more on What media monopolies?

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dana Blankenhorn <danablankenhorn () mindspring com>
Date: August 26, 2005 3:17:59 PM EDT
To: dave () farber net
Subject: Re: [IP] What media monopolies?
Reply-To: Dana Blankenhorn <dana () a-clue com>


This is the kind of brain-dead study I always have problems with.

Stock market value is not a proper measure of market power. Market  
power is
the proper measure of market power.

Here, for instance is the five year chart of The Coca-Cola Co., which  
holds
a virtual duopoly on the drinks market with Pepsi. (I happen to own 100
shares in my SEP IRA. It's part of being an Atlantan.)

http://finance.yahoo.com/q/bc?s=KO&t=5y

You'll see the stock price has been virtually flat the last five  
years. Is
this because the drinks market is wildly competitive? No. Prices for  
fizzy
water haven't fallen, either.

The idea that 5 idiots have managed to keep their advantages from  
filtering
down to shareholders and thus they're not monopolists is absurd on  
its face.

Oh, and Intel stock hasn't been able to get out of its own way since  
2001, either. http://finance.yahoo.com/q/bc?s=INTL&t=5y
Does that prove they're not a monopolist?

All this study proves is that, at best, the media companies are  
incompetent monopolists.

Dana Blankenhorn   dana () a-clue com
Mooreslore Blog    http://www.corante.com/mooreslore/
ZDNet OpenSource    http://blogs.zdnet.com/open-source/index.php
Editor: voic.us, A-Clue.Com http://www.voic.us http://a-clue.com


----- Original Message ----- From: "David Farber" <dave () farber net>
To: "Ip Ip" <ip () v2 listbox com>
Sent: Friday, August 26, 2005 1:48 PM
Subject: [IP] What media monopolies?



> 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
> |
> |            could not possibly be acting as monopolies.
> |
> |
> |
> |            According to Thierer, Director of PFF's Center for  
> Digital
> |
> |            Media Freedom, and economist English, today's media   
> market
> is
> |
> |            more diverse and highly competitive than ever before, a
> point
> |
> |            is illustrated by a 200 percent increase in the number of
> |
> |            media outlets over the past forty years. That   
> competition is
> |
> |            reflected in the market performance of five of the  
> largest
> |
> |            media operators. "By looking at the performance of  
> publicly
> |
> |            traded media firms and their stock over the past five   
> years,
> |
> |            it is readily apparent that monopolists do not  
> dominate  this
> |
> |            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."
> |
> |
> |
> |            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
> |
> |            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
> |
> |            favor of aggressive regulation of media ownership.
> |
> |
> |
> |            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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