4 Ownership: How it works and who owns what (right now)

Prior to the emergence of cable news stations (and, really, just cable television), there were three major TV networks in the United States – ABC, NBC, and CBS.  Back in the day, these were the front faces of the big media owners in an increasingly global market.  Over in the newspaper world, communities had between one and three “local” newspapers that served them (by comparison – London had seven.  Just something to think about).  AM and FM radio stations were scattered across the dial, handling everything from music to news to talk.  Plenty of people owning their little slice of the media pie.  As the decades have progressed, so have the ownership models.  Larger companies began seeing the value of ownership across multiple markets, using the same content across those markets to cut costs.  Smaller market stations and printers were offered lucrative purchase prices.  The commercialization and profitability of media began to usurp the underlying ideology of the independent and never-biased newsroom, the potential of a variety of media products for diverse audiences, and the connections between the community and the media that served it.  Some see this as a corruption of our media landscapes – others simply saw this as an inevitability.  Our job is to take a look at those observations.

The Essentials

• We have talked about the fact that we are in a commercial media world here, so who owns the various parts of that world has to be at least talked about. The owners of companies like Disney, GE, Twitter, Viacom, Tribune, or Amazon have massive control over what we see, hear, read, and play.  If everything is about profit, and companies like these and many others are about making as much profit as possible, this will affect what is created, sold, produced, and offered to us … and what is not.  Keep this in mind as you think about what we are putting in our bodies every day.

The reality is that, for as long as there have been media products (individual stations, newspapers, channels, etc.), there have been companies that have owned multiples of them.  Prior to the Federal Telecommunication Act of 1996 (affectionately referred to as “FTA96” – more on that later), there were specific rules on what percentage of any media market one entity could own across each of the legacy media formats (radio stations, television stations, and newspapers).  These rules were meant to guarantee that there were a variety of owners and, therefore, competition within the markets (remember – US media is, for the most part, commercial and therefore profit-driven media).  The truth, of course, is that expectations for what TV should look like, radio should sound like, and how newspapers were organized controlled formats and basically dictated that everything already looked and sounded the same.  Once FTA96 was passed and signed into law, the rails were removed and the media industry as we knew it was changed forever.  Does this mean that all media could be monopolized by a single company?  No.  There are still limits as to how much of a market any one company can own.  Having said that, it became much easier for a larger company (in radio, the clearest example is of Clear Channel Media, which was recreated as iHeartMedia, with stake in 150 media markets across the country) to buy-out smaller stations and companies then streamline the delivery of content – that is another way of saying they eliminate multiple broadcasts by streaming the same music and content to stations across the country with minimal customization for an individual market.  What you hear on the Top 40 station is, song for song, the same whether in Atlanta, Chicago, Omaha, Denver, or Los Angeles.  Does this make the company more profitable?  Absolutely.  Does it eliminate market and content choice?  That is for you to decide.

Why ownership matters for Media Literacy

            The beauty of a media market is that it is diverse.  In any given market, we would want to have a plurality of choices in content and choices.  Yes, news is news (or, one hopes, it should be), but I also like to be able to listen across the radio dial (yep – I still do that) to find a variety of musical styles, some I might like and some I cannot stand.  I want to be able to surf TV stations or wander through endless musical catalogs or movie options.  A strong, diverse market is where it is at – choice is key.

            As we have seen media ownership fluctuate during the last 30 years, whether it is because the regulation and laws changed or just because something was bought and then either consolidated (think Disney or the lesser known Sinclair) or dismantled (like we talked about in the previous chapter with Newspapers), the idea of “choice” or “options” has nearly collapsed.  As we develop our media literacy skills, we want to be thinking about how media ownership – like so many other things we have discussed here – affects our media diets.  This then leads to the big question – how does the media perhaps not control what we think/listen to/read/watch/play, but we think about when we do all those things?  THAT is the difference between eating a good portion of fiber with your protein of choice and binging on Pop Tarts … not that I have ever done that or anything.  The pop tarts might be some instant gratification – but they honestly are not what we would call quality or “good” for us.  I ask you to think about those ideas as we move through this discussion.^[1]

What ownership looked like back in the day.

            Media ownership and media laws, rules, and the like are intimately intertwined.  In 1934, once the power of media was recognized through the Payne Fund Studies and other such research, the Federal Communication Commission (the FCC) was created to keep the major (now legacy) media in check: Newspaper, Radio, and Television.  The motion picture was also governed (primarily through what became the rating system and the MPAA), but the legacy media was recognized as unique.  Unlike book publishers, movie companies, or music recording studios, which are creating one product and promoting that same one product for purchase and consumption, legacy media are relying on you (the audience member) repeatedly tuning in, reading, turning on, or streaming the continually produced content that is intermingled with advertisements.  There are two key purposes of legacy media ownership: to create content that drives audiences back to your channels and to sell ad space to those that want to sell their products to your audiences (you know … all of us).  That is how they keep themselves afloat and turning a profit – keep your eyes and ears on what they are putting out day after day.  With this in mind, let’s talk about the big players from back in the day and how they have evolved into what we are experiencing as of the release of this text.

