What’s the Big Deal with Media Consolidation?

You may have seen this Frugal Dad infographic floating around on the web in the past few months:

Media Consolidation Infographic

Source: Frugal dad

I know I’m going to be called naive, stupid, blind, or, worst of all, a Republican for saying this, but I don’t see what the big deal is. I think fear of media consolidation comes from a general fear of business mixed with a quirky phobia of media in particular. I have not, for instance, heard anyone complain about the limited number of American automakers. (Although, undoubtedly someone has).

I see a close analogy in politics. Take health care reform, for example. If I was in favor of the Patient Protection and Affordable Care Act (aka Obamacare, I term I hate), I probably praised its passage because of its increased coverage and lowering of prices. But be careful, what passed was not lower prices, but rather a piece of legislation. What the effects of that legislation are remain to be seen. But if I’m an average citizen I don’t really care. I conflate the two and if, in the future, prices don’t decrease or coverage doesn’t increase I don’t blame PPACA. Instead, I assume we forgot to add something to the bill or that the evil insurance companies are trying to screw us over again and I call for further legislation. The inverse example holds if I was initially against PPACA. I see an extraordinarily small number of people robustly examining the economic and policy literature. Instead, they wait for “their side” to tell them whether the bill is good or bad. They work off of emotions rather than logic. This can be useful, but also malicious.

Similarly, media consolidation does not imply an effect, at least it shouldn’t without examining the evidence. It is an “event” or a phenomenon, and its effects are quite distinct from its occurrence in the sense that just because we distrust corporations a priori does not imply negative consequences from corporate mergers without some empirical basis.

The same fears were present recently during the preposed merger of AT&T and T-Mobile. But take a look at the history of telecom mergers since 2000:

Now, I have no idea if the price reductions were a result of these mergers—economies of scale might suggest that they were—but really it doesn’t matter. You have to prove the negative counterfactual, that is, without these mergers telecom prices would have dropped even lower. Otherwise we should conclude that telecom mergers benefited customers.

Similarly, in the case of media consolidation you need to prove that all the things commonly kvetched about are a result of media consolidation itself—that there is something unique about having six media companies that isn’t present when there are, say, fifteen (or twenty or fifty). That seems like a tall task as far as I can see.

Nor are the statistics in the infographic all that alarming in their own right. Let me quickly dismiss any negative affect of consolidation on entertainment (I think that’s just silly, I mean, hello, Game of Thrones) and instead focus on news outlets as I perceive this to be the real area of concern. I am not, for instance, nervous that “232 media executives control the information diet of 277 million Americans,” since those 232 media executives are themselves controlled by the millions of Americans who own stock in their companies. Besides that, it is far more likely it is the media desires of those 277 million consumers who control the news and entertainment programing decisions of these 232 media executives.

Let’s consider another: three times more people read Time Warner news (a media conglomerate) every month than read Google News (the anti-establishment upstart). I suppose I am meant to find this alarming. Instead, I find it quite remarkable. You’re telling me that in a mere six years since officially launching, Google News has grown to a readership one-third the size of one of the most established print media companies in the history of the world? A company that publishes the likes of—year of first issue in parenthesis—Time (1923), Sports Illustrated (1954), Fortune (1930), People (1974), InStyle (1994), CNN.com (1995), and The Huffington Post (2005). That Google could do that in six years is literally amazing. With the “Big Six” that vulnerable, how can you possibly fear them?

You may be quick to point out that Google News is a news aggregator and many of their links simply redirect to one of the established media companies. True, but as long as people use Google News as their portal, it is Google News that controls what news people see, not the big media companies. Google could, at any time, simply switch providers and link to sources not owned by the Big Six, to the Associated Press, for instance. If you think Google would be foolish to do so because it would quickly lose readership then you admit it is consumers, not companies, who are in control.

And the word “control” implies a conspiracy of enormous proportions. To what ends are media giants “controlling” what news I read and watch? So I will vote Republican or Democrat? I think there is enough regulatory capture to go around regardless of what party holds office. If they are so good at making me “buy” things (read: browse their content to push up advertising revenues), how do they ever go out of business? Why do they need to merge at all? If you’re in financial straights just “control” the public into using your content. Wikipedia lists 47 CNN programs that have been cancelled over the years. Why were they cancelled? If the media companies are in control why couldn’t they just make me watch those shows? Certainly it wasn’t low ratings, that would imply it is consumer demand, not executives, that dictates programing.

Perhaps you think I have perverted the concept of “control.” Instead, by “control” you mean that the Big Six can choose to show me certain pieces of news and not others. Fine, I agree. But implicit in that statement is that, far from showing us what we want to watch, they are showing us some alternative set of programing. Again, to what ends? Do media executives have a strong interest in showing me two straight days of the royal wedding instead of revolutions in the Middle East? Seems strange. More likely they anticipate making more advertising revenue because we would rather watch such silliness. Or maybe you think their motives are something more sinister, but what? I truley have no idea. What about the realities of expensive overseas bureaus, which must be shut down because we do not demand enough international news? Are the many thousands of employees who work for these corporations complicit in the process of them choosing what we watch? And what does all of this have to do with consolidation? You mean Glenn Beck wouldn’t be inspiring Tea Partiers if there was less consolidation? If, say, NewsCorp owned Fox News, but The Wall Street Journal was still independent? I literally don’t get it.

By the way, the latter type of weak control implies the former type of strong control. For if it is media corporations—and not the media tastes of consumers—that drives programing, it must also be the case that these same corporations have the power to dictate our preferences. And dictating our preferences is akin to making us watch and read whatever they desire. In this model they could get by with a single low-cost show, make us watch it, and save much more money than they currently spend. Reality seems like evidence that the model is wrong.

But maybe I’m wrong. I’m open to the idea. But I need evidence that somehow the overall quality of media across the board has been diminished specifically due to consolidation. I need proof of the effect, not proof of a neutral phenomenon occurring. Maybe I’ll skim through some academic media journals, surely someone has written something on the subject. But will it be compelling enough to instill fear in me? For it is truly fear and alarm that infographics like the one above are meant to encourage.

I just don’t see what you see. I see an incredibly robust set of media institutions, some owned by the Big Six and some smaller and independent. I see an improved technological infrastructure that allows me to stream non-US programing such as the BCC or Al Jazeera any time of day or night. I see fantastic investigative journalism going strong. I see thousands of blogs sprouting up, many of them outside the US, that give me unique perspectives on the world that I didn’t have access to even ten years ago. I see Twitter becoming so powerful that it helped to fuel revolutions in Iran and Egypt. This is the media environment that I’m familiar with. I am not afraid of consolidation by the biggest media companies because they are not in control. Instead, I control them every time I choose to go to a competitor to get the kind of news I want and trust. And these days are very good for that kind of consumer choice.

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