The media is exploding with blogs, social networking and alternative forms of media, but a select few hold the keys to the information and news distributed daily to the American people.
In 1983, approximately 50 corporations dominated the news media, according to the book “Copyright’s Paradox“. Today, the “big six” companies virtually control all the news media in the United States:
- Time Warner
- Walt Disney
- News Corporation
- CBS Corporation
- NBC Universal
These companies comprise the media industry’s oligopoly, a term which means that analog and digital media are controlled by a few rich and powerful owners. The trend of media organization consolidation will likely continue, as history has proven, despite the proliferation of media type changes and citizen journalism.
The rich get richer
Because of the current economic state in the U.S., media organizations will likely commercialize and centralize. In tough economic times, people make choices about their consumer and spending habits. They choose to cancel their newspaper subscriptions and to search for free news venues. They may choose to cancel their cable TV and instead only watch free programs. These actions result in less revenue for many media organizations, which can’t keep up with free or more appealing alternative media options. These organizations are then bought out or merge with larger corporations, resulting in centralized media companies and less choice for the American public.
Disney offers a case study in media oligopoly. In 2006, the corporation bought Pixar for $7.4 billion in a highly publicized purchase. In 2009, Disney announced a deal to acquire Marvel Entertainment, and in 2012, Disney announced plans to acquire Lucasfilm, the producer of Star Wars and the Indiana Jones films, for more than $4 billion.
The large companies who hold the money also create the latest and greatest technology that fuels the cycle of oligopoly. For example, General Electric, which used to own NBC Universal, merged with Comcast in 2009 in a $30 billion deal.
Hope springs eternal
There will always be checks and balances in the media industry, however, because of the Federal Communications Commission (FCC). Part of the FCC’s goal is to “ensure the media marketplace remains vibrant, robust and competitive.” The last word is key here – the FCC is partially an antitrust organization – it monitors and prevents trusts and monopolies in the media industry.
Although it is likely the media consolidation trends will continue, consumers shouldn’t fear they will read Disney’s newspaper over morning toast and coffee or pay Time Warner their phone bills. Unfortunately for media corporations, they can’t buy every organization their eyes desire, due to the FCC’s regulations. But, perhaps for once, old rules are a good thing for everyone.