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Why Media Consolidation Is Actually a Good Thing

Today is supposed to be the day during which media ownership as we have known it in modern times will change forever. The Federal Communications Commission is expected to vote today whether to scrap the decades-long prohibition of cross-ownership of newspapers and broadcast outlets in the same market as well as to loosen restrictions on how many TV stations a single company may own in a given market and how much national coverage one company can control. Debate over these proposed rule changes has intensified in the run-up to this vote, but the three Republican FCC commissioners were widely expected at press time to vote to scrap the current regulations. The debate is likely to continue after the vote, with some members of Congress and numerous interest groups poised to urge the legislative branch to overrule the FCC.

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At the heart of the issue of consolidation is the notion of "diversity of voice," which is a fine concept - but just that, a concept. One can make the argument that there was some semblance of this type of diversity when newspapers were owned by individuals and often classified by readers as Democrat or Republican. Most of these disappeared a long time ago, replaced by generally left-leaning editorial pages in the big cities and more center-right-leaning pages in smaller markets. Broadcasters, which were governed by the Fairness Doctrine for most of their existence, never really engaged in the business of "voice." During the past decade, radio has emerged as a major center of "voice," mostly conservative, but that was due to market forces that changed the AM band from a medium for music to one for talk and a public that has not tuned in to liberal talk the way it has to chatter from the right.

The point here is that it is not diversity of voice that matters. The notion that all viewpoints should be represented somewhere in the media is patently ridiculous. It is the quality of voice that matters. Broadcast and newspapers are media that are in slow, painful, inexorable decline. Yet they remain vitally important as the last mass media. If these companies are to continue providing the level of quality information and entertainment to which the American consumer has become accustomed, consolidation and vertical integration will be necessary. Consider that the single greatest cost, and revenue generator, at a TV station is its local news operation. A combined newspaper/TV station newsroom would greatly improve the breadth and sophistication of local TV news, particularly if the TV station used digital multicasting to more closely zone news within a major market. This should boost ratings, and thus profits. The newspaper would benefit from the exposure gained by providing news and analysis to the broadcast audience - heck, maybe a few viewers might actually start to read. Advertisers would benefit from the ability of a single company to put together an integrated media plan that used one medium to feed another to build a compelling sales message and call to action. If rates got out of whack, well, the advertiser could always go across the street to a competitor or maybe even to cable.

On the national level, one need only look at the economics of the broadcast networks to understand that it is going to take a larger base of stations to support the game of Russian roulette that TV networks play. In even the best years, the No. 1 broadcast network is lucky if it nets 10% on revenue of $5 billion. The alternative is to cut costs, and that means cutting the quality of programming, which would mean lower and lower viewership, and, in the end, disaster.

Whether larger media companies will continue this or any commitment to quality is, of course, open to debate. But the current generation of media executives is nearing the end of its run, because cost cutters do not know how to make things grow, and their collective lack of creative ability will become apparent in an improving economy. There will be new management. And quality, not the snobbish sort but the kind that is just plain good, almost always prevails, because it gets ratings and readers.

That's because this is America, and here the marketplace - not a passel of ponderous eggheads - decides what works and what doesn't.

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Why Media Consolidation Is Actually a Good Thing

Cable World, June 2, 2003

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