            For our purposes here, we are going to focus on the history and trajectory of the United States media ownership landscape.  We will not get into the dirty details, but we do need to see how it all came about.  The connection between the needs that come from a commercial system (think “profits”), the development of technologies, and the laws/rules/regulations that control or limit both of these aspects is core to understanding how our media system operates and why being literate regarding that system is so important.  So, let’s talk about it … briefly, of course.

            We do not need to go much further back than the establishment of the big three television networks (ABC, CBS, and NBC), the major movie production companies (Metro-Goldwyn-Mayer or “MGM”, Warner Bros., Paramount, Fox, and RKO), and music labels (Warner Music Group, EMI, Sony Music – formerly CBS Records until 1991, BMG – formerly RCA, Universal – formerly MCA Music, and Polygram).  Uniquely, radio stations started as commercial-free and were paid for solely by their owners (for example, Westinghouse – the appliance manufacturer) would open up a radio station in a new market where they were hoping to sell their products.  The station itself became the biggest advertisement for them.  Eventually, of course, networks started to form, often along the same trajectories as telegraph and telephone lines, so companies like Westinghouse, AT&T, RCA, CBS, ABC, and NBC began to spread ownership to both sell their products and, shockingly, sell advertising (see the next chapter for the detailed discussion on why that is important – but I am sure you get the idea).  We don’t even get into newspapers here, but the same story is true across all of the legacy media.  As an owner, you wanted to maximize profits while minimizing costs.  If you have more stations, but can use the same content across those same stations, you might come out ahead.  That is the gamble of commercial media, which is why ownership becomes such a fickle thing.

            When you look across the brands listed above, you might start to notice that companies that own radio stations might also own music labels.  You might also notice that you see the same names in the movie industry are now part of our everyday television landscape.  What we see here is what vertical integration looks like.  We have discussed this before (synergy) and really dive into it more deeply and broadly in Chapter 7.  For our purposes, it is best to understand vertical integration as a business model.  The idea is this: if one company creates a TV show, another produces it, another broadcasts it, and another is hired to develop the marketing campaign, that is a few different hands in the pot for content creation and brand management.  Additionally, each of those entities are going to charge for their services, meaning fewer profits for the owners of the product.  Now, if you integrate the process – you create a marketing and advertising department in your production company, you have a writing room that creates the content, you have your own production sets and stages and talent, and you own (or have agreements with) the stations that broadcast the content – you can control the costs after the initial investment, never have to spend that money on external elements again, and end up being able to pocket the revenue as well as the differences in cost between in-house v. external contract work.

            From a consumer and media literacy perspective, vertical integration is often associated with the idea of hegemony (hegemony, quickly, is when a power structure tells you what is “right” in order to maintain power).  Anything that is not “right” is automatically considered “wrong” and, therefore, not even considered or discussed.  It is “perfection” by way of absolute control.  Now, I am not saying that media companies are trying to get to that (though, if you want to have that conversation, drop me an email).  However, when you have only a few companies in control of so much content, and they are trying to make a profit, the amount of content is going to decrease AND is going to become homogenized so more people will want to consume it.  Yes, there are those “independent” artists, TV shows, or broadcasts, but they are allowed to exist within a hegemonic system to appease those that are not into the default content.  Keep in mind, though – those in power control the “alternative” content as well.

            Is that where we are realistically?  I am not sure.  However, as we work on our media literacy skills, we do want to be thinking about how the ownership structures have come to be and what is done to ensure that they are being kept as they are  … or were.  In this new digital, hyperreal age, there are new players in town – the tech industry.

Who owns what now??^[2]

As of April 2022 (and this can change quickly), we see that media ownership has moved from strictly media production to media access.  Media companies are often bought and sold.  We see a massive flurry in 1996 (which, oddly enough, led to many media companies defaulting on their loans and going bankrupt 10 years later).  We saw the “vultures” (a little hyperbole from yours truly) swoop in to purchase small market radio, television, and newspaper companies with the goal of breaking them up and selling them off for parts.  We also see (as discussed in the Newspaper section) the purchase of newspapers by hedge funds with the same goal in mind – profit by any means or sell them off.

The newest iteration of this ownership tetris is the entrance of telecom into the mix.  Companies like Verizon, Cox, Charter, AT&T, and others are either purchasing companies outright or moving into mergers and partnerships with media creators and producers.  This becomes what is known as “vertical integration,” “synergy,” or, my personal favorite, “oligopoly.”  One company has complete control of a media product, from the initial conception through the release.  This includes all ancillaries (think “toys” for Disney), advertising, streaming – all of it.  With the inclusion of tech and telecom companies in the ownership “game”, synergy now also includes the wires and airwaves through which your media is delivered.  Currently, of the top 10 media owners in the world, three of the parent companies are not even media creators.  Rather, they are telecommunication companies.  They are the companies that own the cable networks, the phone lines, the internet access, and the other technologies that allow for information to be received.  Comcast (they own NBC) (#3), AT&T (#5), and Charter Communications (#7) now own both the technology that the content flows through and the content itself^[3].  When this much control is in such a few companies, the content itself becomes controlled not for artistic development but for profit.  Consider the discussion of hegemony we had above.  If a few companies control the majority of the content, what are the implications if they control the content AND the way you read, watch, listen to, or play your media?  These are questions we need to be thinking about (Chapter 7, as discussed above, will dig into the idea of convergence in more detail).