Alexandra Brown- Media Oligopolies Final Paper

Alexandra Brown
MJD 101-B
Dr. Williams
16 April 2014

Big Media, Big Consequences: How Media Oligopolies Undermine Your Freedoms

This graphic features the CEOs of the six largest media oligopolies. They are Brian Roberts of Comcast (gigaompaidcontent.files.wordpress.com), Philippe Dauman of Viacom (trialx.com), Bob Iger of Disney (cleveland.com), Jeffrey Bewkes of Time Warner (businessweek.com), Leslie Moonves of CBS (catholicleague.org) and Rupert Murdoch of News Corporation (askmen.com)

           In the 21st century United States, consumers have more in common with the characters in MT Anderson's futuristic dystopia, Feed than they realize.  Like Titus and his friends, they are overwhelmed with media choices each day and might assume that because of this they are exposed to a great variety of voices and viewpoints.  However, the reality is not much better than the "corp"-controlled Feed World; six media oligopolies (Time Warner, Disney, New Corp, Viacom, CBS and Comcast) control 90 percent of media content in the United States (Lutz).  Their holdings range from television stations, film studios, radio stations, websites, print publications and sometimes theme park properties (Free Press). This present trend of corporate consolidation is creeping its way into the digital world and the future as Apple, Amazon, Google, Facebook and Comcast build media empires of their own using the internet. In the United States' 21st century media culture, new media oligopolies are developing and using their power and size to change and control the digital media market, and therefore  place a greater emphasis on profit than on the consumer.

Netflix CEO Reed Hastings (readwrite.com) and Comcast CEO Brian Roberts (latimes.com)

            Comcast, a prominent ISP and cable provider, became the newest of the "Big Six" media oligopolies when it purchased 51 percent of NBC from General Electric in 2011.  A 4-1 FCC decision approved the merger with the caveat that Comcast would expand local news coverage and Spanish programming, make a commitment to offering internet in schools and libraries and cease to manage Hulu, an online video streaming service (Hamill).  In early 2014, Comcast acquired Time Warner Cable from Time Warner in a $45.2 billion stock deal, though the FCC decision is still pending.  If the two companies do merge, they will have 30 million subscribers, the ability to undermine healthy competition in the marketplace and a great deal of clout in negotiations with contract providers (Flint).  Comcast's other pending business deal with Netflix has the potential to change the internet as we know it by violating the concept of net neutrality, in which internet service providers give all content providers equal treatment.  Comcast, however, demanded that Netflix pay for "faster and more reliable access to Comcast's subscribers" (Wyatt and Cohen).  Comcast's actions have the potential to not only limit consumers' choices for how and from whom they access the internet but also undermine the competitive nature of the internet by allowing some content providers privileges and advantages for a fee.

Are Apple users really "think[ing] different" by using Apple products? (johnsiphone.com and hdimagesinfo.com)

           In contrast to Comcast's "family company" image (Pearlstine), Apple has built its company in part through its "think different" slogan which offers a avant-garde appeal to its products (Moorman).  In reality, at least half of American households own at least one Apple product (Daily Mail Reporter), so Apple users are actually well assimilated into main stream media culture.  Apple also "keep[s] things simple"only markets one version of a product at a time (Bajarin) and offering fewer choices to consumers actually bolsters its success. Apple has also impacted the way we consume music through its popular digital music service, iTunes, which creates a focus on single songs thus mitigating the need for the album and album art. Apple has gained a foothold in the production of both mobile phone and music by limiting consumers' exposure to diversity.  Offering only one iPhone simplifies marketing, but it may fail to offer a device that truly suits all consumers.  Creating an emphasis on singles instead of albums may prevent consumers from experimenting with musical preferences.  Apple derives its success by convincing consumers that they will be special or unique through owning an Apple product but treating them like cogs in its profit-driven machine.

