The emergence of media conglomerates in the media is barely newsworthy. This trend has arisen from the environmental factors affecting media houses. The most significant driver of this trend is the convergence of technological tools used by the media to reach their audiences (Mather 6). This paper examines the emergence of News Corp as a media conglomerate. News Corp has several interests in the media and has a hand in almost all forms of print and electronic media. It presents a very exciting case study on the emergence and impact of conglomerates in the media.
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Background of the Conglomerate
News Corp is currently a holding company for several publishing outlets. Its current disposition arose from a reconfiguration of the conglomerate into two main areas of focus after a scandal in one of its outlets. The companies that made up the News Corp Conglomeration before the split were News Limited (publisher of The Times, The Sun, and News of the World), Dow Jones & Company (publisher of the Wall Street Journal), HarperCollins, and the Fox Entertainment Group (News Corp).
In 2012, the company chose to split its holdings into two companies. One company retained the name News Corp and it currently controls the publishing interests of the conglomerate. The other company took on the entertainment interests of the conglomerate under the name 21st Century Fox. As a result of this decision, News Corp currently consists of News Corp Australia, News UK, Dow Jones, New York Post, HarperCollins Publishers, Amplify, and News America Marketing (News Corp).
The media and social trends that drove News Corp to move towards consolidation included the following. First, the world has been undergoing rapid globalization in the last two decades (Perry, Chase and Jacob 42).
An effective response to the demand for information requires the development of global communication networks. In this sense, the quickest way to grow a media business is to buy shares in different media companies with complementary competitive advantages. Secondly, there has been increased competition in the media driven by an increase in the technological options available to media outlets. For instance, the emergence of the internet as a means of sharing information has led to an increase in information sources for consumers. Large corporations no longer have a monopoly over breaking news. This means that media houses with the largest footprint are more competitive because of their ability to reach a wide audience.
The first social trend responsible for the emergence of media conglomerates is the transition from passive reception of news to active search for news. Before the internet, all news that people received came from radio, television of from print sources. The media companies had a total monopoly over the news that their audiences consumed. This changed when the internet became a major communication outlet. Nowadays, consumers are not waiting for media houses to prepare news items.
Rather, they search for news items that are of interest to them. They can find information from personal blogs, social media sites, and various websites. For instance, someone interested in the latest news from Apple does not have to wait for a trade magazine to know what Apple is doing. The person can simply go to Apple’s website and read press releases produced by the company.
The second social trend is that technology is pulling down social barriers and is making it possible for people from all lifestyles to interact (Mather 7). This means that traditional approaches to market segmentation are no longer effective.
How Media Conglomerates affect Consumer Choices
The emergence of media conglomerates can either shrink or expand the choices available to consumers. In the first case, conglomerates can shrink the options available to consumers in the following ways. First, conglomerates tend to repurpose news items to fit each of their media outlets. For instance, an article that appears as a news item in a newspaper can also form the basis of a news item on television. This means that the consumer will get similar facts from both stories, as opposed to two different stories.
Secondly, a large conglomerate can be very effective in censoring material developed for its audience. A consumer that is not aware of the connection between various outlets can fail to realise that the conglomerate is censoring the materials provided for consumption.
The third way in which media conglomerates may shrink consumer choices is when they become monopolies. In this situation, monopolistic tendencies will emerge. This will lead to a reduction in the quality of content provided to consumers.
On the other hand, conglomerates can also contribute towards the expansion of consumer choices in various ways. First, if a conglomerate consists of diverse establishments, then the consumer is likely to benefit from the conglomerates network. Many conglomerates repackage content from their sources to suit the needs of their audience. This is common among media outlets that run both print and broadcast services. They tend to complement each other, since they all have their own sets of reporters.
The second way that a conglomerate may expand consumer choice is by providing consumers with a wide range of services from each of its constituent companies. For instance, a consumer can benefit from reading stock market reports in the New York Times as well as deeper analysis of the stock market in the Wall Street Journal. This gives a consumer a depth of perspective in regards to the stock market.
Thirdly, a conglomerate can expand consumer choices because of its position in the market. A conglomerate can access and use resources efficiently to meet the needs of consumers. In this regard, the conglomerate spends fewer resources in finding out the needs of the consumer and is able to offer better services.
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Synergies Among Outlets Owned by News Corp
The outlets owned by News Corp include News Corp Australia, News UK, Dow Jones, New York Post, HarperCollins Publishers, Amplify, and News America Marketing (News Corp). The main synergies available to News Corp based on its portfolio of outlets are as follows.
First, News Corp can share resources among its outlets. Its publishing businesses can share printing presses to reduce equipment redundancy. This also reduces the cost of labour since the staff members operating the presses can work full time. This means that the presses operated by the New York Times can be available to HarperCollins Publishers for printing publications. In addition, the printing press experts working for the New York Times can also provide solutions to problems experienced by HarperCollins Publishers.
The second synergy available to News Corp because of its status as a conglomerate is that it can use its influence to take control of markets. On one hand, the company generates content through its teams of reporters and its links with industry experts. On the other hand, the company has outlets that specialise in delivery of content. For instance, Amplify delivers digital content produced by the conglomerate, while the New York Times and HarperCollins Publishers package and deliver content in print format. News Corp controls the marketing of its products via News America Marketing. This gives the conglomerate vast control over its entire distribution chain.
Impact of Media Consolidation on Free Flow of Information and Democracy
The main concern arising from media consolidation is that consolidation leads to the emergence of media monopolies, which in turn can interfere with the free flow of information. Whenever one company controls the entire information market, its consumers are at a disadvantage. The interests of the company are likely to take precedence over the interests of its consumers.
However, the main issue is whether the company espouses democratic ideals or otherwise. If the media company lives up to democratic principles, then there is no cause for concern. In fact, having a conglomerate that promotes democracy can lead to greater gains in personal freedoms (Perry, Chase and Jacob).
A consolidated media market can also lead to instability in case something affects the business position of the conglomerate. For instance, when the News of the World became the subject of a scandal in the UK, News Corp had to make many decisions affecting the operations of the entire conglomerate. Democracy relies on free access to information (Perry, Chase and Jacob 42). The collapse of a conglomerate can adversely affect the free flow of information. It can also lead to the loss of democratic space because of reduced accountability from elected officials.
Mather. Print & Digital Audience Pricing Strategies. Roswell, GA: Mather Economics, 2012. Print.
News Corp. Our Businesses. 2014. Web.
Perry, Marvin, et al. Western Civilization: Ideas, Politics, and Society. New York: Cengage Learning, 2012. Print.