MEDIA CONGLOMERATES

MEDIA CONGLOMERATES IN

AMERICA

Communication Studies 197C Summer 2004


CONGLOMERATES IN AMERICA

LEADING GLOBAL PLAYERS.LEADING GLOBAL PLAYERS.CONTROL THE NEWS AND VIEWS OF GLOBAL AUDIENCE.CONTROL THE NEWS AND VIEWS OF GLOBAL AUDIENCE.MOST MEDIA CONGLOMERATES ARE SITUATED IN THE UNITED MOST MEDIA CONGLOMERATES ARE SITUATED IN THE UNITED STATES OF AMERICA.STATES OF AMERICA.THIS IS DUE TO SEVERAL POLICIES ADOPTED BY THE THIS IS DUE TO SEVERAL POLICIES ADOPTED BY THE AMERICAN FEDERAL GOVERNMENT.AMERICAN FEDERAL GOVERNMENT.EG:A LAW WHICH RESTRICTED A COMPANY WHICH OWNED A EG:A LAW WHICH RESTRICTED A COMPANY WHICH OWNED A CABLE STATION IN A PARTICULAR AREA FROM HAVING A CABLE STATION IN A PARTICULAR AREA FROM HAVING A TELEVISION CHANNEL. ALSO THAT A MEDIA COMPANY CANNOT TELEVISION CHANNEL. ALSO THAT A MEDIA COMPANY CANNOT REACH ORE THAN 35% OF THE COUNTRY.REACH ORE THAN 35% OF THE COUNTRY.AS WELL AS BECAUSE OF THE INTRODUCTION AND GROWTH AS WELL AS BECAUSE OF THE INTRODUCTION AND GROWTH OF MEDIA WHICH WAS RAPID IN THE US.OF MEDIA WHICH WAS RAPID IN THE US.THE FCC VOTED THE FCC VOTED DECEMBER 18DECEMBER 18, 2007 TO RELAX MEDIA TO RELAX MEDIA OWNERSHIP RULES, INCLUDING A STATUTE THAT FORBIDS A OWNERSHIP RULES, INCLUDING A STATUTE THAT FORBIDS A SINGLE COMPANY TO OWN BOTH A NEWSPAPER AND A SINGLE COMPANY TO OWN BOTH A NEWSPAPER AND A TELEVISION OR RADIO STATION IN THE SAME CITY TELEVISION OR RADIO STATION IN THE SAME CITY


NEWS CORPORATION

Area News Corp.

# of Films 2,500 films; 300 post-1980 titles

Studio20th Century Fox, Fox 2000, Fox Searchlight, New Regency, Fox

Studios AustraliaTV

ProductionFox Television Studios

Media Networks

Fox, Fox News, Fox Sports, FX, Fox Movie Channel, Fox Television Stations, 50% National Geographic, 30.9% The Golf Channel

Parks & Resorts

Music

Other DirecTV, Sky TV, Star TV, international programming


FOXFOX

• 1904 -- William Fox (clothes dealer) forms Greater New York Film Rental Company

• 1916 -- William Fox starts film production in Los Angeles

• 1930 -- Fox loses firm in $18 million to bankruptcy to his banks

• 1935 -- Merges with Twentieth Century Pictures Company (founded in 1933 by Darryl Zanuck)

• 1936 -- Fox tries to bribe the bankruptcy judge and goes to prison

• 1963 -- much-heralded Joseph L. Mankiewicz film Cleopatra was a disaster and cost a record $44 million.

• Fox was saved from financial disaster only by the release of the fact-based war epic The Longest Day (1963) and the unexpected success of The Sound of Music (1965).


NEWS CORP-1980NEWS CORP-1980

• 1985 -- News Corp buys TCF Holdings (parent company of Twentieth Century Fox Film)

• 1985 -- buys seven US television stations from Metromedia for US$2bn to form Fox Television

• 1985 -- Murdoch becomes US citizen in line with regulations barring foreign ownership of television stations

• 1986 -- launches Fox television network in US

• 1987 -- buys Harper & Row, later merged with William Collins as HarperCollins

• 1988 -- buys Triangle Publications, which includes TV Guide, from Walter Annenberg for US$3bn

• 1989 -- launch of Sky Television - reaches million viewers within year

• 1989 -- The Simpsons premieres on Fox Television Network

• 1990 -- BSkyB formed through merger of Sky Television and British Satellite Broadcasting


NEWS CORP NEWS CORP REGROUPINGREGROUPING

• 1990 -- News Corp nearly goes bankrupt with over US$6bn in debt on three continents

