Why Media Mergers matter…
“Having a few huge corporations control our
outlets of expression could lead to less
aggressive news coverage and a more muted
marketplace of ideas.”
Rifka Rosenwein, Why Media Mergers Matter, Brill’s
Content, December 1999
“If media moguls control media content and
media distribution, then they have a lock on
the extent and range of diverse views and
information,” says [Chuck] Lewis,
[executive director of the Centre for Public
Integrity]. “That kind of grip on commercial
and political power is potentially dangerous
for any democracy.”
Miren Gutierrez, Fewer Players, Less
Freedom, Inter Press Service, March 20,
2004
Vertical Integration
• Many of the large media company owners are entertainment companies and
have vertical integration (i.e. own operations and businesses) across various
industries and verticals, such as distribution networks, toys and clothing
manufacture and/or retailing etc. That means that while this is good for
their business, the diversity of opinions and issues we can see being
discussed by them will be less well covered. (One cannot expect Disney,
for example, to talk too much about sweatshop labor when it is accused of
being involved in such things itself.) The wider ramifications are
highlighted well in this following quote:
• Vertical Integration was once looked upon with alarm by government. It
was understood that corporations which have control of a total process,
from raw material to fabrication to sales, also have few motives for genuine
innovation and the power to seize out anyone else who tries to compete.
This situation distorts the economy with monopolistic control over prices.
Today, government has become sympathetic to dominant vertical
corporations that have merged into ever larger total systems. These
corporations, including those in the media, have remained largely
unrestrained. Ben H. Bagdikian, The Media Monopoly, Sixth Edition,
(Beacon Press, 2000), p. xvii
1980-1990s
In 1983, fifty corporations dominated most of
every mass medium and the biggest media merger
in history was a $340 million deal. … [I]n 1987,
the fifty companies had shrunk to twenty-nine. …
[I]n 1990, the twenty-nine had shrunk to twenty
three. … [I]n 1997, the biggest firms numbered
ten and involved the $19 billion Disney-ABC deal,
at the time the biggest media merger ever. … [In
2000] AOL Time Warner’s $350 billion merged
corporation [was] more than 1,000 times larger
[than the biggest deal of 1983]. Ben H. Bagdikian, The
Media Monopoly, Sixth Edition, (Beacon Press, 2000), pp.
xx—xxi
1990s
• Disney bought ABC in 1995 for $19.6 billion
• Time Warner acquired Turner Broadcasting System in
1996 (including CNN)
• Viacom buy outs CBS in 1999 for around $37 billion
• In 2000, a new company called AOL Time Warner, with
Steve Case as chairman, was created when AOL purchased
Time Warner for US$164 billion. It was the largest
corporate merger in history.
The end of the 1990s
At the end of the 1990s, there were 9 corporations
(mainly US) that dominated the media world:
AOL-Time Warner
Disney
Bertelsmann
Viacom
News Corporation
TCI
General Electric (owner of NBC)
Sony (owner of Columbia and TriStar Pictures and
major recording interests), and
Seagram (owner of Universal film and music
interests).
2002
The top ten media companies were now…
• AOL Time Warner
• Disney
• General Electric
• News Corporation
• Viacom
• Vivendi
• Sony
• Bertelsmann
• AT&T
• Liberty Media
How the big 50 became The Big Six
THE BIG SIX
It is the second
largest global
media
conglomerate,
after AOL Time
Warner.
Rupert Murdoch's News
Corporation Ltd. has media
holdings in the U.S., Canada,
Europe, Australia, Latin
America and Asia.
It's the third
largest global
media
conglomerate. FY
2000 revenues
topped $25 billion.
The $165 billion mega-merger
between AOL and Time Warner,
approved by the FCC in January
2001, is the largest media
merger in history. The new
company promises to offer a
powerhouse of integrated
communication, media and
entertainment across all
platforms -- computer, phone,
television and handheld wireless
devices.
Sony made its
name with
electronics,
but it now has
more than
1,000
subsidaries
worldwide,
many of them
key media
partners.
This privatelyowned
German media
conglomerate
has interests
in 600
companies in
53 countries.
This giant's
subsidiary
Universal
Music Group is
the number
one music
company in
the world,
with roughly
22% of the
1999 global
market.
