Friday, August 8, 2014

August 8 2014. Blogs, the media, and monopoly. Ownership of the media is becoming ever more concentrated. The number of journalists is ever shrinking. Could blogs substitute for the media? I think not (as matter stand) But there is more going on here. Every market sector (including traditional book publishing) is being (or already has been) concentrated—typically under the control of three to five large corporations. A consequence of this is de facto monopolization. Prices and corporate profits go up. Service goes down. The end result is not free market capitalism.

I'm not denying that monopolies are terrible things, but I am denying that it is readily easy to resolve them through legislation of that nature.

Alan Greenspan

I would like to think that blogging can stand in for the media—but in most cases it doesn’t (as yet). The difference is that whereas we bloggers can entertain, inform and amuse, in most cases we rely on the media for our information—so we are using secondary sources. In contrast, the better journalists—who also have superior resources—go out into the field and dig, investigate, and generally get as close to primary sources as possible.

True, much less investigative journalism is now done—unfortunately—but journalists are still much more plugged into primary sources than bloggers are.

Where analysis is concerned, bloggers are on more solid ground. In fact where the economy is the issue, my sense is that the standard of blog analysis is at least as high as the media—and probably superior. Bloggers, in most cases, don’t worry about offending some potential advertiser. They just say what they think.

Personally, I don’t see how a democracy can hope to work without good information—and I don’t think we are going to get good information if the media are owned by a handful of ultra rich guys with their own agendas—and if the media are under-staffed. Yet that is exactly the trend.

Blogger Brian Feinblum has just drawn attention to this fact.

Many people don’t pay attention to who owns a publication or TV station, but they should. The guy who owns Amazon, owns The Washington Post. The guy who owns Cablevision, Knicks, and Rangers owns Newsday. The guy who owns The New York Post, WSJ, and Harper Collins also owns Fox-TV, 21st Century Fox, and over 800 companies in 50 countries.

Short of the government owning or influencing the media, the next biggest danger is having a handful of people own most of the major media. It’s spreading online as well. Google owns YouTube and Amazon owns GoodReads. The big buy up the small and competitors merge.  reported in 2013 that:

  • The newspaper newsroom’s full-time professionals dropped below the 40,000 mark—down 30% since 2000—for the first time since 1978. 
  • The ratio of PR professionals to journalists was 1.2 to 1 in 1980. It was 3.6 to 1 in 2008—and has since grown with the editorial layoffs.
  • Since 1980, the three original networks—ABC, NBC, and CBS lost 52.6% of their evening news audience. About 50 million used to watch Brokaw, Jennings, and Rather. Now 22 million watch who, what, and where.
  • 2006 is the all-time best ad revenue year for newspapers. After peaking at $49.275 billion in ad revenue (print and digital combined) it has fallen to $22.31 billion in 2012. Quite simply, print revenue from ads collapsed from $47.4 billion in 2005 and online only grew from 1.216 billion in 2003 to a paltry 3.37 billion in 2012.
  • Daily newspaper readership went from around 62 million in 1990 to 45 million in 2012.
  • The number of newspapers dropped from 1,100 dailies in 1990 publishing evening editions to 550 in 2009, and morning dailies going from under 600 in 1990 to over 800 in 2009.
  • Since 2007, magazines lost 50% of its subscribers.
  • In 2002, the 22 largest newspaper groups owned 39% of all newspapers in the US and their combined circulation was 70% of daily circulation totals.

So, the state of the news media, as it relates to money, users, and influence, can be summarized as follows:

  • A handful of corporations and billionaires own most of the major mass media.
  • The number of newspaper and magazine readers, as well as television viewers, has steadily declined in the past decade while Internet content downloads, blogs, and e-books have exploded.
  • The growth online, in certain areas, doesn’t make up for offline losses, both in subscriber revenue or ad revenue and in total number of content consumers.
  • The diversification of media has caused both a dilution in editorial content at any single source and a dilution of influence of any one source.
  • However, there are still leaders in the media, and these leaders still carry a lot of weight in shaping public policy, entertainment, and commerce.

This tend towards concentration and oligopolies—and the elimination of competition—is happening throughout U.S. business at a rapid rate and is the antithesis of a free market. It is being driven by financialization and by the fact that we are not enforcing the anti-trust laws.

Why aren’t the anti-trust laws being used? Because politics is largely financed by large corporations—and it is not wise to bite the hand that feeds you.

Thom Hartmann develops the same disturbing point—and focuses directly on the price gouging that results from lack of competition. In a nutshell, it is competition—and only competition—which polices a free market so the consequences of monopoly (or oligopoly) are entirely predictable.

The real reason that airfare costs are so high is because of the stunning lack of competition in the airline industry today. Back in 2001, there were 10 major airlines flying through American skies: American Airlines, TWA, America West, U.S. Airways, Delta, Northwest, United, Continental, Southwest, and AirTran. All those airline choices meant more completion in the marketplace, which translated into lower airfare prices for American consumers.

However, slowly but surely, the competition in the airline industry has disappeared. In 2001, American Airlines bought out TWA. In 2005, America West bought up US Airways, keeping the US Airways name. In 2008, Delta officially began the process of merging with Northwest. In 2010, United and Continental announced that they were joining forces, and just a few months later, Southwest announced that it was taking over AirTran. And finally, last year, US Airways and American Airlines announced that they were merging to form the world’s largest airline.

So, in less than 15 years, the American airline industry has shrunk from ten airlines in the sky to just the big four that are left today.

Similarly, as the number of airlines has dwindled, airfare prices have shot up, because there’s so little competition in the marketplace. The disappearing competition in the airline industry isn’t just some strange phenomenon. In fact, this same sort of thing is happening in just about every other industry in America.

Look at America’s media and telecom industries. Back in 1983 - 90% of American media was owned by 50 companies. As of 2011 - that same 90% was controlled by just 6 massive corporations: GE - Newscorp - Disney - Viacom - Time-Warner - and CBS. Similarly, right now, there are just 10 giant corporations that control, either directly or indirectly, virtually all American consumer products.

And then there’s America’s banking industry. As Mother Jones points out, 37 banks and financial institutions back in 1990 have slowly transformed into the big 4 banks we see today (Citigroup, JPMorgan Chase, Bank of America and Wells Fargo). And we all know how much damage those big banks have done to the American economy.

From fewer airlines in the skies, to fewer banks on Main Street, competition has disappeared from the American marketplace, and it’s all because Ronald Reagan, in 1982, stopped enforcing the Sherman Anti-Trust Act. Ever since Ronald Reagan came to Washington, "mergers and acquisitions" became the main way to do business, and we’ve all suffered as a result, in the form of things like higher airfare costs.

The steady aggregation of big businesses taking over entire industries over the past 34 years in just about every major commercial sector has concentrated far too much power in the hands of too few players. Americans deserve choice.

- See more at:

No comments:

Post a Comment