[corp-focus] The Price of Media Merger Mania

[Robert Weissman]

The Price of Media Merger Mania
By Russell Mokhiber and Robert Weissman
May 2, 2000

The immediate victims in the raging battle between Time Warner and Disney
are the 3.5 million households who on May 1 suddenly lost cable access to
"Who Wants To Be A Millionaire" and other ABC programming. 

Win, lose or draw for Time Warner and Disney -- and a negotiated truce is
likely soon -- the entire consuming public will be the long-run losers.

Underlying the dispute is the massive consolidation in the media business,
which has placed a half dozen megacorporations in control of a wide range
of broadcast and cable television networks, movie production, book
publishing and radio networks, as well as, increasingly, the cable,
satellite, internet and telephone system conduits to deliver media
content.

The Time Warner-Disney conflict is one example among many of how media
concentration empowers corporations while limiting consumer choice and
diminishing the diversity of publicized political viewpoints.

The flashpoint in the current controversy is Disney's demand that Time
Warner Cable Systems include more Disney-owned programming in its cable
packages. Disney has asked Time Warner to include the Disney Channel in
basic cable package, and to feature two other Disney channels, Toon Disney
and the Soap Channel. Disney has also reportedly demanded $300 million
from Time Warner for the rights to carry its channels.

Refusing to concede to these demands, Time Warner pulled the plug on
Disney programming, including the programming aired by seven Disney-owned
ABC affiliates. 

Time Warner's contract to air the Disney shows originally expired at the
end of 1999, but had been repeatedly extended a month at a time. Disney
offered to extend the deal for another 24 days -- through the "sweeps"
period. Time Warner counter-offered to prolong the arrangement for eight
months. Neither side would budge before the May 1 deadline.

Time Warner complains that Disney is asking too much for its programming.
The source of this complaint is Disney's gambit to leverage the power
derived from its ownership of the ABC affiliates -- whose programming Time
Warner must air to offer a viable product -- to force Time Warner to air
other Disney channels, and on terms Time Warner finds onerous.

Time Warner has a good point. This structural advantage gives Disney a leg
up on independent cable networks, and may undermine viewer choice (to see
networks Time Warner won't air in slots given to Disney channels) and
increase viewer cost.

For its part, Disney says it is fearful that, especially if its merger
with AOL is approved, Time Warner will leverage its enormous power to
discriminate against networks which it doesn't own. Disney fears that
Time Warner -- which owns both conduit (the cable networks) and content
providers (including CNN and the WB network) -- will block competitor
channels and networks from using emerging interactive technologies to
deliver advertisements or enhanced programming. For example, Disney
spokespeople say that Time Warner, favoring Time Warner-owned CNN, might
block ABC News from access to the two-way communications needed to ask
individual viewers if they would like more information on a topic
delivered to them.

Disney has a good point, too. Time Warner's structural advantage may
portend additional income streams for its programming only, to the
detriment of competitors -- and, consequently, viewer choice.

Much more important than the immediate Disney-Time Warner dispute is what
the conflagaration highlights: the ongoing merger mania in the media and
telecommunications industries will profoundly shape the face of
information dissemination in the coming century. And all signs now point
to enhanced influence for the media giants, steady deterioration in
programming diversity and increasing news and public affairs
homogenization -- at the expense of the cacophonous public debate
featuring political perspectives from A to Z (not just of ABC) which
should be the foundation of a democratic society.

The first step in addressing these problems is a national moratorium on
major media mergers (including blocking of the Time Warner-AOL merger).

Not only would a moratorium halt dangerous trends in media concentration,
it would give the public and politicians time to sort through the
democratic damage that has already occurred, and to craft appropriate
remedies. 

We could begin a national debate about far-reaching proposals to
enhance our culture and democracy: breaking up the media giants, imposing
strict limitations on horizontal and especially vertical integration in
the media markets, demanding monetary and in-kind payments from the
broadcasters for the public handover of the digital and broadcast spectrum
(including creation of an audience network governed by the public and
financed by the broadcasters), transferring the entire over-the-air
broadcast spectrum to public television outlets, requiring the provision
of free television time to electoral candidates and other measures worthy
of serious consideration.


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. Mokhiber and Weissman are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe,
Maine: Common Courage Press, 1999, http://www.corporatepredators.org)

(c) Russell Mokhiber and Robert Weissman