McChesney makes note of four major trends in media:
• Corporate concentration
• Conglomeration
• Hypercommercialism
• Globalization
Corporate concentration occurred after WWII and represented the classic “buying of market share” through horizontal integration. Media markets became Oligopolies that operated within distinct media markets such as newspaper, radio, magazines, books, television, film, and music. Within each of these markets there were a small number of firms who had control over market share.
As technology developed and the number of media outlets increased one would think that the number of media firms would also rise, but in fact the market reaction to the growth of media is one of greater corporate concentration and the emergence of conglomeration and vertical integration into two or more media markets. Newspapers took ownership of television stations and radio stations. Film Studios took over Theatre chains. With advertisers having a growing number of options to market their wares, media companies responded through mergers and acquisitions to create 10 top tier media companies (now perhaps only 6). News Corp President Pete Chenin described the benefits of conglomeration as “regardless of where the profits move to, you’re in a position to gain.”
Consolidation and Conglomeration allows corporations to cut production costs and control prices in order to maximize profits. Oligopolies tend to work together and keep prices as high as the market will bear (similar to OPEC).
“What is clear is that the option of being a small or middle sized media firm barely exists any longer: a firm either gets larger through mergers and acquisitions or it gets swallowed by a more aggressive competitor.”
Media conglomeration is driven by the need to cross promote brands which is extremely profitable. The effort to ever increase profits has led media towards Hypercommercialism. Cross marketing (through product licensing and development of spinoffs) movies into television shows and video games or household products such as children’s flatware with a graphic of Nemo on it has become the norm. Television shows like Star Trek have been cross sold as books and blockbuster movies as well as holloween costumes, and just about any commodity that can support a graphic image. As the number of companies controlling the markets decreases, the need for product differentiation through branding has increased.
It is important to note that although vertical integration is extremely profitable, it does not guarantee a profit. Some mergers don’t work. There needs to be a unifying factor such as when a newspaper buys television and radio stations that supply news content and Film companies by music companies that supply entertainment.
The larger the conglomerates become the more hyper commercialized they become due to the insatiable appetite for profit. Thus there are ever more pervasive innovations in advertising such as product placement deals that blur the lines of advertising.
McChesney sees several negative factors to these trends in the cluttered media landscape. First of all, editorial integrity is compromised. Journalism is in decline. Large media firms have boards of directors who are also affiliated with the boards of Fortune 1000 corporations. This has created a climate that is adverse to investigative journalism.
Secondly, while demand creates supply, the control of supply in a monopolistic manner can create demand. Consumers are not receiving quality programming more often than not and are stuck with art that is controlled by business with in turn blocks out new talent because it is too risky. While commercialism affords artist to make a living and gives consumer access to the art, hypercommercialism creates cookie cutter media that is increasingly cheaper (i.e. reality television and NBC’s move to eliminate dramas and put Jay Leno in the 10pm slot) that is coded to a hegemonic culture.
Control of media is a political decision that has been forgotten by most. Media is vested with responsibilities to fulfill public service. However, deregulation has allowed for greater corporate control and stronger corporate alignments that serve advertiser interests instead of viewer interest. The establishment of professional journalism and a supposed separation of editorial content from commercial interest has masked the deregulation and consolidation of media. Professional journalism is purported to neutral but when you look at its origins, its development of a neutral bias was seen as a way to increase marketability of media by not antagonizing advertisers and consumers with partisan politics. It was simply more efficient to have the appearance of neutrality even though the media represents and targets the middle and upper class.
Media is now taking its socio-political economic system to a global scale. The advent of the Internet and user generated content would seem to offer a counter force, but when you look at the gatekeepers like Google, Myspace, and YouTube, you see yet another example of Oligopoly that is benefitting from extremely cheap production costs (free user generated content) and control over advertising distribution to the exclusion of any small firms.
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