Transnational Media and Communication: The Restriction in the Flow of Ideas

18 July 2005

Transnational Media and Communication: The Restriction in the Flow of Ideas
Richard C. Vincent, PhD

Some 15 years ago, communication scholar Herbert Schiller wrote that "the separation of culture, politics and the economy is, ... absurd" when "culture is the economy." (1986, 77, 81)

And, as economist T. Miller (1993, 96) observes, "the signified of 'free trade' is the self interest of the most powerful."

The transnationalism of commercial media is a relatively recent development. Until the 1980s, media were essentially national. Sure, imports of movies, books, newspapers, music, etc. have been present for decades. However, it was the influence of the IMF, the World Bank, and the US government to deregulate and privatize communication along with the new emerging satellite and digital telecommunication technologies that contributed to the rise of today's transnational media.

Who are these media giants? The two largest are Time Wamer and Disney. Times Wamer controls CNN, Turner Television, and Home Box Office (HBO). It has the largest US cable television operation, more than 1,000 movie screens outside the United States, a 50 percent interest in DC Comics (Superman and Batman), Time-Life Books, Six Flags theme parks, more than 150 Wamer Brothers (WB) stores, and interests in Atari and Hasboro, among other holdings. As for Disney, it owns film production, ABC Television, ESPN, Lifetime, A&E and the History Channels. In addition, it owns a number of US television and radio stations, television production operations, a record company, theme parks and resorts, two professional sports teams (one baseball, the California Angels; one ice hockey, the Ducks), over 550 retail stores, and a vast line of retail products.

Other media giants are Bertelsmann at fourth, Viacom at fifth, News Corporation sixth, Sony is seventh, TCI is eighth, Universal (Seagram) is ninth, and NBC (General Electric) is tenth. Let's just look at two of these, News Corporation and MCI. Rupert Murdock's News Corporation already of Fers a variety of media programs, but he seems specifically interested in ultimate world media domination. In fact, business leaders such as Disney's Michael Eisner and Time Wamer's Gerald Levin each acknowledge that Murdock is the media executive they most respect as well as fear (McChesney, 1997, 4). Murdock has been making moves to dominate television households in Europe, Asia, South America and even the United States. Included in this mix are the Fox News Channel, Fox Kids Worldwide, British Sky Broadcasting, and some 130 newspapers including the London Times & New York Post. He also publishes TV Guide; book publishing including Harper Collins, and the Los Angeles Dodgers baseball team. Ironically, this Australian's Fox Television Network has just recently won the US broadcast rights for the next several years for all American Postseason baseball broadcast coverage including the tradition-bound World Series. With ticket prices and salaries steadily on the rise, Fox's outbidding of NBC and the other US -based networks can only contribute to escalating costs ultimately paid for by sports fans.

As for MCI, it is the second largest US cable television provider and is additionally part owner in Primestar, a US joint cable operation. Furthermore, it has major interests in cable television programming channels such as Fox Sports Net, Court TV, E!, the Discovery Channel, Black Entertainment TV, and home shopping channels QVC and the Home Shopping Network. So, you now get a fairly good idea of exactly how far reaching and powerful these media companies really are. What is even more interesting is the consideration that the transnational media giants have increased their non-domestic (often the US, sometimes other countries, but almost always countries in the West) revenues from about 15 percent in 1990 to some 40-50 percent today. And, the proportion is still growing!

Now, in order to compete in this transnational environment, these media giants essentially have to continue getting larger and larger. It's the classic economic concern about oligopolies. You tend to make more money as you increase your market share. To gain control, you may also choose to diversify your holdings or seek vertical integration in the industry. Our media via multiple media ventures often does this. You have already seen the breadth above, range from motion pictures, book publishing, television channels networks, music production, amusement parks, retailing, and so on. This vast network of operations aids in a mushrooming of potential profits. For example, a film production would be available for a spin-off soundtrack, a book, theme clothing, restaurant tie-ins at Mc Donald's or elsewhere, CD-Rom and video games, amusement park rides and attractions, retail merchandise including toys and dolls, etc. Truly this is big business! So, if your firm cannot conglomerate, then you simply remain a minor player in the industry, if you can survive at all.

What, you may ask, are the dangers of such practices? It depends which side of the fence you are sitting on. For the transnational, this is exactly the correct road to take. The goal of business in a market economy is typically to make money, and the more the better. The difficulty is that although companies make money, the consumer does not necessarily benefit. And, that is where business management differs from economics. The former is interested in profit maximization under the free market philosophy. The latter must consider the social impact of any business decisions and trends. The two are not necessarily compatible.

