Media Concentration and Diversity

Question 1

What are the contesting theories about Media Concentration and market power?

Answer 1

The two main theories in Neoclassical economics are conservative economists and liberal economists.
CE believe that competition is the most essential thing even in hardly competitive fields, and that the fact that companies are contestable is an indicator of competition. Information is abundant and consumer can decide.
LE believe they need more evidence of concentration to underpin a market failure, and that the internet economy is not immune, and should be observed.

Radical Media Political Economists: The goal of media is to ensure free speech, which is being threatened by big corporations and concentration, and government should be involved to solve this.

Innovation economists: New tech provide new opportunities and new economical structures, it’s okay if businesses went down in favour of other as long as everyone can take part in the network society. Small actors are encouraged to compete due to low transaction costs, we should wait and see.

Question 2

What is the difference between the Cx and HHI indexes?

Answer 2

The Cx, the sum of the market shares (%), does not consider relative weights. HHI is the sum of the squared market shares, highlight the relative weights.

Question 3

What is the brief history of Media Concentration?

Answer 3

70s-80s: economic crisis, shift to services, policymakers under pressure to deregulate
80s-90s: deregulation, deconcentration, big tech conglomerates
00s-10s: low barrier for small players, big concentration in parallel, HHI to measure

Question 4

What are the 3 types of conglomerate and the three types of integration?

Answer 4

Conglomerates: News/media, leisure, ICT

There is horizontal, vertical and diagonal integration

Question 5

What are the 3 types of concentration strategies?

Answer 5

Horizontal:
Economies of Scale: Disney, Het Neuwsbald-Het Volk
Economies of Scope: Warnet Media (CNN, HBOmax, Warner Bros) Het Neuwsbald-De Standaard

Vertical:
Companies Upstream/Downstream value chain

Diagonal:
Companies in other related value chains
Economies of Scale and Scope
Digitization

Question 6

What are Eli Noam’s main takeaways?

Answer 6

Eli Noam, a liberal neoclassicist, conducted a 10 years research on digital and traditional media:
- Boggest Media Owner: Chinese Gov
- Strongest Media Groups: NewsCorp, Google, China
- Digital Media are more concentrated than traditional
- HHI digital 3x higher
- Media concentration rose 2% last decade
- Voices#: US, Voices/capita: CH, Nordics
- Foreign ownership: IE, UK, NL vs. US, RU, CN
- Problems: China, Google (FB Not included), Internet, failing companies

Question 7

How realistic are Hoteling, Steiner, and Beebe’s views in the age of liberalization and digitization?

Answer 7

Hoteling: Excessive Sameness - businesses become similar to appeal to a wider audience

Steiner: Duplication Principle - Companies should produce different products to avoid duplication and waste - Oligopoly worse than Monopoly

Beebe: Lowest common denominator - Companies appeal to the LCD to reach max people min effort

in Digital Age:
Barriers are low for entering, more similar businesses and services, more room for, similar pricing

Low elasticity in terms of quality demand lead to suboptimal quality.

Ad-based economy, appeal to masses, LCD

Question 8

Do markets lead to Diversity?

Answer 8

Tyranny - Anderson
Some groups are systematically valued higher.
Market is very powerful, and dictates competition and innovation, resulting race to bottom in quality, price, and innovation. Lack of barriers, oversupply of goods, erosion of innovation.

Myth of Choice - Arnold
Abundance of choice is a myth, algorithmic determination and stereotypical profiling.
Supplied Diversity =/= Consumed diversity

Question 9

what is the policy discourse on media concentration?

Answer 9

Ownership Regulation - Antitrust..
Content-regulation
Subsidies, local content, quotas, etc.

Market delineation to be solved first
Then policy intervention

Question 10

How did the Evolution in media concentration thinking take place in the music business?

Answer 10

in the 1990s, the music industry was dominated by the big 6, 70% of market shares.
Online, piracy, threat,
Then Universal-Polygram JV
Then Sony-BMG JV
EMI aquisition
Adele 2011 independent label
Rise of streaming platforms
Thinking switched to: few big record labels to handle the relations with the streaming services

Result: necessary intervention not yet achieved,
Facebook and Google to be tackled first