Why Media Mergers matter Having a few huge

Why Media Mergers matter… “Having a few huge corporations control our outlets of expression could lead to less aggressive news coverage and a more muted marketplace of ideas. ” Rifka Rosenwein, Why Media Mergers Matter, Brill’s Content, December 1999

“If media moguls control media content and media distribution, then they have a lock on the extent and range of diverse views and information, ” says [Chuck] Lewis, [executive director of the Centre for Public Integrity]. “That kind of grip on commercial and political power is potentially dangerous for any democracy. ” Miren Gutierrez, Fewer Players, Less Freedom, Inter Press Service, March 20, 2004

Vertical Integration • Many of the large media company owners are entertainment companies and have vertical integration (i. e. own operations and businesses) across various industries and verticals, such as distribution networks, toys and clothing manufacture and/or retailing etc. That means that while this is good for their business, the diversity of opinions and issues we can see being discussed by them will be less well covered. (One cannot expect Disney, for example, to talk too much about sweatshop labor when it is accused of being involved in such things itself. ) The wider ramifications are highlighted well in this following quote: • Vertical Integration was once looked upon with alarm by government. It was understood that corporations which have control of a total process, from raw material to fabrication to sales, also have few motives for genuine innovation and the power to seize out anyone else who tries to compete. This situation distorts the economy with monopolistic control over prices. Today, government has become sympathetic to dominant vertical corporations that have merged into ever larger total systems. These corporations, including those in the media, have remained largely unrestrained. Ben H. Bagdikian, The Media Monopoly, Sixth Edition, (Beacon Press, 2000), p. xvii

1980 -1990 s In 1983, fifty corporations dominated most of every mass medium and the biggest media merger in history was a $340 million deal. … [I]n 1987, the fifty companies had shrunk to twenty-nine. … [I]n 1990, the twenty-nine had shrunk to twenty three. … [I]n 1997, the biggest firms numbered ten and involved the $19 billion Disney-ABC deal, at the time the biggest media merger ever. … [In 2000] AOL Time Warner’s $350 billion merged corporation [was] more than 1, 000 times larger [than the biggest deal of 1983]. Ben H. Bagdikian, The Media Monopoly, Sixth Edition, (Beacon Press, 2000), pp. xx—xxi

1990 s • Disney bought ABC in 1995 for $19. 6 billion • Time Warner acquired Turner Broadcasting System in 1996 (including CNN) • Viacom buy outs CBS in 1999 for around $37 billion • In 2000, a new company called AOL Time Warner, with Steve Case as chairman, was created when AOL purchased Time Warner for US$164 billion. It was the largest corporate merger in history.

The end of the 1990 s At the end of the 1990 s, there were 9 corporations (mainly US) that dominated the media world: q. AOL-Time Warner q. Disney q. Bertelsmann q. Viacom q. News Corporation q. TCI q. General Electric (owner of NBC) q. Sony (owner of Columbia and Tri. Star Pictures and major recording interests), and q. Seagram (owner of Universal film and music interests).

2002 The top ten media companies were now… • AOL Time Warner • Disney • General Electric • News Corporation • Viacom • Vivendi • Sony • Bertelsmann • AT&T • Liberty Media

How the big 50 became The Big Six

THE BIG SIX

It is the second largest global media conglomerate, after AOL Time Warner. Rupert Murdoch's News Corporation Ltd. has media holdings in the U. S. , Canada, Europe, Australia, Latin America and Asia. It's the third largest global media conglomerate. FY 2000 revenues topped $25 billion. The $165 billion mega-merger between AOL and Time Warner, approved by the FCC in January 2001, is the largest media merger in history. The new company promises to offer a powerhouse of integrated communication, media and entertainment across all platforms -- computer, phone, television and handheld wireless devices. Sony made its name with electronics, but it now has more than 1, 000 subsidaries worldwide, many of them key media partners. This privatelyowned German media conglomerate has interests in 600 companies in 53 countries. This giant's subsidiary Universal Music Group is the number one music company in the world, with roughly 22% of the 1999 global market. 2001 pbs online and wgbh/frontline

Where Hollywood Films make Money * Includes domestic and international revenue sources; "TV" includes all related revenue streams, including payper-view, network TV, and premium cable Source: "Filmspace: Behind the Scenes, " ABN Amro, Sept. 12, 2000