2001 pbs online and wgbh/frontline
Where Hollywood Films make Money
* Includes
domestic and
international
revenue sources;
"TV" includes
all related
revenue streams,
including payper-view,
network TV, and
premium cable
Source:
"Filmspace:
Behind the
Scenes," ABN
Amro, Sept. 12,
2000
Windows of Exhibition
Hollywood movies are shown not only on the big screen, they're exhibited on video
and DVD, on network and cable TV, on pay-per-view, and on airplanes. Hollywood
films continue to make money for the studios across all of these platforms, known
as"windows of exhibition," years after their theatrical release.
Here's how it works.
2001, pbs online and wgbh/frontline
DISNEY
Studio Entertainment accounts for 23.6 percent of the revenue that Disney's top
business segments generate, and only 2.7 percent of their operating income.
Business Segment
Media Networks
Studio Entertainment*
Parks and Resorts
Consumer Products
Internet Group
Combined
Revenue (millions)
9615
5944 (23.6%)
6803
2622
368
25402
Operating Income (millions)
2298
110 (2.7%)
1620
455
(402)
4081
*Includes Walt Disney Pictures, Touchstone Pictures, Walt Disney Feature
Animation, Walt Disney Television Animation, Buena Vista Theatrical Group,
Miramax
Source: The Walt Disney Company Annual Report 2000
VIACOM
Entertainment accounts for 13.5 percent of the revenue that Viacom's top business
segments generate, and 8.9 percent of their operating income.
Business Segment
Cable Networks
Television
Infinity
Entertainment*
Video
Publishing
Online
Combined
Revenue (millions)
3895
5382
2765
2758 (13.5%)
4960
596
101
20457
Operating Income (millions)
1250
431
589
210 (8.9%)
76
50
(257)
2349
*Includes Paramount Pictures, Paramount Parks, movie theater and music publishing
operations
Source: Viacom Annual Report 2000
Vivendi Universal
(now owned by GENERAL ELECTRIC)
TV/Film accounts for 31.2 percent of the revenue that Vivendi's top business
segments generate, and only 23.6 percent of their operating income*.
Business Segment
Music
Publishing
TV/Film**
Telecoms
Internet
Combined
Revenue (millions)
495
3540
4248 (31.2%)
5270
48
13601
Operating Income (millions)
94
493
526 (23.6%)
1303
(184)
2232
*Figures for operating income are before depreciation and amortization.
**Includes Universal Pictures, STUDIOCANAL, Universal Studios Recreation
Group, Canal+, Universal Television & Networks Group
Source: Vivendi Annual Report 2000
TIME WARNER
Filmed Entertainment accounts for 21.7 percent of the revenue that AOL Time
Warner's top business segments generate, and only 9.1 percent of their operating
income*.
Business Segment
AOL
Cable
Filmed Entertainment**
Networks
Music
Publishing
Combined
Revenue (millions)
7703
6054
8119 (21.7%)
6802
4148
4645
37471
Operating Income (millions)
2350
2831
796 (9.1%)
1502
518
747
8744
Figures are projected; estimations for operating income are before depreciation
and amortization.
** Includes Warner Bros. Pictures, New Line Productions, Fine Line Features,
Warner Home Video, Warner Bros. Television
Source: AOL Time Warner Annual Report 2000
NEWS CORPORATION
Filmed Entertainment accounts for 27 percent of the sales revenue that News
Corp.'s top business segments generate, and 15.5 percent of their operating income.
Business Segment
Filmed Entertainment*
Television
Cable/Network
Magazines and Inserts
Newspapers
Book Publishing
Combined
Revenue (millions)
6625 (27.0%)
7008
2696
1675
4600
1907
24511
Operating Income (millions)
503 (15.5%)
991
197
437
904
205
3237
Includes Twentieth Century Fox Film Corp., Fox 2000 Pictures, Fox Searchlight
Pictures, Twentieth Century Fox Home Entertainment
Source: News Corp. Annual Report 2001
SONY
Pictures account for 7.7 percent of the sales and operating revenue that Sony's top
business segments generate, and only 1.8 percent of their operating income.
