Tag: Media competition

Posted on By Patrick Maines

Google’s Impact on Journalism

The products and services offered by Google are well known and highly regarded.  Every day, millions of consumers around the globe visit the company’s search engine or sites like Google News or YouTube.  And for this, the company’s employees and (especially) its founders have been well compensated.

But there’s another side to Google that consumers know very little about.  That is Google the corporation, and the effect its business practices are having on competitors, and most dramatically on the professional media, news and entertainment alike.

In important measure, people know little about Google the corporation because news stories and commentary about the company’s business practices are mostly confined to industry trade publications, or technology and economic journals.

Even the public policy issues that the company addresses are complex, and hard to write about in a way that wouldn’t cause most readers’ eyes to glaze over.  How, for instance, would one popularize such issues as the district and appellate court rulings in Viacom v. YouTube, or the FCC’s “network neutrality” proceedings, or the FTC’s recently concluded investigation of Google’s search and advertising policies?

So it’s easy to understand why the public at large doesn’t know much about Google’s role in these matters, but book and newspaper publishers do.  So too do movie studios and Google’s competitors in the online travel business, to name just a few.

And what all of these other companies know is that Google’s scale, business tactics, and aggressive lobbying amount to a distinct threat to their very existence.  A single datum provides a startling view of the challenge: Through the first half of 2012, Google by itself took in more ad dollars than the entire U.S. print media, magazines and newspapers, excluding only the ads on newspaper websites, which even today generate only about 25 percent as many ad dollars as print advertising.

The ways in which Google uses its dominance in search to monetize, by corralling and aggregating (without permission) the content of others, is a story that is long in telling.  But a common feature, as stated in a White Paper submitted to the FTC in 2011 by The Media Institute, is that Google’s “main search page biases Google News results over results of news organizations and other publishers.”

Nor is this the perception and complaint just of American publishers.  On June 25, a coalition of hundreds of Europe’s leading publishers urged the European Commission, which is the EU’s antitrust authority, to  reject outright some remedies that Google offered to end an investigation by the Commission of the same kind of practices the company is accused of by publishers on this side of the Atlantic.

As summarized by GigaOm, “Google is accused of surreptitiously favoring its own services in its search results, locking advertisers onto its platform and scraping content from rival, subject-specific search engines.”

In elaboration of the European publishers’ rejection of Google’s proposals, the president of AEDE, a Spanish association of daily newspapers, put it this way: “In short, Google’s proposed remedies do not address the overarching problems and fundamental harms that Google’s conduct causes in search-related markets and none of them aims at restoring effective competition….  In some ways, they might actually make matters worse by entrenching dominance and misleading consumers.”

Here, as in Europe, the principal venues of appeal for those being harmed by Google’s business practices are the antitrust authorities, which is to say quasi-political bodies.  And that’s a problem. In this country, the FTC has already dismissed an opportunity to do a full antitrust review of Google, in part, we can speculate, because there is no great public support for the news media generally.

Indeed, a Pew poll, released on July 11, found that only 28 percent of respondents believe that journalists “contribute a lot,” down from 38 percent four years ago.  And a Gallup poll, published on June 17, revealed that only 23 percent of the public have “overall confidence” in newspaper and TV news.

Given this lowly rating by their own customers, one might be tempted to dismiss the news media’s cannibalization by Google as something they had coming to them, and there’s an element of truth in that, as with the special contempt for them that the media have inculcated in conservatives and Republicans.

But there’s a much larger issue involved in Google’s anti-competitive behavior, and that is whether this (or any) country will in future have a robust and profitable news media industry, marked not by opinion but by objective news, investigative, and feature reporting.  Surely people of all political persuasions can agree that blogs and content aggregators are not going to fill that role.

At a time when the Internet is obliging mainstream news outlets to publish online, it is not yet clear whether a way can be found to make up, in that process, for the necessary advertising revenue that once came their way – a problem not confined just to the legacy media but to prospective newer entrants in the news reporting business as well.

And it is at this crossroad where Google, the company whose fraying motto is “Don’t be evil,” may prove decisive.

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.  This piece was first published in USA Today on July 19, 2013, under the headline "Beware of Google’s Power."

