MEDIA CONCENTRATION

PATRICIA ESTÉVEZ

FEDERACIÓN DE SINDICATOS DE PERIODISTAS (FESP)

CONCENTRATIONThe word concentration refers to 5 different phenomena:

4 of economical nature…

1. Integration of operations: strategies for external growth (joint ventures, mergers, alliances…)

2. Concentration of ownership: situation at a given time

3. Concentration of the market: dominating position of a series of companies in respect to the market as a whole

4. Audience concentration: of a media outlet in a geographical area

And a 5th of political nature…

5. Centralization or accumulation of power, as a result of the economical power

(C. Llorens, 2003)

MEDIA EMPIRESThe world’s largest multi-media corporations with diversified media-holdings, the «Big 7»:

Time Warner

Disney

News Corp.

Bertelsmann

CBS

NBC

Viacom

MEDIA EMPIRES ARE THE RESULT OF…

3 Trends:

1. Deregulation, liberalization and privatization brought down mental barriers in respect to monolopolies

2. Deregulation «corporatized» media platforms: imposition of business-logic

3. Digitization: consolidation into just one network of telecomms, internet & mass media

(Arsenault & Castells, 2008)

MEDIA EMPIRES HAVE SET NEW TRENDS

3 Trends:

1. Diversification of platforms and convergence: not only they own more than before, but the content created is delivered via an increasing number of platforms. VERTICAL INTEGRATION AS A PRECONDITION OF SUCCESS FOR CULTURAL PRODUCTS

2. Segmentation and Customization: New ways of identifying and delivering customized content targetting critical advertising markets. MONETIZATION OF CONTENT

3. Economies of synergy: networked forms of organization, creating GLOBAL NETWORK ENTERPRISES THROUGH DIAGONAL INTEGRATION. Holdings, partnerships and cross-investments with national, regional and local companies to facilitate market expansion

(Arsenault & Castells, 2008)

EUROPE«Media Power in Europe: The Big Picture of Ownership» (EFJ, 2005) identified:

4 major European multinational and multi-media companies:

- Bertelsmann AG

- Lagadère

- Axel Springer Verlag

- Scandinavian Broadcasting System SA

3 big «foreign players»

- Central European Media Enterprises LTD (CME)

- WAZ

- Ringier

A broadband service provider

- Liberty Global

BERTELSMANN AGBusiness Areas: Television and radio; book publishers; magazines and newspapers; media and communication services; media clubs and direct marketing

Divisions: RTL Group (Luxembourg), Random House, Inc. (New York), Gruner + Jahr (Hamburg), Arvato (Gütersloh), Direct Group (Gütersloh)

Shareholders: Bertelsmann Stiftung (77.4%), Mohn family (22.6%)

Countries: has operations in more than 50 countries

Employees: 102,983

Revenues: 15,400 (2009), 11,007 (sept 2010)

by business field RTL Group: 34.4%; Random House: 11.0%; Gruner + Jahr: 16.0%; Arvato: 30.7%; Direct Group: 7.9%

by region U.S.: 12.5%; Germany: 35.0%; Europe (excluding

Germany): 47.7%; other countries: 4.8%

BERTELSMANN AGRTL Group (Luxembourg)

Television: each day, more than 170 million viewers in Europe watch TV channels operated by RTL Group: RTL Television, Super RTL, Vox or N-TV in Germany; M6 in France; Antena 3 in Spain, RTL 4 in the Netherlands; RTL TVI in Belgium; and RTL Klub in Hungary etc.

Radio: Radio Luxembourg, RTL in France, 104.6 RTL (Berlin), Bel RTL in Belgium…

Fremantle Media, RTL Group’s content production arm, produces more than 10,000 hours of programming every year in 22 countries. With programming rights in about 150 countries, it is also the largest independent TV distribution company outside the United States.