Business Segment
Electronics
Game
Music
Pictures*
Insurance
Combined
Revenue (millions)
39989
5169
4568
4442 (7.7%)
3415
57583
Operating Income (millions)
1989
(409)
164
35 (1.8%)
143
1922
*Includes Sony Pictures Entertainment, Sony Pictures Classics, Columbia Pictures,
Columbia TriStar Television
Source: Sony Annual Report 2001
BERTELSMANN
• Broadcasting - RTL Group
–
Radio, RTL Radio France, RTL2, FUN RADIO, RTL Radio Deutschland, 104.6 RTL (Berlin), ANTENNE BAYERN
(Germany), Radio Hamburg, radio NRW (Germany), RADIO 21 (Germany), bigFM (Germany), Radio Regenbogen
(Germany), Radio Dresden, HITRADIO RTL SACHSEN (Germany), Hit-Radio Antenne (Germany), ANTENNE
MECKLENBURG-VORPOMMERN (Germany), Radio Brocken (Germany), 89.0 RTL (Germany), ANTENNE
THÜRINGEN (Germany), BB RADIO (Germany), 105'5 Spreeradio (Germany), radio TOP 40 (Germany), Oldie 95
(Germany), ROCK ANTENNE's (Germany), RTL Radio Lëtzebuerg, Bel RTL, Radio Contact (Belgium), Mint (Belgium),
Onda Cero (Spain), Europa FM (Spain), Television, RTL Television, M6 (France), Five (UK), ANTENA 3 (Spain), RTL 4
(The Netherlands), RTL 5 (The Netherlands), RTL 7 (The Netherlands), RTL TVI (Belgium), RTL Klub (Hungary), RTL
Televizija (Croatia), Télé Lëtzebuerg, VOX (Germany), RTL II (Germany), Super RTL (Germany), n-tv (Germany), Den 2.
RTL (Luxembourg), RTL Shop (Germany), Traumpartner TV (Germany), RTL TVI (Belgium), Plug TV (Belgium), RTL 9
(France), REN TV (Russia), Fun TV (France), Téva (France), Paris Première, Série Club (France), TF6 (France), W9
(France), M6 Music Rock (France), M6 Music Black (France), M6 Music Hits (France), Antena 3 (Spain), Antena.Nova
(Spain), Five US (UK), Five Life (UK)
Programming
–
FremantleMedia, UFA Film & TV Produktion, UFA Fernsehproduktion, UFA Filmproduktion, UFA Entertainment, Grundy
UFA, GRUNDY Light Entertainment, Karlheinz Brunnemann. teamWorx, Universum Film, talkbackTHAMES,
Crackerjack, Blue Circle, Blu, Home Shopping Service, SND, CLT-UFA, ENEX
• Publishing
–
Books: Random House, Inc., Ballantine, Ballantine Books, Ballantine Reader's Circle, Del Rey, Del Rey/LucasBooks, Fawcett,
Ivy, One World, Wellspring, Bantam Dell Publishing Group, Bantam Hardcover, Bantam Mass Market, Bantam Trade
Paperbacks, Crimeline, Delacorte Press, Dell, Delta, Domain, DTP, Fanfare, Island, Spectra, The Dial Press, Crown
Publishing Group, Bell Tower, Clarkson Potter, Crown Business, Crown Publishers Inc., Harmony Books, Prime, Shaye
Areheart Books, Three Rivers Press, Doubleday Broadway Publishing Group, Broadway Books, Currency, Doubleday,
Doubleday Image, Doubleday Religious Publishing, Main Street Books, Nan A. Talese, Harlem Moon, Knopf Publishing
Group, Alfred A. Knopf, Anchor, Everyman's Library, Pantheon Books, Schocken Books, Vintage, Random House Audio
Publishing Group, Villard Books, The Modern Library, RH Trade Paperbacks, Striver's Row Books, Random House
Children's Books, Dell/Delacorte/Dell Young Reader's Group, Alfred A. Knopf, Bantam, Crown, David Fickling Books,
Delacorte Press, Dell Dragonfly, Dell Laurel-Leaf, Dell Yearling Books, Doubleday, Wendy Lamb Books, Random House
Diversified Publishing Group, RH Value Publishing, Random House Information Group, Fodor's Travel Publications, Living
Language, Prima Games, Princeton Review, RH Espanol, RH Puzzles and Games, RH Reference Publishing , Waterbrook
