T H I N K
A G A I N
By Benjamin Compaine
GLOBA L
MEDIA
Big media barons are routinely accused of dominating markets,
dumbing down the news to plump up the bottom line, and forcing U.S.
content on world audiences. But these companies are not as big, bad,
dominant, or American as critics claim. And company size is largely irrel-
evant to many of the problems facing today’s Fourth Estate.
“A Few Big Companies Are
Taking Over the World’s Media”
No. Much of the debate on media structure is
too black-and-white. A merger of Time Inc. with
Warner Communications and then with America
Online dominates headlines, but the incremental
growth of smaller companies from the bottom does
not. Breakups and divestitures do not generally
receive front-page treatment, nor do the arrival
and rapid growth of new players or the shrinkage
of once influential players.
In the United States, today’s top 50 largest
media companies account for little more of total
media revenue than did the companies that made
up the top 50 in 1986. cbs Inc., for example, was
Benjamin Compaine is a research consultant at the Massa-
chusetts Institute of Technology’s Program on Internet and Tele-
coms Convergence and coauthor of Who Owns the Media?
Competition and Concentration in the Mass Media Industry,
3d ed. (Mahwah: Lawrence Erlbaum Associates, 2000).
20 Foreign Policy
then the largest media company in the United
States. In the 1990s, it sold off its magazines,
divested its book publishing, and was not even
among the 10 largest U.S. media companies by the
time it agreed to be acquired by Viacom, which was
a second tier player in 1986. Conversely, Bertels-
mann, though a major player in Germany in 1986,
was barely visible in the United States. By 1997, it
was the third largest player in the United States,
where it owns book publisher Random House.
Companies such as Amazon.com, Books-A-Mil-
lion, Comcast, and C-Net were nowhere to be
found on a list of the largest media companies in
1980. Others, such as Allied Artists, Macmillan,
and Playboy Enterprises, either folded or grew so
slowly as to fall out of the top ranks.
Indeed, media merger activity is more like rear-
ranging the furniture: In the past 15 years, mca
with its Universal Pictures was sold by its U.S. own-
ers to Matsushita (Japan), who sold to Seagram’s
(Canada), who sold to Vivendi (France). Vivendi
has already announced that it will divest some major
media assets, including textbook publisher
Houghton-Mifflin. Bertelsmann also has had diffi-
culty maintaining all the parts of its global enterprise:
It recently fired its top executive and is planning to
shed its online bookstore. There is an ebb as well as
a flow among even the largest media companies.
The notion of the rise of a handful of all-pow-
erful transnational media giants is also vastly over-
stated. Some media companies own properties
internationally or provide some content across bor-
ders (for example, Vivendi’s Canal + distributes
movies internationally), but no large media con-
glomerate owns newspapers, book publishers, radio
stations, cable companies, or television licenses in
all the major world markets. News Corp. comes
closest to being a global media enterprise in both
“U.S. Companies Dominate the Media”
No. Long before liberalization of ownership in tel-
evision in the 1980s, critics around the world were
obsessed by the reach of U.S. programming, which
cultural elites often considered too mass market and too
infused with American cultural values. However, in
most of the world, decisions of what programming
to buy traditionally lay in the hands of managers who
worked for government-owned or government-con-
trolled broadcasters. Then, as now, no nation’s media
companies could require a programmer to buy their
offerings or force consumers to watch them. As the mar-
ket becomes more competitive, with content providers
such as Canal+ and the bbc marketing their products
globally, it is even more important that media enter-
prises offer programming that people want to watch.
While Viacom, Disney, and aol Time Warner are
U.S. owned, many non-U.S.-owned companies dom-
inate the roster of the largest media groups: News
Corp. (Australia), Bertelsmann (Germany), Reed-
Elsevier (Britain/Netherlands), Vivendi and Lagadere-
Hachette (France), and Sony Corp. (Japan).
The pervasiveness of a handful of media companies
looks even less relevant when one looks at media
ownership across countries. The United Nations’
“Human Development Report 2002” examined own-
ership of the five largest newspaper and broadcast
content and distribution, but on a global scale it is
still a minor presence—that is, minor as a percent-
age of global media revenue, global audience, and
in the number of markets it covers.
Media companies have indeed grown over the
past 15 years, but this growth should be under-
stood in context. Developed economies have grown,
so expanding enterprises are often simply standing
still in relative terms. Or their growth looks less
weighty. For example, measured by revenue, Gan-
nett was the largest U.S. newspaper publisher in
1986, its sales accounting for 3.4 percent of all
media revenue that year. In 1997, it accounted for
less than 2 percent of total media revenue. Helped
by major acquisitions, Gannett’s revenue had actu-
ally increased by 69 percent, but the U.S. economy
had grown 86 percent. The media industry itself had
grown 188 percent, making a “bigger” Gannett
smaller in relative terms. Similar examples abound.
enterprises in 97 countries. It found that 29 percent of
the world’s largest newspapers are state owned and
another 57 percent are family owned. Only 8 percent
are owned by employees or the public. For radio sta-
tions, 72 percent are state owned and 24 percent fam-
ily owned. For television stations, 60 percent are state
owned, 34 percent family owned. These data suggest
there is little foreign direct investment in the media sec-
tors of most countries.
News media can tap wire services from around the
globe such as Reuters, Agence France-Presse, the Asso-
ciated Press, Kyodo News, Xinhua News Agency, and
Itar-Tass. tv news editors can use video feeds from
sources as diverse as U.S.-based cnn to the Qatar-based
Al Jazeera. The variety and ownership of tv content
in general has substantially increased—a reality media
critics ignore. From two state-owned channels in many
European countries and from three U.S. networks plus
the Public Broadcasting Service, there are now
dozens, often hundreds, of video options via
terrestrial, cable, and satellite transmission, not to
mention the offline variety of videocassettes and dvds
and the online availability of music and movies. In addi-
tion, book and magazine publishing continues to be
robust worldwide. Encouraged by relatively low start-
up costs, new publishers are popping up constantly.
N ov e m b e r | December 2002 21
[ Think Again ]

