Big Media Presents Misleading Case for Consolidation
Posted January 23rd, 2007 by Jen Howard
A recent MediaWeek article offers a quick summary of the National Association of Broadcasters’ (NAB) case for relaxing media ownership limits but fails to mention the six new studies released by consumer groups that expose the inaccurate and misleading arguments that prop up the industry’s rationale.
Big Media’s Poverty Claims
One of Big Media’s chief arguments is that further consolidation is needed to save their industry from financial ruin. According to NAB:
“Failure to relax the existing media ownership rules could result in decreased local news and other important local services as stations on the brink of economic survival are forced to curtail such costly programming in order to remain on the air.”
But to make its case, NAB used a misleading and self-serving financial analysis. The broadcasters only report financial records from odd-numbered years, ignoring the high profits brought by election ads placed in even-numbered years.
The study Out of Focus: The NAB’s Fraudulent Financial Analysis uncovers how the revenues in even-numbered years are consistently far higher than odd-numbered years. So by discounting the higher grossing years, Big Media can claim much lower revenues. Case in point: the 2006 election season resulted in record revenues for broadcasters but was left out of NAB’s financial reporting to the FCC.
The broadcast industry remains one of the most profitable business sectors. But the NAB is trying to hide the truth.
So-Called “Digital Competition”
Big Media also claims that the Internet’s popularity is leading to a substantial decline in their audience. The Mediaweek article spells it out:
“The ‘intense competition’ local broadcasters now face from digital and other new media makes the current ownership restrictions both obsolete and harmful to the public interest.”
But contrary to the claims of NAB and other Big Media lobbyists, the reality of online news consumption is that very few Americans rely on the Internet as an important source of local news, and those that do use Web sites owned by Big Media companies.
Data from the study Internet News Media Usage suggests that online users treat Internet sources as supplements to — not substitutes for — traditional media. The study found that only about 10 percent of the Web audience visits independent news sites not operated by Big Media outlets.
And the study Local Web Sites shows that these independent sites themselves rely heavily on the original reporting of traditional media outlets. Very little of the content on these web sites consists of original local news reporting.
These studies – and the three others released alongside them — make it clear that FCC ownership rules remain necessary to promote independent and diverse sources of local news and information.
Click here for a summary of the six media ownership studies
FROM THE NAB WEBSITE…
The FCC is currently considering revisions to the ownership rules. A strong and vocal campaign has been launched to persuade the FCC to not only stop any relaxation, but to roll the rules back to pre-1996 limits. Over 100,000 emails have already been filed against ownership relaxation. Make local broadcasters’ voices heard by filing comments in support of moving broadcast regulation into the 21st century.
Comments are due October 23, and reply comments December 21, 2006.
January 23rd, 2007 at 7:24 pm