Why We Care About Media Ownership Rules

A recent Broadcasting & Cable article asks: “Does anyone still care about media-ownership rules?”

Let’s assume that it’s a given that the members of the StopBigMedia.com Coalition and the thousands of people across the country who rearranged their lives to testify against consolidation at media ownership hearings “still care.”

Well they shouldn’t — or so says Big Media shill Shaun Sheehan — because media ownership rules are “an issue whose time has come and gone.” No use “running all around the country screaming about concentration” when “technology has changed the equation.”

In fact, according to Disney’s lobbyist Susan Fox, given the “attractiveness of new media,” in just a few years the FCC might have to offer incentives just to hold on to any broadcast station owners at all.

And let’s not forget that “CBS has shed stations, Clear Channel has begun divesting itself of all its TV and a third of its radio stations, and Tribune Co. has put its broadcasting division on the block.”

So there is no reason to “still care” about media ownership rules anymore, right?

Wrong (of course).

The Internet does not replace local news

Research by Consumer Federation of America, Consumers Union and Free Press shows that the vast majority of the American public still rely on local media for news and information about their community.

The Internet is at best a supplement. Even those who regularly use the Internet overwhelmingly go to Big Media Web sites, and those of local TV stations and daily newspapers.

So with so many people still relying on traditional media, the argument that “technology has changed the equation” seems a little premature.

FCC Commissioner Michael Copps says it best:

“When more than 80 percent of Americans say local TV, radio or print is their most important source of news and information, I believe the fight against consolidation in the traditional media is a grassroots fight worth having.”

Whether it’s online or over-the-air, the bottom line is that the majority of our news and information is still dominated by a few corporations.

Traditional media are highly profitable

The argument that the “attractiveness of new media” means that broadcasters will need some sort of “incentive” (read: relaxed ownership rules) to remain in the business is laughable — especially when you consider how profitable stations really are:

• Newspapers have average profit margins of 20 percent and sell at an average 10-12 times cash flow.
• TV stations have average profit margins of 30 percent - 50 percent and sell at and average 13-16 times cash flow.

Consolidation is bad for business

Newspapers and broadcast stations are profitable — but depend on quality journalism to remain so.

Big Media corporations that have destroyed the value of their “product” by trying to milk profits through staff cuts and infotainment are in trouble. But many smaller chains and independent outlets are thriving.

Recent sell-offs suggest that the Big Media companies may realize they can’t make consolidation work — not that media ownership rules don’t matter or shouldn’t exist.

In the end, the industry spin that mouthpieces like Sheehan are paid to spew collapses like a house of cards in the face of solid research.

New media work doesn’t eliminate the need to “still care” about media ownership rules. As Craig Aaron of Free Press aptly notes at the end of the article:

“We still have to protect local voices and encourage new ones.”

This entry was posted on Thursday, March 22nd, 2007 at 9:46 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.