• 1991 -- sells most US magazines - including New York, Seventeen, Soap Opera Digest, Soap Opera Weekly, Seventeen, Automobile, New Woman, Premiere and Daily Racing Form - to Primedia

• 1992 -- family's stake in News reduced from 43% to 35%

• 1993 -- pays US$525m for 63.6% stake in Hong Kong-based satellite broadcaster Star TV


EXPANSION CONTINUESEXPANSION CONTINUES

• 1993 -- pays $1.6bn for rights to broadcast US pro football on Fox

• 1994 -- agrees to pay US$500m to New World Communications Group for affiliate agreements from its 12 current network affiliates, takes 20% stake

• 1994 -- BSkyB floated with value of £4.5bn

• 1996 -- sells HarperCollins US education interests to Pearson for US$580m

• 1997 -- buys Heritage Media coupon insert business for US$1.4bn

• 1997 -- buys remaining 80% of New World Communications (10 US television stations) for US$2.5bn

• 1997 -- buys LA Dodgers baseball team for US$350m


IT KEEPS GROWINGIT KEEPS GROWING

• 1997 -- agrees to buy International Family Entertainment cable network (renamed Fox Family Worldwide) for US$1.9bn

• 1998 -- sells Heritage’s radio and television broadcast properties to Sinclair for US$630m

• 1998 -- floats 18% of Fox Entertainment Group

• 2000 -- buys Chris-Craft Industries, BHC Communications and United Television (10 television stations) for US$5.35bn

• 2001 -- sells 49.5% stake in Fox Family Worldwide to Disney for US$5.3bn

• 2003 -- buys 34% controlling stake in Hughes Electronics (satellite broadcaster DirectTV) for US$6.6bn


20TH CENTURY FOX 20TH CENTURY FOX TODAYTODAY

•Units

• Twentieth Century Fox: 10+ films per year

• Fox 2000: 6-8 films per year

• Fox Searchlight: 8-10 films per year

•New Regency: 2-4 co-financed films

•Partners/Key Distribution

•MGM: 5+ films per year

• Lucasfilm: 2 films over four years

•New Regency: 3-4 films per year


WALT DISNEY COMPANYWALT DISNEY COMPANY

Area Walt Disney# of

Films 1,207 films

Studio Walt Disney Pictures, Touchstone, Hollywood, Miramax, Dimension

TV Producti

onBuena Vista Productions, Toucthstone, Walt Disney

Media Networks

ABC, ABC Television Stations, ABC Family, ABC Radio, Disney Channel, Toon Disney, Soapnet, 80% of ESPN, 37.5% of A&E, 50% of Lifetime,

39.6% of E! & Style, 27.5% of A&E & History

Parks & Resorts

Disney World, Disneyland Resorts, Disney Cruiseline, Tokyo Disney, Disneyland Paris, Hong Kong Disney

MusicWalt Disney Records, Walt Disney Music Publishing, Hollywood Records,

Mammoth Records, Lyric Street Records

Other Disney Quest, ESPN Zone, Go.com, Consumer Products, Mighty Ducks


DISNEY 1928-1940 DISNEY 1928-1940 ANIMATION ROOTSANIMATION ROOTS

• 1928 -- Iwerks modifies Disney's "Oswald The Lucky Rabbit" character, turning it into Mickey Mouse

• 1928 -- first silent film featuring the Mouse premieres

• 1930 -- Disney buys Iwerks' 20% share of company for US$2,920

• 1934 -- Three Little Pigs wins Academy Award

• 1937 -- Disney's first full-length animated feature film Snow White & the Seven Dwarfs premieres at cost of US$1.5 million

• 1940 -- Walt Disney Productions goes public to repay US$4.5 million in debt


DISNEY 1950-1960 DISNEY 1950-1960 BEYONDBEYOND

ANIMATION ANIMATION

• 1950 -- first Disney TV special One Hour in Wonderland airs on NBC

• 1952 -- Walt Disney develops ideas for a "family park" to be called Disneyland

• 1953 -- Disney establishes Buena Vista Distribution Company as Disney's film distributor

• 1954 -- ABC invests US$500 000 in cash, guarantees all WED bank loans and gets 35% ownership of Disneyland (with all profits from park's food concessions for 10 years

• 1954 -- Disneyland show on ABC network

• 1955 -- Disneyland opens in Anaheim; 1 million visitors within 6 months

• 1955 -- Mickey Mouse Club, Disney's second TV show, is launched

• 1960 -- Disney buys ABC's one-third interest in Disneyland for US$7.5 million and pay off all loans

• 1966 -- Walt Disney died (frozen?)