Windows of Exhibition Hollywood movies are shown not only on the big screen, they're exhibited on video and DVD, on network and cable TV, on pay-per-view, and on airplanes. Hollywood films continue to make money for the studios across all of these platforms, known as"windows of exhibition, " years after their theatrical release. Here's how it works. 2001, pbs online and wgbh/frontline

DISNEY Studio Entertainment accounts for 23. 6 percent of the revenue that Disney's top business segments generate, and only 2. 7 percent of their operating income. Business Segment Media Networks Studio Entertainment* Parks and Resorts Consumer Products Internet Group Combined Revenue (millions) 9615 5944 (23. 6%) 6803 2622 368 25402 Operating Income (millions) 2298 110 (2. 7%) 1620 455 (402) 4081 *Includes Walt Disney Pictures, Touchstone Pictures, Walt Disney Feature Animation, Walt Disney Television Animation, Buena Vista Theatrical Group, Miramax Source: The Walt Disney Company Annual Report 2000

VIACOM Entertainment accounts for 13. 5 percent of the revenue that Viacom's top business segments generate, and 8. 9 percent of their operating income. Business Segment Cable Networks Television Infinity Entertainment* Video Publishing Online Combined Revenue (millions) 3895 5382 2765 2758 (13. 5%) 4960 596 101 20457 Operating Income (millions) 1250 431 589 210 (8. 9%) 76 50 (257) 2349 *Includes Paramount Pictures, Paramount Parks, movie theater and music publishing operations Source: Viacom Annual Report 2000

Vivendi Universal (now owned by GENERAL ELECTRIC) TV/Film accounts for 31. 2 percent of the revenue that Vivendi's top business segments generate, and only 23. 6 percent of their operating income*. Business Segment Music Publishing TV/Film** Telecoms Internet Combined Revenue (millions) 495 3540 4248 (31. 2%) 5270 48 13601 Operating Income (millions) 94 493 526 (23. 6%) 1303 (184) 2232 *Figures for operating income are before depreciation and amortization. **Includes Universal Pictures, STUDIOCANAL, Universal Studios Recreation Group, Canal+, Universal Television & Networks Group Source: Vivendi Annual Report 2000

TIME WARNER Filmed Entertainment accounts for 21. 7 percent of the revenue that AOL Time Warner's top business segments generate, and only 9. 1 percent of their operating income*. Business Segment AOL Cable Filmed Entertainment** Networks Music Publishing Combined Revenue (millions) 7703 6054 8119 (21. 7%) 6802 4148 4645 37471 Operating Income (millions) 2350 2831 796 (9. 1%) 1502 518 747 8744 Figures are projected; estimations for operating income are before depreciation and amortization. ** Includes Warner Bros. Pictures, New Line Productions, Fine Line Features, Warner Home Video, Warner Bros. Television Source: AOL Time Warner Annual Report 2000

NEWS CORPORATION Filmed Entertainment accounts for 27 percent of the sales revenue that News Corp. 's top business segments generate, and 15. 5 percent of their operating income. Business Segment Filmed Entertainment* Television Cable/Network Magazines and Inserts Newspapers Book Publishing Combined Revenue (millions) 6625 (27. 0%) 7008 2696 1675 4600 1907 24511 Operating Income (millions) 503 (15. 5%) 991 197 437 904 205 3237 Includes Twentieth Century Fox Film Corp. , Fox 2000 Pictures, Fox Searchlight Pictures, Twentieth Century Fox Home Entertainment Source: News Corp. Annual Report 2001

SONY Pictures account for 7. 7 percent of the sales and operating revenue that Sony's top business segments generate, and only 1. 8 percent of their operating income. Business Segment Electronics Game 5169 Music Pictures* Insurance Combined Revenue (millions) 39989 (409) 4568 4442 (7. 7%) 3415 57583 Operating Income (millions) 1989 164 35 (1. 8%) 143 1922 *Includes Sony Pictures Entertainment, Sony Pictures Classics, Columbia Pictures, Columbia Tri. Star Television Source: Sony Annual Report 2001

