http://commposite.uqam.ca/videaz/docs/romcen.html

Corporate Concentration: A Threat to the Right to Communicate?
Robert W. McChesney
School of Journalism and Mass Communication, University of Wisconsin-Madison

Not to be distributed without the author's express permission.

Abstract: By the end of the 1990s a major turning point was made in the realm of media. Whereas media systems had been primarily national before the 1990s, a global commercial media market emerged full force by the dawn of the 21st century. Today one must first grasp the nature and logic of the global commercial system and then determine how local and national media deviate from the overall system. This article discusses the strength and power of the emerging global commercial media system.

Sommaire

The Rise of the Global Media System
The Holy Trinity of the Global Media System
Conclusion: The Two Wild Cards in the Global Media Deck
References

By the end of the 1990s a major turning point was made in the realm of media. Whereas media systems had been primarily national before the 1990s, a global commercial media market emerged full force by the dawn of the 21st century. In the past, to understand any nation's media situation, one had to first understand the local and national media and then determine where the global market - which largely meant imports and exports of films, TV shows, books, and music - fit in. Today one must first grasp the nature and logic of the global commercial system and then determine how local and national media deviate from the overall system. The rise of a global commercial media system is closely linked to the rise of a significantly more integrated 'neoliberal' global capitalist economic system. To some extent the rise of a global media market is encouraged by new digital and satellite technologies that make global markets not only cost effective but also lucrative. It is also encouraged by the institutions of global capitalism - the World Trade Organisation (WTO), the World Bank, the International Monetary Fund - as well as those governments, such as that of the United States, that advance the interests of transnational corporations (TNCs). Moreover, media and communication more broadly have become a much more significant sector for business activity during the past generation (Mandel, 1997).

The rise to dominance of the global commercial media system is more than an economic matter; it also has clear implications for media content, politics and culture. In this article I briefly chronicle the rise of the global media system and its core attributes. It is a system that, in the end, is dominated by less then ten global TNCs with another three or four dozen firms filling out regional and niche markets. I examine the activities and holdings of the three most important global media firms - Time Warner, Disney, and News Corporation - in detail. In my view the general trajectory of the global commercial media system is quite negative if one wishes to preserve and promote those institutions and values that are conducive to meaningful self-government. I conclude by assessing where the Internet fits into the emerging global media system. Some argue that the Internet will 'set us free,' and undermine corporate domination of not only communication but the overall political economy. I think that notion is flawed but, as I discuss, there are other signs that the system is meeting resistance.

The Rise of the Global Media System

The global markets for film production, TV show production, book publishing and recorded music have been oligopolistic markets for much of their existence. Although there are important domestic industries in many of these industries, the global export market is the province of a handful of mostly U.S. owned or U.S. based firms. These not only remain important markets, but they all are tending to grow faster than the global economy. The motion picture and TV show production industries are absolutely booming at the global level (Peers, 1997a). The major film studios and U.S. TV show production companies (usually the same firms) now generate between 50 and 60 percent of their revenues outside of the United States (Goldblatt, 1997). A key factor that makes these global oligopolies nearly impenetrable to newcomers are their extensive distribution systems (Rawsthorn, 1997b). Although the Dutch owned Polygram is attempting to establish a global distribution system for its films, for most other independents the smart move is to link to one of the existing giants (Dawtrey, 1997b; Rawsthorn, 1997a). The global film industry is the province of seven firms, all of which are part of larger media conglomerates. Likewise, the global music industry is dominated by five firms, all but one (EMI) that are part of larger media TNCs (Sandler, 1997).

What distinguishes the emerging global media system is not transnational control over exported media content, however, as much as increasing TNC control over media distribution as well as content. Prior to the 1980s and 1990s, national media systems were typified by nationally owned radio and television systems, as well as domestic newspaper industries. Newspaper publishing remains a largely national phenomenon, but the face of television has changed almost beyond recognition. The rise of cable and satellite technology has opened up national markets to scores of new channels. The primary provider of these channels are the media TNCs that dominate cable television channel ownership in the United States, and have aggressively established numerous global editions of their channels to accommodate the new market (see, for example, Williams, 1997). Neoliberal 'free market' policies have opened up ownership of stations as well as cable and satellite systems to private and transnational interests. As The Wall Street Journal notes, 'the cable colonialists continue to press on in Europe, Asia and Latin America, betting on long-term profit' (Frank and Rose, 1997, p. A1). Likewise, the largest media TNCs are invariably among the main players in efforts to establish digital satellite TV systems to serve regional and national markets (DeGeorge and Malkin, 1997; McElvogue, 1997a). Television is rapidly coming to play the same sort of dominant role in Europe, Asia and worldwide that it has played in the United States for two or three generations. After reviewing the most recent research, one observer noted in early 1998: 'Europe hasn't caught up to American TV consumption levels, but Europeans are spending more time than ever watching television' (Hils, 1998, p. 41).

The close connection of the rise of the global media system to the global capitalist political economy becomes especially clear in two ways. First, as suggested above, the global media system is the direct result of the sort of 'neoliberal' deregulatory policies that have assisted in the formation of global markets for other goods and services. At the global level, for example, the WTO ruled in 1997 that Canada could not prohibit Time Warner's Sports Illustrated from distributing a Canadian edition of the magazine (Urquhart and Bahree, 1997). Although there is considerable pressure for open media markets, this is a sensitive area and there are strong traditions of protection for domestic media and cultural industries. Nevertheless the trajectory is clearly in the direction of opening markets to TNC penetration. There are often strong commercial media lobbies within nations that see as much to gain by opening up their orders than they do by maintaining any form of protectionism.

