The Concentration of Media Ownership Essay

Introduction

It is no secret that the type of media ownership has a crucial impact on media content and media policy. The diverse media produce a wide mixture of options for the audience, while media under the umbrella of a sole corporation contribute to content unification. Many scientists agree that “media diversity plays an important role in upholding democracy as the 4th estate” (Achtenhagen, Melesko, and Ots, 2018, p. 129). Scholars also admit that increasing levels of media ownership concentration show a disturbing tendency all over the world. This paper aims to explain to what extent the concentration of media ownership threatens democracy.

Impact of the Ownership Concentration on the Media Content

There are many types of ownership – corporate, personal, the ownership of foundations, government, and employee ownership. Media ownership matters for media management as it has a crucial impact on company activities. Scientists note that “because of differences in institutional and external pressures from financial markets or local communities, privately-owned media companies are managed differently from publicly owned” (Achtenhagen, Melesko, and Ots, 2018, p. 130).

Such pressures impact the quality of the produced news and establish control over the news content. Therefore, scientists recommend a shift to other forms, like the ownership by trusts and foundations, charitable organizations, not-for-profit corporations, or the media owned by its employees to protect the interests of local communities. Other ways of financing the independent media may include crowdfunding and community-owned press, although these forms sometimes turn out to be financially unsustainable.

In countries like the UK or US, media-ownership concentration is mainly characterized by a predominance of owners’ commercial interests. On the opposite, in countries with autocratic regimes, the main problems are caused by manipulation of news content, propaganda, and fake news. It is said in a study based on a new dataset of 591,532 articles on US-led multinational military operations in Libya, Iraq, Afghanistan, and Kosovo, published by 2,505 newspapers in 116 countries (Baum and Zhukov, 2019). Scientists have found that “ownership chains exert a homogenizing effect on the content of newspapers’ coverage of foreign policy” (Baum and Zhukov, 2019, p. 36). Besides, co-owned media provided information similar in scope, focus, and diversity, compared to newspapers that were not co-owned.

Notably, these papers covered similar topics and distributed the same focus between ‘hard’ and ‘soft’ news. They also did not vary in the breadth of issues they included in their coverage of a given problem. Thus, scientists concluded that competition in the media market mitigates the homogenizing effect and forces the co-owned media to diversify their approaches (Baum and Zhukov, 2019). It was also emphasized that restrictions on freedom of speech introduced in various countries reduced the diversity of the media content.

Media Conglomerates

There is another type of media ownership concentration – media conglomerates, owned by media holding companies. They appear after mergers and acquisitions of broadcast companies, advertising and public relations agencies, research firms, publishing houses, Internet marketing firms, and all kinds of media-related businesses. Some of the world’s largest media conglomerates are Comcast, Disney, and Time Warner, according to the Fortune 500 list of largest corporations (Kelley, Sheehan, and Jugenheimer, 2015). Scientists believe this form of ownership has its advantages, but it can jeopardize the interests of the local audience and adversely affect the quality of the information product. Moreover, media conglomerates may act in violation of the rules of fair competition.

Thus, media owned by conglomerates receive more benefits from the information product they produce than their audiences. As mentioned above, co-owned media often release homogenized news, violating the pluralism principle. For example, a conglomerate that owns radio and television stations, magazine and newspaper publishers can send one correspondent instead of four for the event, and then broadcast similar news (Kelley, Sheehan and Jugenheimer, 2015).

On the other hand, a conglomerate usually includes not only media but also broadcasting and online platforms, cable systems, Internet operators, advertising agencies, and outdoor companies. Belonging to a single parent company allows them to interact most effectively in terms of speed and quality of business processes (Kelley, Sheehan, and Jugenheimer, 2015). However, since organizations that are part of a conglomerate may cut corners by overlapping the job done by different firms, there is a risk of more errors than when interacting with independent enterprises.

Independent local media companies competing with the conglomerates are also at high risk. Because if the conglomerate, for example, owns an advertising company, then this company will give preference to parental media. The same may apply to the parental research agency, which is likely to first share valuable information with the media under the common umbrella. Furthermore, scientists believe that “these firms would have tremendous power in favoring certain political candidates” (Kelley, Sheehan, and Jugenheimer, 2015, p. 293). Mentioned violations may hurt the main components of democracy – the freedom of speech, fair competition, and the same business conditions for all.

