acquisition [i.e., buying a cable system or a telephone network]. When the companies get so big, they become chaotic internally, like dynamical, organic systems." The result: satirists such as Mike Judge, the creator of Beavis and Butt-head, "wreaking havoc on the mainstream."For that matter, Rushkoff could have mentioned Bruce Springsteen's The Ghost of Tom Joad, one of the most deeply subversive works produced by a popular artist in many years. Then again, the media conglomerates have demonstrated on many occasions that they have no ideological agenda other than the pursuit of profits, and that they're just as willing to earn those profits from Springsteen's populist agitprop as they are from, say, Disney theme parks or violent, misogynist rap music.The social and cultural critic Neil Postman, author of such books as Amusing Ourselves to Death (1985), a critique of television, and Technopoly (1992), a jaundiced take on the wonders of technology, says he argued at a recent conference that commercials are more harmful to viewers than television violence. It's not surprising, he says, that no one responded to his call for fewer ads."Dole, Clinton, and Gore all agree on violence, but none of them wants to take on the issue of what values commercial broadcasting teaches," Postman says.PERPETUAL FEEDBACK Call it a perpetual-feedback loop: media conglomerates amass such power that they cow politicians and regulators into allowing them to become even more powerful, which in turn leads to another round of favorable treatment at the hands of government.The latest example of this is the telecommunications- deregulation bill now being hashed out by a House-Senate conference committee, the bill Ben Bagdikian refers to as a "horror." Despite the Republican majority's alleged disdain for government intervention in the economy, the bill contains a pernicious provision, pushed by the Christian Coalition, to make Internet providers and on-line services legally responsible for any "indecent" material posted by their subscribers. But aside from sex, the bill reads like a wish list the industry wouldn't have dared hope for before the Newtonian revolutionaries arrived on Capitol Hill.For instance, both the Disney-Cap Cities/ABC and the Westinghouse-CBS mergers are technically illegal under current law. Westinghouse and CBS own TV stations that reach 33 percent of the national audience, and the law currently sets a cap of 25 percent. The deregulation bill would raise that limit to 35 percent. Likewise, Disney and Cap Cities/ABC each owns a VHF television station in Los Angeles. Under current law, the combined company would have to sell one of those stations, but not under the deregulation bill. Officials of the four companies involved in these mergers have made no secret of their hope that the bill will become law, overturning the FCC's divestiture requirements.What's more, the bill would virtually eliminate multiple- ownership prohibitions, allowing one corporation to gobble up the dominant newspaper, TV and radio stations, and cable systems in one market area.US Representative Ed Markey (D-Malden), who chaired the House Subcommittee on Telecommunications and Finance when the Democrats were in the majority, succeeded in inserting several provisions in the House bill to lessen its monopoly-friendly effects.Nevertheless, he remains opposed to the bill, and has denounced it by saying, "This legislation will make Citizen Kane look like an underachiever."Vice-President Gore has reportedly urged President Clinton to veto the conference committee's legislation if it resembles the original House bill. But observers fear that the conflict-averse Clinton may sign a bad bill as long as its worst provisions have been either removed or smoothed over.It's disheartening, of course, that we have to settle for holding actions and damage control at a time when media concentration is already at unprecedented levels. Indeed, advocates of diversity say much more action is needed to counter the trend toward monopoly.Bagdikian, in The Media Monopoly, calls for strict limits on media ownership, a graduated tax on advertising, even the election of newspaper editors by staff members as ways of limiting commercial pressures on journalists.Richard Parker, a senior fellow at the Kennedy School's Joan Shorenstein Center and a former publisher of Mother Jones and Ramparts, advocates such reforms as the return of strict regulation of children's programming; the revival of the Fairness Doctrine, abolished during the Reagan administration, which compelled broadcast stations to air opposing views; a requirement that the FCC lease rather than give away (as it currently proposes) new broadcast frequencies that will be used for additional money-making programming; and a change in the "notion of the channel" so that broadcasters would be able to own discrete time slots, which he says would be much more affordable than purchasing an entire station or network and would thus boost diversity.Parker's overriding concern is that Americans, having been taught to think of themselves almost exclusively as consumers rather than citizens, find it increasingly difficult to distinguish information from entertainment. He cites the example of Rush Limbaugh, a genuinely talented performer whose outright lies have been repeatedly exposed by his critics (see FAIR's 1995 book The Way Things Aren't: Rush Limbaugh's Reign of Error), and yet who is widely credited with the Republican victory in the 1994 elections."America is in the process mythologically of being transformed from a nation into a theme park," Parker says.Which is why it's so important for progressives and diversity advocates to seek new ways of making themselves heard.Jim Hightower, for instance, has not taken his ball and bat and gone home, despite his disappearance from ABC. He's currently exploring alternative distribution systems, and hopes to unveil a home page on the World Wide Web that will include audio clips of his radio commentaries, which continue to be heard on a number of stations. He writes a column for AlterNet, the wire service of the alternative press. And he plans to start a biweekly newsletter, the Hightower Lowdown, in January."Progressives have always faced media blockages, and have always had to claw their way around or through it," he says. "And we have to do the same thing today."Clearly, the consequences of retreating rather than fighting back are unacceptably high. As the Media Access Project's Andy Schwartzman puts it: "When you're talking about media ownership you are not simply talking about widgets, advertising markets, and similar pure-economic questions. The power of a daily newspaper or a television station affects the very structure of the democratic process. That's the kind of power that isn't easily measured in dollars. It goes to the very heart of self-governance."

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

Close
alternet logo

Tough Times

Demand honest news. Help support AlterNet and our mission to keep you informed during this crisis.