Posted on By Kurt Wimmer, Esq.

Media Institute Response to ‘The Truth About Google, Search, and the Media Industry’

GUEST BLOG

[EDITORS’ NOTE:  Kurt Wimmer is a partner in the Washington, D.C., office of Covington & Burling LLP.  He is chairman of The Media Institute’s First Amendment Advisory Council, and is the principal author of the Institute’s white paper to the Federal Trade Commission about Google’s practices.  The article below is in response to the rebuttal of Oct. 6 by Adam Kovacevich of Google, which can be found on this site.]  

By Kurt Wimmer, Esq.

When Google wrote the Media Institute about the white paper we submitted to the FTC (“How Google is Dominating the Media Economy”), Patrick Maines invited Google to respond on this blog.  Frankly, we were pleased that we’d prompted a frank conversation about Google and the future of media.  We expected and were ready to welcome energetic disagreement with our position; after all, one of the Media Institute’s underlying missions is promoting a diversity of voices on major public policy issues.

But instead of deepening the debate, Google dusted off talking points that it’s been using for years, most of which our paper readily acknowledges. 

We don’t question, for example, that Google News drives some traffic to some publications’ websites.  Most viewers of Google News do not click through to any of the media sites from which Google scrapes content – about half of all users go no further than Google News and thus do not generate a dime for the content producers.  But we know that some traffic does flow from Google News to publishers’ sites.  We do have serious doubts about the “value” of this traffic, and we worry that, as it has in other areas, Google increasingly uses its News page to cannibalize whatever value there is.  Whether these websites can “opt out” of News is unhelpful because of the predicament News puts publishers in – opt-in, and feed the Google monster; opt-out and starve alone.  Our concerns do not relate to publishing only; as our paper pointed out, Google Places is following the Google News model in using its search dominance to scrape and scuttle local review websites.  Google’s response breezily ignores these points.

We have the same objections to Google’s treatment of Books and YouTube in its response, which again relies on broad statements rather than engaging in any serious debate.  Google simply bypasses our basic premise, which is that it has used its scale to coerce content makers into accepting the Google business model.  Google claims legal victory in the dispute between YouTube and Viacom, but the Second Circuit won’t hold oral argument to settle the matter until later this month.  Given the brazen evidence that YouTube was founded and grew on a business model of copyright infringement, we believe that Viacom is likely to take the upper hand – but we won’t claim victory until the Second Circuit rules, and suggest that Google should do the same.

And Judge Chin’s concerns about the Google Books Settlement have left that agreement hanging by a thread.  Though we disagree with Google’s legal arguments in both cases, we wouldn’t have criticized Google for offering an outspoken defense of those positions.  But Google, rather than addressing the colossal quantities of content it stockpiles at the expense of creators and competitors, offers only the same hollow defense: We bring books and video to a wider audience.  This is no help, in our view, given the costs that Google’s response sidesteps.  Infringement always brings works to a “wider audience” – an audience that the creators of the works did not agree to serve for free, and one that does not fund the creative spark that created the works.  In fact, both Google Books and YouTube exist not to bring works to a wider audience, but to create dominant platforms for works that deny creators the benefit of a competitive marketplace.

The rise of Google’s dominance in media deserves a candid discussion, both here and at the FTC.  We wish Google had contributed something new to the discussion, rather than just reiterating its weary talking points.  We would welcome any additional comments that Google would like to make in defense of its position or in rebuttal to our white paper.

                                   

The opinions expressed above are those of the writer and not necessarily of The Media Institute’s Board, contributors, or advisory councils.

Posted on By Patrick Maines

Response to The Media Institute White Paper: The Truth About Google, Search, and the Media Industry

GUEST BLOG

[EDITORS’ NOTE: In this space we offer Google an opportunity to take issue with the White Paper that The Media Institute filed with the FTC in August.  Google’s response is printed below exactly as we received it.]