Press , Shaw Books, Fisherman Bible Study Guides
BERTELSMANN (cont’d)
Magazines: GRUNER, JAHR, ALLAKSTE YEFSIS, ART, ASTROLOGOS,
AUTOREVUE, AVTO MAGAZIN, BIEN DANS MA VIE, BÖRSE ONLINE, BRIGITTE,
BÜHNE, ÇA M'INTéRESSE, CAPITAL, CAR & MOTOR, CLAUDIA, CONNECT,
COSMOPOLITAN, CUISINE ACTUELLE, CUISINE GOURMANDE, DB MOBIL,
DECORATION, DIVA, DOGS, E&T - FÜR JEDEN TAG, ELLE, ELTERN FAMILY,
ELTERN ARZT & SCHWANGERSCHAFT, ELTERN UNSER BAB, E-MEDIA,
EMOTION, ESSEN & TRINKEN, EXODOS, FEMME ACTUELLE, FITNESS, FLORA
GARTEN, FOCUS, FORMA, FORMAT, FRAU IM SPIEGEL, FOCUS, FUSHI
MEIRONG, GALA, GEO, GLAMOUR, GOLFREVUE, GUIDE CUISINE, GUSTO,
HÄUSER, HEALTHY LIVING, HOW TO SPEND IT, IKIA & DIAKOSMISI,
IMPULSE, JACK, JASMIN, JIAJU, JOY, KLIK, LEA, LISA, LIVING AT HOME,
LUFTHANSA EXCLUSIVE, MANAGEMENT, MARIE CLAIRE, MEN'S HEALTH,
MIA, MOJ LEPI VRT, MOJA LEPA BA TA, MOJE DIJETE, MOJE GOTOWANIE,
MUY INTERESANTE, NAJ, NATIONAL GEOGRAPHIC, NEON, NEWS, NOVA,
PAIDI & NEI GONIS, PARENTS FUMU, PARK AVENUE, P.M., PRIMA, PROFIL,
QUEST, RODZICE, SCHÖNER WOHNEN, SER PADRES, STARS, STERN, STORY,
SWAROVSKI MAGAZIN, TéLé LOISIRS, TOP GIRL, TREND, TV-MEDIA, VIEW,
VIVA!, VOICI, VSD, VW MAGAZIN, WOMAN, XIANFENG, Xpress, YACHTREVUE,
YI REN, YO COCINO
Newspapers: CHEMNITZER MORGENPOST, DRESDNER MORGENPOST,
FINANCIAL TIMES DEUTSCHLAND, MORGENPOST AM SONNTAG,
SÄCHSISCHE ZEITUNG
Music:
Sony BMGArista, Bluebird, BNA, Burgundy, Columbia, Epic, Jive, J Records,
Legacy, Masterworks, Provident, RCA, Windam Hill, Zomba
2004-2005
• On February 4, 2004, Mark Zuckerberg launched
"Thefacebook,” originally located at thefacebook.com
• The News Corp. chairman Rupert Murdoch paid just $580
million for the social media giant MySpace in 2005.
• In 2005, Google acquired of online video source YouTube
for an estimated $1.65 billion dollars.
2005 -2006
2006
• By the end of 2006, there are only 8 giant media
companies dominating the US media, from which
most people get their news and information:
• Disney (market value: $72.8 billion)
• AOL-Time Warner (market value: $90.7 billion)
• Viacom (market value: $53.9 billion)
• General Electric (owner of NBC, market value:
$390.6 billion)
• News Corporation (market value: $56.7 billion)
• Yahoo! (market value: $40.1 billion)
• Microsoft (market value: $306.8 billion)
• Google (market value: $154.6 billion)
•
•
•
•
•
Television
- NBC Universal (January 2010)
Cable
– Comcast Cable
Programming
– E! Entertainment, Style, Comcast SportsNet Philadelphia, Comcast
SportsNet Mid-Atlantic, Comcast SportsNet Chicago, Comcast
SportsNet West, SportsNet New York (partial), The Golf Channel,
Versus Network, AZN Television, PBS KIDS Sprout, TV One, G4
Sport Franchises
– Philadelphia 76ers, Philadelphia Flyers, Philadelphia Phantoms,
Philadelphia Charge, Frederick Keys, Delmarva Shorebirds, Bowie
Baysox
Other
– Through Comcast Spectator, Wachovia Center, Wachovia Spectrum,
Ovations Food Services, New Era Tickets, Front Row Marketing
Services
Terms you should know
•
•
•
•
•
•
•
•
Hollywoodism
Vertical Integration
Windows of Exhibition
Conglomerates
Monopoly
Majors
Independents
Distributors
•
•
•
•
•
Exhibitors
Anchor Product
Merchandising
Product Placement
Paramount Consent
Decrees
• Anti-Trust Laws
• Consolidation
Anchor
Product