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Behind the media merger movement: world information cartel.

A new international information order is being constructed. It is very different from the publicly controlled one Third World nations have sought, which has been bitterly attacked by the U.S. media. Instead of equal access to information and greater participation in the production of messages, there is a growing concentration of capital and resources in the United States, the dominant center of the world communications network.

Powerful U.S. corporations have undertaken an ambitious set of initiatives that will enable them to retain and perhaps extend their worlwide advantage. The use of computerized information in manufacturing processes--like robotics and automation--has increased, and the production, processing, storage and dissemination of information, imagery and data have become major industries in their own rights. The media constitutes an important subset of this rapidly growing system. A wave of media mergers this spring has placed the so-called cultural industries at the center of the transnational corporate economy. A few of the more prominent deals include:

Section The American Broadcasting Companies, a $3.7 billion enterprise, is acquired by Capital Cities Communications, a mere billion-dollar baby. This combination represents the largest merger outside the oil industry in U.S. history. Metromedia, itself recently bought out, sells seven key television stations to Rupert Murdoch and Marvin Davis for $2 billion. Murdoch and Davis already own 20th Century Fox. CBS, regarded by some as the Establishment, repels one takeover bid and braces itself for others.

Section The publishing, industry, less flamboyant but no less ambitious, engages in the merger mania. Gulf and Western, already owner of Paramount Studios and Simon & Schuster, acquires Prentice-Hall, the largest textbook publisher in the United States. Those subsidiaries make G.&W., among other activites, the largest publishing house in the world. The Newhouse publishing chain buys out The New Yorker, adding it to its already vast newspaper and publishing holdings, which include Random House, Alfred A. Knopf, Pantheon, Villard, Times Books, Vintage Books and Modern Library. CBS acquires twelves national magazines from the Ziff-Davis group for $362.5 million.

* In the electronic-communications field, joint ventures are also the preferred course. A.T.&T. enters the videotex field, in partnership with Chemical Bank, Time Inc. and the Bank of America. A parallel combination, CBS, I.B.M. and Sears, Roebuck join to purchase a videotex operation called Trintex.

The media gives the juiciest developments substantial, if not illuminating, coverage, but there is a built-in conflict of interest. A fuller understanding of what is happening might be an obstacle to the creation of a corporatist America.

The massive concentration of the nation's cultural and information industries is portrayed in the pages of the press and on the broadcast news as entrepreneurial jousting. Just as the round-the-clock soaps and happy-talk news shows trivialize life's dilemmas to personal strengths and weaknesses, changes in the information system are presented largely in terms of an individual's character and energy--not as a structural transformation.

Is Ted Turner morally fit to run CBS? Will he endanger CBS's status as what founder and former chair William Paley called a "public trust"? Will Jesse Helms become Dan Rather's boss? Will S.I. Newhouse quash The New Yorker's vaunted editorial independence? Will Rupert Murdoch's down-market New York Post be a model for his new broadcast properties?

While the public is asked to reflect on these sideshows, the cultural industries are responding boldly to the uncertainties and opportunities of highly fluid world and national markets. Far from merely reacting, they have become major initiators in the emerging transnational information system.

Taking advantage of the pro-profit, anti-union, social-accountability-be-damned climate created by the Reagan Administration, media owners and other resource holders are maneuvering freely in the cultural and information field. They are concentrating their holdings, the better to exploit the domestic market and to penetrate the international market with information goods and services. The smell of profits and global information dominance pervades the mediamerger market. And for good reason.

The Federal Communications Commission, historically a weak defender of the quality of the nation's information, has abandoned all considerations of the public interest. It has pushed deregulation to new areas of the broadcast sector. The number of television and radio stations that a license holder may acquire has been nearly doubled since last year. The traditional obligations of station owners to serve the public's cultural and information needs have either been eliminated or weakened drastically. For example, standards limiting the number of commercials that may be run each hour have been relaxed; the requirement that programming logs be kept has been eliminated; children's programming guidelines have been ignored; and license renewals for stations have become virtually automatic.

These measures have enhanced profits and touched off a frenzy of investment in media properties. The just-announced sale of KTLA, an independent television station in Los Angeles, for a record $510 million to the tribune Company--owner of television stations in Atlanta, New Orleans and Denver, the Chicago Tribune, the New York Daily News, five radio stations, fifteen cable television systems and the Chicago Cubs--is a case in point. The value of most television stations' property and equipment is nominal. The sale price is another matter. It represents a capitalization of the advertising dollars the station expects to rake in from selling its viewing audience to the sponsors. With a potential audience of millions of New York City--area viewers, ABC's affiliate WABC has an estimated price tag of $800 million.

The takeover trend has also been encouraged by the rampant speculative greed in the investment community. Metromedia, for example, was taken private last year by its chief owner and other directors, who effected the transaction by issuing $1.9 billion in low-rated, high-yield "junk bonds." These securities will be assumed by Murdoch and Davis in their acquisition of seven television stations from Metromedia. In a deregulated economy, no one asks how the bonds will be paid off.

In addition to the domestic opportunities that excite the promoters of media combinations, the international market offers lucrative incentives. The new electronic networks, which bring together computers and satellites, play an important role here.

The transnational business system is dependent on a steady flow of information to coordinate its widely dispersed manufacturing, service and marketing operations. Those companies fill the circuits of the communications satellites with streams of data, informing and instructing their affiliates throughout the world about production schedules, inventory levels, labor and tax policies and currency-exchange rates.

U.S. advertising agencies are a vital element in this global machinery. They carry the corporate sales messages over satellites, cables or air waves to audiences in Europe and other continents. There are also the products of the media. More than half of all U.S. film revenues are derived from foreign sales, and American movies dominate world screens. Since the 1950s, U.S.-made television programs have saturated the schedules of industrialized and nonindustrialized countries alike. Italian television, for example, is practically an affiliate of the American networks. U.S. commercial television has been a major source of programming for Third World countries as well.

Hollywood's vaults, filled with old films--2,500 of which came under the control of Murdoch and Davis when they purchased 20th Century Fox--are expected to become the main source of programming for the cable systems operating in Europe and being constructed in many other countries. According to Business Week:

With increasing deregulation of television in Europe, and with cable systems expanding, broadcasters and cable operators are hungry for programming. At the same time, U.S. and foreign advertisers are eager to reach European consumers. . . . Murdoch and Davis, one analyst adds, "are going to be perfectly positioned for that."

U.S. cultural industries are gearing up to exploit the world market for equipment, expertise and programming--data, films, television shows, music and so on. The current wheeling and dealing in media properties reflects their anticipations. It also reflects the loss of a social capability to shape national and international consciousness.

Despite efforts to downplay the increased corporate control over national and international communications systems, the public is aware, albeit in a confused way, that its information diet is not all it should be. Total investment in home television equipment is at least ten times what station owners have spent on their transmitting facilities. For such an outlay, viewers receive programs and commercials transmitted over what has traditionally been a public resource--the electromagnetic frequency spectrum. In this one-sided arrangement, the station owners hold licenses to use the spectrum, while the consumer pays for his or her cultural and information disorientation, transmitted over what could almost be considered private airwaves.

In the 1984 election, the notion that new ideas are needed got an airing, though few emerged. In 1985, one not-so-new idea urgently deserves attention. It is best expressed as a question: How may at least a part of the nation's information and cultural apparatus be rescued from near-total corporate control and be made accountable and accessible to the viewing, listening and reading public?
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Author:Schiller, Herbert I.
Publication:The Nation
Date:Jun 8, 1985
Previous Article:Uncivil liberties.
Next Article:The role of the critical journal.

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