Lords and the Liberals

Trends in Concentration of Global/ Canadian MediaWhy Does Ownership and Control Matter, anyway?

What about those Press Lords and Liberals ( 3 cases of direct economic censorship)

What can be Done?

Concentration

• The communication business tends ‘naturally’ to concentration– Effort to become bigger: control larger markets– ( see why next week)– Cross media ownership: mergers and

acquisitions– Ie. Concentration of firms through new forms of

corporate alliances or integration– But also Concentration of..

• Products• Media formats• Markets• All to reduce risk and maximize profit

Three Economic Structures

Monopoly: single firm dominates production and disribution ( eg. Telus until 1990)

Oligopoly: a few firms dominate Competition: sufficient firms that no one is

predominant Internationally, a condition of oligopoly and this

is playing out in domestic markets Rise of new forms of corporate integration

Types of Corporate Affiliation

• Horizontal:– Integration of like companies in like fields

• EG: Sun and Province ( share services)• Chain ownership

• Vertical– From production, to distribution, to exhibition to rental:

all aspects of the supply chain– Eg: Alliance Atlantis

• Conglomerate– Multiple company clusters, containing both horizontal

and vertical integration, but in many different service/product fields.

– This is characteristic of all the largest companies both globally and domestically

Ownership Policy in Canada

• Caps on Foreign ownership ( 20 and 25% foreign)• Private ownership in print media, and most of TV• Public ownership of CBC• Some regulation of competition policy in all

businesses– eg. Prevent price fixing, predatory competition, illegal

trade in secrets etc.– Procedural, rarely normative… do not ask how much

competition is enough. See competition bureau

• Historically, competition policy in Canada is weak• Through CRTC, some effort to police cross media

ownership, but that was dropped in 2000

Trends to Concentration of Media Ownership in

Canada• Before WW1: 138 dailies with

different owners ( now 100 over 6 main owners)

• By 1992: only 18 independents remaining– now even fewer: just 5

Canadian Media Concentration of O: 2000 a

Turning PointBell Canada Enterprises

- February 2000 bought CTV for 2.3 b- Acquired Globe and Mail- Also own Expressvu: satellite- Also own Telco in Ont/Quebec- Owns Sympatico: Canada’s largest internet portal

- CanWest bought Hollinger: all 13 major markets plus: CanWest TV, National Post

• Mostly owned by CanWest-Global who bought Hollinger…which had the highest share ever--42% of dailies (CanWest now 28%)

• Hollinger takeover of Southam in 1995 was appealed by Council of Canadians but failed in lower courts.

Statistical Snapshot

• Daily Newspapers– Circulation about 5 million daily– About one in two read one every day ( General

Social Survey 98)– Now about 100 daily papers nation wide– Big Five( share as at 2003) control over 80%

• CanWest/ Southam ( 13) 28.5%• Quebecor (15) 21%• Torstar(5) 13.8 %• Gesca(na) 9.2%• Osprey (22) 9.2%• Bell Globemedia (1) 6.4%

Snapshot cont’d

• Top 3 control 63% of circulation. Just 5 indies remaining

• About 1000 community papers– Much less highly concentrated: top 8 control

39% of circulation• TV:

– According to Statistics Canada, one quarter of all viewing is of news and public affairs.

– Viewing share: 19.2 for Bell/CTV/Globemedia– CBC 15.2%– CanWest:14.7%– CHUM 7.6%

TV News cont’d

• Of Canadian broadcasters, 50% of spending on Canadian broadcasters is on news. Total in 2002 was $654 million for ( Broadcasting Policy Monitoring Report)

• $230 million by CBC alone • Thus, TV spend about 20$ per citizen to inform

them ( this about one third of what papers spend)• Major wires: CP and Broadcast News

– CanWest threatened to pull out– Wires Provide one third to one half of average

paper content

Profile Cont;d

– Foreign ownership: 25% in print, 20% direct and 33% indirect in TV

– Of the 12 largest firms, only BCE widely held

– Very profitable: margins 20% or more, lower in TV than print

– Owning the media is a license to print money ( Lord Beaverbrook)

• tion

Market Concentration Test

- Measured by subs, or audiences reached by ownership group

- Assessed by decision about effective competition ( between TV and news outlets)

- Now over 60% of Canadians receive their local newspaper from the same co as one of their TV stations

- Only effective competition is between local and national papers, local and international TV

- But in both cases, one in three Canadians do not access both: this cannot be exposed to a diversity of views in the predominant news media

Studies on the Economic Effects of Concentration

• Ad rates rise ( proven after takeover of Tribune by Southam in 1980)

• Positive: economies of scale• Negative: loss of local control,

job loss• Fall out: Quebecor takeover followed by Cuts, and

CanWest takeover followed by cuts of 1/3 news staff at the Post, and closure of websites

Content Effects

• Before and after study of front page, editorial, features,sources of content,areas of interest, revealed changes in Windsor Star ( Winter study)

• Evaluation of whether these changes are positive or negative depends on one’s ideological position.

