My beef with Big Media

Ted Turner
This article appeared in Ode issue: 23

Fewer and fewer corporations control an ever larger share of what we see in the media. Ted Turner warns that this is a dangerous development for the public, for democracy—even for capitalism itself.

In the late 1960s, when Turner Communications was a business of billboards and radio stations and I was spending much of my energy racing boats, a UHF-TV station came up for sale in Atlanta. It was losing $50,000 U.S. a month and its programmes were viewed by fewer than 5 percent of the market. So I acquired it.

When I moved to buy a second station in Charlotte—this one worse than the first—my accountant quit in protest, and the company’s board vetoed the deal. So I mortgaged my house and bought it myself. The Atlanta purchase turned into a Superstation; the Charlotte purchase—when I sold it 10 years later—gave me the capital to launch CNN. Both purchases played a role in revolutionizing television. And neither could happen today.

In the current climate of consolidation in the media industry, independent broadcasters simply don’t survive for long. That’s why we haven’t seen a new generation of people like me or even Rupert Murdoch—independent television upstarts who challenge the big boys and force the whole industry to compete and change. It’s not that there aren’t entrepreneurs eager to make their names and fortunes in broadcasting if given the chance. If nothing else, the 1990s dot-com boom showed that the spirit of entrepreneurship is alive and well in the world today, with plenty of investors willing to put real money into new media ventures.

The difference is that the U.S. government has changed the rules of the game. When I was getting into the television business, lawmakers and the Federal Communications Commission (FCC) took seriously the commission’s mandate to promote diversity, localism, and competition in the media marketplace. They wanted to make sure that the big, established networks—CBS, ABC, NBC—wouldn’t forever dominate what the American public could watch on TV. They wanted independent television producers to thrive. They wanted more people to be able to own TV stations. They believed in the value of competition. When the FCC had received a glut of applications for new television stations after World War II, the agency set aside dozens of channels on the new UHF spectrum so independents could get a foothold in television. That helped me get my start 35 years ago.

But that was then.

Today, media companies are more concentrated than at any time over the past 40 years, thanks to a continual loosening of ownership rules by the FCC. Media giants now own not only broadcast networks and local stations; they also own the cable companies and the studios that produce most of the programming. To get a flavour of how consolidated the industry has become, consider this: In 1990, the major broadcast networks—ABC, CBS, NBC, and Fox—fully or partially owned just 12.5 percent of the new television series they aired; the rest were from independent producers. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.

In this environment, most independent media firms either get gobbled up by one of the big companies or driven out of business altogether. Yet instead of balancing the rules to give independent broadcasters a fair chance in the market, Washington continues to tilt the playing field to favour the biggest players.

In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are independent thinkers. They know they can’t compete by imitating the big guys—they have to innovate. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher quality, more jobs and greater wealth. It’s called capitalism.

But without the proper rules, healthy capitalist markets turn into sluggish oligopolies—and that is what’s happening in media today. Large corporations are more profit-focused and risk-averse than ever before. The moguls behind the mergers are acting in their corporate interests and playing by the rules. We just shouldn’t accept those rules. They make sense for a corporation. But for a society, it’s like over-fishing the oceans. When the independent businesses are gone, where will the new ideas come from? We have to do more than keep media giants from growing larger; they’re already too big. We need a new set of rules that will break these huge companies into smaller ones.

Throughout the 1990s, media mergers were celebrated in the press and otherwise ignored by the American public. So, it was easy to assume that media consolidation was neither controversial nor problematic. But then a funny thing happened. In the summer of 2003, the FCC proposed changes favouring even more consolidation—raising the national audience-reach cap from 35 percent to 45 percent; allowing corporations to own a newspaper and a TV station in the same market; and permitting corporations to own three TV stations in the largest markets, up from two, and two stations in medium-sized markets, up from one.

Unexpectedly, the public rebelled. Hundreds of thousands of citizens complained to the FCC. Groups ranging from the National Organization for Women to the National Rifle Association demanded that Congress reverse the ruling. And lawmakers finally took action, pushing the national audience cap back down to 35, until—under strong White House pressure—it was revised back up to 39 percent. Last June, the U.S. Court of Appeals threw out the rules that would have allowed corporations to own more television and radio stations in a single market.