By Adam Kovacevich, Head of Competition, Public Policy and Public Affairs, Google (Washington, D.C., office)

In August 2011, The Media Institute submitted a white paper to the Federal Trade Commission claiming that Google practices could “foreclose competition” in the media industry. The white paper largely restates past criticisms of Google on copyright and intellectual property issues. We appreciate the opportunity to post a rebuttal. Some of these criticisms are obsolete or have already been litigated; others we believe are just wrong. Here are the facts:

Google Has a Record of Helping the News Industry

Google News drives valuable traffic to news organizations’ websites for free. Each click from Google News to a publisher’s site is a business opportunity, offering newspapers and other publishers the chance to show ads, register users and earn loyal readers. Google News follows international copyright law by only showing users a headline and a short snippet for each news story.

Google sends news publishers more than 4 billion clicks each month. Google News provides about 1 billion of these clicks, and an additional 3 billion come from other Google services like web search. This means that Google sends approximately 100,000 business opportunities to publishers every minute.

Google News works with publishers by offering them useful tools. For example, Editors’ Picks is a feature that enables editors in newsrooms to identify the stories they believe should receive attention. Additionally, the new “standout” tag on Google News gives publishers the ability to self-designate unique and noteworthy content from their own or other publications. Articles tagged as “standout” may appear with a “Featured” label on the Google News homepage and News Search results. [Google News Blog, Aug. 4, 2011, Sept. 24, 2011]

News Organizations Can Easily Opt-Out of Google News

News publishers have control over their inclusion in Google News. If at any point a web publisher wants Google to stop indexing their content, they’re able to do so quickly and effectively by sending Google an opt-out request. Google also provides publishers with instructions to block their content from Google News, should they choose to do so. [GoogleNewsBlog, Dec. 2, 2009]

Opting out of Google News does not remove content from Google Web Search results. If a publisher opts out of Google News, but stays in Web Search, their content will still show up as natural web search results. [GoogleNewsBlog, Dec. 2, 2009]

Google Is Investing in the Future of Journalism

Google donated $5 million to nonprofits devoted to developing journalism in the digital age. $2 million went to the John S. and James L. Knight Foundation, a nonprofit that supports programs that drive innovation in journalism. The Knight Foundation used half of its grant to augment the Knight News Challenge, a media innovation contest that recognized 16 winners in 2011. [Official Google Blog, Oct. 26, 2010, June 22, 2011]

Google and the Associated Press are offering six $20,000 scholarships to journalism students to encourage and enable innovation in digital journalism. The Online News Association, the world’s largest membership organization of digital journalists, will administer the program. [OfficialGoogleBlog, Aug. 15, 2011]

Google Books Helps People Discover Books, Benefiting Users, Authors and Publishers

Google Books helps readers find information and gives authors and publishers a new way to be found. For instance, the Google Books Partner Program enables publishers to promote their books online for free — so that users can search through them, and find out where to buy them or get them from a library. More than 40,000 partners have joined the Partner Program, including nearly every major U.S. publisher. [GoogleBooksBlog, May 23, 2011]

Google will work to make more of the world’s books discoverable online. The March 2011 decision by Judge Denny Chin to reject the Google Books settlement was disappointing, but Google is reviewing the Court’s decision and considering various options. We believe this agreement has the potential to open up access to millions of books that are currently hard to find in the US today. [GoogleBooksAgreement]

Google Helps Rights Holders Manage Their Presence on YouTube

YouTube created Content ID to help rights holders manage their content on YouTube. Managing rights for content owners on YouTube has been important since the site’s early days. In 2007, this strategy led to the creation of a new technology called Content ID. Content ID is a full set of audio and video matching tools that give rights holders fine-grained controls for managing their content if someone uploads it to YouTube. Rights holders have the option of blocking, tracking, or making money from videos containing their content. More than 100 million videos have been claimed with Content ID. [YouTubeBlog, Dec. 2, 2010]

Content ID helps rights holders monetize their content. More than 1,000 partners use Content ID. Rights holders who claim their content with Content ID generally more than double the number of views against which YouTube can run ads, which doubles the rights holders’ potential revenue. Content ID contributes more than a third of YouTube’s monetized views each week. [YouTubeBlog, Dec. 2, 2010]

YouTube won its copyright case against Viacom. In June 2010, a federal court decided against Viacom in its copyright infringement lawsuit against YouTube. The court ruled that YouTube is protected by the safe harbor of the Digital Millennium Copyright Act if it works cooperatively with copyright holders to help them manage their rights online. [OfficialGoogleBlog, June 23, 2010]