I have outlined the concerns along three simple lines and expand on them below. The points of discussion are:

  1. Problems of monopolistic behavior
  2. Promotion of consumer values at all costs
  3. Denigration of journalistic values

Problems of monopolistic behavior

As the economist tells US, there are inherent disadvantages in a monopolistic business situation. Essentially, when firms strive for control of a marketplace, they resort to practices of exclusion of competition and these practices often are illegal or at least highly questionable. Hence, we have firms that engage in behaviors such as price fixing. In the media, price fixing may exist in advertising rates, theater ticket prices, video or music price setting, etc. One simple example can be found in the pricing of music CD. The US Justice Department has been investigating large US music retailers such as Tower Records. What the investigation suggests is that US, consumers have long been paying at least several dollars more per CD than they should. As manufacturers have been lowering wholesale prices, the large retailers have not passed along the discounts to consumers. Consequently, CD continues to cost 17-18 USD whereas they really should be priced at 12-14 USD. And, if this is the case in the United States, how do we explain the cost of a CD in the UK or Ireland at the equivalent of about 25-30 USD?

Another problem of monopolies is that in times of severe concentration of control, the firm usually spends most of its resources attempting to maintain control rather than benefit the consumer. As a result, little money goes into research and development which would mean new and/or cheaper/more efficient products that would likely benefit the consumer.

We see this in the United States where overt-corporatism is found in the deregulation frenzy, spurred on by corporate pressures to ease regulations. As a result, consumer-oriented regulations are eliminated because it may stand in the way of further growth and profitability. The results have been that a new wave of legislation, epitomized by the Telecommunications Act of 1995, where almost no public input was allowed.

In India, when STAR TV proved popular among viewers, News Corporation responded by increasing its share two-fold in India's largest Hindu-language Zee TV and then bought local language programs with News Corp. subsidiaries Fox TV and 20th Century Fox. Thus success breds more of the same in the media business world.

Take for example the World Cup football/soccer tournament in Europe several years ago. Several teams of interest to the UK and Republic of Ireland had qualified. Since Murdock had broadcast control over all games in the region he offered key matches only on a pay-per-view or video-on-demand basis.

The British and Irish people became so irate that legislation was soon written to prevent such a move in the future. Yet sports are one thing. The advocates of cultural programming, the arts, social affairs, concerns of indigenous people, matters involving disenfranchised groups, or advocates of children's programming may be much less powerful and therefore, unable to win legislative coups over the big media business lobbies.

Problems of consumer values at all costs

Southeast Asia may be the last major region affected by international satellites. It really was not until the 1990s, for example, that Southeast Asia saw Western television enter on such a massive scale - advances in technology plus market liberalization were reasons. Asia, of course, is the largest worldwide market (2.8 billion) and has one-third of the world's television sets. While Asia has been known to foster a distinct cultural and linguistic heritage, this specialty is now in jeopardy. We see MTV, Western news and movie channels, and other Western influences spreading across Asia. The cultural heritage of these countries is being threatened by the trans-border data flow. People are being told they need products they never realized they required. They are told that Western styles and habits may be better than their own traditions and customs. Young people in particular now grow up with stronger ties to New York and Los Angeles than their own capitals and families.

Then there is the danger that comes when making money is more important than quality of information flow. China's 1.2 billion people are a desirable audience. Consider what happened when News Corp. purchased STAR TV in 1993. A controversial program on the Chinese government on BBC World Television News leads to PRC official complaints. Murdock simply pulled the plug - note that he also was an investor in the Beijing People's Daily. Similar pressures caused him to pressure Harper Collins of London to cancel a book contract with a former ambassador to China because it too was critical of the regime.

Denigration of journalistic values

Years ago, Fred Friendly relayed how he and Edward R. Murrow were often told by CBS's management that news was not to interfere with advertising time. If you must break in with a news bulletin, they said, do it during the program, not the commercials.

The problem has only gotten worse. A few years ago journalist Arthur Kent reported that executives at NBC ordered him to avoid news stories that were depressing. Additionally, he was told to report only on those stories for which a positive resolution could be demonstrated within the story. If it was not possible, then the story should be dropped.

One of the latest examples is the trend toward "civic" or "public" journalism. The trend attempts to improve journalism and reduce sensationalism. In actuality, the move offers ideology-free reporting that attempts to be so balanced that it is nothing short of boring. In fact, publishers seem to love it for it is essentially inserting the broadcast programming philosophy of homogeneity and the lowest common denominator in newspapers. This, then, helps newspaper circulation as stories appeal to everyone without giving any particular group that which they really desire or need. The move, by the way, is credited in the 1996 re-election of controversial and ultra-conservative North Carolina legislator Jesse Helms. Journalism was unable to ask probing questions or force politicians to answer such questions (McChesney, 2000, 2). In addition the move side steps the all-important issue of newspaper ownership that we are discussing here.


The concentration of media power has risen to alarming levels. The greatest price may be is effect on life in a democratic society. Communication is vital to democracy, and global media conglomeration is stifling our ability to freely communicate. If the people do not do something to stop the spread of these media giants, things will only worsen. The question that must be asked is: Do communication networks supposed to benefit a select few, or are they designed to serve society as a whole?

Richard C. Vincent, PhD
2560 Campus Road
School of Communications
University of Hawaii, Manoa
Honolulu, HI 98622 USA
+1 808 9563352