1. Media Ownership and Control

2. Introduction Last week we looked at media market:
the significance of cultural industries in understanding the relationship between culture, society and economy
models of cultural industries
whether cultural goods have special economic features
consequences of such characteristics
This week we look at media ownership

3. General Market Theory
Problems of allocation of resources and scarce resources
In market economy all these decisions are made according to market criteria
Consumers’ demand for / and producers supply not always matched
Accumulation of capital:
create bigger firms
creates unequal power between producers and consumers

4. Types of control /Types of ownership
Two levels of control:
allocative control
operational control
Allocative control:
formulation of overall strategy
deciding whether, when and where and how to expand
development of basic financial policy
control over distribution profits

5. Operational control:
autonomous to some extent over immediate production
however, range of option limited by the overall policy and strategy of organization
Types of ownership:
legal ownership
economic ownership

6. Ownership and control in cultural industries
Massive growth in the size and scope of cultural industry corporations
General tendency in capitalist economy towards concentration
Why does it matter?
proprietors as key players in market economies
they reproduce and reinforce values of free enterprise, profits,...
use their media to promote and protect media, and non- media interests
use their media as ‘megaphone’ for influencing debates and policies
Reinforced by nature of cultural commodity
The problem of control

7. Big is beautiful (and profitable?)
Mergers and acquisitions as general trend
4900 mergers in USA between ; in 1989 alone
Similar trend in cultural industries
in five years between there were 557 reported media business acquisitions and merger just one short of entire total of such deals in 29 years between

8. Significant examples include:
Viacom purchase of Paramount and Blockbuster (1994) and CBS (1999)
Disney purchase of ABC (1995) and Pixar (2006)
Sony purchase of CBS Records (1988) and Columbia Pictures (1989) and BMG (2003) and MGM (2005)
Time Warner of Turner Broadcasting (1995) and merger with AOL (2000)
Vivendi purchase of Seagram/Universal (2000) and its merger with General Electric/NBC (2003)
The impact:
4 companies account for 90% of US recorded music
6 companies account for over 90% of box office revenue
6 companies control 80% of cable market in the USA

9. Changing structures and strategies in cultural industries
The formation of conglomerates
Synergy
Forms of conglomerates
media conglomerates
the leisure conglomerates
information/ communication conglomerates
Vertical and horizontal integration
catalogue of content
control over distribution

10. Conclusion Media industries are getting bigger
They are important players in national/global economy
But not as big as assumed
There are still significant small companies
What is new about the structure of cultural industries?
What are the implications of further commodification of culture?
What are the implications for creative autonomy?