The European Union (EU) and European Commission (EC) provide an excellent case study in the evolution of media policymaking to a largely market über alles position. Historically European nations have enjoyed prominent and well-financed national public broadcasters as well as a variety of other mechanisms to protect and promote domestic cultural production. The EU and EC hardly are commissioned to advance the interests of U.S. based media TNCs, but they are devoted to establishing strong European firms and a regional open commercial market. By this logic, the traditional notion of public service media, meaning nonprofit media with public subsidy, is something of a square peg. The EC sees its mission as encouraging more competitive media markets, rather than promoting public service media (Tucker, 1997c; Tucker, 1997d; Buckley and Gapper, 1997). Nevertheless, there was considerable concern that U.S. based media firms would quickly overwhelm Europe unless regulations to protect European content were enacted. The EU nearly passed a law in 1997 requiring that 50 percent of TV content be European made, but after a 'ferocious lobbying' campaign by European media interests dependent upon U.S. fare, the wording was watered down to be meaningless (Tucker 1997a, p. 3; Tucker 1997b). The EU system has been more effective in spreading commercial values; on two occasions in 1997 the European Court of Justice ruled that member states could not prohibit cable TV channels that featured advertising to children, even though this violated national statutes ('Broadcasting across borders,' 1997; 'TV restrictions unlawful,' 1997). An indication of the shifting terrain of European policymaking came in June 1997 when the European Summit found it necessary to include a protocol to the EU Treaty formally acknowledging that public service broadcasters had a right to exist (Leclercq, 1997).

Advertising is the second way that the global media system is linked to the global market economy. Advertising is conducted disproportionately by the largest firms in the world, and it is a major weapon in the struggle to establish new markets. For major firms like Procter & Gamble and Nike, global advertising is arguably the most important aspect of their campaigns to maintain strong growth rates (Tomkins, 1997; Beatty, 1997). In conjunction with the 'globalisation' of the economy, advertising has grown globally at a rate greater than GDP growth in the 1990s (Cardona, 1997). The most rapid growth has been in Europe, Latin America, and especially east Asia, although the economic collapse of the late 1990s has doused what had been characterized as 'torrid ad growth' (Wentz and Herskovitz, 1997, p. 18; Wentz, 1998). Advertising in China is growing at annual rates of 40-50 percent in the 1990s, and the singularly important sector of TV advertising is expected to continue to grow at least that rate with the advent of sophisticated audience research that now delivers vital demographic data to advertisers, especially TNC advertisers (Stein and Daswani, 1997). It is this TNC advertising that has fueled the rise of commercial television across the world, accounting, for example, for over one-half of the advertising on the ABN-CNBC Asia network, which is co-owned by Dow Jones and General Electric (Lucas, 1997).

The advertising agency business itself has consolidated dramatically on a global basis in the 1990s, such that the three largest firms - WPP Group, Omnicom Group and Interpublic Group - have a combined income 15 percent greater than that of the ad organizations ranked 4 through 10, and the size of ad organizations falls precipitously after one gets past the first dozen or so ('Top 10 ad organizations,' 1997). The 15th largest advertising organisation in the world does barely 10 percent of the business of the WPP Group. The consolidation is encouraged by globalisation, as the largest advertisers increasingly prefer to work with a single agency worldwide. When Citibank consolidated its global advertising into one agency in 1997, an observer noted that 'they want to have one brand with one voice - that's their mantra' (Cardona and Arndorfer, 1997, p. 4). The global consolidation is also encouraged because the larger an ad agency, the more leverage it can have getting favourable terms for its clients with global commercial media (Smith, 1997). Put together, all of this suggests ever more consolidation in the years to come, and the largest advertising organisations are scurrying about purchasing almost all of the remaining viable independent agencies around the world (Elliott, 1997; Fannin, 1997b). And this, in turn, suggests increased advertising influence over media operations.

But the most important corporate concentration concerns the media industry itself, and here concentration and conglomeration are the order of the day. In short order the global media market has come to be dominated by nine or ten TNCs, that rank among the largest firms in the world: Time Warner, Disney, Bertelsmann, Viacom, Tele-Communications, Inc. (TCI), News Corporation, Sony, Seagram (owner of Universal Studios), General Electric (owner of NBC) and the Dutch Philips (owner of Polygram). The largest media firm in the world, Time Warner, is some 50 times larger in terms of annual sales than the world's 50th largest media firm. These firms all have global distribution networks and have major interests in more than one - usually several - media sectors. The global media market is rounded out by a second tier of some three or four dozen firms that are national or regional powerhouses, or which have strong holds over niche markets, like business or trade publishing. About one-half of these second-tier firms come from North America and most of the rest come from western Europe and Japan. In combination, these 50 or 60 firms control most of the media - book publishing, magazine publishing, music recording, TV show production, TV station and cable channel ownership, cable/satellite TV system ownership, film production, motion picture theater ownership, newspaper publishing - in the world (Herman and McChesney, 1997).

There are tremendous economic advantages to size and prudent conglomeration in the global media market, so firms are aggressively expanding through mergers and acquisitions, or putting themselves in the position to be purchased at a premium by another giant. Small firms operating in one market simply cannot compete, unless they are formally linked to a giant. Sony, for one example, has hired the investment banking Blackstone Group, to help it identity media takeover candidates (Shapiro, 1997). To compete in the global market, a firm needs the scale that comes with being a major player in Europe and, especially, the United States. 'We want to be a world-class media company,' the CEO of the U.K.'s Pearson TV stated, 'and to do that, we know we've got to get bigger in America' (Littleton and Peers, 1997, p, 36). Firms like the music powerhouse EMI are invariably on the market; they are worth considerably more merged with one of the other five global music giants that are all part of huge media conglomerates, or to another media TNC that wants a stake in the music market (Rawsthorn, 1997c).

But corporate growth, oligopolistic markets, and conglomeration barely reveal the extent to which the global media system is extraordinarily noncompetitive in the economic sense of the term. On the one hand, many of the largest media firms share major shareholders, own pieces of each other, or have interlocking Boards of Directors. When Variety compiled its list of the 50 largest 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' (Peers, 1997b, p. 31). On the other hand, the market strongly encourages firms to establish equity joint ventures where the media giants each own a part of an enterprise. This way firms reduce competition and risk, and increase the chance of profitability. In the burgeoning realm of satellite television, for example, even the potentially most lucrative markets like Japan, Germany and the United States have seen joint ventures and mergers reduce the number of viable entrants to two or one. In Germany, former arch-enemies Kirch and Bertelsmann buried the hatchet in 1997 to co-own Premiere (Hils, 1997). In Japan, News Corporation's joint venture Japan Sky Broadcasting (JSkyB) has already merged with one of its two potential competitors (Nakamoto, 1997b). The CEO of Fuji Television, Japan's biggest media company and a partner in JSkyB, states that 'eventually there will only be one satellite broadcaster' (McElvogue, 1997b, p. 53).

