"What it comes down to is that two companies own nine of the top 11 stations in town..."

Clear Channel, CBS stations are dominant in the ratings in L.A.

By Richard Wagoner, Posted: 04/21/2011, http://www.dailybreeze.com/ci_17902877

KIIS-FM (102.7) was Los Angeles radio's dominant force once again, based on the monthly Arbitron ratings released this week. While down a half point to 5.1, the station was still a half point better than KOST (103.5 FM) at 4.6.  With KFI's (640 AM) third-place 4.3 - its highest rating since at least November 2010 - owner Clear Channel had a 1-2-3 sweep. Add in 10th place KBIG (flat at 3.3), and the company had four of the top 10 stations in town - an amazing feat.

But wait: Though CBS didn't have quite the dominance as Clear Channel, it also controlled much of the top 10, with fourth-place KRTH's (101.1 FM) 4.2, a sixth-place tie between KNX (1070 AM) and KROQ (106.7 FM) at 3.5, and a 10th-place tie between Amp Radio (97.1 FM) and sister The Wave (94.7 FM) - matching Clear Channel's KBIG at 3.3.

What it comes down to is that two companies own nine of the top 11 stations in town.

In my opinion, that is market dominance that needs to be broken up. Last time something like that happened, the Federal Communications Commission broke up NBC and forced the launch of ABC, which later became one of America's premier networks...

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While Cable System Operators Have Fought Consumer Choice (aka A la carte) Cable, Consumers are taking their dollars elsewhere. In Response, the Big 5 Media Corporations are Dumping Less Lucrative Businesses...

2/18/2009--More and more the entertainment mega corporations, the big 5, ie., Disney, Fox, Viacom-CBS, GE-BBC-Universal and Time-Warner, are dumping their less-profitable cable and satellite distribution arms, while retaining their ultra-profitable broadcasting and content-production divisions (studios and cable channels).

Thanks to the internet reaching as much or more of the country than cable and satellite, a lot of the TV fare we have to pay big bucks for on cable can now be found on free websites sponsored by the Big 5. These sites typically have very few commercials, maybe 2 minutes in a half hour show instead of 8. Some of the best shows are archived forever, such as all 35 years of Saturday Night Live, and all ten years of the Daily Show. What the Big 5 are doing is cutting out the middlemen. And since cable system monopolies have jacked up their rates much higher than the rate of inflation for over 20 years, it's hard to feel too sympathetic for them.

Fox last year traded away the #1 DirectTV satellite service to Liberty Media (an owner of cable channels), and this month reported a $6.4 billion loss.

Seeing the writing on the wall, Time-Warner is spinning off the nation's 2nd largest cable system as an independent company. Given that Time-Warner owns numerous cable channels, which are essentially TV "brands" that they can distribute any way they want, they now can fully embrace giving viewers the maximum number of ways to see their programming, whether it's on the internet, cable, phone company TV or satellite. Their bottom line was really hurting, with their last quarterly loss being $16 billion, so I can understand why they chose to get out of a very competitive business. Contrary to what corporate propagandists say, they don't like competition.

Another big cable system owner, Charter, just declared bankruptcy. Charter is controlled by Paul Allen, a co-founder of Microsoft who couldn't transfer his success in software to the cable business.

Controlling all facets of a business, or what is termed "vertical integration", has made a lot of money for stock traders who helped the big guys gobble up additional variations of their core business. The big guys haven't always done as well. AT & T really blew it 10 years ago when they bought TCI, which then owned Liberty Media and the nation's top cable system operator. Very soon they wrote off around $50 billion in losses, and spun off Liberty Media to the public, and sold the cable systems to Comcast. They recovered well (well, maybe not for us) by the Bush administration letting them merge with SBC and BellSouth and buy Cingular Wireless, essentially rendering the U.S. a 2 -phone company country (except for some tiny competitors).

(see http://greedwatch.blogspot.com/search/label/AT%2BT)

This trend of binging and purging really hit Clear Channel, which hugely overpaid for over 1000 radio stations and hundreds of thousand of billboards 10 years ago and then they lost billions and dumped a lot of stations. CBS likewise gorged on radio stations and billboards and then wrote off a lot of paper-value recently. Time-Warner blew over $100 billion by buying America OnLine and found that Americans weren't that keen about buying everything over the internet.

In the end, we still have 5 mega corporations that produce and distribute most of our news and entertainment. But at least we have more ways to get it, at lower cost, and that's good.


