1. Media as Businesses 1. Business organization 2. Implications?

2. Media business: video clips Entertainment Tonight Xena, Warrior Princess Hollywood Squares MTV

3. Facts about media Concentration Increasing Concentration Most people unaware Media ownership no longer LOCAL Ownership increasingly trans-national

4. Issues, Concerns Power of media moguls “Tomorrow Never Dies” Elliott Carver Hidden agendas, conflicts of interest Media globalization Internet immune?

5. How real an issue today? Big media dominate US, world AOL, Time Warner merger AOL: world’s #1 provider of online services Time Warner : one of world’s largest traditional media companies

6. AOL Time Warner Leader in every major media sector 78.3m Internet visitors 21% US magazine revenues 19% U.S. cable subscribers 13% of box office sales 16% music sales

7. What does the merger mean? Faster Internet service Interactive TV Online music Movies online Advertising, e-commerce New media amalgams Cross promotion

8. Concerns about merger Huge company Potential to dominate U.S. media markets Power to exclude rivals FTC consent decree: new company to facilitate competition

9. Other conglomerates? NBC: RCA/GE CBS: Viacom ABC: Disney UPN: Viacom Fox: News Corp. WB: AOL Time Warner

10. Global media giants 1. AOL Time Warner ($41b) 2. Disney ($24.8b) 3. Vivendi/Seagram ($16.6b) 4. Viacom ($14.9b) 5. Bertelsman($14.8) 6. News Corp. (14.1b) 7. Sony ($10.8b) 8. NBC/GE ($7b)

11. Media conglomerates National, international companies AOL Time Warner, Viacom, News Corp., Gannett, GE Puget Sound media

12. Types of ownership Governmental ownership or funding Employees work for govt. Revenues: taxes, fees Profit? + Capital, not commercialized - Government

13. Types of ownership Private ownership, individuals or groups Revenues: sales Profit required + Competition, independence - Commercialization, independence

14. U.S. media: characteristics Pvt. ownership, minimal govt. control Media businesses Profit orientation Revenue: Ads, subscription

15. Advertising revenues Medium$/ad revenues Daily newspapers TV Magazines Radio

16. U.S. media: characteristics News= industry standards Competitive environment Economies of scale Unit costs drop in mass production Economic efficiency/vertical integration

17. Why concentration? FCC rules Media very profitable Existing profits Attractive to sell U.S. tax laws Concentration savings Synergy

18. + on Concentration Economies of scale More resources, potential for quality More public service Greater independence Greater investment

19. - on Concentration Fewer voices Private agendas Public unaware Synergy of dubious public value Loss of family companies No longer local

20. Rupert Murdoch Danger to democracy? News Corporation Criticisms: Politics China Content Goals

21. Media business: video clips Entertainment Tonight Promotion of Viacom companies: VH1 Xena, Warrior Princess Production ending; no vertical integration Hollywood Squares Promotion of CBS show MTV Promotion of Viacom products (CD, book, play, movie)