“Corporate Ownership Is Killing SEPTEMBER 2002

Hard-Hitting Journalism”
A bright red herring. When exactly was presidential aspirations. But Hearst’s dual roles did not
WORLD ECONOMIC OUTLOOK
this golden age of hard-hitting journalism? One might affect U.S. politics or democracy in any lasting way. The comprehensive assessment of economic prospects and
call to mind brief periods: the muckrakers in the early jury is still out on the effect of Berlusconi’s dual roles. policies prepared twice a year by the staff of the IMF
20th century or Watergate reporting in the 1970s. But Corporate-owned newspapers may actually pro-
across countries and centuries, journalism typically has vide better products than those that are family owned: Today, over 1,110 Scenarios and
not been “hard-hitting.” With more news outlets and Research suggests that large, chain-owned newspapers International projections
competition today, there is a greater range of journal- devote more space to editorial material than papers Monetary Fund economists The World Economic
ism than was typical in the past. Further, a 2000 com- owned by small firms. In many parts of South Ameri- are at work analyzing the Outlook, published at least
parison of 186 countries by Freedom House, a non- ca, where regulation has restricted or prevented cor- economic and financial factors twice a year, in English,
profit devoted to promoting democracy, suggests that porate ownership, family-run enterprises have often that will determine future French, Spanish, and Arabic,
press independence, including journalists’ freedom been closely identified with ideological biases or even global trends. Because their offers a comprehensive
from economic influence, remained high in all but two with using political influence to benefit other business- projections will have an impact picture of the international
members (Mexico and Turkey) of the Organisation es. Brazilian media enterprise Globo, owned by the on the decisions made by the economic situation and
for Economic Co-operation and Development, where politically involved Marinho family, encompasses a tv IMF and its member countries, prospects for the future.
global media’s markets are concentrated. network, radio, cable, and magazines. Yet Globo no their research must be based on
Also underlying the complaint that news has been longer opposes recent moves to liberalize Brazilian the latest facts and figures, and Information used
“dumbed down” is an assumption that the media media ownership because then it could gain access to the sharpest insights. The in top-level decision
ought to be providing a big dose of policy-relevant desirable foreign investment. As Latin American media results of this unique research making worldwide
content. Japan’s dominant public broadcaster, nhk, shift from family-owned, partisan media to corporations, effort are available through IMF With its analyses backed by the
does so, yet is Japan a more vibrant democracy as a observes Latin American media scholar Silvio Wais- publications, respected the expertise and resources of the
result? More to the point, with so many media out- bord, the media become less the “public avenues for the world over for their quality and IMF’s over 1,100 economists,
lets today, readers and viewers can get more and bet- many ambitions of their owners,” and their coverage of broad coverage. Now, with a
Before you make the World Economic Outlook
ter news from more diverse perspectives, if that is government corruption “is more likely to be informed subscription to the World
decisions, let the is a uniquely authoritative
what they want. Or they can avoid it altogether. The by marketing calculations and the professional aspira- Economic Outlook, you can
International Monetary
share in these forecasts and
reference in the field.
alternative is to limit the number of outlets and impose tions of reporters.” This trade-off may not be bad.
content requirements on those remaining. Global media will not necessarily introduce
Fund’s top economists
studies—as they are published.
explain financial and An authoritative
The third problem with this notion of corpora- aggressive journalism in places where press freedom reference you’ll use
tions killing journalism is that it assumes ownership has traditionally been constricted. For instance, World Economic Outlook economic developments
that could have a throughout the year
matters. In the old days of media moguls it may have: News Corp. was criticized for dropping bbc news includes analyses of
William Randolph Hearst, William Loeb, and Robert programming from Star tv presumably to mollify profound impact on Today, even small economic
increasingly globalized fluctuations can trigger major
McCormick were attracted to the media because they Chinese leaders in the mid-1990s. Yet satellite trade and capital your interests.
each had political agendas, which permeated their broadcaster Phoenix tv (in which News Corp.’s financial swings. It’s vital to
newspapers. Nearly a century before Italian media Star tv maintains a 37.6 percent stake, alongside
markets have the latest perspective on
The World Economic Outlook
owner Silvio Berlusconi rose to the top of Italian poli- that of the local Chinese owners) sometimes push- represents a unique what’s happening—and
Interest rates. Exchange where it could lead in the
tics, Hearst, whose newspapers dominated in the Unit- es the envelope in China, as when it reported on the m a rkets. Trade balances. international exercise in
ed States, was elected to the U.S. Congress and harbored election of Chen Shui-bian as president in Taiwan. information-gathering and coming months and years.