--Rex Frankel, 2/18/2009
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A Historical Trend of Sell-offs:

RADIO: ABC sold off much of their news and music radio stations to Citadel Broadcasters in 2006, while keeping their ESPN radio and Radio Disney stations. NBC had sold off their radio division in the 1980's. Only CBS remains heavily in the radio business but is selling a lot of stations in middle American markets in order to keep their big holdings in big cities.

MUSIC: All of the Big 5 have been out of recorded music since Universal Music (which had previously bought ABC's labels) was bought by Vivendi of France in the 1990's and CBS's Columbia and Epic records division were sold to Sony in the 1980's. NBC's RCA labels were sold off in the 1980's and are now owned by Sony.

MILESTONES IN MEDIA MONOPOLISM:

compiled by Rex Frankel, 1/19/2009

OVER THE LAST 20 YEARS, THE BIG 5 MEDIA CORPORATIONS BOUGHT UP THE MOST LUCRATIVE MEDIA ASSETS AND DUMPED THE LESS PROFITABLE ONES, ENDING UP WITH NEAR TOTAL CONTROL OF TV, CABLE AND FILM PRODUCTION, AND MOSTLY DUMPING PRINT, RADIO, AND RECORDED MUSIC.

GE/NBC/UNIVERSAL:

Main Businesses: TV stations and network, cable channels, film and TV production and distribution, theme parks

Bought During the Bush Years: Universal Studios, Telemundo TV network, Bravo, Oxygen and the Weather Channel

1932-Feds make GE and Westinghouse sell stakes in RCA radio networks

1957-MCA Universal buys Paramount’s pre-1948 film library

1980--RCA sells Random House book publisher to Newhouse co.

1985-GE buys RCA, getting NBC TV network and stations

1986-GE sells RCA music division to Bertelsman of Germany. They eventually sell it to Sony.

1987-GE sells consumer electronics division of GE and RCA to Thomson of France

1987-NBC radio programming producer is sold to Westwood One, a firm now owned by CBS.

1988-NBC sells 5 of its radio station to Emmis Broadcasting

1989-Universal buys 1/3^rd stake in Cineplex Odeon theaters. Stake is sold later to AMC Theaters

1989-NBC launches CNBC cable channel

1990-Universal and MCA is sold to Matsushita of Japan (now known as Panasonic)

1991-Polygram buys film producers Propaganda and Working Title Films and in 1992 buys Interscope Films. Polygram was jointly owned by Siemens and Philips of Europe.

1995 Universal is sold to Seagrams

1996-NBC and Microsoft launch MSNBC channel

1997-Universal buys October Films

1997-Universal buys out its partner in USA and Sci-Fi cable channels (Viacom)

1999-Universal buys Polygram pictures and recorded music co.

2000-Seagrams and Universal are sold to Vivendi of France. Deal is a disaster financially.

2001-Vivendi buys Houghton Miflin book publishing

2001-NBC buys Telemundo TV network which owns two stations in several major markets

2002-Vivendi sells Seagrams liquor business and Houghton Miflin book publishing

2002-NBC buys Bravo cable channel from Cablevision Corp. and MGM

2003-GE buys Universal Pictures leaving Vivendi with 20% stake in new NBC-Universal company. Vivendi keeps ownership of Universal recorded music division

2006-NBC buys Miss Universe and Miss USA pageants with Donald Trump

2007-NBC buys Oxygen cable channel from Oprah Winfrey

2008-NBC buys the Weather channel

TIME-WARNER:

Main Businesses: magazines, cable channels, film production and distribution

Bought during the Bush years: split the #3 cable system owner with their main competitor, Comcast (#1 in USA). Time Warner is the #2 largest cable system owner.

1944-Warners buys Looney Tunes cartoon studio and Bugs Bunny

1948-Warners sells film library to MGM

1967-DC Comics is bought by Kinney National Company

1969-Kinney National buys Warner Brothers, in 1972 Kinney spins off Warner Communications Co.

1972-Time inc. buys HBO pay channel

1978-Warner Communications buys cable system operator ATC

1982-CBS sells paperback publishing to Warners

1987-Time and Warner merge

1989-Warners buys Lorimar-Telepictures studios

1989-Time magazine publishing merges with Warner, which makes films and record

1991-Turner Broadcasting (18% owned by Time-Warner) buys Hanna-Barbera animation company

1992-Turner launches the Cartoon Network

1993-Turner merges with Castle Rock and New Line films

1996-Time-Warner buys Turner Broadcasting, getting CNN, TBS and other cable channels, and old MGM film library

1998-T-W sells Six Flags theme parks to Premiere Parks co.

1999-AOL buys Mapquest internet site

2000-Time-Warner merges with America Online. Deal is a huge money-loser.