Random House, Inc. (New York)

With more than 11,000 new books issued a year and 500 million books sold annually, it presents a broad spectrum of editorial voices supplied by over 120 publishing imprints in 19 countries, including historic publishing houses such as Doubleday and Alfred A. Knopf (USA); Ebury and Transworld (UK); Plaza & Janés (Spain); Sudamericana (Argentina) and Goldmann (Germany).

BERTELSMANN AGGruner + Jahr (Hamburg)

More than 285 print titles and accompanying homepages in over 20 countries, printing plants in Germany and the United States, and professional websites.

Arvato (Gütersloh)

Arvato AG is an international media and communication service provider, offering from conventional printing to modern services such as service centers, financial clearinghouses and mobile services. Arvato is comprised of four divisions: Arvato Services, Arvato Print, Arvato Digital Services and Arvato Systems

Direct Group (Gütersloh)

More than 15 million customers in the 16 countries where Direct Group has operations: media clubs, bookstores, online stores, publishers, direct sales

LAGARDÈREBusiness Areas: Television and radio; book publishers; magazines and newspapers; media and communication services; media clubs and direct marketing

Divisions: Lagardère Publishing (book-publishing business segment); Lagardère Active (magazine publishing, audiovisual -radio, television, audiovisual production- and digital activities, and advertising sales); Lagardère Services, (travel retail and press-distribution business segment); Lagardère Unlimited (sport industry and entertainment)

Countries: operations in more than 50 countries

Employees: 29,519

Sales: 7,892 M € (2009)

by region U.S. and Canada: 12.8%; France: 33.6%; Europe

(excluding France): 36.8%; other countries Europe (non-EU): 7.4%, other countries: 9.4%

AXEL SPRINGER VERLAGBusiness Areas: over 230 newspapers and magazines, more than 80 online offerings, holdings in television and radio stations

Countries: active in a total of 36 countries.

Employees: 10,500

Revenues:  2,611.6 M € (2009)

PROSIEBENSAT.1 GROUPBusiness Areas: Commercial television, premium pay channels, radio stations and related print businesses.

2nd largest broadcasting group in Europe. In Germany (SAT.1, ProSieben and kabel eins) is number one in the TV advertising market. Strong market positions in free TV in the Netherlands with the channels SBS 6, Net 5 and Veronica, in Hungary with TV 2 and FEM3, and in Sweden with Kanal 5 and Kanal 9.

Shareholders: Lavena Holding companies (56.7%), Telegraaf Media Groep N.V. (6.0%), Free Float (37.3%)

The Lavena Holding companies are controlled by funds advised by Kohlberg Kravis Roberts & Co. L.P. (KKR) and Permira Beteiligungsberatung GmbH (Permira).

Free float includes 6,027,500 treasury shares.

Countries: has operations in 14 countries

Employees: 5,000

Revenue: 1,320.9 € (2009)

(Took over  SBS Broadcasting Group on June 27 2007)

CENTRAL EUROPEAN MEDIA ENTERPRISES

Business Areas: Broadcast, content, new media

Leading vertically integrated media company in Central and Eastern Europe. It operates TV Nova, Nova Sport, Nova Cinema and MTV in the Czech Republic, PRO TV, PRO TV International, ACASA, PRO CINEMA, Sport.ro and MTV Romania in Romania, TV Markíza, Nova Sport, Television Doma and MTV in the Slovak Republic, POP TV, Kanal A and POP BRIO in Slovenia, NOVA TV in Croatia and bTV, Pro.BG, bTV Comedy, bTV Cinema and Ring.BG in Bulgaria.

Countries: has operations in 6 countries

Bermuda company, with subsidiaries in the Netherlands, London and in each operating country

WESTDEUSCHE ALLGEMEINE ZEITUNG (WAZ) MEDIA GROUP

Business Areas: Press, Radio stations, online market, service companies

29 daily newspapers with a circulation of over 2,5 million copies, 19 weekly newspapers, 186 popular magazines and trade journals, 99 advertising journals, and approximately 400 customer magazines, among others. It has financial interests in numerous local radio stations on the Rhine and the Ruhr, and is the majority shareholder in eleven of them. In July 2005, it sold to Bertelsmann AG its 20 percent share in the Holding BW-TV (Bertelsmann-WAZ-TV) which they operated together.

