[opendtv] Re: Ted Turner on Media Consolidation
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 15 Nov 2004 12:37:01 -0500
At 5:00 PM -0500 11/11/04, Manfredi, Albert E wrote:
>But doesn't this sound disingenuous coming from Ted
>Turner?
>
>First of all, what he describes here is the same across
>any number of industries. How many car manufacturers
>survived from the early 1900s? Whatever happened to the
>Briklin? The DeLorean? It was easy once to start a new
>car company, but no more. What about oil companies?
>Airplane manufacturers? PCs?
>
>So why should the broadcast media be any different?
Because it has relied on government regulation to build the current
oligopoly. In the other examples, government regulation has generally
been used to prevent the abuse of consumers by market-based trusts.
Clearly there are some industries that can only support a limited
number of competitors. And many of these large industries are global,
not national in nature (this is true for TV as well).
But the reality that Turner presented in his opinion piece, is much
different that the examples you cite. His success came in part from
the ability to bypass the gatekeepers during a period when government
regulation was conceived as a way to prevent abuse by media
conglomerates. Turner did use the same vertical integration
techniques to build his empire; he even invested in content to keep
the conglomerates from holding his distribution hostage. In the end
however, his empire became part of the conglomerates.
A better example to support your position, would have been as follows:
Japan starts bringing small, fuel efficient automobiles into the U.S.
market. The public starts buying them and the Big three get upset,
running to Congress to prohibit new car dealerships from being
established in the U.S. In essence, the only way to buy a Honda
would be to go to a Chevrolet dealership, that would only offer a few
models at less than competitive prices.
>But more to the point, Ted Turner's success, and I'll
>bet his interest at the start, depended on his being
>able to have nationwide and even global access. He is
>one of them. Had he been limited to his one UHF station
>in Atlanta, he would have lost interest and done
>something else.
He simply took advantage of the rules as they existed, and got his
foot in the door. He now claims that it could not be done today, and
he is correct. It took an international conglomerate (Newscorp) to
finally knock CNN off the mountaintop. It would not have taken Fox
near as long to do so, had it NOT been for the roadblocks they
encountered in cable distribution.
Yes, Turner is no better than the others...he used an oligopoly to
fight an oligopoly.
>
>I think the focus of his complaint here is the national
>cap. How successful would CNN be if it could only
>access 35 or even 39 percent of US markets?
What's your point? This is exactly the problem that the Fox News
Channel faced because the cable oligopoly would not carry them for at
least half a decade. But it is not a problem faced by the
corporations that are limited in their ownership reach to 35 or 39%.
THIS IS AN OWNERSHIP cap, NOT a reach cap. The networks REACH nearly
100% of U.S. homes; the only limit is how many of the stations that
carry the Network's content they can OWN.
One can easily argue that the ONLY thing the networks would lose, if
they were COMPLETELY PROHIBITED from owning ANY TV stations is the
profits from their owned and operated stations. They would STILL be
carried in EVERY market by affiliates. Of course, if they could not
own stations, one might also argue that it is VERY likely that they
would drop OTA distribution and deal exclusively with cable and DBS.
Bottom line, its all about money and control. The networks only get
about half of the revenues from broadcast TV today. They want the
rest.
>I'm not saying he isn't making some good points. I
>am saying that it's not clear why he is the one making
>these points. If the national cap is of any real value,
>it should cover not just those with OTA infrastructure,
>but also those with DBS and cable infrastructure, *and*
>those providing content. The national cap is
>meaningless as it is. It doesn't do what Ted Turner
>wants.
You are comparing apple and oranges, and ignoring the tremendous
power that the members of an oligopoly can exert on competitors who
are not vertically integrated.
One could argue that no single competitor should control access to
more than X percent of the national audience. IN truth, this IS the
case today. No cable MSO controls more than about 25% of U.S. homes.
No DBS system controls more than about 15% of U.S. homes. But the
networks have the ability to control both cable and DBS, via
retransmission consent, without regard for the OTA distribution that
they own, which enables the regulations they have used to control 90%
of the content delivered by cable and DBS.
Any content producer should have the ability to reach 100% of the
national audience. This should be a simple economic decision. That
is, it will cost $X to reach this market and $Y to reach this market,
etc. But this is NOT the case today, as it is impossible to gain
distribution at ANY cost unless you cut a deal with the oligopoly
that controls access to the viewing public.
One reason that DVDs are so popular is that they have become a bypass
technology. You can go direct to the consumer, as the guys who
produced Stolen Honor were forced to do during the recent campaign.
Better yet, they got tons of free publicity, thanks to the efforts of
the media conglomerate to prevent their documentary from being seen.
The good news is that the public - with one obvious exception - is
growing sick of it. Turner notes the importance of this emerging
reality. I have sometimes been mistaken for Turner when traveling,
but that's about the only thing we share in common. To his credit, he
moved the ball forward against all odds. To his everlasting shame he
used the same system to build another empire that has become just as
obnoxious as the ones he sought to beat.
If nothing else, this gives him the right to express his opinions.
>
>Where would he and his nationwide and global networks
>be if the national cap were applied fairly?
Exactly where they are today. These issues are completely decoupled.
Maybe someday you will understand this...
>
>I'm not positive about this, but my impression is that
>soon after the shutdown of NTSC, setting up a new
>(single) OTA TV station will probably be a lot easier
>than trying to get nationwide access on any
>multichannel service. Until the newly freed up
>spectrum gets all used.
Both will be nearly impossible unless the ground rules are changed.
Regards
Craig
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