2000-TW buys some magazines from the Tribune Company. It resells them in 2007 to Bonnier.

2003-TW sells half stake in Comedy Central to Viacom (already owned other half)

2004-AOL-TW sells music division to Edgar Bronfman

2005-TW buys remains of bankrupt Adelphia cable with chief rival Comcast Corp.

2006-TW sells its book publishing division to Hachette of France.

2006-TW buys half of Court TV channel from Liberty Media (already owned other half)

2009-Time Warner plans to spin off #2 US cable systems division to shareholders.

WALT DISNEY COMPANY:

Main businesses: TV stations and network, cable channels, film production and distribution, theme parks, books and magazines

Bought During the Bush Years: Pixar Animation, top producer of computer animated films

1943-feds force RCA to divest itself of ABC radio network

1960-Disney buys out stake in Disneyland from ABC

1984-ABC buys ESPN channel

1985-Capital Cities co, owner of TV stations and newspapers, buys ABC

1993-Disney buys Miramax films

1994-ABC buys out Viacom’s stake in the Lifetime channel

1995-Disney Buys ABC TV and radio networks

1996-Radio Disney network is launched

1997-Disney sells its 4 daily newspapers to Knight-Ridder

1997-Disney buys asset of Cinergi Pictures, producers of Die Hard series

1999-Disney sells its women’s magazines

2006-Disney buys Pixar Animation, which had been founded by GeorgeLucas

2006—ABC sells its music, talk and news radio networks and stations to Citadel Broadcasting, keeping ESPN Radio and Radio Disney stations

FOX—RUPERT MURDOCH-NEWS CORPORATION:

Main Businesses:

Newspapers in USA, Australian and UK, cable channels, TV stations and network, magazines, book publishing, internet sites

Bought During the Bush Years: myspace.com and Wall Street Journal

1935-Century Pictures and Fox Film merge to form 20^th Century Fox

1977-Murdoch buys NY Post

1985-Murdoch buys Fox Pictures and also buys 7 TV stations from Metromedia to set up TV network. Murdoch buys the Boston Herald and Chicago Sun-Times but later sells them

1987-Murdoch buys Harper and Row book publishers

1988-Murdoch buys TV Guide and Seventeen magazine

1988-Murdoch buys William Collins book publisher

1991-Murdoch sells several magazines

1995-Sets up Fox sports channels in partnership with TCI, later brings in channels owned by Cablevision in east coast

1996-Fox News channel is launched

1996-Fox buys New World Communications, getting 10 TV stations

1997-Buys and in 2003 sells L.A. Dodgers baseball team, keeps broadcast rights

1997-Fox/Liberty Media buys control of FitTV channel

1999-Fox trades stock to Liberty Media for full control of Fox Sports channels

1999-Fox sells TV Guide to Gemstar corp.

1999-Murdoch buys William Morrow and Avon books from Hearst

Buys and later sells DirecTV satellite TV distributor

2000-Fox buys 10 Chris-Craft TV stations, gaining second channels in several major markets

2001-Sells Fox Family channel to Disney, had bought it from Pat Robertson in 1997

2001-Fox sells its 33% stake in the Golf channel and Outdoor Life to Comcast, getting full ownership of Speedvision channel in deal.

2003-Murdoch buys DirecTV from General Motors

2005-Murdoch buys myspace.com

2006-Murdoch trades DirecTV to Liberty Media in exchange for Liberty’s 19% stake in News Corp.

2007-Murdoch buys Wall Street Journal and Dow Jones Company. To finance the deal, Fox sells 9 TV stations in smaller market.

CBS-VIACOM-SUMNER REDSTONE

Main businesses: TV stations and network, billboards, radio stations, film production and distribution, book publishing, cable channels

Bought During the Bush Years: rest of Comedy Central, and DreamWorks Pictures

1938-CBS buys Columbia record label

1964-CBS buys NY Yankees baseball team, sells in 1973

1965-CBS buys Fender guitar co.

1970-Viacom is formed when feds make CBS divest its ownership of TV show producers and syndicators

1981- MTV-launched 1981 by Warner Communications and American Express

1985-Viacom buys out partners, gets full ownership of MTV, VH-1, Showtime, the Movie Channel and Nickelodeon

1985-Mutual Broadcasting radio network is sold by Amway to Westwood One. NBC sells its radio network to Westwood One.