S avings, investments, and debt. The World Economic
Commodity prices. Economic analysis performed by the
International Monetary Fund Outlook brings you that per-
policies. So many factors spective, giving you analysis,
influence the world economy staff to guide key initiatives
forecasts, and figures you’ll
“Global Media Drown Out Local Content” that it’s often difficult to get a
clear perspective of what’s
and to serve the IMF’s
member countries. use all year long.
ahead. And yet, h aving just International Monetary Fund Telephone: (202) 623-7430
Absolutely not. Most media—like poli- other programming determined by local producers, such a perspective is absolutely Publication Services Telefax: (202) 623-7201
tics—are inherently local. Global firms peddle whol- even though it shares a recognizable format with mtv vital to making well-informed Box WEOFP02S E-mail: publications@imf.org
ly homogeneous content across markets at their peril. stations elsewhere. News Corp.’s newspapers in the decisions today that will best 700 19th Street, N.W.
Thus, mtv in Brazil plays a mix of music videos and United Kingdom look and read differently from those serve your interests tomorrow. Washington, D.C. 20431 U.S.A.
Prepaid orders may be mailed, phoned, faxed or e-mailed. Please include AMEX,
Visa, or MasterCard number, expiration date, and signature on all orders.
22 Foreign Policy
[ Think Again ]
in the United States. When Star tv, an Asian sub-
sidiary of News Corp., began broadcasting satellite tel-
evision into India, few tuned in to Dallas and The Bold
and the Beautiful dubbed in Hindi. The network only
succeeded in India once it hired an executive with
experience in Indian programming to create Indian
soap operas and when an Indian production house
took over news and current affairs programming.
“The Internet Has Leveled the Playing Field”
Yes. Or more accurately, it’s helping to level the ter-
rain because it is a relatively low-cost conduit for all
content providers. As the old adage goes, “Freedom
of the press is guaranteed only to those who own
one.” Make no mistake: an activist with a dial-up
Internet connection and 10 megabytes of Web serv-
er space cannot easily challenge Disney for audi-
ences. But an individual or a small group can reach
the whole world and, with a little work and less
money, can actually find an audience.
Worldwide, an estimated 581 million people were
online by 2002, more than one third of whom lived
outside North America and Europe. Yet the Internet
is in its infancy. The number of users is still growing
and will continue to expand to the literate population
as access costs decrease.
Once online, Internet users have access to thou-
sands of information providers. Some are the same
old players—Disney with its stable of cartoon icons,
“Proliferating Media Outlets
Balkanize Public Opinion”
No. The flip side of concerns that media concen-
tration has limited available information is the con-
cern that technology has made it possible to access
so many voices that people in democratic societies can
and will seek only information that supports their
prejudices. A fragmented public, tuning in only to
select cable channels or specific Web sites, could thus
wall itself off from healthy public debate.
Recent U.S. studies show that as users gain
24 Foreign Policy
Often viewed as a negative, consolidation may
have considerable social benefits. It took the deep
pockets of News Corp. to create and sustain a
long-awaited fourth broadcast network in the
United States. And the 1990 merger in the Unit-
ed Kingdom of Sky Channel and bsb created a
viable television competitor from two money-los-
ing satellite services.
Infinity with its familiar music and talk-radio broad-
casting, and old government-run stations still oper-
ating in much of the world. But these coexist with
newer, Internet-only options such as those found at
Realguide.com, which links to 2,500 real-time audio
streams from around the world, or NetRadio, which
outdraws many traditional stations. These Internet-
only “broadcasters” have not had to invest in gov-
ernment-sanctioned licenses and generally have no
limits on their speech.
In countries where governments strictly control
print and broadcast media, governments also can try
to restrict Internet access, as China does. But some may
choose not to do so: In Malaysia, the government
pledged not to censor the Internet to promote its ver-
sion of Silicon Valley to foreign investors. As a conse-
quence, Malaysian cyberspace media are free of the
restrictions their print and broadcast brethren face
[see “Mahathir’s Paradox,” page 100].
experience with the Internet, they use it not to
replace other sources of information but for more
practical applications. They perform work-related
tasks, make purchases and other financial trans-
actions, write e-mail messages, and seek informa-
tion that is important to their everyday lives.
Although news is low on the list of its uses, the
Internet functions in much the same way as older
news media: offering opportunities for both those
[ Think Again ]
who directly seek news sites and those who chance
upon news links serendipitously. The Pew Internet
ly find news while they are doing other things
online. This picture is not consistent with the New, Relevant,
and American Life Project reports that 42 per- notion that Web audiences routinely tune out
BROOKINGS
Essential
cent of those who read news on the Web typical- information with which they disagree.
I N S T I T U T I O N P R E S S