BERTELSMANN • Broadcasting - RTL Group – Radio, RTL Radio France, RTL 2, FUN RADIO, RTL Radio Deutschland, 104. 6 RTL (Berlin), ANTENNE BAYERN (Germany), Radio Hamburg, radio NRW (Germany), RADIO 21 (Germany), big. FM (Germany), Radio Regenbogen (Germany), Radio Dresden, HITRADIO RTL SACHSEN (Germany), Hit-Radio Antenne (Germany), ANTENNE MECKLENBURG-VORPOMMERN (Germany), Radio Brocken (Germany), 89. 0 RTL (Germany), ANTENNE THÜRINGEN (Germany), BB RADIO (Germany), 105'5 Spreeradio (Germany), radio TOP 40 (Germany), Oldie 95 (Germany), ROCK ANTENNE's (Germany), RTL Radio Lëtzebuerg, Bel RTL, Radio Contact (Belgium), Mint (Belgium), Onda Cero (Spain), Europa FM (Spain), Television, RTL Television, M 6 (France), Five (UK), ANTENA 3 (Spain), RTL 4 (The Netherlands), RTL 5 (The Netherlands), RTL 7 (The Netherlands), RTL TVI (Belgium), RTL Klub (Hungary), RTL Televizija (Croatia), Télé Lëtzebuerg, VOX (Germany), RTL II (Germany), Super RTL (Germany), n-tv (Germany), Den 2. RTL (Luxembourg), RTL Shop (Germany), Traumpartner TV (Germany), RTL TVI (Belgium), Plug TV (Belgium), RTL 9 (France), REN TV (Russia), Fun TV (France), Téva (France), Paris Première, Série Club (France), TF 6 (France), W 9 (France), M 6 Music Rock (France), M 6 Music Black (France), M 6 Music Hits (France), Antena 3 (Spain), Antena. Nova (Spain), Five US (UK), Five Life (UK) Programming – Fremantle. Media, UFA Film & TV Produktion, UFA Fernsehproduktion, UFA Filmproduktion, UFA Entertainment, Grundy UFA, GRUNDY Light Entertainment, Karlheinz Brunnemann. team. Worx, Universum Film, talkback. THAMES, Crackerjack, Blue Circle, Blu, Home Shopping Service, SND, CLT-UFA, ENEX • Publishing – Books: Random House, Inc. , Ballantine Books, Ballantine Reader's Circle, Del Rey/Lucas. Books, Fawcett, Ivy, One World, Wellspring, Bantam Dell Publishing Group, Bantam Hardcover, Bantam Mass Market, Bantam Trade Paperbacks, Crimeline, Delacorte Press, Dell, Delta, Domain, DTP, Fanfare, Island, Spectra, The Dial Press, Crown Publishing Group, Bell Tower, Clarkson Potter, Crown Business, Crown Publishers Inc. , Harmony Books, Prime, Shaye Areheart Books, Three Rivers Press, Doubleday Broadway Publishing Group, Broadway Books, Currency, Doubleday, Doubleday Image, Doubleday Religious Publishing, Main Street Books, Nan A. Talese, Harlem Moon, Knopf Publishing Group, Alfred A. Knopf, Anchor, Everyman's Library, Pantheon Books, Schocken Books, Vintage, Random House Audio Publishing Group, Villard Books, The Modern Library, RH Trade Paperbacks, Striver's Row Books, Random House Children's Books, Dell/Delacorte/Dell Young Reader's Group, Alfred A. Knopf, Bantam, Crown, David Fickling Books, Delacorte Press, Dell Dragonfly, Dell Laurel-Leaf, Dell Yearling Books, Doubleday, Wendy Lamb Books, Random House Diversified Publishing Group, RH Value Publishing, Random House Information Group, Fodor's Travel Publications, Living Language, Prima Games, Princeton Review, RH Espanol, RH Puzzles and Games, RH Reference Publishing , Waterbrook Press , Shaw Books, Fisherman Bible Study Guides