1987-Redstone buys control of Viacom

1987-CBS sells off it book publishing division to Harcourt Brace Jovanovich

1988-CBS sells recorded music division to Sony

1993-Viacom buys Paramount Pictures

1993-Paramount buys Macmillan book publishing

1994-Viacom buys Blockbuster video rental stores

1994-Viacom sells Madison Square Garden and 2 sports teams to partnership of Cablevision and ITT.

1994-Infinity Radio buys Westwood One

1995-Viacom sells its cable systems to TCI (which eventually sold out to AT & T, which sold them to Comcast)

1995-CBS is sold to Westinghouse Corp, which owned 8 CBS TV affiliates, 18 radio stations, the Nashville Network cable channel and 31% of Country Music TV channel. Eventually most of Westinghouse’s non-media assets are sold off and company is renamed CBS.

1995-Viacom launches UPN TV network using Chris-Craft’s network of stations

1995-Viacom spins off its local cable TV systems, which TCI buys.

1996-CBS buys Infinity Radio getting 77 stations and up to 6 stations in several major markets.

1997-CBS buys American Radio Systems, getting 98 stations

1999-Viacom and CBS merge, with Redstone in full control.

1999-CBS buys Outdoor Systems billboard firm, largest in USA

1999-CBS buys King World-distributor of shows like Oprah, Wheel of Fortune

1999-Westwood One buys Metro Networks, producer of radio traffic reports

2000-Viacom buys Black Entertainment TV cable channel.

2003-Viacom buys other half of Comedy Central from Universal

2004-Viacom spins off Blockbuster video stores to shareholders, writing off big loss

2005-to boost stock price, Redstone splits CBS and Viacom in two, though he still controls them; CBS writes off $18 billion loss from purchase of overpriced radio and billboard assets

2005-Paramount buys DreamWorks pictures

2006-CBS sells Paramount’s 5 theme parks to Cedar Fair, owner of Knotts Berry Farm in L.A area.

2007-CBS sells off 39 radio stations and 10 TV stations in smaller markets

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Boo Hoo!...Media Giants Say Anti-Monopoly Rules Governing the Public-Owned, but Corporate-Occupied Airwaves are Unfair...to Them

Feds bottle caps
Congloms prep deals as end to regs looms

http://www.variety.com/article/VR1117852459.html?categoryid=1064&cs=1

By PAMELA MCCLINTOCK, 9/10/2001

WASHINGTON -- The forecast for the next wave of media consolidation got friendlier Friday when a federal appeals court sent strong signals that it will allow networks and the congloms who own them to add unprecedented numbers of TV stations and cable systems to their empires. Reps of the mega-companies that dominate the entertainment biz were present -- and smiling -- during oral arguments before a three-judge appellate panel in the nation's capital. Ultimately, the court's ruling could reshape the TV biz in terms of who controls both programming and distribution. It didn't take long for the robes to begin questioning the merits and constitutionality of two Federal Communications Commission ownership rules underpinning the historic balance between nets and affiliates, as well as the historic tension between broadcasters and cablers.

"You're in a jam," said Judge Harry Edwards to FCC general counsel Grey Pash. CBS, Fox and NBC want the court to scrap an FCC cap that blocks a broadcaster from reaching more than 35% of the national audience.

Counsel for the nets told the appeals court that the FCC reg is "oppressive" and a violation of the First Amendment. "Every day this rule is in effect, we are being deprived of reaching 65% of the nation's households" said Edward Warren, attorney for the Eye, Fox and Peacock.

Already, CBS parent company Viacom is at about 40%. Fox is likewise over the cap due to its recent merger with Chris Craft. Affiliates, i.e., independent station owners, argue that the rule is their last defense against the power of the networks, and that the nets shouldn't be allowed to dominate both programming and distribution. Should the 35% cap be lifted, networks will use their leverage and might to determine compensation and to buy up stations, according to the National Affiliated Stations Alliance (NASA) and the National Broadcasters Assn. (NAB). While most attention has been focused on the 35% rule, the second FCC ownership reg up before the appeals court is of equal significance. As it stands now, the FCC won't allow a broadcaster to operate a cable system in the same market. Thus, congloms like AOL Time Warner can't get into the lucrative business of operating a TV station in any of the many markets where they provide cable service. Another good example is the Walt Disney Co., which would have to dump stations in certain major markets if it wanted to pursue a merger with a cable giant such as Comcast. (While the Mouse isn't a direct party in the appeals case, top Disney lobbyist Preston Padden made sure to be on hand Friday.) During the much-anticipated hearing, AOL Time Warner general counsel Paul Cappuccio told the court that the cross-ownership cable/broadcast rule equals "ongoing suppression" and "irreparable harm."

Pash bashing?