“Media Coverage Drives Foreign Policy”

Government’s Greatest The Chechen Wars
Probably not often. Analyzing media In many places, governments are even more like- Achievements Will Russia Go the Way
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media cover, does that mean the media (or those Chinese government delayed release of the crew of
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Beyond Sweatshops Shrewd Sanctions
The idea that media coverage of international landing on Hainan Island in 2001, claiming that an Statecraft and State Sponsors
Foreign Direct Investment of Terrorism
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the “cnn effect.” The classic case is the coverage of comments did precede and were then reflected in Meghan L. O’Sullivan
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Governance
Protecting the The Roles of the Public and
ested publics.” For example, advertisers’ sense of which tors and networks, who in turn compete with satellite Private Sectors
policies on media ownership are in their interest may providers. Regulation and policy limits will always be American Homeland Robert E. Litan, Michael Pomerleano,
differ from that of regular newspaper readers or that necessary, but having different regulatory frameworks Michael E. O’Hanlon, Peter R. Orszag, and V. Sundararajan, eds.
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N OW AVA I L A B L E I N PA P E R BAC K
papers from merging results in both having to trim autonomous public broadcasters, yet the ruling Liber-
news budgets or pages, neither having the resources to al Democratic Party (ldp) strongly influences the agen- India
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Available at your local bookstore or order online at

