What media monopolies?

[David Farber <dave () farber net>]

Begin forwarded message:

From: h_bray () globe com
Date: August 26, 2005 10:50:54 AM EDT
To: dave () farber net
Subject: What media monopolies?






                          News Release                         |
|            FOR IMMEDIATE RELEASE
|
|            August 26, 2005
|
|                                              CONTACT: Patrick Ross or
Amy|
|
Smorodin|
|
202-289-8928|
|
|
|
|
|                             Media Monopolies Are a Myth
|
|              Thierer and English Cite Declining Market Capitalizations
|
|
|
|            WASHINGTON D.C. - If the stock market is any indication,  
the
|
|            argument that just a few large media conglomerates control
the|
|            market for what we see, hear and read, is completely  
without
|
|            merit. So conclude Adam Thierer and Daniel English in  
the new
|
|            Progress on Point, "Testing 'Media Monopoly' Claims: A Look
at|
|            What Markets Say," released by the Progress & Freedom
|
|            Foundation. In their paper, Thierer and English evaluate  
the
|
|            market performance of five large media outlets and deduce
that|
|            declining stock value -- market caps down 52% over the last
|
|            four years -- is a clear indication that the corporations
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|            could not possibly be acting as monopolies.
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|
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|            According to Thierer, Director of PFF's Center for Digital
|
|            Media Freedom, and economist English, today's media  
market is
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|            more diverse and highly competitive than ever before, a  
point
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|            is illustrated by a 200 percent increase in the number of
|
|            media outlets over the past forty years. That  
competition is
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|            reflected in the market performance of five of the largest
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|            media operators. "By looking at the performance of publicly
|
|            traded media firms and their stock over the past five  
years,
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|            it is readily apparent that monopolists do not dominate  
this
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|            marketplace," Thierer and English write. "Indeed, quite the
|
|            opposite is true. Large, traditional media companies are
|
|            struggling to adapt to a very rapidly evolving media  
market."
|
|
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|            The authors argue that if the media industry is truly
|
|            controlled by monopolies, investors would be clamoring  
to buy
|
|            media stock. "Our analysis reveals that these five firms  
have
|
|            lost a combined 52 percent of their value (in terms of  
market
|
|            capitalization) over the past five years, making it
impossible|
|            to conclude that these firms possess excessive market  
power.
|
|            Simply stated, if this industry was 'monopolistic' or even
|
|            'oligopolistic,' its top firms would not be losing that  
sort
|
|            of value."
|
|
|
|            Thierer and English also compare the stock performance  
of the
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|            five large media firms with the so called "new media"
|
|            companies to further prove that older firms do not  
monopolize
|
|            the media market. "(T)he media marketplace is far more
dynamic|
|            and competitive than critics imagine. If any of these firms
|
|            were 'monopolists,' they would go down in history as  
some of
|
|            the worst performing monopolists of all time. Not only have
|
|            they failed to recoup 'excessive' profits, but haven't even
|
|            been able to return to value of their stocks to pre-2000
|
|            levels. Further, at least in terms of stock market
|
|            performance, they are being easily outpaced by 'new media'
|
|            companies such as Yahoo! and Google, who are stealing  
away an
|
|            increasingly large share of the advertising revenue pie."
|
|
|
|            The issue of media monopolies is also explored in Media
Myths:|
|            Making Sense of the Debate Over Media Ownership,  
authored by
|
|            Adam Thierer and recently published by The Progress &  
Freedom
|
|            Foundation. Media Myths  debunks longstanding arguments in
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|            favor of aggressive regulation of media ownership.
|
|
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|            The Progress & Freedom Foundation is a market-oriented  
think
|
|            tank that studies the digital revolution and its  
implications
|
|            for public policy. It is a 501(c)(3) research & educational
|
|            organization.



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