merge and churn

In the early 1980s three networks - ABC, CBS and NBC - accounted for around 92% of US television viewers. Australian figures were even more concentrated, with the three networks and ABC accounting for almost all viewers.

In the US AT&T ('Ma Bell') controlled 78% of local telephone service and around 98% of the long distance market. In Australia Telstra had a larger share of the local and long-distance market for domestic calls. IBM accounted for 77% of the computer market.

How the would has changed, and not just because of the web.

    in the age of the internet 

We disagree with the hyperbole that the net means the death of "media dinosaurs".

It's clear that there's great uncertainty in the canyons of Manhattan (and other climes inhabited by media czars). And there's much noise from soothsayers that the end is nigh. However, 'old media' has proved characteristically resilient. Today the prophets warn that Napster means the end of old media and life as we know it. Forty years ago it was television. Eighty years ago radio and recorded music would mean the death of culture. 

There's thus some value in looking at the past: new technologies have generally supplemented rather than destroyed existing communication mechanisms, 'content' companies have assimilated new delivery mechanisms, markets consume content rather than bandwidth. 

In the 1960s for example, amid hoopla about the "Information Age" (or merely access to easy money), media conglomerates and IT bought publishing houses to exploit an 'education' or 'infotainment' boom that was claimed to be underway. Buyers included IBM, CBS, Xerox, GE, Litton Industries, Raytheon, Paramount and RCA. At the same time the number of publishing houses doubled, from an estimated 6,000 to around 12,500.

    some characteristics 

Old media is still profitable and has the revenue to acquire complementary or competing new media interests. Despite gloomy prognostications regional newspaper and radio interests continue to deliver above-average returns, in contrast to the black hole with the name 'new media'.

Media groups are getting larger. 'Critical mass' is important - in the eyes of executives and fund managers - and many seem to have adopted Roy Thomson's model: "I buy newspapers to make money to buy more newspapers to make more money." And if czars can afford bigger toys they'll buy them. There have been suggestions that in the US two percent of publishers account for 75% of all titles and that the top 30% of publishers are responsible for 99% of all books published.  

In response to uncertainty - whether it's the search for the 'killer app' or merely the perceived need to pre-empt competitors - most of the groups are heading in two directions. 

Some are hedging their bets by 'bundling' film, print, recorded music, broadcasting and online services. Some throw in a theme park chain as well. Integration is a challenge few have mastered. Others - such as Elsevier, Thomson and Kluwer - are specialising, shedding non-core holdings to fund growth as specialist publishers online and offline. Most are seeking a global presence and thus operate in Australia. 

The groups continue to 'churn' their holdings, with ongoing restructuring of the empires and newspapers, magazines, film studios and other properties being actively traded. We've provided a schematic of what group operates in which area.

    merge and churn

Anthony Smith's The Age of Behemoths: The Globalisation of Mass Media Firms (New York: 20th Century Fund 91), Richard Gershon's The Transnational Media Corporation: Global Messages & Free Market Competition (Mahwah: Erlbaum 97) and The International Market in Film & Television Programs (Norwood: Ablex 93) edited by Eli Noam & Joel Millonzi are suggestive.

Michael Wolf's The Entertainment Economy (New York: Times 99) and the modish Global Media Economics: Commercialisation, Concentration & Integration of World Media Markets (Ames: Iowa State Uni Press 98) edited by Alan Albarran & Sylvia Chan-Olmsted are less convincing than Harold Vogel's Entertainment Industry Economics (Cambridge: Cambridge Uni Press 98). For a guts & glory view consult Bruce Wasserstein's Big Deal (New York: Warner 98).

If you're a Gilderoid you'll buy his vision of a new digital community. We don't. Dan Schiller's paper Ambush on the I-Way: Commoditization on the Electronic Frontier, his provocative Digital Capitalism: Networking the Global Market System (Cambridge: MIT Press 99) and Deep Impact: The Web & the Changing Media Economy (Info Feb 99) are both more convincing and more entertaining than George Gilder's Telecosm: How Infinite Bandwidth Will Revolutionise Our World (New York: Free Press 00).

Russell Neuman's The Future of the Mass Audience (Cambridge: Cambridge Uni Press 96) offers an incisive analysis of 'demassification' and narrowcasting, arguing that new technologies will not lead to the death of the mass media and fragment communities. In the opposite corner Joseph Turow's Breaking Up America: Advertisers and the New Media World (Chicago: Chicago Uni Press 97), like Cass Sunstein's Republic.com (Princeton: Princeton Uni Press 01), is overstated but worth a look.

Capitalism & the Information Age: the Political Economy of the Global Communication Revolution (New York: Monthly Review Press 98) is a lament from the left, edited by Robert McChesney, Ellen Wood & John Foster. Like The Global Media: The New Missionaries of Global Capitalism (London: Cassell 97) by Edward Herman & McChesney it complements the bleak The Global Political Economy of Communication: Hegemony, Telecommunications & the Information Economy (New York: St Martin's 94) edited by Edward Comer.

There's a more iconoclastic view in Who Owns the Media? Competition & Concentration in the Mass Media Industry (Mahwah: Erlbaum 00) by Benjamin Compaine & Douglas Gomery and in The Rise & Fall of Communication Empires (PDF) by Robert Picard. That latter's insightful Delusions of Grandeur: The Real Problems of Concentration in Media (PDF) comments that many critics

have been vociferous but a careful review of their work shows that much is based on limited anecdotal evidence and filled with polemical rhetoric that based on often on fanciful thinking rather than a thorough examination of the facts and issues. As a result much of literature about conglomerates and concentration is disingenuous and reflects a poverty of intellectual analysis. In some cases authors are stuck in chic pop-neomarxist and cultural rhetoric and unable or unwilling to apply themselves intellectually to situation today. They continually sing the same old refrain begun years ago with bothering to see how and why the situations to which it is applied have changed.

    and converge

As we've highlighted in our Network guide, 'convergence' has been an enduring buzzword since the 1980s. In practice it is useful to distinguish four types of convergence:

in media products and markets - the emergence of hybrid media such as datacasting

in media platforms

in corporate structures - the proliferation of alliances, joint ventures, acquisition and mergers between corporations originating from traditionally distinct industry sectors.

in media regulation and policy - the adaptation of laws, regulations, policies and bureaucratic structures to changing industries and new media services.

Digital Convergence: Comparative Corporate Strategies for consolidating content & distribution channels amongst multinational media and communications firms (PDF) by Payam Eshraghian offers a perspective.

In Australia the federal Commonwealth Department of Communications, Information Technology & the Arts (DCITA) - part of a portfolio encompassing the National Office for the Information Economy, the Australian Broadcasting Commission, Australian Film Commission, Australian Communications Authority and the Australian Broadcasting Authority (ABA) - deals with many aspects of the information economy, from content production to distribution and consumption. The ABA in turn embraces radio/television broadcast licensing, digital television development and regulation of online content.

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