26 Foreign Policy w w w . b r o o k i n g s . e d u
[ Think Again ]
tiser to withdraw sponsorship and in another, seeking
the withdrawal of a broadcasting license.
Paradoxically, relaxing broadcast regulation may
expand competition. When News Corp. put togeth-
er a fourth network in the United States in 1986, the
timing was not random. It followed two regulatory
decisions: the Federal Communications Commission
raised the limit on local licenses that a single firm could
own from seven to twelve and waived a rule that
kept tv networks from owning their programming.
The first change allowed News Corp. to assemble a
core of stations in larger markets that gave it a viable
base audience, and the second sanctioned News
Corp.’s purchase of 20th Century Fox, with its tele-
vision production studio. Fox was thus able to launch
the first successful alternative to the Big Three in 30
years. Its success also paved the way for three other
large media players to initiate networks.

[ Want to Know More? ]

Alan Albarran and Sylvia Chan-Olmsted provide a dispassionate view of the effect of corporate ownership
on media content in Global Media Economics: Commercialization, Concentration, and Integration of World
Media (Ames: Iowa State University Press, 1998). Most writers on the media are far from dispassionate. Typ-
ical of this genre is Dean Alger’s Megamedia: How Giant Corporations Dominate Mass Media, Distort Com- “Oil companies as
petition, and Endanger Democracy (Lanham: Rowman & Littlefield, 1998) and Leonard Downie Jr. and
Robert G. Kaiser’s The News About the News: American Journalism in Peril (New York: A.A. Knopf, 2002). they evolve should
The classic work to raise the alarm about media concentration is Ben H. Bagdikian’s The Media Monopoly consider themselves
(Boston: Beacon Press, 2000). Research on newspaper consolidation and chain ownership is reviewed in Chap-
ter 1 of Who Owns the Media? Competition and Concentration in the Mass Media Industry (Mahwah: energy sources.”
Lawrence Erlbaum Associates, 2000) by Benjamin M. Compaine and Douglas Gomery. ▲ Brian Connor/Account Manager

Channels of information on the relationship between media and society are abundant. In Virtuous Cir-
cle: Political Communications in Post-Industrial Societies (New York: Cambridge University Press,
2000), Pippa Norris contradicts the notion that media reduce civic activism, diminish trust in government,
and retard knowledge of public affairs. Norris also coedits, with Marvin Kalb, the Harvard International
Journal of Press and Politics, an analytical journal on the press-policymaking nexus. Ten country case stud-
ies on the media’s role in promoting democracy may be found in Democracy and the Media: A Comparative
Perspective (Cambridge: Cambridge University Press, 2000), edited by Richard Gunther and Anthony
Mughan. In “Clarifying the CNN Effect: An Examination of Media Effects According to Type of Mili-
tary Intervention” (Cambridge: Joan Shorenstein Center on the Press, Politics and Public Policy, 1997),
Steven Livingston explores the limits of media’s role in setting public policy agendas.
Today we’re the source of many energies. In
Shanthi Kalathil’s “Chinese Media and the Information Revolution” (Washington: Carnegie Endow- the U.S., we’re one of the largest producers of
ment for International Peace, 2002) explains why the Internet is not a force for press freedom in China. solar panels and the largest producer of natural
Other fascinating country-specific glimpses are Laurie Anne Freeman’s Closing the Shop: Information gas, the cleanest burning fossil fuel. And we’re
Cartels and Japan’s Mass Media (Princeton: Princeton University Press, 2000) and Anil Dharker’s look investing in the new energy sources of the

© 2002 BP p.l.c.
at the Star Network’s Indian debut in his review of Edward S. Herman and Robert W. McChesney’s future—hydrogen and wind.
The Global Media: The New Missionaries of Corporate Capitalism (London: Cassell, 1997) in the Sum-
mer 1998 issue of FOREIGN POLICY. It’s a start.

On the OpenDemocracy Web site, see the spirited debate between Compaine and McChesney on
the impact of corporate media ownership on democracy. The site also includes several articles on media
in such places as Italy, Latin America, and Japan.

»Foreign
For links to relevant Web sites, access to the FP Archive, and a comprehensive index of related
Policy articles, go to www.foreignpolicy.com.

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28 Foreign Policy bp.com