DISNEY FURTHER EXPANSIONS

• 1983 -- Disney Channel; Tokyo Disneyland – licensed

• 1984 -- Michael Eisner, from Paramount, became CEO of Disney after failed takeover bid for company by Bass Bros.; First Touchstone release

• 1986 -- Capital Cities Communications buys ABC network for US$3.5 billion to create Capital Cities-ABC

• 1987 -- first Disney Store opens

• 1990 -- first Hollywood Pictures release

• 1992 -- Disneyland Paris opens

• 1993 -- buys Miramax for US$80m


Disney: 1994-2004 – Frustration

• 1994 -- Frank Wells (COO) dies

• 1994 -- Jeffrey Katzenberg leaves, starting Dreamworks with Steven Spielberg (famed film director/producer) and David Geffen (recording industry maven)

• 1995 -- Pixar relationship pays off with Toy Story release; Pixar goes public

• 1995 -- Disney buys Capital Cities-ABC for US$19bn

• 2001 -- buys Fox Family Worldwide from Murdoch and Saban for US$5.3bn

• 2003 -- sells Anaheim Angels for US$180m ($240m invested)

• 2004 -- Pixar ends relationship after 2005

• 2004 -- Comcast makes unsuccessful US$54bn hostile takeover bid for Disney


TIME WARNERTIME WARNER

Area Time Warner

# of Films 6,500 films incl. Turner Library (pre-1986 MGM titles and titles made by

RKO)

StudioWarner Bros., Castle Rock, Bel Air Ent. - JV w/ Canal +, Village

Roadshow - JV, New LineTV

ProductionWarner Bros. TV, Castle Rock TV, 32,000 TV titles, 13,500 animated

titles incl. Hanna Barbera libraryMedia

NetworksHBO (39MM subs), WB, TBS, CNN, 50% Comedy Central, Cartoon

NetworksParks & Resorts

(used to own Six Flags)

Music (Sold in 2003 to Edgar Bronfman)

OtherTime Inc.(130 mags), AOL (24MM subs), Time Warner Cable (11MM

subs), DC Comics; Atlanta Braves, Hawks, and Thrashers


TIME WARNERTIME WARNER

• 1907 -- four Warner brothers establish film distribution business and move into production

• 1918 – the brothers open their first West Coast Studio on Sunset Boulevard

• 1925 -- Warner establish Vitaphone Co., begin experimental sound pictures at Warner Vitagraph studio in Brooklyn

• 1926 – Warner’s Don Juan, starring John Barrymore, features music but no spoken dialogue

• 1927 -- Warner moves Vitaphone to Hollywood, release Al Jolson's The Jazz Singer


WARNER BROS 1935-WARNER BROS 1935-19501950

• 1935 -- first Porky Pig cartoon from Warners animation unit

• 1940 -- Bugs Bunny introduced by Warners

• 1944 -- Court ruling that Warners must release Olivia de Havilland after 7 year contract – beginning of end of “Studio System”

• 1948 -- much of Warner’s film library sold to MGM

• 1949 -- Warner ordered to divest cinemas; sells chain in 1951 to Mann Theaters


FRUSTRATION1958-FRUSTRATION1958-19701970

• 1958 -- Warner Bros. Records founded, later renamed WEA

• 1963 -- Warner closes animation unit

• 1963 -- Warner buys ailing Reprise records (Sinatra)

• 1967 -- Jack Warner sells his stake in Warners to Seven Arts

• 1967 -- Atlantic records bought by Warner-Seven Arts

• 1969 -- Warner-Seven Arts acquired by Kinney National (Steve Ross) and becomes Warner Communications


TIME TIME WARNER/AOL/TURNERWARNER/AOL/TURNER

• 1980 -- CNN founded by Ted Turner

• 1986 – got back into theater business with Paramount, buying CinAmerica (Mann & Festival Theaters); sold out in 1997;

• 1988 -- Turner founded TNT, a movie channel

• 1989 -- Time Warner created with Time's acquisition of Warner Communications

• 1992 -- Turner founded Cartoon Network

• 1996 -- Time Warner takes over Turner Broadcasting System

• 2000 -- AOL “merges with” Time Warner

• 2003 -- 'AOL' dropped from AOL Time Warner corporate name

• 2003 -- Warner Music arm sold to consortium led by Edgar Bronfman (former head of Universal) in Nov. for US$2.6bn