• But increasing commodification of the news, in search for profits

• Emergence of ‘lifestyle’, tabloid news, blurring ‘reality’genres

• More wire imports from AP/etc. globally. Less local coverage

• Reduced editorial pages/investigative journalism• More and more repackaging

Commercial Reductionism

• See Lorimer and Gasher text, pp. 116-118• Sometimes called the Lowest Common

Denominator of taste effect: need to maximize audiences and profits, drive to ‘dumb down’ news and current affairs, slant to violence and sex as non-verbal, universal global formulae entertainment with high export value

• Slant to personalization and attack in politics (tabloid thesis)

• Flip side is the least objectionable content: bland mainstreaming to maximize audiences ( bland thesis)

Basis for Public Policy Concern

• Impact on channels for editorial diversity ( Vancouver: Sun,Province and BCTV, the most viewed news source in Lower Mainland all owned by Asper family)

• Concern that Daily Newspapers have become bland: unlikely to disturb the status quo due to market pressures/flirt with conflict of interest

• After takeovers, a hollowing out of reporting capacity Rural areas without news bureaus, replicating centre periphery dominance: market failure

The Criticisms of Commercial Ownership and Control

• Structural Political Economy• A study of interlocking elites:

– Political and media elites– Corporate and media elites

• A study of elite influence, censorship and ideological control over news manufacture

Lords of the Global Village

• Examples: Ben Bagdikian “Lords of the Global Village’– Mosco, Schiller, Murdoch, Clement, Hannigan, Babe, Mansell other authors

• Look at the interlocks and interpenetration of media and corporate or state elites: 40 to 60% overlap on Boards and other networks of power

• Social and structural interlocks between powerful economic and media and political elites imply a world view that is deeply shared

Criticisms from an O & C perspective

• Assume either direct economic censorship or indirect censorship through ideological limits on the manufacture of news– either through reinforcing professional norms, organizational cultures, or other systemic controls

• Point to instrumental examples of direct economic censorship: GE is the US’ largest weapons manufacturer but NBC has pulled stories on arms trade ( Anderson: 26) or focuses solely on Saddam Hussein’s ‘weapons of mass destruction’, not asking what is the US role in build up of arms, nor what the military industrial complex gains when Bush pushes to war

Myth of Private Media Transparency

• webs of relationships: public information on these private consortia is weak

• There is no ‘access to information act’ which controls the private sector boardroom

• Little tradition of hard hitting media monitoring, profile of editorial spending in print

• No legal protections for journalists or creators against economic censorship

• Journalists are gagged:– In an MA study ( Ian Ross) of NDP and press, BC

journalists afraid to express an opinion– Cannot protest coverage ( eg. Mad Cow Disease scare)– Some professional unions ( eg CEP) wonder if it is

necessary to pass status of the journalists legislation in Canada

Major Media Issues

• Relaxing restrictions on Foreign Ownership

• Avoiding divestiture or significant regulation of competition

• Improving self-regulation

What can be done?

• Kent Commission (1980): proposed limiting ceiling on Chain growth, ordering divestiture, exempting papers from taxes, shield laws for editors in chief, press rights panel in the Human Rights Commission

• All rejected except Press Councils

Other Proposals before Senate

• National public newspaper? ( or recognition of CBC)

• Professional designation for journalists like doctors

• National ombudsperson( more consistency among provincial press councils)

• Arms length monitoring( like Pew/Columbia Journalism Review)

• Need for study of impacts of concentration

Blindspots

• Access to Information Legislation is inadequate

• Need for Whistleblowing Legislation• Need for transparency of editorial spending• Need for more peer review/awards and

incentives for ‘good’ investigative journalism• Need for review by CRTC arms-length rule in

cases of cross media ownership when sole owner is so powerful

Conclusion: • As the number of corporate owners drops, more

content is controlled by fewer companies. Oligopoly describes this condition.– Journalists find themselves in a conflict of interest

situation in reporting on the malfeasance of their owners

• Societies debate whether the media are public or private goods every generation– Ideological pendulums shifts– Should governments regulate competition? How?

• Yet few governments have the power to seize assets/curb power of their private media ( co dependent)

• Need for civic/political pressure

Other Sources

• Jim Winter, Democracy’s Oxygen, 1995• Ben Bagdikian, “Lords of the Global

Village”• Robert McChesney, Global Media• Lorimer and Gasher, custom

courseware• Interim Report on the Status of the

Media, 2004 Senate Committee on Transport and Communications