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Coast-to-coast flashes on the great convergence of the media

By Dante Chinni / June 27, 2006



WASHINGTON

In the past few weeks, on different coasts, the nation's great and continuing media consolidation debate took a few big steps – in opposite directions.

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Last week, here in Washington, the Federal Communications Commission announced it was again ready to review and almost certainly loosen the nation's media ownership rules. How much they will be loosened is the question.

The FCC's announcement came three years after sweeping rule changes that allowed companies to own more outlets – TV and print – in each locale and allowed each network to reach a greater percentage of the TV viewing audience. So sweeping were those 2003 changes that Congress reversed many of them, and the federal courts threw them out and requested that the FCC start over.

The rule review is required by law – an acknowledgment that technology has changed the media landscape. But critics fear that loosening the rules too much can be detrimental to democracy. They are concerned that too few owners will limit the number of voices available to consumers and lead to the thing media haters most despise, a large monolithic force controlled by a few rich people. Most owners, of course, balk at that suggestion.

First, they say, the Internet prevents those big media companies from getting too powerful. There are thousands of voices out there now. Anyone with a computer and a broadband connection can cover the news – an argument sound on a theoretical level, but one that ignores pesky realities such as how many people actually listen to each of those thousand little voices compared to the few big ones.

Second, owners argue, they are all about serving the customer. What's really better for consumers, a fragmented group of small news organizations that are short of resources, or a smaller number of big companies that can spend on the best staff, equipment, and reportage? Isn't the answer obvious?

Again, in theory, maybe. But the better question might be what's actually better for those big companies, which brings us to the news from the other coast last week.

Out in Los Angeles a company that was a poster child for "bigger media is better media," Tribune Company, is having trouble. There, members of the Chandler family, which had owned the Los Angeles Times for more than 100 years, are looking for someone to buy at least some of Tribune's media outlets, if not all of them, citing poor economic performance.

In 2000, Tribune bought the Times parent company, Times Mirror, and hoped to take advantage of those loosened rules the FCC was then considering. Tribune received waivers from the government in several markets where the company owned too many outlets – newspapers and TV stations – and hoped to become a model of how big-company synergy could work.

But that simply hasn't been the way the markets have seen things. Tribune's stock price is currently lower than it was in 2000. Its revenues are down. One analyst called the merger "a very big failure."

And Tribune is not the only media company that has found less than stellar success in the promise of growth and synergy. Remember all the excitement around the AOL Time/Warner merger in 2000? Ah yes, back when the tech market was unstoppable and AOL appeared to hold the perfect delivery system for Warner content like, you know, surefire hits like "Battlefield Earth." But, of course, times change.

The truth is the verdict is still very much out on the "bigger is better "media argument. But at the very least, at the moment, it seems safe to say that bigger isn't necessarily better. It may be a case-by-case argument. It may be that we aren't far enough along the great convergence of media – where your computer is your TV and your newspaper – for these mergers to work yet. Who knows?

But the biggest media ownership news of the year so far is probably not a story of consolidation, but fragmentation – the dissolution of the Knight Ridder newspaper chain, in which a company, McClatchy, came in and bought all the papers and then sold several of them to different buyers.

There is more than a little irony in all this. For years, journalists have decried what has happened to newsrooms because of bottom-line pressures. Big companies have been bought by bigger companies, journalists lament, and often the new owners, with few ties to the outlets' hometown or history, have cut staff to meet high profit margins.

Ultimately, whatever the FCC does, the brakes in the great media buyoff may be applied not by the FCC or disgruntled newsrooms or irate citizens, but by the companies themselves that decide that even if they think "bigger is better" the final arbiter for them, the bottom line, isn't so sure.

Dante Chinni, a senior associate at the Pew Project for Excellence in Journalism in Washington, writes a twice-monthly column on media issues.

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