• 2004 – Time Warner makes $4.7-$4.8 billion offer for MGM


MARKET TALK

• DISNEY, "NEW" VIACOM (AND ITS FORMER PARENT CBS CORPORATION, THE FORMER "OLD" VIACOM), TIMEWARNER, NEWS CORPORATION, BERTELSMANN AG, AND GENERAL ELECTRIC TOGETHER OWN MORE THAN 90% OF THE MEDIA HOLDINGS IN THE UNITED STATES

• AMONG OTHER ASSETS, DISNEY OWNS ABC, BUENA VISTA MOTION PICTURES GROUP, ESPN, AND MIRAMAX FILMS.

• CBS CORPORATION OWNS CBS, CBS RADIO (FORMERLY INFINITY RADIO), SIMON & SCHUSTER EDITING GROUP, A 50% OWNERSHIP STAKE IN THE CW, ETC.

• TIME WARNER OWNS CNN, TIME, AOL, A 50% OWNERSHIP STAKE IN THE CW, ETC.

• RUPERT MURDOCH, THE MEDIA MAGNATE, APART OF NEWS CORP., ALSO OWNS BRITISH NEWS OF THE WORLD, THE SUN, THE TIMES, AND THE SUNDAY TIMES, AS WELL AS THE SKY TELEVISION NETWORK, WHICH MERGED WITH BRITISH SATELLITE BROADCASTING TO FORM BSKYB, AND SKY ITALIA; IN THE US, HE OWNS THE FOX NETWORKS AND THE NEW YORK POST. SINCE 2003, HE ALSO OWNS 34% OF DIRECTV GROUP (FORMERLY HUGHES ELECTRONICS), OPERATOR OF THE LARGEST AMERICAN SATELLITE TV SYSTEM, DIRECTV, AND INTERMIX MEDIA (CREATORS OF MYSPACE.COM) SINCE 2005.


DEBATES

• MEDIA COMPANIES ARE BLAMED AS MEDIA CONCENTRATION LEADS TO MONOPOLY IN THE MARKET

• SPONSORS AND ADVERTISERS MORE IMPORTANT THAN VOICE OF THE MASSES

• NEWS PROVIDED IS IN THE INTEREST OF THE CORPORATES CONTROLLING MEDIA HOUSES

• NEWS IS DISTILLED TO SUITE THE PERSONAL REQUIREMENTS

• LACK OF HEALTHY MARKET COMPETITION

• PEOPLE HAVE LESS DIVERSE OPTIONS

• INCREASED CONCENTRATION OF MEDIA OWNERSHIP CAN LEAD TO THE CENSORSHIP OF A WIDE RANGE OF CRITICAL THOUGHT.

• HENCE SLOW MODERNIZATION AND INCREASE IN PRICES

• DOES NOT SERVE PUBLIC INTEREST

• CONCENTRATION OF MEDIA CONGLOMERATES IN US HAS LED TO AMERICANIZATION


COUNTER VIEW

• MEDIA COMPANIES STATE THAT IT LEADS TO BETTER COMPETITIVENESS BETWEEN GIANT MEDIA CONGLOMERATES

• REDUCED COST OF OPERATIONS DUE TO CONSOLIDATION OF SOME FUNCTIONS

• MORE SEGMENTED OR DIFFERENTIATED PRODUCTS AND SERVICES TO RESPOND TO A WIDER VARIETY OF DEMANDS BETTER

• CONSOLIDATION OF MEDIA HAS LED TO A MOVEMENT OF CITIZEN JOURNALISM

• INTERNET HAS BECOME A NEW SOURCE OF AQUIRING INFORMATION. THROUGH BLOGS, FORUMS.

• THANKS TO THIS TREND GOOGLE AND YAHOO ARE ALSO MEDIA GIANTS IN THE MAKING.


CONCLUSION

WHETHER MEDIA CONGLOMERATES ARE THE RIGHT THING OR NOT THE TRUTH OF THE MATTER IS THAT THE NUMBER OF MEDIA CONGLOMERATES HAS REDUCEDFROM 9 IN 1900’S HAS DECREASED TO 8 WHICH PROVES THAT IT IS A GROWING PHENOMENA. WHETHER IT LEADS TO RESPONSIBLE MEDIA OR MAKES A NEW WORLD ORDER IS SOMETHING ONLY TIME WILL TELL.


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MEDIA CONGLOMERATES

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