The FCC defends its actions by saying that we have more media choices than ever before. But only a few corporations decide what we can choose. That is not choice. That’s like a dictator deciding what candidates are allowed to stand for parliamentary elections, and then claiming that the people choose their leaders. The loss of independent operators hurts both the media business and its citizen-customers. When they disappear, the emphasis in the media shifts from taking risks to raking in profits. When that happens, quality suffers, local culture suffers and democracy itself suffers. Top managers in these huge media conglomerates run their companies for the short term. Media mega-mergers inevitably lead to an overemphasis on short-term earnings.

You can see this overemphasis in the spread of reality television. Shows like Fear Factor cost little to produce—there are no actors to pay and no sets to maintain—and they get big ratings. Thus, American television has moved away from expensive sitcoms and on to cheap thrills. We’ve gone from Father Knows Best to Who Wants to Marry My Dad?, and from My Three Sons to My Big Fat Obnoxious Fiancé.

Consolidation also means a decline in the local focus of both news and programming. After analyzing 23,000 stories on 172 news programmes over five years, the Project for Excellence in Journalism found that big media news organizations relied more on syndicated feeds and were more likely to air national stories with no local connection than smaller ones. That’s not surprising. Local coverage is expensive, and will usually be sacrificed in the quest for short-term earnings.

Loss of local content also undercuts the public-service mission of the media, and this can have dangerous consequences. In early 2002, when a freight train derailed near Minot, N.D., releasing a cloud of anhydrous ammonia over the town, police tried to call local radio stations, six of which are owned by radio mammoth Clear Channel Communications. According to news reports, it took over an hour to reach anyone at the stations to put an alert on the air. No one was answering the phone because the programming for all six stations was being beamed from Clear Channel headquarters in San Antonio, Texas—some 1,600 miles away. By the next day, 300 people had been hospitalized, many partially blinded by the ammonia. Pets and livestock died.

Consolidation has given big media companies new power over what is said not just on the air, but off it as well. Cumulus Media banned the band Dixie Chicks on its 42 country music stations for 30 days after lead singer Natalie Maines criticized President Bush for the war in Iraq. It’s hard to imagine Cumulus would have been so bold if its listeners had more of a choice in country music stations.

And Disney recently provoked an uproar when it prevented its subsidiary Miramax from distributing Michael Moore’s film Fahrenheit 9/11. As a senior Disney executive told The New York Times: “It’s not in the interest of any major corporation to be dragged into a highly charged partisan political battle.” Follow the logic, and you can see what lies ahead: if the only media companies are major corporations, controversial and dissenting views may not be aired at all.

This is a fight about freedom—the freedom of independent entrepreneurs to start and run a media business, and the freedom of citizens to get news, information, and entertainment from a wide variety of sources, at least some of which are truly independent and not run by people making decisions based on quarterly earnings reports. No one should underestimate the danger. Big media companies want to eliminate all ownership limits. With the removal of these limits, immense media power will pass into the hands of a very few corporations and individuals.

What will programming be like when it’s produced for no other purpose than profit? What will news be like when there are no independent news organizations to go after stories the big corporations avoid? Who really wants to find out? Safeguarding the welfare of the public cannot be the first concern of a large publicly traded media company. Its job is to seek profits. But if the government writes the rules in a way that encourages entry into the market of entrepreneurs—men and women with big dreams, new ideas, and a willingness to take long-term risks—the economy will be stronger, and the country will be better off.

Media companies have grown so large and powerful, and their dominance has become so detrimental to the survival of small, emerging companies, that there remains only one alternative: bust up the big conglomerates. We’ve done this before: to the railroad monopolies in the first part of the twentieth century, to phone companies more recently. Breaking up the media conglomerates may seem like an impossible task when their grip on the policy-making process in Washington seems so sure. But the public’s broad and bipartisan rebellion against the FCC’s pro-consolidation decisions suggests something different. Politically, big media may again be on the wrong side of history—and up against a country unwilling to lose its independents.

Excerpted from the savvy American politics magazine Washington Monthly (July/August 2004). Subscription information: Washington Monthly, 733 15th Street, NW, Suite 520, Washington, DC 20005, USA, service@washingtonmonthly.com, www.washingtonmonthly.com

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Media Conglomeration Bad for Democracy, Change the FCC