Media Merger Notes
“Media Mergers: The Danger Remains”
By Catherine Yang
“The government has always imposed antagonism between media, but that is coming to an end.”
How big are big media?
2001: 311 deals valued at $113 billion were announced
Highest amount for ANY industry
Local TV stations: 39% cash flow margin
Cross-ownership is seen as VERY desirable
Vertical integration
“Behind the Mergers”
“Big isn’t necessarily bad, but big contains the seeds of mischief that can hurt a republic like ours.”
Neil Hickey, Editor, CJR, 2002
“The widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.”
Associated Press v. U.S. (1945)
So what, exactly, is wrong with the merger mania?
The 35% limit stops the networks from buy up all the independently owned affiliates; controls what they put on the air
Many stations have profit margins of over 50%
Synergy: more stations to reach more viewers with promos for their evening newscasts, news magazines, morning shows and entertainment, which builds audiences, which allows their ad rates to be higher
What else is wrong?
Newspapers and TV stations would merge and no longer be competitors
Duopoly rule already shot down: now okay to own two stations in one market
No longer a 30% cap on the number of U.S. households a cable co. can reach.
Can this be a good thing? Yes
Newspaper buying a TV station may impose more rigorous standards
Rich media buying something in the boondocks may improve quality
Major media better able to fight nuisance lawsuits
“You can’t be journalistically vigorous if you aren’t economically strong.”
Michael Gartner
former President, NBC
Worst-case Scenario?
If all the following are owned by one company in your area, it would allow endless cross-promotion and very little hard news on anything related to their interests:
Newspapers cable system video stores
Theaters Publishers of books/mags
Pro sports teams
“What Now?” By Michael Epstein
Evolution of digital technologies, convergence have pushed this trend
Perceived higher profits -- economy of scale
Fragmentation of audiences make it desirable
Bush Administration tolerant towards it
Sense of public service fading
Jay Schwartzman
Pres., Media Access Project
Schwartzman’s Vision (public-interest lawyer)
“Over-the-air broadcasters should each be required to carry some minimum amount of locally produced, locally originated programming that addresses the needs of the community, including controversial issues. . .”
Schwartzman’s question
Are media properties any different from any other entity in the economy?
Historical answer: yes
FCC does not need proof that actual harm has already happened to act under the public interest standard; that’s different from monopolies being broken up by the FTC or the Justice Dept.
The diversity question
Diversity in ownership brings diverse programming
Vertically integrated program producers may not share it with competitors; should be required
Program access a problem
Fairness doctrine not being enforced
Reserved capacity for non-commercial uses
Low capacity radio should come back
Media issues in the news
Headlines from fall semester ‘03
What do they mean for society?
Artist/reporter issues
Actors rally to protest non-equity road shows
An award for Stephen King? Horrors!
Trying to bypass the good-news filter
FCC Rules
FCC plan to ease curbs on big media hits Senate snag
Viacom cuts forecast as local advertising is slow to rebound
No-call list dealt setback in court ruling
Court rules FCC erred in decision on net access
(Internet access providers who sued to get the right to lease lines from cable companies)
Piracy
Studios moving to block piracy of films online
Hollywood is facing online piracy, but it looks like an inside job
Fighting the idea that all the Internet is free
Rules near on TV piracy; critics press their case
Privacy, copyright
Clinton ‘history’ doesn’t repeat itself in China (censoring of her memoir)
Cameras watching students, especially in Biloxi
The media business
New scrutiny for Liberty Media’s Starz deal
Unhappy shareholders because of stock drop
Head of BSkyB quits, with Murdoch’s son possible heir
Media grow, but they can’t hide
Industry facing problems that mergers alone won’t solve
Day in court for bid to end WorldCom’s bankruptcy (MCI)
More media business
GE finishes Vivendi deal, expanding its media assets
Pixar-Disney talks said to show progress
SEC pursues Time Warner investigation
Executives subpoenaed in accounting inquiry
The media critic who would be a mogul
(NY magazine critic trying to buy it)
Hardware for media
The talking e-mail blues
(Problems with voice recognition programs)
Sony is selling convergence, but will Europe buy it?
Advertising
To see the ads, eager magazines write the copy
Call centers in survival mode in face of do-not-call rules
Advertising: Shows like ‘Nike Training Camp’ widen the scope of product placements
Criticism arises over the way calling plans advertise rates
More on advertising
CA is set to ban junk e-mail
Ad buyers cold to TV season, but still plan to spend big
For $166 million, official NY beverage
A change of habits to elude spam’s pall
Music
A game player that happens to be a phone
Cable’s new giant flexes his muscles (Comcast)
Europe’s antipiracy proposal draws criticism
Audible service could teach music industry a lesson
Universal Music to cut jobs as industry slump lingers
With Cable TV at MIT, who needs Napster?
New parent-to-child chat: Do you download music?
More on Music
Is legal action against file swappers good business?
Is it wrong to share your music?
Teens, the record industry’s tastemakers, come to grips with being its adversaries
For music industry, U.S. is only the tip of a piracy iceberg
Crackdown on copyright abuse may send music traders into software underground
Television entertainment
NBC’s affection for ‘coupling’ cools as Thurs. night viewers wander
At a television bazaar, a glut of shows
Two HBO shows lose viewers after starting strong
Advertising: the absence of TV viewers has network executives scratching their heads
With no knockouts, NBC’s champ faces jabs (lackluster entertainment season)
New fall TV season is mostly underwhelming
Newspapers
New papers hope free and brief will attract younger readers
A media chain keeps it all in the family (Freedom Communications)
Sparring Seattle papers can’t even agree to break up
The Times chooses veteran of magazines and publishing as its first public editor
By Catherine Yang
“The government has always imposed antagonism between media, but that is coming to an end.”