But the three appellate robes reserved most of their questioning for FCC counsel Pash, who didn't seem to make much headway in arguing that overturning the rules would have "enormous adverse consequences." The judges said it would be more than appropriate for the court to strike the ownership rules, but let the FCC draw up new limits -- this time, with adequate justification. Consumer advocates say remanding the rules to the FCC would be tantamount to overturning them altogether, since Republican FCC topper Michael Powell has made it clear that he favors deregulation. Others disagree and say that now that he heads the regulatory agency, Powell must take a more centrist position compared to that he maintained previously as just a commissioner.

Nonetheless, it was difficult for affiliates to appreciate the witty barbs that punctuated much of Friday's legal session. "I don't mean to disturb the good humor, but please, hear me out," said attorney Bob Long, who argued for the NAB and NASA, which reps the more than 600 CBS, Fox and NBC affiliates.

Reach breach

Long said it was a "gross overstatement" for the networks to argue that they are being cut off from reaching 65% of the American audience, considering that nets reach virtually everyone through broadcast programming alone. What's more, companies like Viacom that own some of the nets provide vast cable programming.

But nets say the affiliates are crying wolf and that affils still enjoy enormous power, pointing out that some larger station groups, such as Tribune, are nearing the 35% limit themselves. In the competitive age of cable and satellite, networks say they shouldn't be barred from fully participating in the marketplace. Even before the oral arguments, the nets and AOL Time Warner were predicting success. Several months ago, the same appeals court struck down an FCC cable ownership rule prohibiting a cabler from reaching more than 30% of the national audience. FCC cap cast The FCC will soon launch a public probe into whether the cap should be kept in some fashion, but again, people are predicting that Powell will work toward deregulation. In the coming days, the FCC is expected to launch a similar probe into repealing a cross-ownership rule barring a broadcaster from owning a newspaper in the same major market. Powell is definitely opposed to this regulation. Meanwhile, the federal appeals court is expected to rule on the two ownership rules in the next few months.

-----------------------------

It's not fairness

L.A. Times Editorial 7/24/2007

There are plenty of opinions on the airwaves; the government doesn't have to mandate equal time.

(Democrats) anger at (talk radio) demagoguery is justified, but their response isn't. They want to re­vive the Fairness Doctrine - a Cold War-era federal rule designed to promote balanced coverage of important isues on the public airwaves. Under this rule, broadcasters who took a side on a divisive topic could be compelled to give free airtime to opposing points of view. If they refused, they risked losing their licenses.

The threat to talk radio is clear. If the rule were reinstituted, stations that carry Rush Lim­baugh could be forced to broadcast commentaries favoring everything that Limbaugh derides, from greenhouse gas controls to same-sex marriage. With hundreds of provocative talk-show hosts on the air, federal regulators could soon be awash in demands for rebuttals.

But the danger posed by the Fairness Doc­ttrine Is broader and more fundamental than an attack on a radio format. No matter what your point of view might be, you have free or inexpensive out­lets available today to express It - maybe not a radio or TV station but certainly a website, a video blog, a podcast or an e-mail newsletter. At the same time, the public has unprecedented access to a diverse array of opinions. Just as the govern­ment shouldn't decide what you say on the chan­nels you create, nor should it be able to dictate the range of opinions people hear over the air.

The Federal Communications Commission instituted the Fairness Doctrine in the late 1940s as a compromise of sorts - it wanted broadcast­ers to pay attention to local issues but feared they would exert undue influence over them. It aban­doned the rule in 1987 on grounds that the rise of cable TV networks had diluted broadcasters' sway over public opinion. The proliferation of media sources has made that dilution even more pro­nounced today.

Granted, broadcasters remain the most pow­erful voices because they're the ones with the larg­est audiences. But that's because the public chooses to tune them in, not because there are no alternatives. Restoring the government's power to monitor broadcasters' fulminations and splice in opposing views seems more likely to tame speech than to enlighten listeners.

---------------------------

What can we own?

L.A. Times editorial, 8/25/2006

MEDIA COMPANIES IN THIS COUNTRY face unreasonable government restrictions on their activities. Yet for the Federal Communications Commission, rewriting the ownership limits for television and radio stations has been a labor fit for Sisyphus. The commission updates the rules every few years, as required by law, only to have a federal appeals court or Congress smack them down.

The latest go-round started when the Commission announced in June that it would reconsider some of its rules limiting what companies can own. The FCC had tried to ease or eliminate these limits in 2003, only to have its actions blocked by the U.S. 3rd Circuit Court of Appeals. The Senate, prodded by a motley alliance of anti-corporate zealots and conservative activists who think local media tycoons are less lib­eral than national media tycoons, also intervened.

