The Evolution of the Media Industry

In The New Media Giants, Changing Industry Structure, David Croteau and William Hoynes discuss the media industry and how it has been affected by merging, which is a result of deregulation in the past few decades. In particular, the authors follow CBS from it’s peak in the 60’s until it was purchased by Viacom, which was originally created as a spin-off of CBS when the FCC attempted to “limit network control over television programming and thereby encourage the development of a diversity of programs…” (“financial interest and syndication rules”-page 28). The argument behind this thinking is that “media giants” should not monopolize the industry because to do so would inhibit diversity. However, since Reagan’s presidency, the economy has experienced a conservative, pro-business shift that discourages regulations. When the FCC regulations were relaxed, Viacom and CBS merged, along with numerous other businesses listed on pages 24-28. Croteau and Hoynes attribute these changes in the media industry to growth, integration, globalization and concentration of ownership. Huge growth allows integrated media conglomerates to utilize “synergy,” which refers to the “dynamic where components of a company work together to produce benefits that would be impossible for a single, separately owned unit of the company.” (page 23). Advances in technology, such as the Internet, (which follows TV’s trend of being dominated by media giants), went hand in hand with deregulation and the expansion of the industry. Horizontal integration (owning different types of media products) and vertical integration (owning assets involved in various stages of the production, distribution, and sale of a type of media product), have also been catalysts for change. Companies see international markets vital to future growth and channels such as MTV and Nickelodeon experience huge success abroad. While there is a debate about how much truth there is in claiming that a few companies dominate the industry, the overall tone of this piece supports this concept. Then again, the writing ends by examining new media as wasted potential. The image I chose (above) displays the revenue segment for UTV software Communications Ltd, now owned by Disney. It represents horizontal integration by illustrating how the company owns various types of media products (movies, television, broadcasting, new media, and games content). Disney is an interesting company to read about because it owns so many other channels such as ABC and ESPN, which I don’t typically associate with traditional “Disney.”