Google Does Not Block Other Search Engines from Crawling YouTube

Bing and Yahoo both display YouTube videos on their search engine results pages. A search for [rebecca black friday] on Bing and Yahoo displays the YouTube video as the fourth result on Bing (following two Wikipedia entries and a Bing Images result) and as the third result on Yahoo (following two Wikipedia entries). [Bing | Yahoo]

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Posted on By Patrick Maines

Google and the Media

The Wall Street Journal was the first to report, in June, that Google was about to be served with subpoenas as part of an investigation by the Federal Trade Commission into “whether the Internet giant has abused its dominance in Web-search advertising.”  If the FTC gets around to asking (under subpoena and in confidence) what media companies think about that allegation, they better come prepared to stay awhile.

This, because although you won’t find many media companies willing to say so publicly, Google is roundly feared and detested, and for good reason.  Google dominates the online advertising market, “by skimming away the earnings of media companies as it scrapes up their content, denying them of the scale that would be required for effective competition with the gatekeeper to the Internet.”

This and other observations are among the findings in a white paper submitted to the FTC by The Media Institute last week.  Titled “Google and the Media: How Google Is Leveraging Its Position in Search To Dominate the Media Economy,” the paper amounts to an indictment of the business practices of a company that has achieved extraordinary success with consumers.

As stated in the press release: “Google has used two principal strategies for appropriating the creative content of others for their own gain.  The first, exemplified by Google News, takes content from potential competitors to launch new businesses while depriving those competitors of the revenue their original content generates….  The second strategy, exemplified by YouTube and Google Books, is to test legal limits of copyright and, when challenged, to resolve any disputes by further cementing its monopoly.”

The Institute’s white paper makes no specific recommendations to the FTC, saying only that we are confident that the Commission can “find an appropriate prospective remedy to protect competition in the media, search, online and mobile markets.”

Our commissioning and release of this paper has led some – like the excellent media reporter John Eggerton – to ask whether this isn’t sort of an unusual position for an organization like TMI to take, given our view that government ought to stay out of the marketplace generally, and the media specifically.

And the gentleman is right; it is somewhat out of the ordinary.  But it’s also the case that there’s nothing usual or ordinary about Google, or about the threat that Google presents to an entire industry – in this case the professional, for-profit media – which taken together represent something special and uniquely important in this country.  And as shown here and here, our concern with Google’s business practices predates the FTC investigation by at least three years.

More than this, we would argue that the careful application of the antitrust laws is completely consistent both with capitalism and the general wisdom in keeping the government at bay in most ways.

A good parallel can be found in the Institute’s robust promotion both of freedom of speech and of strong copyright laws. We know that there is a certain tension between the two, but we think that tension can be reconciled, and that in fact these two values are the opposite sides of the same coin – valuable in their own right and vital when taken together.

And in any case, the facts here speak for themselves.  As stated in the conclusion of the white paper:

Despite its stated values to the contrary, Google has shown a willingness to exercise its monopoly power to the detriment of media companies, publishers, and journalists. These are companies ready to compete in the digital age, and prepared to rise or fall on the quality of their content and the strength of their creativity.  They face challenges that will promote innovation.  But they also face a challenge – from Google – that discourages improvement, and that transforms any advance into a setback as Google misdirects users to its own webpages, displaying the content of others and foreclosing competitors from that same aggregated content.  Absent intervention by the Commission, the future of the media economy will remain in significant danger of being dominated by a single entity that will foreclose competition.

                                   

The opinions expressed above are those of the writer and not necessarily of The Media Institute, its Board, contributors, or advisory councils.

 

Posted on By Patrick Maines

Evil Is as Evil Does

The search giant Google is attracting criticism from those who see in that company’s business practices a threat to professional journalism, old and new.  The latest such comes in the form of a policy paper written by media attorney Kurt Wimmer, and published online by The Media Institute.

Honored this year by the Reporters Committee for Freedom of the Press, Wimmer has advised journalists and legislators in more than two dozen countries concerning new media laws, protection of journalists, and freedom of information.