BERTELSMANN (cont’d) Magazines: GRUNER, JAHR, ALLAKSTE YEFSIS, ART, ASTROLOGOS, AUTOREVUE, AVTO MAGAZIN, BIEN DANS MA VIE, BÖRSE ONLINE, BRIGITTE, BÜHNE, ÇA M'INTéRESSE, CAPITAL, CAR & MOTOR, CLAUDIA, CONNECT, COSMOPOLITAN, CUISINE ACTUELLE, CUISINE GOURMANDE, DB MOBIL, DECORATION, DIVA, DOGS, E&T - FÜR JEDEN TAG, ELLE, ELTERN FAMILY, ELTERN ARZT & SCHWANGERSCHAFT, ELTERN UNSER BAB, EMEDIA, EMOTION, ESSEN & TRINKEN, EXODOS, FEMME ACTUELLE, FITNESS, FLORA GARTEN, FOCUS, FORMAT, FRAU IM SPIEGEL, FOCUS, FUSHI MEIRONG, GALA, GEO, GLAMOUR, GOLFREVUE, GUIDE CUISINE, GUSTO, HÄUSER, HEALTHY LIVING, HOW TO SPEND IT, IKIA & DIAKOSMISI, IMPULSE, JACK, JASMIN, JIAJU, JOY, KLIK, LEA, LISA, LIVING AT HOME, LUFTHANSA EXCLUSIVE, MANAGEMENT, MARIE CLAIRE, MEN'S HEALTH, MIA, MOJ LEPI VRT, MOJA LEPA BA TA, MOJE DIJETE, MOJE GOTOWANIE, MUY INTERESANTE, NAJ, NATIONAL GEOGRAPHIC, NEON, NEWS, NOVA, PAIDI & NEI GONIS, PARENTS FUMU, PARK AVENUE, P. M. , PRIMA, PROFIL, QUEST, RODZICE, SCHÖNER WOHNEN, SER PADRES, STARS, STERN, STORY, SWAROVSKI MAGAZIN, TéLé LOISIRS, TOP GIRL, TREND, TV-MEDIA, VIEW, VIVA!, VOICI, VSD, VW MAGAZIN, WOMAN, XIANFENG, Xpress, YACHTREVUE, YI REN, YO COCINO Newspapers: CHEMNITZER MORGENPOST, DRESDNER MORGENPOST, FINANCIAL TIMES DEUTSCHLAND, MORGENPOST AM SONNTAG, SÄCHSISCHE ZEITUNG Music: Sony BMGArista, Bluebird, BNA, Burgundy, Columbia, Epic, Jive, J Records, Legacy, Masterworks, Provident, RCA, Windam Hill, Zomba

2004 -2005 • On February 4, 2004, Mark Zuckerberg launched "Thefacebook, ” originally located at thefacebook. com • The News Corp. chairman Rupert Murdoch paid just $580 million for the social media giant My. Space in 2005. • In 2005, Google acquired of online video source You. Tube for an estimated $1. 65 billion dollars.

2005 -2006

2006 • By the end of 2006, there are only 8 giant media companies dominating the US media, from which most people get their news and information: • Disney (market value: $72. 8 billion) • AOL-Time Warner (market value: $90. 7 billion) • Viacom (market value: $53. 9 billion) • General Electric (owner of NBC, market value: $390. 6 billion) • News Corporation (market value: $56. 7 billion) • Yahoo! (market value: $40. 1 billion) • Microsoft (market value: $306. 8 billion) • Google (market value: $154. 6 billion)

• • • Television - NBC Universal (January 2010) Cable – Comcast Cable Programming – E! Entertainment, Style, Comcast Sports. Net Philadelphia, Comcast Sports. Net Mid-Atlantic, Comcast Sports. Net Chicago, Comcast Sports. Net West, Sports. Net New York (partial), The Golf Channel, Versus Network, AZN Television, PBS KIDS Sprout, TV One, G 4 Sport Franchises – Philadelphia 76 ers, Philadelphia Flyers, Philadelphia Phantoms, Philadelphia Charge, Frederick Keys, Delmarva Shorebirds, Bowie Baysox Other – Through Comcast Spectator, Wachovia Center, Wachovia Spectrum, Ovations Food Services, New Era Tickets, Front Row Marketing Services

Terms you should know • • Hollywoodism Vertical Integration Windows of Exhibition Conglomerates Monopoly Majors Independents Distributors • • • Exhibitors Anchor Product Merchandising Product Placement Paramount Consent Decrees • Anti-Trust Laws • Consolidation

Anchor Product