Satellite broadcasting is a very small example of the joint venture phenomenon. The 10 largest media TNC have joint ventures on average with six of the other nine media giants. Often times, the media TNCs enjoy multiple joint ventures with each other. News Corporation has joint ventures with each of the other nine media giants. News Corporation heir Lachlan Murdoch expressed the rational view when explaining why News Corporation is working more closely with Kerry Packer's Publishing and Broadcasting Ltd., the company that with News Corp. effectively controls much of Australian media. It's better, Murdoch the younger contends, if we are not 'aggressively attacking each other all the time' (Groves, 1997c, p. 8). The global media market is one where the dominant firms compete aggressively in some concentrated oligopolistic markets, are key suppliers to each other in other markets, and are partners in yet other markets. As the headline in one trade publication put it, this is a market where the reigning spirit is to 'Make profits, not war' (Hall and McConville, 1997, p. 3). In short, the global media market looks much more like a cartel than it does a competitive marketplace.

The Holy Trinity of the Global Media System

The nature of the global media system seems less abstract when one examines the recent growth, activities, and strategies of its three most important TNCs: Time Warner, Disney and News Corporation. Time Warner and Disney are the two largest media firms in the world, with 1998 sales in the area of $23-26 billion. News Corporation is in contention with Viacom for the status as fourth largest global media firm, with sales slightly more than one-half those of Time Warner and Disney, but under its CEO Rupert Murdoch it has led the way in media globalization. These are global empires constructed largely in the 1990s, and they are a long way from completion.

Time Warner is the outgrowth of the 1989 merger of Time and Warner Communications and the 1996 acquisition of Turner Broadcasting. It will do around $26 billion in business in 1998, and its sales are expected to continue to grow at double-digit rates for the foreseeable future. With 200 subsidiaries worldwide, Time Warner has seen its non-U.S. income increase from around 15 percent in the early 1990s to 35 percent in 1997. Early in the 21st century, Time Warner expects to earn a majority of its revenues outside of the United States. That is where the most dramatic growth can be found. What is also striking about Time Warner is how it is a dominant global player in virtually every single important media sector except newspaper publishing and radio broadcasting. Time Warner's challenge is to develop its synergies; to mesh its extremely lucrative parts to increase the size of the profit whole ('Ted Turner's management consultant,' 1997). But it has an unparalleled combination of content production and distribution systems to work with.

Here are some of Time Warner's holdings:

• majority interest in the U.S. WB television network;
• largest cable broadcasting system operator in U.S., controlling 22 of 100 largest markets;
• controlling interest in cable TV channels CNN, Headline News, CNNfn, CNN International, TNT, TBS, Turner Classic Movies, CNNSI, The Cartoon Network, Court TV, HBO, HBO International, Cinemax;
• partial interest in cable TV channel Comedy Central;
• minority stake in U.S. satellite TV service PrimeStar;
• Warner Brothers film studios, one of the half-dozen studios that dominated the global market;
• Warner Brothers TV production studios, one of largest TV show production companies in the world;
• New Line film studios;
• the largest U.S. magazine publishing group, including Time, People, Sports Illustrated and Fortune;
• Warner Music Group, one of the six firms that dominate the global recorded music industry;
• 2nd largest book publisher in the world, with 42 percent of sales outside the U.S.;
• 150 Warner Bros. retail stores;
• Six Flags theme park chain;
• The Atlanta Hawks and Atlanta Braves U.S. professional sports teams;
• Hanna-Barbera animation studios;
• 10 percent stake in France's Canalsatellite, a digital TV service;
• one of largest movie theatre owning companies in the world, with over 1,000 screens, all outside the U.S.;
• 23 percent stake in Atari;
• 14 percent stake in Hasbro;
• minority stakes in the following non-U.S. broadcasting joint ventures: Germany's N-TV, New Zealand's Sky Network Television, European music channel VIVA, and Asian music channel Classic V.

This list fails to do justice to Time Warner's global reach. CNN International is the dominant global TV news channel, broadcasting in several languages to some 200 nations (Anderson, 1997). HBO is a global powerhouse as well, having expanded successfully into western Europe, Latin America, Eastern Europe and all across Asia. As one observer notes, HBO's International division 'gobbles up new countries' (Klapwald, 1997, p. 56; see also Groves, 1997a; Nadler, 1997; Meils, 1997; Dutz, 1998). The Warner Bros. film studios has established relations with Australian, German, French and Spanish companies to co-produce films, often times not in English (Dawtrey, 1997a; Weiner, 1997; Karon, 1997). Even the US based magazine division is going global, with non-U.S. editions of its publications, and planned acquisitions of European magazines (Fannin, 1997a; M. Brown, 1997).

But what really distinguishes Time Warner and what gives it such leverage in the global market are two related things. First, in addition to arguably producing more media content than any other firm, Time Warner also has the world's largest library of music, films, TV shows, and cartoons to exploit. This makes Time Warner a firm that is extremely attractive to national media firms for joint ventures or simply major contracts, as it has with Canal Plus, the satellite television power in France, Spain and Italy (Vulser 1997; Jack, 1997; Hopewell, 1998; Hopewell and Guider, 1997). Second, Time Warner arguably has more recognizable media brand names as any firm in the world. Branding is considered the most crucial determinant of market success, and the one factor that can assure success in the digital world, with its myriad of choices, albeit controlled by a small number of owners. Branding also lends itself to extensive licensing and merchandising of products related to media characters, channels and programming. Time Warner considers its Looney Tunes cartoons alone a $4 billion worldwide brand, and Batman a $1 billion worldwide brand. With 150 Warner Bros. retail stores and scores of licensing agreements, merchandising has become a multi-billion dollar segment of Time Warner's annual income, and it is among the fastest growing branches of its global operations.