Bezos explains why he doesn't believe e-publishing will affect content. (wired.com and killadj.com)

            What Apple is to music, Amazon is to books. Jeff Bezos began Amazon as an online book seller in the 1990s, and though the website has gone on to sell a plethora of products from crayons to caviar, its continued impact on publishing is staggering.  In 2007, Amazon introduced the Kindle, an e-reader that could store up 200 books, and today, Amazon controls 65 percent of the e-publishing industry (Packer).  E-publishing and the Kindle allows for more books to be published because it not necessary to spend the time and money editing a book, promoting a book and placing a book in a book store when it can simple be uploading to Amazon, made available for purchase and promoted by customer reviews (Packer).  However, while e-publishing is profitable for Amazon, it is not necessarily profitable for the consumers.  Amazon has begun offering Kindle Singles, works of prose that are too long to be short stories but not long enough to be novels, but editor David Blum is inundated with  three or four of these works each week, "making it hard for even an experienced editor like Blum to do much more than read and publish them" (Packer).  Bezos decries the "gatekeepers" of the traditional publishing industry, but investing more attention in fewer books allows better quality books to be offered to the consumer (Packer).  The consumer ultimately suffers because an emphasis on efficiency rather than storytelling degrades their reading experience.

Google CEO Larry Page in the style of a Breaking Bad promotional poster that featured Bryan Cranston as Walter White, satirizing Google's desire grow its influence over the internet sometimes to the detriment of consumers and other businesses. (theaverage.com and the12squarespace.com)

            Google has an immense online presence as well, and its search engine accounts for 70 percent of internet queries.  It also owns a variety of other online businesses including a map service, restaurant reviews and travel bookings (Wyatt), and in 2006 Google acquired YouTube which receives "the lion's share of online video traffic" according to Hitwise (Sorkin and Peters).  Google could use its search engine to promote these other businesses and holdings, thus fencing consumers in and making it difficult for competitors to reach them.  The concerns of Google's competitors such as Expedia, Priceline and Kayak who have difficulty competing with Google's travel business for search rankings, led to a two year FCC investigation into possible violations of antitrust and anticompetition statuses.  The FCC unanimously ruled in favor of Google, which claimed that its search rankings are based on" neutral algorithms" (Wyatt).  However, a Google account offers access to  Youtube and Blogger accounts among others, even if the user only intended signed up for Gmail.  This ease of access encourages internet traffic to Google's holdings, thus suggesting that Google does seek to promote itself and expand its control of the internet.

Did Facebook purchase Instagram and Whatsapp to avoid competing with them? (bewellmorristown.com and blog.tdstelecom.com)

            Google+, Google's social media website, has had difficulty matching ​Facebook's momentum, however. Facebook has 1.19 billion monthly users, and despite a recent study that suggested it would lose 80 percent of its users by 2017, it is here to stay according to Alexander Howard, a fellow at the Tow Center for Digital Journalism at the Columbia Journalism School, because users will stay committed to keeping in touch with friends and family (Fitzpatrick).In fact, it seems like Facebook is just getting started in terms of building its influence.In 2012, Facebook acquired Instagram, a popular photo sharing website for mobile devices for $1 billion (Rusli) and in 2014, Facebook purchased Whatsapp for $19 billion.Whatsapp is a messaging service similar to text messaging that uses broadband which frees users from text messaging rates and is "particularly cost effective for communicating with people overseas" (Covert).Through these two business dealings, Facebook eliminated two formidable competitors for photo sharing and messaging.Facebook is emerging as a social media oligopoly because instead of improving its own services to offer competitive options to consumers, reduced the number of choices consumers can take advantage of for those services in order to maximize profits.

The invasive nature of Google and Facebook's data aggregation rivals that of Big Brother. (politico.com)

           The impact of Google and Facebook's activities on  consumers extends far beyond those of  corporate consolidation, however.  Facebook and Google make $3.2 billion and $36.5 billion respectively from selling the data that they collect from users' activities on their services (Andrews).  Ray Kurzwell, the director of engineering at Google stated that in the future, Google "will have read every email you've ever written every document, every idle thought you've ever tapped into a search-engine box" (Mosbergen).  The browser codes that powers Facebook are aware of when users type but do not publish and users provide plenty of photos, statuses, personal information and product preferences willingly (Golbeck).  This collection of data allows advertiser to target consumers with relevant advertisements  which makes them more likely to purchase products.  Data aggregation has more serious consequences, however, because Facebook profiles and Google Searches can provide information to employers or banks that can cost consumers jobs or loans without ever knowing why (Andrews).  Facebook and Google's quests for profits undermines users' privacy and can create serious problems for them long after they sign off.

