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The New Global Media | The Nation

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The New Global Media

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The global media market is rounded out by a second tier of four or five dozen firms that are national or regional powerhouses, or that control niche markets, like business or trade publishing. About half of these second-tier firms come from North America; most of the rest are from Western Europe and Japan. Each of these second-tier firms is a giant in its own right, often ranking among the thousand largest companies in the world and doing more than $1 billion per year in business. The roster of second-tier media firms from North America includes Dow Jones, Gannett, Knight-Ridder, Hearst and Advance Publications, and among those from Europe are the Kirch Group, Havas, Mediaset, Hachette, Prisa, Canal Plus, Pearson, Reuters and Reed Elsevier. The Japanese companies, aside from Sony, remain almost exclusively domestic producers.

This article is adapted from Robert W. McChesney's Rich Media, Poor Democracy (Illinois).
Three charts accompany this article: "Global Media Moguls," "Who Owns the Movies?" and "Who Owns the Music?"

About the Author

Robert W. McChesney
Robert McChesney is Gutgsell Endowed Professor in the Department of Communication at the University of Illinois. He...

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This second tier has also crystallized rather quickly; across the globe there has been a shakeout in national and regional media markets, with small firms getting eaten by medium firms and medium firms being swallowed by big firms. Many national and regional conglomerates have been established on the backs of publishing or television empires, as in the case of Denmark's Egmont. The situation in most nations is similar to the one in the United States: Compared with ten or twenty years ago, a much smaller number of much larger firms now dominate the media. Indeed, as most nations are smaller than the United States, the tightness of the media oligopoly can be even more severe. The situation may be most stark in New Zealand, where the newspaper industry is largely the province of the Australian-American Rupert Murdoch and the Irishman Tony O'Reilly, who also dominates New Zealand's commercial-radio broadcasting and has major stakes in magazine publishing. Murdoch controls pay television and is negotiating to purchase one or both of the two public TV networks, which the government is aiming to sell. In short, the rulers of New Zealand's media system could squeeze into a closet.

Second-tier corporations are continually seeking to reach beyond national borders. Australian media moguls, following the path blazed by Murdoch, have the mantra "Expand or die." As one puts it, "You really can't continue to grow as an Australian supplier in Australia." Mediaset, the Berlusconi-owned Italian TV power, is angling to expand into the rest of Europe and Latin America. Perhaps the most striking example of second-tier globalization is Hicks, Muse, Tate and Furst, the US radio/publishing/TV/billboard/movie theater power that has been constructed almost overnight. In 1998 it spent well over $1 billion purchasing media assets in Mexico, Argentina, Brazil and Venezuela.

Thus second-tier media firms are hardly "oppositional" to the global system. This is true as well in developing countries. Mexico's Televisa, Brazil's Globo, Argentina's Clarin and Venezuela's Cisneros Group, for example, are among the world's sixty or seventy largest media corporations. These firms tend to dominate their own national and regional media markets, which have been experiencing rapid consolidation as well. They have extensive ties and joint ventures with the largest media TNCs, as well as with Wall Street investment banks. And like second-tier media firms elsewhere, they are also establishing global operations, especially in nations that speak the same language. As a result, they tend to have distinctly pro-business political agendas and to support expansion of the global media market, which puts them at odds with large segments of the population in their home countries.

Together, the sixty or seventy first- and second-tier giants control much of the world's media: book, magazine and newspaper publishing; music recording; TV production; TV stations and cable channels; satellite TV systems; film production; and motion picture theaters. But the system is still very much in formation. New second-tier firms are emerging, especially in lucrative Asian markets, and there will probably be further upheaval among the ranks of the first-tier media giants. And corporations get no guarantee of success merely by going global. The point is that they have no choice in the matter. Some, perhaps many, will falter as they accrue too much debt or as they enter unprofitable ventures. But the chances are that we are closer to the end of the process of establishing a stable global media market than to the beginning. And as it takes shape, there is a distinct likelihood that the leading media firms in the world will find themselves in a very profitable position. That is what they are racing to secure.

The global media system is fundamentally noncompetitive in any meaningful economic sense of the term. Many of the largest media firms have some of the same major shareholders, own pieces of one another or have interlocking boards of directors. When Variety compiled its list of the fifty largest global media firms for 1997, it observed that "merger mania" and cross-ownership had "resulted in a complex web of interrelationships" that will "make you dizzy." The global market strongly encourages corporations to establish equity joint ventures in which the media giants all own a part of an enterprise. This way, firms reduce competition and risk and increase the chance of profitability. As the CEO of Sogecable, Spain's largest media firm and one of the twelve largest private media companies in Europe, expressed it to Variety, the strategy is "not to compete with international companies but to join them." In some respects, the global media market more closely resembles a cartel than it does the competitive marketplace found in economics textbooks.

Global conglomerates can at times have a progressive impact on culture, especially when they enter nations that had been tightly controlled by corrupt crony media systems (as in much of Latin America) or nations that had significant state censorship over media (as in parts of Asia). The global commercial-media system is radical in that it will respect no tradition or custom, on balance, if it stands in the way of profits. But ultimately it is politically conservative, because the media giants are significant beneficiaries of the current social structure around the world, and any upheaval in property or social relations--particularly to the extent that it reduces the power of business--is not in their interest.

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