The thrust of his paper is that, at a time when there is great concern for the future of the media, much of this concern is misplaced.  There’s no crisis in journalism per se, he argues, but rather a crisis in the monetization of journalistic content, a condition greatly exacerbated by the fact that one company dominates both search and online advertising.

Is anyone monetizing digital content?  Yes.  News and information continues to be monetized – at a rapidly increasing rate – by search engines, content aggregators, and others whose new, targeted advertising models have overtaken the spending that had supported journalism in the past.

Again, the dramatic new feature here is the split between content creation and content monetization – those who create the content are not those who are monetizing it.  Google, for example, had a record $23 billion in revenue during 2009, without producing a word of original content.  Google’s job is simply to monetize the content that others have created, and it has performed that job exceptionally well.  Today, more than 70 percent of the Web searches conducted in the United States (and up to 90 percent of those in Europe) flow through Google’s servers.  By its recent acquisition of AdMob, Google will control the vast majority of the mobile application advertising market as well.

Complaints about Google’s disruptive effect on professional journalism are not new, of course, and this is not the only active concern about Google’s business practices.  Other people have problems with the company’s abuse of copyrighted material (as in Viacom’s lawsuit against Google’s YouTube subsidiary), or with Google’s invasion of privacy, such as seen in the recent “Spy-Fi” affair.

What is new is the degree of scrutiny of Google’s practices by government antitrust officials.  As reported last month in a lengthy story in The New York Times, “the search giant’s decisions on such matters may soon be judged by higher authorities.”  As the Times reporter, Brad Stone, put it: “Almost a decade after Google promised that the creed ‘Don’t be evil’ would guide its activities, the federal government is examining Google’s acquisitions and actions as never before, looking for indications that the company’s market power may be anticompetitive in the worlds of Web search and online advertising.”

It’s become hard to know, in recent years, what the government may deem to be in restraint of trade, but if it happens, sometime in the near future, that it initiates an antitrust review of Google and you find yourself wondering why, read Wimmer’s piece and wonder no more.

Cross posted here on Huffington Post.

Posted on By Richard T. Kaplar

More on Newspapers and Aggregators

If newspapers ultimately survive, they might owe a debt of gratitude not only to Rupert Murdoch (as Patrick Maines suggested here recently), but also to two brothers who have combined their expertise in economics and the law to analyze the problem and come up with a potential solution.

As I wrote here earlier this month, online aggregators quite possibly could kill off newspapers by pirating the papers’ original news content.   Among the industry watchers who have studied this phenomenon are Daniel Marburger, Ph.D., a professor of economics at Arkansas State University, and his brother David Marburger, Esq., a partner at the Baker Hostetler law firm in Cleveland.   

The brothers have conducted an extensive analysis of both the economic and legal frameworks of the newspaper industry (print and online), and how these frameworks intertwine in the digital age.  In a number of papers and articles, the Marburgers have gone beyond the usual observations in two important ways: (1) They draw a distinction between “pure aggregators” and “parasitic aggregators”; and (2) they suggest a way of closing a loophole in copyright law that would seriously curtail the so-called parasites.

“Pure aggregators,” they say, use only a headline and maybe a sentence from the original news source, and then link back to that source (i.e., a newspaper website).  Pure aggregators are economically good for papers on balance because they drive readers to the newspapers’ websites.

“Parasitic aggregators,” on the other hand, take content from newspaper sites, rewrite it a bit, and then pass it off on their own sites.  These parasitic aggregators are bad because they retain readers rather than drive them to the newspapers’ sites.

In the Marburgers’ longest paper on the economic viability of newspapers, two section titles sum up the problem and its effect: “The federal copyright act allows parasitic aggregators to ‘free-ride’ on others’ substantial journalistic investments”; and “If the law does not change, newspapers continually will diminish their journalistic resources until they can subsist only by underproducing news or until they go out of business.”

The Marburgers’ solution would allow newspapers to seek redress for unfair competition under state statutory or common-law remedies for unjust enrichment – remedies that federal copyright law has in effect precluded since 1976.  They’re not suggesting a new law – just an amendment to Section 301 of the Copyright Act.