Average citizens can stand up to media giants. (drewclark.com)

           Consumers ultimately lose in a media landscape in which media oligopolies' focus on power, control and profit rather than creating a quality media experience for consumers.  However, media consumers need not accept defeat.  It won't be easier to stand up these large companies as they have a great deal of clout in Washington; Comcast alone spent $18.8 million on lobbying in 2013 (Shield, Green and Litvan).  Nonprofits like Free Press, however, are advocating "universal and affordable Internet access, diverse media ownership, vibrant public media and quality journalism," with 700,000 advocates in Massachusetts who write letters to and meet with elected officials and a team in Washington that conducts research, testifies before Congress and crafts policy proposals (Free Press).  Citizens elect their officials to represent their interests, not those of Big Media.  Through working with organizations like Free Press or even working alone, it is the citizens' duty to remind them.

            

Works Cited:

Andrews, Lori. "Facebook Is Using You." The New York Times. The New York Times Company, 04 Feb. 2012. Web. 18 Mar. 2014.

Bajarin, Tim. "6 Reasons Why Apple Is Successful." Time. Time, 7 May 2012. Web. 17 Mar. 2014.

Covert, Adrian. "Facebook Buys WhatsApp for $19 Billion." CNNMoney. Cable News Network, 19 Feb. 2014. Web. 17 Mar. 2014.

Daily Mail Reporter. "Apple's Taking Over! Over Half of American Households Have at Least One of the Gadgets." Mail Online. Associated Newspapers, 29 Mar. 2012. Web. 18 Mar. 2014.

Golbeck, Jennifer. "Facebook Wants to Know Why You're Self-Censoring Your Posts." Slate Magazine. The Slate Group, 13 Dec. 2013. Web. 18 Mar. 2014.

Griggs, Brandon. "How ITunes Changed Music, and the World." CNN. Cable News Network, 26 Apr. 2013. Web. 18 Mar. 2014.

Hamill, Kristen. "U.S. Approves Comcast-NBC Merger." CNNMoney. Cable News Network, 18 Jan. 2011. Web. 18 Mar. 2014.

Free Press. "What We Do | Free Press." Free Press. Free Press, n.d. Web. 25 Mar. 2014.

Free Press. "Who Owns the Media? | Free Press." Free Press. Free Press, n.d. Web. 17 Mar. 2014.

Flint, Joe. "Comcast Acquisition of Time Warner Cable Could Undermine CBS Deal." Los Angeles Times. Los Angeles Times, 19 Feb. 2014. Web. 25 Mar. 2014.

Moorman, Christine. "Why Apple Is a Great Marketer." Forbes. Forbes Magazine, 10 July 2012. Web. 17 Mar. 2014.

Mosbergen, Dominique. "Google Engineering Director Says Company Will Know You Better than Your Spouse Does." NewsComAu. New Limited, 24 Feb. 2014. Web. 18 Mar. 2014.

Packer, George. "Cheap Words." The New Yorker. Condé Nast, 17 Feb. 2014. Web. 17 Mar. 2014.

Pearlstine, Norman. "Brian Roberts on His Vision for Comcast." Bloomberg Business Week. Bloomberg, 09 Aug. 2012. Web. 15 Apr. 2014.

Rusli, Evelyn M. "Facebook Buys Instagram for $1 Billion." DealBook. The New York Times Company, 9 Apr. 2012. Web. 18 Mar. 2014.

Sorkin, Andrew R., and Jeremy W. Peters. "Google to Acquire YouTube for $1.65 Billion." The New York Times. The New York Times Company, 9 Oct. 2006. Web. 18 Mar. 2014.

Shields, Todd, Stephanie Green, and Laura Litvan. "Time Warner Cable Deal Sets Comcast's D.C. Lobbying Machine in Motion." Bloomberg Business Week. Bloomberg, 06 Mar. 2014. Web. 25 Mar. 2014.

Wyatt, Edward, and Noam Cohen. "Comcast and Netflix Reach Deal on Service." The New York Times. The New York Times, 23 Feb. 2014. Web. 17 Mar. 2014.