But nobody understands branding and merchandising better than Disney, which runs neck-and-neck with Time Warner for the honor of being the world's largest media firm. With some 590 Disney retail stores worldwide as well as merchandising and licensing deals with numerous manufacturers and retailers, Disney is evolving into what one industry observer characterizes as 'the ultimate global consumer goods company' (Mermigas, 1997, p. 14). Disney has moved aggressively into China, with seven stores in Hong Kong and plans to open several more on the mainland in 1998 and 1999 (Groves, 1997e). Disney has carefully intertwined its media brands with its retail activities, and has done so on a global basis. It has major Disney theme parks in Japan and France as well as the United States, a Disney passenger cruise ship line, and is launching DisneyQuest, a chain of 'location-based entertainment' stores - i.e. high tech video arcades - based around Disney brands (Voland, 1997). Disney has even launched a planned community near its Disney World resort in Orlando, Florida, replete with Disney run schools and social services. Disney is also the master of synergies, the process of taking a media brand and exploiting it for all the profit possible. Its animated films routinely generate vastly more income and profit from merchandising and other sources than they do from box office receipts. In 1998 Disney will also launch an ESPN Sports Weekly magazine (to compete with Time Warner's Sports Illustrated) and a chain of ESPN Grill restaurants to capitalize upon the ESPN trade name.

Here are some of Disney's holdings:

• the U.S. ABC television and radio networks;
• ten U.S. TV stations and 21 radio stations;
• U.S. and global cable TV channels Disney Channel, ESPN, ESPN2, ESPNews, ESPN International, and major stakes in Lifetime, A&E and History Channels;
• a stake in Americast, an interactive TV joint venture with several U.S. telephone companies;
• major film studios, Miramax and Walt Disney Pictures;
• TV production and distribution through Buena Vista;
• magazine publishing through its Fairchild and Chilton subsidiaries;
• music recording, including the Hollywood, Mammoth and Walt Disney labels;
• world's largest theme parks and resorts, including Disneyland, Disney World and a stake in EuroDisney;
• Disney cruise line;
• DisneyQuest, chain of high-tech arcade game stores;
• controlling interest in Anaheim Mighty Ducks and Anaheim Angels U.S. professional sports teams;
• 590 Disney stores worldwide.
• 50 percent stake in Super RTL, a joint venture with Bertelsmann;
• 20-33 percent stakes in the following commercial media companies: Eurosport TV network, the Spanish Tesauro SA, the German terrestrial channel RTL2, the German cable TV channel TM3, and Scandinavian Broadcasting Systems SA; the Brazilian TVA, a pay TV company.

Disney, like Time Warner, has globalized its production and has signed production and distribution deals with firms in France, Japan and Latin America, to mention but a few (Nakamoto, 1997a; Orwall, 1997b; Paxman, 1997). Disney's Miramax is launching a European film studio to be based in Britain (Parkes, 1997). And Disney is making a fullscale assault on the global television market, operating on many fronts. It is the largest shareholder in Scandinavian Broadcasting Systems (SBS), the company which owns and operates major commercial terrestrial TV channels in Norway, Sweden, Denmark, Finland, Belgium and the Netherlands. The SBS goal is to corner 25-40 percent of the TV advertising revenue in each of those markets, and it has already been successful in that regard in Norway and Belgium (Westcott, 1997; Edmunds, 1997). Disney also has distributed its Disney TV Channel in numerous nations around the world, customizing it to local cultures and languages. Most important, Disney's ESPN International has become the world leader in televised sport, broadcast in 21 languages to over 165 countries.

Sport is arguably the single most lucrative content area for the global media industry, a point understood best of all by Rupert Murdoch, CEO of News Corporation. Sport was crucial in making his British Sky Broadcasting (BSkyB) the most successful satellite TV service in the world and in making the U.S. Fox TV network a full fledged competitor to ABC, NBC and CBS. Murdoch, more than any other figure, has been the visionary of a global corporate media empire. Using as a base his newspaper empires, first in his native Australia where he controls 70 percent of the daily circulation, and later in Britain where he is the largest newspaper publisher, Murdoch has expanded into film, publishing, and, especially, television on a global basis ('Let battle commence,' 1997). He has established a major film studio in Australia to serve the global market (Groves, 1997b; Groves, 1997d). Murdoch remains the most aggressive media mogul, and he has turned to joint ventures to expand his empire without using much of his own capital. 'We don't see ourselves as a large corporation,' Murdoch informed a closed meeting of investors in 1997. 'We see ourselves as tiny compared to the world-wide opportunities for media.' Murdoch has devoted inordinate attention to developing media properties in Asia and Latin America, even though News Corporation will receive the majority of its income from the United States for at least another decade. 'He views these investments in multiyear terms,' a securities analyst states, 'even multigenerational' (Lippmann, 1997, p. B10).

Here are some of News Corp.'s holdings:

• the U.S. Fox television network;
• 22 U.S. television stations, covering 40 percent of the U.S. population;
• Fox News Channel, U.S. and international TV network;
• 50 percent stake in fx, fxM, Fox Sports Net, Fox Kids Worldwide, Family Channel TV channels;
• film studio 20th Century Fox;
• Twentieth Television, U.S. and international TV production and distribution group;
• over 130 daily newspapers, including The Times (of London) and the New York Post;
• 25 magazines, including TV Guide;
• book publishing, including Harper-Collins;
• Los Angeles Dodgers professional baseball team;
• controlling interest in British Sky Broadcasting (BSkyB) satellite TV service;
• numerous Sky TV channels distributed across Britain and parts of Europe including Sky News;
• Latin American TV channels El Canal Fox and Fox Sport Noticias;
• partial stake in Latin Sky Broadcasting satellite TV service to Latin America, joint venture with Televisa and Globo;
• 80 percent stake in New Zealand's Natural History Unit, world leading producer of nature and wildlife documentaries;
• Heritage Media, leading U.S. direct marketing company, with 1996 revenues over $500 million;
• 30 percent stake (nonvoting) in Primestar, U.S. satellite TV joint venture with major cable companies;
• Asian Star TV satellite TV service;
• pan-Asian TV channels: ESPN and Star Sports (4 Asian channels), Channel V music channel (with 4 Asian channels) joint venture with major record companies, Star World, Star Plus, Star Movies (9 Asian channels);
• 50 percent stake in Indian TV channels Zee TV, El TV and Zee Cinema;
• partial stake in Indian cable TV company Siti Cable;
• partial stake in Indonesian pay TV venture Indovision and Film Indonesia pay TV channel;
• partial stake, with Sony, Fuji TV and Softbank, in Japan Sky Broadcasting satellite TV system;
• Star Chinese Channel, broadcast across Taiwan;
• 45 percent interest in Phoenix Chinese Channel, satellite TV service for mainland China;
• partial interest in Golden Mainland Productions, TV joint venture with Taiwan Sports Development;
• Australian TV channels FoxTel;
• partial interest in ChinaByte, web site joint venture with China's People's Daily;
• India Sky Broadcasting, satellite TV service.

The defining feature of Murdoch's global push is the establishment of satellite television systems, along with the channels and programming to be displayed on them. By 1998 Murdoch claimed to have TV networks and systems that reached more than 75 percent of the world's population, with his launch of satellite systems in Latin America, Japan, and India to complement his other activities. 'The borderless world opened up to us by the digital information age will afford huge challenges and limitless opportunities,' Murdoch contends (Gapper, 1997a, p. 23). The archetype will be BSkyB, which not only dominated British pay television, but also has launched film and program production facilities and has channels to be broadcast not only in Britain but also on European TV systems and eventually across the world (Clover, 1997; Boehm, 1997). His two other main TV "brands" are the Fox channels, connected to his U.S. TV network, cable channels and major film and TV production studios, and his Star Television service, which News Corp. purchased in 1993, for all of Asia. The list above barely gives a sense of how quickly New Corporation has made Asian television its own fiefdom. In India, for example, it has equity stakes of either 50 or 100 percent in eight different networks. In combination these channels constitute 45 percent of the total viewership in cable and satellite homes in India. News Corp. has six networks in China, and its Phoenix joint venture has already been cleared in 36.2 million Chinese cable TV households. In Taiwan, News Corp. has seven channels and dominates the market (Davey, 1997).

When Prince Al-Waleed invested $400 million to purchase a five percent stake in News Corp. in 1997, he commented that 'News Corp. is the only real global media company that covers the world' (R. Frank, 1997, p. B4). Whether News Corp. ever fulfills its ambitions remains to be seen, and it faces numerous obstacles along the way. In India, for example, the government in 1997 cracked down on foreign ownership of media after Murdoch hired scores of former government employees to be his top local executives (Karp, 1997; Wanravi, 1997). But News Corp. has enjoyed tremendous successes and its persistence has paid off just about everywhere, including China, where Murdoch had gotten in hot water in 1994 by stating that new communication technologies 'were a threat to totalitarian regimes everywhere' (Walker and Snoddy, 1997, p. 1). And as firms like news Corp. expands through mergers and acquisitions they run the risk of taking on large levels of debt that leaves them exposed, especially if there is a business recession. But, nevertheless, all of the media giants are emulating News Corp.'s strategy of getting bigger and going global with a vengeance. If they wish to maintain or expand their profitability - and avoid getting swallowed up by a competitor - it is not even an option. And in the current political environment, the global media giants are in position to make dramatic strides in short order. The world is being remade before our eyes.

Conclusion: The Two Wild Cards in the Global Media Deck

The discussion to this point has emphasized the strength and power, the almost irreversibility, of the emerging global commercial media system. If one is concerned with the promotion and expansion of participatory democracy, or some sort of civic life and values aside from those of the market, this is a fairly depressing scenario. But in tumultuous times like these, no one can speak with certainty with regard to the future. In mainstream debate, in fact, the tumult is largely associated with the dramatic technological revolution in computering and communication, most significantly represented by the rise of the Internet in the middle and late 1990s. With the Internet 'wild card,' the traditional concentrated control over communication on technological grounds effectively ends. Accordingly, the Chinese government has gone to considerable lengths to limit the ability of Chinese to get online, or to prevent to dissemination of politically dissident websites (Eckholm, 1997). But the Internet does not merely threaten governments; it also holds the potential to undermine corporate control of media. If anyone can produce a website as minimal cost and it can be distributed worldwide via the World Wide Web, it will be only a matter of time (expansion of bandwidth, improvement of software) until the media giants find themselves swamped by countless high quality competitors. As one New York Times correspondent put it: 'To hear Andy Grove [CEO of Intel] and Reed Hundt [former chair of the U.S. Federal Communications Commission] talk, the media industry is about where the horse-and-buggy business was when Henry Ford first cranked up the assembly line' (Landler, 1998, p. 9).

This is nonsense. Although the rise of the Internet and digital communication introduces instability to the media industry, in the current neoliberal political environment, the Internet is being developed on nearly purely commercial grounds, meaning whoever can make the most money wins. Thereal action with the Internet at present comes less on the media side than on the telecommunication and computering side, and with the corporate economic order in general. The easiest and most lucrative manner for the Internet (and digital communication networks) to be exploited is to serve the wealthiest corporate clients who have the most to gain by rapid, global communication (Schiller, in press). 'It may seem as if the two year old internet industry is mounting a takeover of corporate America,' the Financial Times noted in 1998. 'The reality is more like a merger' (Denton, 1998, p. 6). Indeed, the Internet and digital communication network are in some ways the defining features of the emerging global economic order. Already electronic commerce and marketing are booming, with strong projections of continued rapid growth (Wheelwright, 1998). And this is how the Internet is being exploited as it rapidly evolves from being primarily a U.S. medium to being a global medium. As Business Week notes, 'it's a nifty way to expand a company's markets without spending a bundle on foreign subsidiaries' (Browne and Green, 1997, p. 50E8).