Cityweb Network: online market.

Service companies, among other things, runs private postal delivery services in North-Rhine Westfalia and Thuringia.

Countries: has operations in 10 European countries (special interest in Southeastern Europe)

Employees: 17,000

RINGIERBusiness Areas: multinational integrated media company - print, broadcast, radio, online and mobile media brands, and is a successful player in the printing, entertainment and internet business

Ringier publishes and prints over 70 newspapers and magazines in Germany, Hungary, Romania, Serbia, Slovakia and the Czech Republic. In Asia, it owns the printing company Ringier Print (HK) Ltd., Hong Kong, and Ringier is active in China since 1997.

Countries: has operations in 6 European countries

Employees: 7,448

Revenue: 1,296.1

By country Switzerland and Germany 63.7%; Czech Republic 11.4%; Slovakia 5.1%; Hungary 8.3%; Romania 2.7%; Serbia 4.8%; Pacific 4.0%

LIBERTY GLOBALBusiness Areas: Video on Demand, High Definition TV, and Digital Video Recorders, broadband internet services, Multi-feature VoIP telephony services

Largest cable company outside the U.S. and one of the fastest growing in the world. 31.2 million homes passed, 17.7 million customer relationships, and 27.5 million video, voice, and internet subscriptions (RGUs)

Divisions:

UPC Broadband: Cable operations in 10 countries, Largest Pan-European cable operator

Unitymedia (Germany): part of the UPC Broadband division, second largest cable operator in Germany

Telenet (Belgium): Own ~ 50% of Telenet, Largest cable operator in Belgium

Chellomedia: Content generator: 44 channels, of which 29 are 100% owned and 15 joint ventures. Subscribers: 252 million TV households globally

Also: Australia (Austar) and the Americas (VTR –Chile; Liberty Cablevision - Puerto Rico)

Countries: 14 countries

Employees: 20,000

Revenue: $9,000 M

EUROPE

«Media Power in Europe: The Big Picture of Ownership» (EFJ, 2005) warned:

- Media ownership in Europe was no longer local in nature

- Media ownership is increasingly transnational and multi-continental

As a result, national media regulations do no longer apply and economic competition rules are difficult to enforce, while cross-ownership is enabling use and reuse of content over several media.

EU - REGULATION The EC Merger Regulation checks that mergers do not endanger competition.

2 main issues:

1. It doesn’t tackle vertical integration appropriately. Main risk: «gate-keepers», equal access must be granted to infraestructure and services

2. The assessment of media concentration is based on quantitative considerations (external growth) and internal growth can only be considered when concerning abuse of a dominant position. This leads to accept certain situation that, within the framework, could mean a threat to plurality (ex: mergers of companies operating in different geographic markets)

Ultimately, control rests primarily on Member States, and concerns are raised at times about the tendency of fostering domestic economy instead of safeguarding plurality

AUTHORS’ RIGHTS

2 main issues:

- Use, reuse and customization of content, cross-platform and throughout the media group, without proper compensation

- Inequality – different collective agreements in different countries

AUTHORS’ RIGHTSThe business model of the «Global network enterprise» is at the core of this

«We can find multiple (and proliferating styles of control and decision-making bein tolearted in different parts of the network, so log as those at the centre of the web can gain from allowing a particular practice and/or organizational arrangement to exist in part of their networked ‘empire’» (P.E. Louw 2001)

- The lack of cross-national regulation leaves author’s rights issues up to the «good faith» of the company: Corporate Social Responsibility of the media empires

- Need for cross-national labor coordination in order to bargain collectively more efficiently (ex: Rizzoli)

CONCERN

In the midst of the financial crisis, there is no talk about concentration issues anymore