The Global Perspective

Most media conglomerates and media corporations have subsidiaries around the world, which brings this type of media ownership to a global level. These are huge companies with tens of thousands of employees like Google, Facebook, AOL, WPP, Amazon, with offices in the USA, UK, Europe, Australia. For example, WPP operates in more than 100 countries, “has headquarters in England, Ireland, US, Japan, China, India, and Latin America and employs more than 140,000 people” (Kelley, Sheehan and Jugenheimer, 2015, p. 294). In this regard, scientists are concerned about the privacy of people’s data, as all these companies are undoubtedly engaged in data collection for commercial purposes.

The list of the largest media conglomerates includes, in alphabetical order, Bertelsmann AG, CBS Corporation, EW Scripps Company, General Electric, Grupo Prisa, Hearst Corporation, Lagardère Group, Liberty Media (Kelley, Sheehan and Jugenheimer, 2015, p. 283). This list is continued by National Amusements, News Corporation, Organizações Globo, Sony, Time Warner, Viacom, Vivendi SA, Walt Disney Company (Kelley, Sheehan and Jugenheimer, 2015).

In this context, the manipulation of Facebook data is the most significant concern, as it already had an impact on the results of the US elections and the Brexit referendum in 2016. Moreover, China continues to expand its media presence outside the country, buying media companies and prolonging agreements with news agencies around the world (Myllylahti and Baker, 2019). Such expansion is an alarming trend, as it is highly likely that the Chinese government influences media holdings owned by Chinese corporations.

Besides, there is a tendency when news companies all around the world to sell their digital media actives to cut costs and survive. Scientists cite the example of the American telecommunications company Verizon Communications, which bought Yahoo in 2017 for $4.5 billion but then was forced to start selling its digital assets, including Tumblr, which was sold for only $3 million in 2019 (Myllylahti and Baker, 2019). Later that year, the company put up for sale HuffPost, Buzzfeed, Vice, and Vox. Besides, Disney, which owns 21% of Vice, has sold part of its stake in the company for $353 million (Myllylahti and Baker, 2019). Furthermore, the process of redistributing media ownership will likely continue into the 2020s.

The Concentration of Media Ownership in the UK

In the UK, the concentration of media ownership continues in all areas of journalism – from newspapers, magazines, radio, and television to social networks, Internet platforms, and podcasts. Most often, from 3 to 8 key market players hold the audience’s attention. According to a recent report by the UK-based Media Reform Coalition (2019), the concentration of media ownership has gotten much worse since 2015. News UK, Daily Mail Group and Reach companies have 83% share of the newspaper market, while mentioned companies plus Guardian and Telegraph gather nearly 80% of online readers (New report: who owns the UK media, 2019). Gannett, Johnston Press Trinity Mirror, Tindle, and Archant are local media market leaders, with 80% of the total market share.

BBC Radio and Commercial Radio have 46% of all commercial local analog radio stations and two-thirds of all commercial digital stations. The researchers also report that the UK digital landscape is even more concentrated. Google has a 92% share of search domination, leaving 4% for Bing, 2% for Yahoo, 1% for MSN, and 1% for DuckDuckGo (Who owns the UK media, 2019). Besides, Facebook, Snapchat, Instagram, and Twitter are platforms through which UK users mainly get the news. Therefore, democracy in the UK remains under threat, as well as the small independent media.

Another issue that causes concern is that dishonest UK-based media frequently practice misinformation and post-reality information manipulation. The scientist perceives freedom of the press as freedom of expression and freedom of media (Khan, 2018). She notes that by 2017 the UK has found itself at 12 ranks lower position in the World Press Freedom Index since 2012, presumably, because of new regulatory measures (Khan, 2018).

Scholar believes that media regulation in the UK needs to be changed, as by now it “has led to privatization of media and the formation of media conglomerates presenting threats to freedom of the press” (Khan, 2018, p. 102). The scientist concludes that excess freedom of expression and concentration of media ownership threatens freedom of the press in the UK badly, precisely its diversity and plurality.