Media ownership restraints seek to preserve a healthy competition of distinct voices, but the rules developed over the decades are woefully outdated. If anything, what the FCC tried to do three years ago was too modest. In an age of cable and satellite TV (not to mention an age of You Tube. com -It's no longer justifiable for the government to impose any limits on how many affiliates broadcast networks can own, given that CBS, NBC and ABC no longer control the distribution of their programming the way they did when American families gathered around their sets to watch "I Love Lucy," captured by their rabbit-ear antennas.

And yet the FCC only sought to raise the percent­age of the national audience that network-owned at affiliates can reach from 35% to 45%. This would have been a radical move - in 1960. Three years ago, It was laughably meek. After a compromise raised the limit to 39%, these rules aren't even on the table for review this time around.

A different set of rules limiting the number of me­dia outlets one company can own within the same city do remain relevant. Here again, the FCC was rather prudent in its ill-fated 2003 ruling. The Commission would have let TV groups control three sta­tions in markets with at least 18 outlets, and two sta­tions in markets with five to 17 outlets - although only one of the stations could be among the four most popular in that community. It also proposed to allow TV, radio and newspaper owners in a community to consolidate to varying degrees, depending on the number of TV stations in the market.

Full disclosure: Tribune Co., owner of this news­paper and KTLA-TV Channel 5, would benefit from a relaxation of these rules. Indeed, its purchase of The Times in 2000 was allowed because of the widespread assumption that the so-called cross-ownership rule banning ownership of a broadcast station and news­paper in the same city would soon be retired, as it should be.

More cities might still have a competitive news­paper market if more broadcasters had been allowed to buy newspapers in the past.

Studies show that those broadcasters that do operate local newspapers through waivers or exemptions offer more news and public affairs programs, on average, than competi­tors that don't. Moreover, the business challenges facing media giants such as Tribune and Time Warn­er Inc., which had hoped for greater "synergy" divi­dends, underscore the ever-changing media land­scape and the fact that Americans have a growing number of media choices. The number of people who regularly watch local TV news is down from 77% in 1993 to 54% today. It's in their interest that the FCC press ahead with liberalization.

(Editor's note. This claim that letting TV station operators also buy up daily newspapers will lead to a competitive newspaper market is totally bogus. In fact, only a few companies control most of California's daily newspaper subscribers.

See http://greedwatch.blogspot.com/search/label/Newspapers, for list showing that 40% of California daily newspapers are owned by one company, MediaNews Group, which is also partners with Hearst Corporation, a large owner of TV stations and cable TV channels. Two of the other largest daily paper owners in California, Tribune company and Freedom Communications also own lots of TV stations. With this control of California daily papers by TV station owners, you'd think that most towns would have two or more daily, competitive papers, based on the L.A. Times' logic. Not so. In fact, it's very hard to find a city in this state where one paper isn't totally dominant. )

Are the corporate suits ruining TV?


Network control and media consolidation are wringing the creativity out of entertainment.

By Marshall Herskovitz

L.A.. Times, November 7, 2007


After 20 years and five series, including "thirtysomething" and "My So-Called Life," my partner, Ed Zwick, and I have -- for the time being at least -- stopped producing television programs.


It's not personal. I count as friends many of the executives who work at the networks. We had a deal at one network, ABC, for all of those 20 years, and, in spite of many regime changes, we were always treated with great respect. This is not about how we were treated but rather something much larger: How a confluence of government policy and corporate strategy is literally poisoning the TV business.


It started in 1995 when the Federal Communications Commission abolished its long-standing "finsyn" rules (that's financial interest and syndication, for those unfamiliar with the term), allowing networks for the first time to own the programs they broadcast. Before that, under classic antitrust definitions, the networks had been confined to the role of broadcaster, paying a license fee to production companies for the right to broadcast programs just two times. The production companies owned all subsequent rights. In the mid-1990s there were 40 independent production companies making television shows. If a particular network didn't like a show -- as famously happened with "The Cosby Show" many years ago -- the production company could take it to another network.


But not after 1995. The abolition of the old rules set in motion an ineluctable process, one that has negatively affected every creative person I know in television. Today there are zero independent production companies making scripted television. They were all forced out of business by the networks' insistence -- following the FCC's fin-syn ruling -- on owning part or all of every program they broadcast.