In this short space I am oversimplifying the Marburgers’ excellent analysis and recommendations – but I hope I can help draw attention to a thoughtful paper that is worthy of serious consideration and widespread recognition.   

Posted on By Patrick Maines

A Matter of Trust

We’ll know soon whether the proposed Google-Yahoo! advertising deal will be challenged by the Department of Justice. Certainly there are signs, most notably the hiring of antitrust litigator Sanford Litvack, that it may do so.

But figuring out what is, and is not, in restraint of trade is kind of tricky these days.  In 2002, antitrust concerns derailed the merger of DirecTV and Echostar, a union that would have reduced the number of satellite TV companies from two to one.  Yet just this summer, the two companies that comprise the whole of the satellite radio industry were allowed to merge.

So the opinions that follow aren’t informed by any special knowledge of what the DOJ will do, or even by the factors that will carry the greatest weight within that agency.  By whatever market analysis the DOJ employs, the deal that some refer to as GooglyHoo either will or will not be allowed to go forward.

The question being addressed here is narrower.  It is what the deal might mean to online publishers.  Because of the inherent uncertainties in a deal not yet consummated, much less experienced, we don’t have all the facts.  But there’s a difference, as someone once said, between a lack of complete knowledge and a complete lack of knowledge.  We don’t know everything about GooglyHoo, but we know enough to be worried.

Importantly lurking in the background of this matter is the parlous state of journalism and the legacy media.  In the introduction to its State of the News Media 2008, here is how the Project for Excellence in Journalism (PEJ) put it: “The crisis in journalism, in other words, may not strictly be loss of audience.  It may, more fundamentally, be the decoupling of news and advertising….  Online, the problem is that the revenue model is in search, not conventional, advertising — and journalism sites are now already lagging behind other Internet sectors financially.”

In a Perspectives piece published by The Media Institute earlier this week, attorney Stephen Kinsella suggests a number of ways in which the Google-Yahoo! ad deal could harm the interests of publishers.  Most directly, he says the deal would mean that “online publishers will earn less revenue from their search syndication and contextual advertising deals.”

“Google and Yahoo!,” Kinsella notes, “are currently the two major players in syndicated search and contextual advertising, and compete with each other for these deals with online publishers.  This competition is what pushes both companies to offer more advantageous terms to online publishers.  A Google-Yahoo! agreement will weaken Yahoo!’s competitiveness in bidding for these deals, simply because Yahoo! will have fewer of its own ads to serve as advertisers increasingly migrate away from Yahoo!’s higher prices following the implementation of the deal.”

A similar argument was made by the World Association of Newspapers (WAN).  On Sept. 15, this umbrella organization for some 18,000 newspapers worldwide asked competition authorities in Europe and North America to block the deal, saying it would have a negative impact on the ad revenues that the search firms provide to newspapers.

Quoth the WAN: “The competition that currently exists between Google and Yahoo! is absolutely essential to ensuring that our member titles receive competitive returns for online advertising on their sites….  In our view, the proposed advertising deal between Google and Yahoo! would seriously weaken that competition, resulting in less revenues and higher prices for our members.”

Concerns about the prospective anti-competitive effects of the deal have also been expressed by the leading U.S. advertising association, the Association of  National Advertisers, and with less vigor by the American Association of Advertising Agencies.

The concerns and objections raised by these individuals and organizations do not, of course, prove that the Google-Yahoo! ad deal would be ruinous to online publishers, or that the deal would mark the beginning of the end for Yahoo!.  But given the current state of the legacy media, and their future reliance — if they have a future — on online advertising, it is not surprising that this deal has alarmed many people.

Judging by some of its business practices and policy positions, as posted here in July, Google the company (as distinguished from Google the search engine) disappoints in many ways.  And at the end of the day this disappointment, if shared, may be a matter of some moment.  Because given the opacity and potential harm of this proposed deal, the question of support for it may come down to a matter of trust.  And the view from here is that Google hasn’t earned that trust.

Posted on By Richard T. Kaplar

The Real Problem With Radio

Washington radio icon Chris Core was given the boot in February after 33 years behind the microphone at WMAL-AM in the Nation’s Capital.  He was part of a cost-cutting move by the station’s owners, who also fired the entire on-air staff of sister station WJZW-FM.