Communications Act of 2003, containing rules for electronic media, and the Enterprise Act of 2002 focused on the newspapers are the main laws regulating media relations in the UK. The Office of Communications is responsible for implementing these laws (Iosifidis, 2016). British media laws protect pluralism, but do not regulate mergers and acquisitions. For this, there is a special merger regime, applied to the whole market, not only the media sector (Iosifidis, 2016). The merger regime aims to retain and enhance competition and thus – diversity and plurality.

There is also a media public interest test that allows the Secretary of State for Business, Innovation, and Skills to interfere in media and cross-media mergers in case they look suspicious. Besides, there were EU laws that regulated the liberalization of the UK media and communications policy (Iosifidis, 2016). However, after the Brexit happened, there is an emerging necessity to create British legislation that will help to maintain the liberalization processes.

Media Ownership Tendencies in Ireland

Ireland is a country with one of the highest levels of media ownership concentration in Europe. Irish scholars point out that plurality “is a cornerstone of a healthy dynamic democracy” (Jonathan et al., 2016, p. 3). They also quote the Council of Europe, who said that “democracy would be threatened if any single voice with the power to propagate a single viewpoint become too dominant” (Jonathan et al., 2016, p. 4). The two most influential media owners are RTÉ, the national state broadcaster, and Denis O’Brien, a businessman who owns a crucial minority stake of Independent News and Media (INM) newspaper and has a significant share in the commercial radio stations sector.

There are concerns that Irish legislation lacks specific legal barriers for media ownership concentration. The public widely criticizes Irish defamation laws, especially high jury awards, lack of certainty regarding damages, and a large number of legal proceedings against media, which together threaten media pluralism (Jonathan et al., 2016). Scientists emphasize that when the question of putting out conflicting materials arises, the editors prefer to play it safe and not publish them. Such nuances pose a serious threat to media pluralism and diversity.

Ireland has a law spelling out the importance of protecting media pluralism. It is a Competition and Consumer Protection Act 2014, which presents the rules for media mergers (Jonathan et al., 2016). This act enables the government to control the influence of media mergers on media plurality, particularly – the ownership and content diversity.

Therefore, the Minister for Communications, who is responsible for the implementation of this act, can prohibit any media merger, especially when a particular company is trying to acquire more than 20% of a media sector (Jonathan et al., 2016). Nonetheless, the law has no means to regulate the current high level of media ownership concentration. Hence, there is an urgent need to upgrade the Irish legislation and restrict companies from creating a media market with a dense ownership concentration.

Interestingly, the preferences of the Irish audience are different from most European countries. Among all types of media, Irish people prefer a radio with almost 3 million people, who listen to it every weekday, including 83% of 15-21 years olds (Jonathan et al., 2016). Even more intriguing, most people prefer local radio stations – 58% and only 44% enjoy the national radio (Jonathan et al., 2016). There is plenty of independent radio stations in Ireland, but still, Communicorp-owned Newstalk supplies the news to the whole network. Thus, there are still concerns regarding the quality of information these audiences receive.

Other European countries have the same trends in the concentration of media ownership. The recent study based on data from Belgium newspapers issued in 1983-2013 shows that papers still have the same level of content diversity of news stories (Beckers et al., 2019). However, scientists found that “newspapers owned by the same media group were more alike than independently owned newspapers” (Beckers et al., 2019, p. 1665). That is how content unification spreads without proper state regulation.

New Zealand Media and its Main Concerns

Despite the high level of investors’ influence on the New Zealand media, there is still a list of independent editorials which survived in the face of fierce competition. This list includes digital media outlets like Scoop, Spinoff, Newsroom, BusinessDesk (Myllylahti, and Baker, 2019).

Moreover, some media introduced new pay models that are very helpful in supporting independent journalism. Among the most well-known papers are Allied Press, a regional newspaper group, Asia Pacific Report, an independent news site, BusinessDesk, a business, economics, and politics newswire (Myllylahti, and Baker, 2019). Other media on this list are Crux, a non-profit, local digital-only news site, and National Business Review, a financial newspaper group (Myllylahti, and Baker, 2019). Thus, the situation with independent media is quite promising, despite the ongoing media ownership concentration.

