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Alex Stroup, Editor

Disney vs. Comcast

Why you should worry about a Disney media consolidation

Tuesday, March 9, 2004
by Sarah Olson, contributing writer

Comcast's $54 billion bid for the Walt Disney Company on February 11 last month sent shockwaves through the telecommunications industry, Wall Street, Disney shareholders, and media consumers alike. Should Comcast's bid to take over Disney be successful, the largest media merger to date would create the world's largest media company.

Among those perturbed by the announcement is a small—but growing—group of media activists, independent journalists, and consumers who want access to a variety of radio, television, and print reporting, and more diverse arts and cultural entertainment.

We live in a society where the average media consumer—each and every one of us whether we realize it or not—has access to hundreds of cable channels, radio stations for every genre imaginable, at least one daily newspaper, countless Web sites, and near complete advertisement saturation in the form of billboards, audio, video, and print commercials, coffee cup sleeves, pop-up ads and so on. And while it may seem that this information suggests an increased diversity of media, it is instructive to look at who owns what within today's media landscape: While an increased number of channels is available to today media consumer, the ownership of media outlets has steadily decreased over the last decade.

And why is this problematic? Why should a Disney shareholder or media consumer care about the consolidation of media into an increasingly small number of companies? In order to answer these questions, let's take a look at what happened to radio after the Telecommunications Act of 1996 deregulated the radio industry.

Proponents of the Telecommunications Act lauded it as a bill that would increase and promote “diversity of programming and diversity in the viewpoints expressed,” according to Reed Hundt, chair of the Federal Communications Commission (FCC) in 1996. But more recent studies have found that the deregulation of the radio industry has done just the opposite. According to a recent study by the Future of Music Coalition, 10 parent companies control two-thirds of radio broadcasts and radio revenue in the United States.

Moreover, two companies, Clear Channel and Viacom, control 42 percent of radio broadcasts. Clear Channel alone has grown from 40 stations in 1995 to over 1,240 today, and currently has over 100 million listeners. The effects of this can be seen in almost every market sector and every genre. Just four companies control 70 percent or greater of every large radio market in the United States. In smaller markets, these same four companies control up to 90 percent of market share. Additionally, four parent companies also control two-thirds of the county's news radio listeners.

The ramifications of this tightened control on radio venues are stark. There are countless examples of radio disk jockeys behaving badly, including instances where morning disc jockeys slaughtered animals live on the air, encouraged drivers to run bicyclists off the road, and one instance where a San Jose, California disc jockey invited a young girl into the studio to read sexually explicit jokes. And the problem is highlighted when listeners realize that they have nowhere else to go. In effect, they cannot boycott the radio without turning it off entirely.

One of the most notorious examples of the very real dangers of media consolidation, combined with irresponsible use of the airwaves occurred in Minot, North Dakota. In January 2002, a train carrying 200,000 gallons of poisonous anhydrous ammonia, a chemical used in fertilizer, overturned, unleashing a cloud of the deadly gas over portions of this small farm town.


When authorities called the radio stations asking them to implement the emergency broadcast system, no radio personnel was there to answer the phone.


Unfortunately, each of the nine radio stations in the Minot area is owned by Clear Channel, which widely uses the practice of voice tracking, or piping in musical programming from a far away location. So, when authorities called the radio stations asking them to implement the emergency broadcast system, no radio personnel was there to answer the phone. The entire city went for hours without knowing that there was a problem, in part due to the fact that there was no mention of it on any local radio station.

Today, larger and larger portions of the American public are saying that the state of radio consolidation is not OK with them, and that they are unwilling to allow the rest of media outlets to consolidate in the same fashion.

Last June 2, the FCC, headed by Michael Powell (son of Colin Powell), voted to relax a series of rules designed to limit the consolidation of ownership among media outlets. The rules that the FCC voted to jettison included a broadcast and print cross-ownership ban where one company could not own a newspaper and a television station in the same market, as well as a national 35 percent market ownership cap, and a cap preventing broadcasters from owning more than two television stations in the same market.

The FCC passed this rule relaxation after a record number of people around the country submitted public comments that asked the FCC not to relax those media ownership regulations. In addition, citizens around the country flocked to public hearings held by two sympathetic members of the FCC, Jonathan Adelstein and Michael Copps. In spite of this public outcry, the FCC passed these new relaxed regulations, potentially opening up media venues to a swarm of new proposed mergers, and turning the entire United States media landscape into a repeat of the radio industry consolidations in the post-1996 era. The FCC decision sparked congressional investigation, public protest, and is currently being challenged in court.

Meanwhile, Comcast has approximately 21 million households subscribing to its services. Combine that with the Walt Disney Company's ownership of ABC TV, the Disney Channel, ESPN, Radio Disney, Hyperion, five magazine publishing groups, four newspapers, theme parks, hotels, Disney Cruise Line, Touchstone, Miramax Films, and Buena Vista, and you have redefined the meaning of the word monopoly.

Because of the growing size of these mergers, it is helpful to ask some basic questions:

  • Just what constitutes too much control of the nation's broadcast outlets?
  • How might original programming be hindered?
  • Could independent cable operators and locally produced network broadcasts be jeopardized?
  • What's the likely cost impact on the consumer?
  • What is the benefit to media consumers?

While public opinion has not yet changed the course of media consolidation, it is conceivable that in the foreseeable future we as a nation might say enough is enough. If the prospect of what you see and what you hear being controlled by an increasingly limited number corporations owned by an increasingly limited number of people concerns you, there are a number of actions that you can take.

First, you can write your elected officials. The Senate Commerce Committee took up the issue of media consolidation last summer. Both the Senate and the House will be looking at new laws for indecency, and during this election year the issue of media consolidation is sure to be addressed within the spectrum of political discourse. You can make sure that it is, and that the concerns of media consumers are well represented.

Second, you can write to the FCC and express your concerns about the effect that media consolidation may have on local and independent artists, musicians and journalists. Write the FCC at:

Federal Communications Commission
445 12th Street,
SW Washington, DC 20554

You can also find the contact information for individual commissioners online at the FCC's Web site (link).

Additionally, if you are a Disney Corporation shareholder, your opinion is important. Let Disney know that you are concerned about the upcoming possible merger.

And finally, you can encourage localism and diversity in media by supporting independent news, music, and cultural outlets within your local community.


Thoughts, questions, or comments?
Contact Sarah at solson75(at)yahoo(dot)com.


TAKE ACTION!

Write the Federal Communications Commission (FCC) at:

Federal Communications Commission
445 12th Street,
SW Washington, DC 20554

For more information on this subject:

Media Channel, a global network for democratic media (link)

Media Alliance, a nonprofit training and resource center for media workers, community organizations, and political activists (link).

Future of Music Coalition, a not-for-profit collaboration between members of the music, technology, public policy and intellectual property law communities (link).

ABOUT THE AUTHOR

Sarah Olson is a part-time radio producer and journalist, and a full-time technical writer based in the San Francisco Bay Area. She covers a wide range of issues, from politics and economics to immigration and poverty.

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