Marc Fisher, a Washington Post reporter who had written “The Listener” radio column since 1995, wrote his final column and signed off June 1, as he lamented the passing of “the kind of eccentric, iconoclastic voices that made radio so alluring from the 1950s into the ’80s.”  Now, Fisher says, the talent is “mostly anonymous and amateur.”  The implication: Radio in the Washington, D.C., market isn’t worth writing about anymore.

Critics of “media concentration” will be quick to seize on the tales of Core and Fisher to “prove” that big is bad.  They will tell us that the multiple-station ownership practiced by big companies like Clear Channel and Citadel (which now owns WMAL) is the root cause of all that is wrong with radio today, from the loss of “localism” to the homogenization of programming.

Unfortunately, these critics will be exactly wrong.  Media concentration is not the cause of radio’s problems – it is an effect of something else entirely: the fragmentation of audiences that has come about as exploding technology has given the public a whole new panoply of delivery platforms.

Listeners (and especially young listeners) are getting their audio fix via satellite radio, Internet radio, cell phones, and PDAs, and can create their own mix on iPods and MP3 players.  Don’t forget free HD radio and, soon, free Internet radio in cars.  The always-philosophical Core recognizes that “radio stations have to either evolve from their traditional ways or wither.” 

Kenneth J. Goldstein, president of Communications Management Inc., presciently observes that fragmentation not only is the cause of consolidation (as station owners try to re-aggregate audiences), but also of cost pressures, less localism, content sharing, and stretching the boundaries of taste. 

Regrettably, policymakers are being bombarded with the big-is-bad “concentration myth” by critics of multiple ownership.  However, until policymakers understand the issue correctly (i.e., realize that media consolidation is merely one effect of technology-driven fragmentation), the debate is fated to be an uninformed waste of time.  And any policy “solutions” that spring from such a spurious debate are almost sure to be catastrophic.

Continue reading “The Real Problem With Radio”

Posted on By Patrick Maines

Cross Ownership: That ’70s Show in the Senate

There they go again. No, not the FCC.  This time it’s the U.S. Senate, still worried after all these years that the same company might own a newspaper and a TV station in the same market.  The Senate recently passed Senate Joint Resolution 28, which cancels a very modest attempt by the FCC to relax the newspaper-broadcast cross ownership rule in the nation’s top 20 media markets.

In effect, the Senate is saying that ownership of newspapers and TV stations should be restricted just as it was in 1975 when the rule was adopted – when viewers in big cities were lucky to get six over-the-air channels, and “cable” was still the “community antenna” in rural areas.

The effort to relax or even eliminate the cross ownership ban has gone on for years, even as the FCC was repealing virtually all of its other ’70s-era ownership restrictions.  The FCC’s action on Dec. 18 wasn’t much, but it was still too much for a Senate that’s apparently afraid to move out of the 1970s.

John F. Sturm, president and CEO of the Newspaper Association of America, summed it up when he said: “It is incomprehensible that Congress would shackle local newspapers – and only newspapers – with a ban that fits the eight-track era, but not the iPod world we live in.”

There is no logical reason for the Senate to act this way.  Could the reason be political?  Congress and the FCC are routinely barraged with mass e-mails orchestrated by various interest groups.  The magnitude of these mailings can appear far greater to policymakers than it really is.  Think of the man behind the curtain in "The Wizard of Oz."

A popular policy target of such groups has been “media consolidation,” always portrayed as a looming evil.  But in today’s economic environment, multiple ownership of media outlets has become an economic necessity – a matter of survival. 

Critics fear that “consolidation” will result in fewer voices and viewpoints reaching the public.  The real danger, however, is that media voices will be lost as struggling newspapers and broadcast outlets are forced out of business, suffocated by antiquated rules that prevent them from taking advantage of the economies of scale that come with multiple ownership.

It will be ironic indeed if the anti-consolidation forces triumph, leaving us with less rather than more media diversity.  The politically timid Senate is playing right into the critics’ hands.  It’s time for our solons to pitch their eight-tracks and reach for an iPod.