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"Debate/Monopoly on Information: It's a World of Media Plenty. Why Limit Ownership?"
Source: The New York Times, October 12, 2003. A fundamental principle of microeconomics is that consumers are better off when they have choices. Today's television-viewing options—especially when compared to the options consumers had thirty years ago—seems, at first glance, like a situation in which consumers have lots of choices. Cable and satellite television providers offer hundreds of channels catering to a range of tastes and preferences: from sports fanatics to movie buffs, from cooking, gardening, and home improvement aficionados to kids who love cartoons, from music video fans to news junkies. The reality behind the surface choices is more complex. Television programming is a highly concentrated industry. While there appear to be many channels, they are owned by large media corporations. Many of these are the result of mergers and acquisitions that have been permitted by the relaxation of old anti-trust regulations within the industry. The article by Stephen Labaton presents both sides of a heated debate over whether the concentration of media in a few hands has allowed product diversification to flourish or whether it has led to a dangerous lack of competition. A Commissioner from the Federal Communications Commission points out that 90 percent of the top 50 cable TV stations are owned by the same corporate conglomerates that own the major television networks and cable systems. What does this mean? Cable system providers are the companies that hook up the cable wires in your home and provide you with packages of channels for a monthly fee. When they own the cable channels (a backward linkage), they make more profits by putting their own channel in their packages than if they offer an independently owned channel. This might reduce consumer choices. There are also potential problems when television networks and cable channels owned by the same company are both offering news and other information programming. You, the viewer, may not be getting a diversity of political perspectives. The issue becomes even more complex if a major newspaper and television channel in the same market are co-owned. While reading a newspaper and watching the news provides the illusion of multiple sources of information, consumers may really be hearing one voice. Nonsense, says the other side! Remember that thirty years ago viewers only had three major networks offering ½ hour of national news per night. Now there are many more hours of news and public affairs programming. Because cable and satellite providers depend on viewer subscriptions as well as advertising revenue, they will continue to be responsive to consumer preferences. Consumer sovereignty prevails. If the rules do not change, however, the old networks are the ones most likely to get squeezed out. Our democracy thrives on freedom of the press. Our newspapers and television are not owned by or directly controlled by the government. A free press is meant to guarantee that reporters can ask tough questions and dissenting opinions can be heard. But today, the greatest threat to a free press may not be from a government that jails reporters or silences dissenters. It may come from corporations that have vested interests in promoting or skimming over certain stories, or in offering bland, cheery, empty-calorie newscasts that entertain more than they inform. Questions for Discussion:
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