It remains to be seen exactly where the Internet and/or any other digital communication network will fit into the global media landscape 10 or 20 years down the road. If it remains, as Time Warner CEO Gerald Levin puts it, 'not clear where you make money on it' (in Landler, 1998, p. 9), the web might become primarily a means of selling digital media products directly to the consumer. To the extent it is aggressively developed as a commercial medium by cable, satellite and terrestrial television companies, all signs point to its becoming increasing like the existing commercial broadcasting system. Something along these lines tends to be the prevailing wisdom among the media giants. 'I believe the electronic revolution is simply one new form of communications that will find its place in the food chain of communications and will not displace or replace anything that already exists,' the president of Time, Inc. stated, 'just as television did not replace radio, just as cable did not replace network television, just as the VCR did not replace the movie theatres' (Snoddy, 1997, p. 7). At any rate, in this type of scenario, the existing media giants should have little problem using their current market position to incorporate the Internet into their existing empires. There may be some reshuffling of the deck between them, but little likelihood of the industry being overturned.

Ironically, the most striking feature of digital communication may well be not that it opened up competition in communication markets, but that it has made it vastly easier, attractive, and necessary for firms to consolidate and strike alliances across the media, telecommunication, and computer software sectors. In the 1990s almost all the media giants have entered into joint ventures or strategic alliances with the largest telecom and software firms. Time Warner is connected to several of the U.S. regional Bells telephone giants, as well as AT&T and Oracle. It has a major joint venture with U.S. West. Disney, likewise, is connected to several major U.S. telecommunication companies as well as to America Online. News Corp. is partially owned by WorldCom (MCI) and has a joint venture with British Telecom (Herman and McChesney, 1997; Flaherty, 1997). The global media cartel may become something of a global communication cartel.

At any rate, the global corporate media giants are leaving nothing to chance with the Internet. Bertelsmann and Sony, the third and sixth largest global media firms respectively, have made development of the Internet a main strategic focus (Studemann, 1997). Consider the activities of Time Warner and Disney, for example. Time Warner produces nearly 200 web sites, which it aggressively promotes to its audiences through its existing media (Landler, 1998). Its CNN web site is now available in Swedish, with other languages to follow (Jakobsen, 1997; Galetto, 1997). Time Warner uses it web sites to go after the youth market, to attract sports fans, and to provide entertainment content similar to that of its 'old' media (Griffith, 1998; Shaw, 1997). Time Warner is bringing advertisers aboard with long term contracts, and giving them equity interest in some projects (Sharkey, 1997). Its most developed relationship with advertisers is the ParentTime web site joint venture it has with Procter & Gamble (Riedman, 1997). Disney's vision of the digital future also sees a major role for advertising. 'With a click of a remote-control button,' ABC president Preston Padden enthused in 1997, 'customers will be able to tell us if they want a free sample of a new headache remedy or wish to test-drive a new car' (Pope, 1997, p. B5). Disney has been as aggressive in cyberspace as Time Warner and the other media giants; in 1997, as part of a 'blitz by Disney to establish Internet beachheads for many of its products,' it launched a subscription website for its 'Daily Blast' children's web site, exclusively available on the Microsoft Network. (Orwall, 1997c, p. B4).

By the end of the 1990s, while it remains unclear where the Internet will fit into or how it might alter the global media system, this much can be concluded. Despite the much ballyhooed 'openness' of the Internet, to the extent it becomes a viable mass medium, it will likely be dominated by the usual corporate suspects. The media giants have enormous advantages over any other Internet 'content providers.' These include their abilities: to use their existing programming; to promote their web sites on their traditional media; and to draw in major advertisers. Moreover, as the possessors of the hottest 'brands,' the media firms have the leverage to get premier location from browser software makers and Internet service providers (Orwall, 1997a). The ultimate aim of the corporate media giants, as the president of Starwave, the web site producer linked to Disney, stated, is 'to create the destination which contains everything someone could want . . It's the brand power that we have' (Sacharow, 1997, p. 48). To the extent the Internet develops as a commercial medium worldwide, these patterns would hold true as well. Indeed, aimed at the affluent consumers that would attract web advertising, the Internet might even increase information and communication inequality in the developing world, if not everywhere (Browne and Green, 1997). The dissident and noncommercial voices will remain and have the potential of being extraordinarily important. But they will hardly challenge the hegemony of the corporate communication giants, as they will exist largely on the margins with what at this point in time is an indeterminable amount of influence in the big scheme of things.

But it does not have to be this way. The second wild card in the global media deck is the world's people, constituted as organized citizens rather than as consumers and couch potatoes. It can be difficult, especially from the vantage point of the United States or the wealthy nations, to see much hope for public opposition to the global corporate media system. As one Swedish journalist noted in 1997, 'unfortunately, the trends are very clear, moving in the wrong direction on virtually every score, and there is a desperate lack of public discussion of the long-term implications of current developments for democracy and accountability' (Wennerberg, 1997, p. 3). Yet, there are indications that progressive political forces in nations around the world are increasingly making media issues part of their political platforms. As the global media system is increasingly intertwined with global capitalism, their fates go hand-in-hand. And despite much blathering about the 'end of history' and the triumph of the market in the commercial media and among western intellectuals, the actual track record is quite dubious. Asia, the long celebrated tiger of 21st century capitalism, is now mired in a deep economic depression. Latin America, the other vaunted champion of market reforms since the 1980s, has also seen what a World Bank official terms a 'big increase in inequality' (Colitt, 1997, p. 7). The ecologies of both regions are little short of disastrous. If, and perhaps only if, the reigning spirit of profits uber alles ever comes under political challenge, it seems likely that the corporate media system will be subject to a well-deserved public examination as well.

References

Anderson, Karen. 1997. 'CNNI's money makers.' Cable & Satellite Express. 8 May. p. 6.

Boehm, Erich. 1997. 'BSkyB eyes move into U.K. film market.' Variety. 21-27 April. p. 8.

'Broadcasting across borders.' 1997. Financial Times. 15 July. p. 11.