How big are big media?
2001: 311 deals valued at $113 billion were announced
Highest amount for ANY industry
Local TV stations: 39% cash flow margin
Cross-ownership is seen as VERY desirable
Vertical integration
“Behind the Mergers”
“Big isn’t necessarily bad, but big contains the seeds of mischief that can hurt a republic like ours.”
Neil Hickey, Editor, CJR, 2002
“The widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.”
Associated Press v. U.S. (1945)
So what, exactly, is wrong with the merger mania?
The 35% limit stops the networks from buy up all the independently owned affiliates; controls what they put on the air
Many stations have profit margins of over 50%
Synergy: more stations to reach more viewers with promos for their evening newscasts, news magazines, morning shows and entertainment, which builds audiences, which allows their ad rates to be higher
What else is wrong?
Newspapers and TV stations would merge and no longer be competitors
Duopoly rule already shot down: now okay to own two stations in one market
No longer a 30% cap on the number of U.S. households a cable co. can reach.
Can this be a good thing? Yes
Newspaper buying a TV station may impose more rigorous standards
Rich media buying something in the boondocks may improve quality
Major media better able to fight nuisance lawsuits
“You can’t be journalistically vigorous if you aren’t economically strong.”
Michael Gartner
former President, NBC
Worst-case Scenario?
If all the following are owned by one company in your area, it would allow endless cross-promotion and very little hard news on anything related to their interests:
Newspapers cable system video stores
Theaters Publishers of books/mags
Pro sports teams
“What Now?” By Michael Epstein
Evolution of digital technologies, convergence have pushed this trend
Perceived higher profits -- economy of scale
Fragmentation of audiences make it desirable
Bush Administration tolerant towards it
Sense of public service fading
Jay Schwartzman
Pres., Media Access Project
Schwartzman’s Vision (public-interest lawyer)
“Over-the-air broadcasters should each be required to carry some minimum amount of locally produced, locally originated programming that addresses the needs of the community, including controversial issues. . .”
Schwartzman’s question
Are media properties any different from any other entity in the economy?
Historical answer: yes
FCC does not need proof that actual harm has already happened to act under the public interest standard; that’s different from monopolies being broken up by the FTC or the Justice Dept.
The diversity question
Diversity in ownership brings diverse programming
Vertically integrated program producers may not share it with competitors; should be required
Program access a problem
Fairness doctrine not being enforced
Reserved capacity for non-commercial uses
Low capacity radio should come back
Media issues in the news
Headlines from fall semester ‘03
What do they mean for society?
Artist/reporter issues
Actors rally to protest non-equity road shows
An award for Stephen King? Horrors!
Trying to bypass the good-news filter
FCC Rules
FCC plan to ease curbs on big media hits Senate snag
Viacom cuts forecast as local advertising is slow to rebound
No-call list dealt setback in court ruling
Court rules FCC erred in decision on net access
(Internet access providers who sued to get the right to lease lines from cable companies)
Piracy
Studios moving to block piracy of films online
Hollywood is facing online piracy, but it looks like an inside job
Fighting the idea that all the Internet is free
Rules near on TV piracy; critics press their case
Privacy, copyright
Clinton ‘history’ doesn’t repeat itself in China (censoring of her memoir)
Cameras watching students, especially in Biloxi
The media business
New scrutiny for Liberty Media’s Starz deal
Unhappy shareholders because of stock drop
Head of BSkyB quits, with Murdoch’s son possible heir
Media grow, but they can’t hide
Industry facing problems that mergers alone won’t solve
Day in court for bid to end WorldCom’s bankruptcy (MCI)
More media business
GE finishes Vivendi deal, expanding its media assets
Pixar-Disney talks said to show progress
SEC pursues Time Warner investigation
Executives subpoenaed in accounting inquiry
The media critic who would be a mogul
(NY magazine critic trying to buy it)
Hardware for media
The talking e-mail blues
(Problems with voice recognition programs)
Sony is selling convergence, but will Europe buy it?
Advertising
To see the ads, eager magazines write the copy
Call centers in survival mode in face of do-not-call rules
Advertising: Shows like ‘Nike Training Camp’ widen the scope of product placements
Criticism arises over the way calling plans advertise rates
More on advertising
CA is set to ban junk e-mail
Ad buyers cold to TV season, but still plan to spend big
For $166 million, official NY beverage
A change of habits to elude spam’s pall
Music
A game player that happens to be a phone
Cable’s new giant flexes his muscles (Comcast)
Europe’s antipiracy proposal draws criticism
Audible service could teach music industry a lesson
Universal Music to cut jobs as industry slump lingers
With Cable TV at MIT, who needs Napster?
New parent-to-child chat: Do you download music?
More on Music
Is legal action against file swappers good business?
Is it wrong to share your music?
Teens, the record industry’s tastemakers, come to grips with being its adversaries
For music industry, U.S. is only the tip of a piracy iceberg
Crackdown on copyright abuse may send music traders into software underground
Television entertainment
NBC’s affection for ‘coupling’ cools as Thurs. night viewers wander
At a television bazaar, a glut of shows
Two HBO shows lose viewers after starting strong
Advertising: the absence of TV viewers has network executives scratching their heads
With no knockouts, NBC’s champ faces jabs (lackluster entertainment season)
New fall TV season is mostly underwhelming
Newspapers
New papers hope free and brief will attract younger readers
A media chain keeps it all in the family (Freedom Communications)
Sparring Seattle papers can’t even agree to break up
The Times chooses veteran of magazines and publishing as its first public editor
posted by Louise Mengelkoch at 6:55 PM
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