The most profound change resulting from that ruling is the way networks go about the business of creating programming. Networks today exert a level of creative control unprecedented in the history of the medium. The stories my friends tell me would make me laugh if the situation weren't so self-defeating. Network executives routinely tell producers to change the color of the walls on sets; routinely decide on the proper wardrobe for actors; routinely have "tone" meetings with directors on upcoming pilots; routinely give notes on every page of a script. (When we did "thirtysomething" in the late '80s, we never received network notes.) And by the way, they have every right to do these things. As owners, they have a responsibility to satisfy themselves that their product is competitive and successful.


The problem, of course, is that these executives often have little background or qualification for making creative decisions. They are guided by market research and -- they want to believe -- a learned intuition about what the public wants. This season's new shows have been a good indicator of how successful that strategy is: Even before the current writer's strike, virtually every new show was struggling.


But the changes have gone further. Over the last few years -- during a time when network profits have been increasing -- salaries and profit participation for the writer-producers who create the shows have been slashed. Fees were cut by one-third to one-half, and profit participation in many cases was effectively eliminated. It's a curious (and peculiarly American) fact that many of the great artistic talents in the history of film and TV also have been entrepreneurs: Chaplin, Capra, Serling, Pakula, Lucas, Spielberg -- the list goes on. For reasons that are probably more psychological than anything else, creative and financial independence seem to go hand in hand.


Yet what we have now is a complete absence of either in the world of television. Your TV may receive 200 channels, but virtually every one of them is owned by one of six big companies -- NBC Universal, Disney, Time Warner, Viacom/Paramount, Sony and News Corp. And each channel has a brand identity dictated by those companies to which each program must adhere. Producers are now employees, not creators. If you were foolish enough to independently produce a TV pilot today, when you took it to the network, you would give up at least half of your ownership and all of your control, even though the network wouldn't pay any more than it used to pay as that old license fee.


Is there significance to this, outside the narrow concerns of Hollywood and the lost earning power of producers? I think so. Besides any esoteric discussion of the value of storytelling in a culture -- which I believe is immense -- this trend is part of a larger problem caused by the FCC in all areas of media. The relaxation of the Fairness Doctrine (which required the networks to present the news in a balanced way), the lapse of any oversight of networks' civic responsibility, the commoditization of network news -- these are all parts of a troubling move toward the aggregation of control of information in an ever-shrinking number of entities.


Our founding fathers could not have foreseen that freedom of the press might eventually be threatened just as much by media consolidation as by government. And if you doubt that's happening, just watch Bill Moyers' recent expose on the networks' passive collusion with government in selling the Iraq war.


Because the business of television has become an exclusive club, closed to new members, some producers are turning to the Internet to have a voice. And, of course, the Big Six are doing everything they can to own and control that as well. Already, it's impossible to make an "overall deal" -- the time-honored arrangement in which producers are kept on retainer to develop shows for a particular network -- without agreeing to be exclusive to the network on the Internet as well as television. The logic of this defies all laws of economics; producers pledge fealty to networks because they (the producers) don't have the millions it takes to shoot, distribute and broadcast their own programs on television. Producing for the Internet, on the other hand, costs as little as $30,000 an hour, and "broadcasting" costs much less. Virtually anyone can do it.


So what value do the networks provide that makes it worthwhile for producers to agree to that exclusivity? You tell me, because I can't figure it out. Less polite folks might call it extortion.


Zwick and I have joined that migration to the Internet. We've created a project called "quarterlife" -- a series and a social network -- that we own and control, and we had to give up our TV deal in order to do it. The series will premiere Sunday on MySpace and then on our site, quarterlife.com, the next night. We've worked very hard, and spent a great deal of our own money, to make it as good as anything we've ever done on television. And we've gotten calls from every guild and virtually every producer we know, all of whom are curious to see if this little experiment can succeed. Because if it does, it will prove that there's a way to independently produce, finance and distribute ambitious content on the Internet. And if we can do it, others can do it. To be sure, there's every possibility this series will end up on television after it's established on the Internet, but only if we still own it and control it creatively, which would make it unique in today's landscape.


The problems of network ownership and creative control are not directly at issue in the current strike by the Writers Guild of America. What's at stake is how writers will be compensated, given the control everyone assumes the big companies will exert over new methods of delivery.


But make no mistake -- deep resentment in the entire creative community over the absolute power now wielded by these companies is the fuel that feeds the strike. The public is also fed up, turning out in droves and sending millions of e-mails whenever the FCC holds hearings on the subject. And yet the large corporations move forward, seemingly unaware that they are strangling the creative engine that might save them.