Brown, Maggie. 1997. 'A whiff of the exotic.' Financial Times. 8 September. p. 11.

Browne, Leslie and Green, Heather. 1997. 'Welcoming Spanish speakers to the web.' Business Week. 29 December. p. 50E8.

Buckley, Neil and Gapper, John. 1997. 'Publishing merger plan probed by Brussels.' Financial Times. 12 December. p. 15.

Cardona, Mercedes M. 1997. 'Coen: Ad spending in '98 will outpace overall economy.' Advertising Age. 15 December. p. 6.

Cardona, Mercedes M. and Arndorfer, James M. 1997. 'Citibank's global plum lands at Y&R.' Advertising Age. 11 August. p. 4.

Clover, Julian. 1997. 'Sky launches Nordic package.' European Television Analyst. 12 March. p. 5.

Colitt, Raymond. 1997. 'Latin America reforms 'fail to cut income disparities'.' Financial Times. 13 November. p. 7.

Davey, Gary. 1997. 'Star TV.' Asia Research ( a Goldman Sachs publication). 24 October. pp. 5-14.

Dawtrey, Adam. 1997a. 'Warners Intl. favors local flavor.' Variety. 26 May- 1 June. p. 19.

Dawtrey, Adam. 1997b. 'Polygram sets sail for American market.' Variety. 15-21 December. pp. 11, 40.

DeGeorge, Gail and Malkin, Elisabeth. 1997. 'Satellite TV: still a fuzzy picture.' Business Week. 29 December. p. 50E4.

Denton, Nicholas. 1998. 'Mainstream.com.' Financial Times. 3-4 January. p. 6.

Dutz, Vladimir. 1998. 'HBO takes first steps with Romanian service.' TV East Europe. January. p. 1.

Eckholm, Erik. 1997. 'China cracks down on dissent in cyberspace.' The New York Times. 31 December. p. A3.

Edmunds, Marlene. 1997. 'Buying sizzles for Scandi TV.' Variety. 7-13 April. p. M14.

Elliott, Stuart. 1997. 'In a further push into Latin America, DDB Needham is buying a stake in a Brazilian agency.' The New York Times. 16 June. p. C12.

Fannin, Rebecca A. 1997a. 'Every title a pearl.' Advertising Age International. May. p. i16.

Fannin, Rebecca A. 1997b. 'DDB Needham takes majority interest in Brazil hot shop DM9.' Advertising Age. 16 June. p. 12.

Flaherty, Nick. 1997. 'Diving in at the deep end.' Cable and Satellite Europe. March. pp. 61, 63.

Frank, Robert. 1997. 'Prince Waleed invests $850 million in News Corp., Netscape, Motorola.' 25 November. p. B4.

Frank, Robert and Rose, Matthew. 1997. 'A massive investment in British cable TV sours for U.S. firms.' The Wall Street Journal. 17 December. pp. A1, A10.

Galetto, Mike. 1997. 'CNN spots online gold and starts speaking Swedish.' Electronic Media. 17 March. p. 28.

Gapper, John. 1997a. 'News Corporation raises coverage.' Financial Times. 15 September. p. 23.

Goldblatt, Henry. 1997. 'The universal appeal of schlock.' Fortune. 12 May. p. 32.

Griffith, Victoria. 1998. 'Get them while they're young.' Financial Times. 5 January. p. 19.

Groves, Don. 1997a. 'Hooks and 'faith' helped delivery.' Variety. 9-15 June. p. 63.

Groves, Don. 1997b. 'Fix Oz studios eye int'l biz.' Variety. 25-31 August. p. 18.

Groves, Don. 1997c. 'Heir power.' Variety. 8-14 September. p. 8.

Groves, Don. 1997d. 'Bowing complex courts new synergies.' Variety. 15-21 September. pp. 21, 27.

Groves, Don. 1997e. 'Tough going: sino the times.' Variety. 1-7 December. pp. 1, 86.

Hall, Lee and McConville, Jim. 1997. 'Time Warner, News Corp.: make profits, not war.' Electronic Media. 28 July. pp. 3, 38.

Herman, Edward S. and McChesney, Robert W. 1997. The Global Media: The New Missionaries of Corporate Capitalism. London and Washington: Cassell.

Hils, Miriam. 1997. 'DF1 in Premiere fold.' Variety. 1-7 September. p. 29.

Hils, Miriam. 1998. 'Tube time on the rise in Europe.' Variety. 5-11 January. pp. 41, 48.

Hopewell, John. 1998. 'WB creates Spanish axis.' Variety. 5-11 January. p. 28.

Hopewell, John and Guider, Elizabeth. 1997. 'Sogecable, WB in pact.' Variety. 14-20 July. p. 33.

Jack, Andrew. 1997. 'Warner to purchase 10% of Canal Satellite.' Financial Times. 18 November. p. 20.

Jakobsen, Lars. 1997. 'CNN interactive in Swedish.' Cable & Satellite Express. 20 March. p. 8.

Karon, Paul. 1997. 'WB, Village ink prod'n pact.' Variety. 15-21 December. p. 20.

Karp, Jonathan. 1997. 'India may pull plug on News Corp.'s TV.' The Wall Street Journal. 2 September. p. A15.

Klapwald, Thea. 1997. 'Int'l division gobbles up new countries.' Variety. 3-9 November. p. 56.

Landler, Mark. 1998. 'From gurus to sitting ducks.' The New York Times. Section 3. pp. 1, 9.

Leclercq, Thierry. 1997. 'Europeans give blessing to public service.' Television Business International. July/August. p. 13.

'Let battle commence.' 1997. The Economist. 26 April. pp. 60, 63.

Lippmann, John. 1997. 'News Corp.'s Murdoch is shopping to expand empire.' The Wall Street Journal. 16 April. p. B10.

Littleton, Cynthia and Peers, Martin. 1997. 'All American raises Brit flag.' Variety. 6-12 October. p. 36.

Lucas, Louise. 1997. 'Business television in Asia receiving mixed signals.' Financial Times. 11 December. p. 14.

Mandel, Michael J. 1997. 'The new business cycle.' Business Week. 31 March. pp. 58-68.