Many critical merger processes began back in 2011, and continue to this day. Today, four foreign corporations dominate the New Zealand media market – APN News and Media (now NZME), Fairfax Media, Media Works, and Sky (Hope, 2018). Scientists also talk about duopoly in the print and radio sectors, monopolies in the paid TV sector, and only three competitors on free-on-air television, including state-owned companies (Hope, 2018). Furthermore, in 2012, began the mass acquisition of media holdings by banks, hedge funds, and private equity companies, similar to mass purchases of the 1990s-2000s (Hope, 2018). The process ended when Rupert Murdoch finally sold NZME shares in 2016.

That is why, from now on, media companies became mainly focused on revenues and profits, and the community interest was abandoned. This trend was accompanied by increasing pressure on the news departments as they were forced to create more commercially-driven content instead of focusing on the problems of local audiences. Hope (2018) provides an example of a TV channel owned by Media Works Corporation, the content of which has changed dramatically after the new business model was introduced.

Changes also affected the channel’s employees – some senior journalists were fired; others preferred dismissal just not to sign a contract with new owners. Furthermore, Hope (2018) emphasizes that “NZME and Media Works maintain their duopoly in the commercial radio market” (para. 5). Thus, media ownership concentration has a devastating effect on media diversity and pluralism in New Zealand.

Australian Media Market Waiting for Greens

Australia is the state with the highest concentration of media ownership in the world. According to the report (Dwyer and Muller, 2016), “News Corporation and Fairfax Media together own the majority of national and capital city newspapers” (para. 12). Here are the names of individuals who own Australian media: Bruce Gordon – WIN, 9, Ten, Gina Rinehart – Ten, James Packer – Ten, Lachlan Murdoch – NOVA, News Corporation (US), Foxtel, Ten, NewsCorp (Australia), APN.

This list also includes Bill Caralis – Super Network Radio, Janet Cameron – Grant, John Singleton, and Fairfax Media Limited – MACQUARIE, Kerry Stokes – Seven Group Holdings Ltd, Prime Media Group, 7 (Dwyer and Muller, 2016). Besides, News Australia, Fairfax Media, Seven West Media, and APN News and Media got over 90% of newspaper industry revenue in 2015-2016. Furthermore, Southern Cross Media, the ABC, APN News, and Media and Nova Entertainment got over 70.9% of free-on-air TV industry revenue in 2016-2017 (Dwyer and Muller, 2016). All these media belong to a narrow circle of people and pursue the interests of corporations.

The level of concentration of media ownership is exceptionally high in Australia. Evershed (2018) notes that Australia’s performance is second only to China and Egypt, the non-democratic countries with state-owned media. The good news is that Australia’s media corporations will soon be targeted by the federal Greens’ policy, “which places breaking up the nation’s media concentration front and center” (Remeikis, 2019, para. 1). The purpose of this government policy will be to shift the focus of media from corporate profits and revenues to the interests of readers and local communities.

African Potential for Media Democratization

As many African countries still suffer from dictatorial governments, the problem of media ownership concentration remains relevant on the continent. Notably, in states where democratic societies can develop, the role of the media is critical in democratization processes (Tomaselli, 2017). Most often, the main obstacles are the lack of material resources and poor infrastructure (Tomaselli, 2017).

But in more developed countries, like South Africa, the dominance of corporate capital is becoming a widespread problem. In particular, acquisitions of the local newspapers by massive media corporations weaken the potential of South African print mass-media. The purchases by domestic black groups of the previously white-owned enterprises also contribute to the ownership concentration, influencing the editorial policies. Thus, the situation in South Africa is not much different from other English-speaking countries around the world.

Thus, this paper gives a detailed description of the extent to which the concentration of media ownership threatens world democracy. Media pluralism, diversity, and freedom of the press, which are the cornerstone of any democratic society, are suffering. If the trends of media ownership concentration remain unchanged, this will lead to the inevitable homogenization of content, and a final shift from materials that serve the interests of local communities to commercialized ones. Moreover, in many countries, there is a weak position of states that can hardly implement the laws governing media mergers, thus failing to provide proper conditions for fair competition and media diversity.

Reference List

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Beckers et al. (2019) ‘Are newspapers’ news stories becoming more alike? Media content diversity in Belgium, 1983-2013’, Journalism, 20(12), pp. 1665-1683.

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