Within five years there won't be a significant distinction between TV and broadband. As of now, the Internet is just too big for any company to get its hands around, and that's good for all of us. If the large companies -- and the FCC -- cannot come to comprehend the paradox that too much control is destructive to their own ends, they may bring about their own downfall, losing their audience and their workers at the same time. Like carriage makers at the dawn of the auto age.


Marshall Herskovitz is a TV and movie producer whose credits include "Blood Diamond," "thirtysomething" and the upcoming "quarterlife." He is president of the Producers Guild of America (which is not affiliated with the Alliance of Motion Picture & Television Producers, currently being struck by the Writers Guild of America).

Matrix of Big USA Media Monopolies

Who Owns the Media?

"The past two decades have witnessed the number of major corporations that dominate television, movies, music, radio, cable, publishing and the Internet dwindle from 50 to less than two dozen, with much of the control concentrated in fewer than 10 massive conglomerates. While enriching investors, these changes have endangered democracy – which demands an informed citizenry with access to variety of voices and viewpoints.

This shift has been aided and abetted by government policies that explicitly reward a cartel of industry giants at the expense of the public interest. While the media moguls crow about “deregulation,” the last thing they want is genuine market competition. History shows that the relaxation of media ownership rules always leads to more market consolidation and less competition. " To read more:
http://www.freepress.net/issues/ownership

"In 2004, television became a $52 billion industry. The networks know this fact. They know how much money is at stake and they know how much power the TV industry possesses. The huge corporations that own networks and stations know exactly how big television has gotten. There should be no doubt about the true agenda of the television industry. Through all the hirings, firings, lawsuits, regulations, market shares and scandals that cloud the landscape, the community of television will continue to share one common goal. There is one overarching ideology in which every member of the television establishment believes. To truly understand television, one must understand television's true (yet hidden) agenda....

American TV networks make billions of dollars and each one would betray the spirit of profitable TV by challenging the status quo. Television will always protect the current state of affairs and no slurs will ever be hurled upon the ideologies of greed, materialism or consumerism. "You don't get rewarded in commercial broadcasting for trying to tell the truth about the institutions of power in this country," said veteran TV journalist Bill Moyers in December 2004. "I think my peers in commercial television are talented and devoted journalists, but they've chosen to work in a corporate mainstream that trims their talent to fit the corporate nature of American life. And you do not get rewarded for telling the hard truths about America in a profit-seeking environment."

To read more: http://turnoffyourtv.com/commentary/hiddenagenda/agenda.html

HOW'D THEY GET SO BIG?

A GUIDE TO THE USA MEDIA HOLDINGS OF:
GE, TIME-WARNER, WALT DISNEY CO., VIVENDI-UNIVERSAL, NEWS CORPORATION
BERTELSMANN AND CBS-VIACOM
click here

CJR's online guide to what major media companies own, including smaller corporate media companies: http://www.cjr.org/tools/owners/

Media Reform Information Center, Links and Resources on Media Reform
http://www.corporations.org/media/

http://www.thenation.com/special/bigten.html
http://www.thenation.com/doc/20020107/miller

http://www.mediachannel.org/ownership/chart.shtml

http://www.takebackthemedia.com/owners.html


www.publicintegrity.org/telecom/


http://www.moveon.org/moveonbulletin/bulletin7.html

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Top Telecommunications and Media Companies

And tool to find out who owns the
media in your region

http://openairwaves.org/ or http://www.publicintegrity.org/telecom/ same site

list of biggies in each field of media, and links to more info

http://www.publicintegrity.org/telecom/rank.aspx?act=industry

"You watch television to turn your brain off and you work on your computer when you want to turn your brain on."
-- Steve Jobs, co-founder of Apple Computer and Pixar, in Macworld Magazine, February 2004

http://turnoffyourtv.com/

More profiles of the big media companies: http://www.oligopolywatch.com/stories/2003/07/12/media.html

http://www.oligopolywatch.com/stories/2004/04/07/television.html

http://www.oligopolywatch.com/stories/2004/07/04/telephony.html

http://www.oligopolywatch.com/stories/2004/01/31/bookPublishing.html

http://www.oligopolywatch.com/stories/2004/01/31/bookPublishing.html

http://www.oligopolywatch.com/stories/2004/07/25/music.html

the Big-8 mega-media companies http://www.freepress.net/ownership/chart.php

the big-8 cable companies http://www.freepress.net/ownership/chart.php?chart=cable

the big TV station owners http://www.freepress.net/ownership/chart.php?chart=tv

the big printed media owners http://www.freepress.net/ownership/chart.php?chart=pub

the big phone & cable companies http://www.freepress.net/ownership/chart.php?chart=telecom