Murdoch Calls For Relaxed Cross-Ownership Rules
In an op-ed at his flagship Wall Street Journal today, News Corp chief Rupert Murdoch rehashed some of his recent barbs (such as claims of fair use abuses) while wrapping News Corp. with the American flag. Those prior public statements now seem part of a regulatory “reform” strategy as he adds a call for relaxing media cross-ownership rules to the litany of remedies needed to maintain the News Corp. oligopoly.
The government has a role here. Unfortunately, too many of the mechanisms government uses to regulate the news and information business in this new century are based on 20th-century assumptions and business models. If we are really concerned about the survival of newspapers and other journalistic enterprises, the best thing government can do is to get rid of the arbitrary and contradictory regulations that actually prevent people from investing in these businesses.
One example of outdated thinking is the FCC’s cross-ownership rule that prevents people from owning, say, a television station and a newspaper in the same market. Many of these rules were written when competition was limited because of the huge up-front costs. If you are a newspaper today, your competition is not necessarily the TV station in the same city. It can be a Web site on the other side of the world, or even an icon on someone’s cell phone.
These developments mean increased competition, and that is good for consumers. But just as businesses are adapting to new realities, the government needs to adapt too. In this new and more globally competitive news world, restricting cross-ownership between television and newspapers makes as little sense as would banning newspapers from having Web sites.
Murdoch’s assessment of the direction of the threat to incumbent media companies is spot on. The future delivery channel for “newspapers” and “TV’ and “radio” wil be the Internet. However, I disagree with his proposed remedy. This is not the time to feather the nests of corporate titans, especially at a time when as much as 90 percent of what Americans read, hear and watch is controlled by five corporations (Bagdikian, 2004). We need to hasten the fragmenting of these oligopolies, not allow them to become more tightly integrated. Moreover, relaxing cross-ownership rules could jeopardize fledgling neighborhood (hyper-local) news efforts by allowing incumbent interests to consolidate and wield even more market power than they do today.
For the record, News Corp is the world’s second-largest “media” conglomerate (number one, Disney). It’s no wonder that Murdoch champions additional consolidation.
For additional analysis of this op-ed, which is based on testimony at an FCC workshop last week, see WiredPen: Rupert Murdoch: Journalism and Freedom – A Rebuttal.
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2 Comments, Comment or Ping
jannaq
Great post. I agree with you that Murdoch made a fair assessment of the threat to incumbent media companies. He raises a great point when he explains that technology is not a killing force for journalism but rather, an outlet from which journalists can provide for their readers on a much larger scale. This means, as Murdoch explains, not everyone will succeed as “some newspapers and news organizations will not adapt to the digital realities of our day – and they will fail.” Technology increases the value of being able to provide people access to the right information, at the right time, and have it delivered in the right context. In a world where I’m more likely to see the latest stories Tweeted or posted on my Facebook Newsfeed much before I reach traditional news outlet, I am not surprised to see this journalistic shift. It will be interesting to see how future installments of new media journalism unfold to become more convenient and integrated among multiple channels of access.
I also believe Murdoch to be very correct in his belief that, despite the larger scope technology provides, the old advertising-based business model does not translate well to online journalism. Perhaps Murdoch’s proposed remedy of deregulating cross-ownership may not be the answer, but what will? In search of the solution, new tools like Journalism Online popped up to help with the transitional period. Journalism Online in particular works with publishers to provide customers with a single paid account that will allow them access to all of Journalism Online-member publisher’s content. Whether or not Journalism Online is the answer to the media industry’s prayers, it’s clear that something must change.
Dec 8th, 2009
Stephen Brashear
I’ve never been a big fan of large news media conglomerates and while I agree that it is not a good time for “relaxed cross-ownership rules,” I’m not sure how relaxing those rules would threaten Hyperlocal news operations. Regardless of whether or not the cross-ownership rules are relaxed, newspapers and television stations can enter the hyperlocal market and many have. There are competing hyperlocal news sites, some homegrown some spawned by legacy news organizations. Some hyperlocal sites have supported a few staff members full-time through online advertising. Were those sites able to sustain themselves because they had a news business model or because they, for a while, had the hyperlocal market cornered? Will there ad revenue decrease with more competitors or will they have name/brand recognition that will set them apart from others? The biggest threat to the hyperlocal pioneers could be newspapers’ and television stations’, those of which still have name and brand recognition, logos at the top of hyperlocal sites. Relaxing the cross-ownership rules now, would only allow corporations like News Corps slow the seemingly imminent diminishment of the market dominance by large media conglomerates.
Dec 9th, 2009
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