McElvogue, Louise. 1997a. 'Digging for gold in Latin America.' Television Business International. September 1997. p. 92.

McElvogue, Louise. 1997b. 'Developing Fuji.' Television Business International. December 1997. pp. 52-53.

Meils, Cathy. 1997. 'HBO goes sat for Slovak launch.' Variety. 17-23 March. p. 35.

Mermigas, Diane. 1997. 'Strong profit picture for animation.' Electronic Media. 22-29 December. p. 14.

Nadler, John. 1997. 'HBO gets sat hookup.' Variety. 7-13 April. p. 66.

Nakamoto, Michiyo. 1997a. 'Walt Disney presents: a Japanese story.' Financial Times. 17 July. p. 5.

Nakamoto, Michiyo. 1997b. 'JSkyB confirms talks on PerfecTV merger.' Financial Times. 23 December. p. 17.

Orwall, Bruce. 1997a. 'On-line service by Disney's ABC unit will be promoted by AOL, Netscape.' The Wall Street Journal. 4 April. p. A5.

Orwall, Bruce. 1997b. 'Disney's Miramax signs pay-TV pact with Canal Plus.' The Wall Street Journal. 16 May. p. B6.

Orwall, Bruce. 1997c. 'Disney blitzes cyberspace with 'Daily Blast' service.' The Wall Street Journal. 28 July. p. B4.

Parkes, Christopher. 1997. 'Disney hires once more, to keep the Brits a'coming.' Financial Times. 4 November. p. 5.

Paxman, Andrew. 1997. 'It's a smaller world already for Disney in Mexico.' Variety. 17-23 March. p. 32.

Peers, Martin. 1997a. 'Movie biz enjoys global warming.' Variety. April 7-13. pp. 1, 32.

Peers, Martin. 1997b. 'The global 50.' Variety. 25-31 August. p. 31.

Pope, Kyle. 1997. 'High-definition TV is dealt a setback.' The Wall Street Journal. 13 August. p, B5.

Rawsthorn, Alice. 1997a. 'Put to the screen test.' Financial Times. 30-31 August. p. 7.

Rawsthorn, Alice. 1997b. 'Film industry focuses on distribution scene.' Financial Times. 4-5 October. p. 5.

Rawsthorn, Alice. 1997c. 'Playing in a minor key.' Financial Times. 22-23 November. p. 22.

Riedman, Patricia. 1997. 'ParentTime 1st family channel for PointCast.' Advertising Age. 18 August. p. 19.

Sacharow, Anya. 1997. 'Star power.' Adweek. 5 May. p. 48.

Sandler, Adam. 1997. 'BMG's potent portfolio boosts market share.' Variety. 15-21 December. pp. 38, 78.

Schiller, Dan. in press. The enchanted network: how digital capitalism is remaking the world.

Shapiro, Eben. 1997. 'Sony says its weighing digital moves and hires Blackstone Group to assist.' The Wall Street Journal. 21 November. p. B6.

Sharkey, Betsy. 1997. 'Warner's web.' IQ. 18 August. pp. 10-14.

Shaw, Russell. 1997. 'CNN/SI challenges ESPN site.' Electronic Media. 21 July. p. 20.

Smith, Alison. 1997. 'Strength through unity.' Financial Times. 10 November. p. 15.

Snoddy, Raymond. 1997. 'Programmer turned publisher.' Financial Times. 9 June. p. 7.

Stein, Janine and Daswani, Mansha. 1997. 'Counting China.' Television Business International. December. pp. 30-31.

Studemann, Frederick. 1997. 'Online and on top.' Financial Times. 18 November. Germany section. p. 9.

'Ted Turner's management consultant.' 1997. The Economist. 22 March. p. 86.

Tomkins, Richard. 1997. 'P&G to get ahead by marketing.' Financial Times. 5 June. p. 21.

'Top 10 ad organizations.' 1997. Advertising Age. p. s2.

Tucker, Emma. 1997a. 'EU media initiative bogged down.' Financial Times. 13 March. p. 3.

Tucker, Emma. 1997b. 'TV law finds the off-switch.' Financial Times. 17 April. p. 3.

Tucker, Emma. 1997c. 'German groups to halt digital TV promotion.' Financial Times. 16 December. p. 3.

Tucker, Emma. 1997d. 'EU tells telecoms groups to isolate cable TV.' Financial Times. 17 December. p. 3.

'TV restrictions unlawful.' 1997. Financial Times. 3 June. p. 25.

Urquhart, John and Bahree, Brushan. 1997. 'WTO body orders Canada to change magazine rule.' The Wall Street Journal. 1 July. p. B8.

Voland, John. 1997. 'Disney sets sights on new games.' Variety. 11-17 August. pp. 7, 8.

Vulser, Nicole. 1997. 'Time Warner to but 10% stake in Canalsatellite.' Cable & Satellite Express. 20 November. pp. 1, 2.

Walker, Tony and Snoddy, Raymond. 1997. 'Murdoch woos China on satellite TV.' Financial Times. 16 May. p. 1.

Wanravi, Anil. 1997. 'Star in a storm.' Television Business International. October. pp. 82-83.

Weiner, Rex. 1997. 'H'wood's euro fever.' Variety. 19-25 May. pp. 1, 70.

Wennerberg, Tor, 1997. Letter to Edward S. Herman. 18 August.

Wentz, Laurel. 1998. 'Happy new year? Asia drops long shadow over forecast.' Ad Age International. January. pp. 3, 6.

Wentz, Laurel and Herskovitz, Jon. 1997. 'Asian economic turmoil douses torrid ad growth.' Advertising Age. 8 December. p. 18.

Westcott, Tim. 1997. 'SBS moves in from the margin.' Television Business International. October. pp. 77-80.

Wheelwright, Geoffrey. 1998. 'Money-makers on the Internet.' Financial Times. 7 January. IT section. p. 15.

Williams, Michael. 1997. 'NBC Europe enters Spain, eyes France.' Variety. 8-14 September. p. 33 <!--[Haut de la page] -->