Transnational Media and Communication - Research Paper Example

 Content page Topic pg. no Introduction ……………………………………………………………………………3 Aims of the study………………………………………………………………………..3 The global media industry -Convergence of media and technology………….……..….4 Involvement in key media sectors……………………………………………………….6 Vertical integration and benefits ...………………………………………………………6 Second tier companies………………..……………………………………………...………….7 Why go international?................................................................................................................7 Main players in global media industry……………………………………………………………………………..8 Media conglomerates: today’s dinosaurs?.................................................................................8 Is cultural diversity under threat? ………………………………………………………..9 Cultural Intrusion and Confrontations to National Sovereignty…………………….…...12 Local resistance……………………………………………………………………….…13 Conclusion……………………………………………………………………………….14 References Introduction: The deregulation and the globalization of the worldwide communication sector in the 1990s saw its effects on the media industries. After combining new communication technologies like the satellite, digital cable and mobile delivery methods, the media sector has built an international marketplace for its products. The rapidly growing use of commercial satellites helps in releasing media products such as information, news and entertainment. It is now vital for media conglomerates to sketch their strategies in a worldwide context, with the ultimate intention of bringing lucrative growth by utilizing economies of scope and scale (Thussu, 98). Like all conglomerates, media companies seek economies of scale, try to promote huge volume of transactions and exploit the multi-market opportunities. Media buying networks are increasingly engaged in arguments with multi-market corporations. They try to get closer to media employers and develop a symbiotic connection with them (Chalaby, 162). There has been an union of both media and technologies. Along with this there is the development of vertical combination in the media industries to achieve the desired target of constructive globalization. All these resulted in the concentration of media power in the hands of a small number of large transnational businesses. These businesses are in turn undermining media plurality and democratic discussion (Thussu, 98). Subsequently the paper comes to the main research question of whether transnational media corporations represent a threat to the world’s cultural diversity and whether local resistance is possible. Aims of the study: The study aims to introduce the global media industry and some of its key players. One may look at a selection of corporations in the global media industry, such as Time Warner, Walt Disney, Bertelsmann and News Corporation. Now, the problems that have confronted them in recent years and the challenges they are likely to meet in the future may be analyzed. Finally the report investigates the threats that transnational media imposes on the diverse cultures of the world and what kind of restriction do these cultures impose on the current status of global penetration. The global media industry -Convergence of media and technology Prior to globalization, most media conglomerates had been confined to only regional level businesses. Disney, for instance, was mainly concerned with cartoon films, and theme-park processes. Time was known primarily as a publishing house. Viacom was TV syndication, and a cable group and News Corporation was an assembly, which owned a sequence of newspapers in Australia. With the privatization of broadcasting across world, there have been introduction of new techniques for delivering media and communication content, specifically, satellites, cable and Internet (Sreberny-Mohammadi). With the advent of technology these corporate bodies tried to exploit the global market. With deregulation and relaxation of cross-media ownership limits, particularly in the USA and Britain, media conglomerates looked forward to widen and deepen their existing network. As a result of that over the last two decades, there has been an enormous wave of mergers and acquisitions in the global media industry as each organization concentrated on expanding their reach. In 1985, Rupert Murdoch purchased Twentieth Century Fox to gain a root in the USA and in 1989 Sony acquired Columbia TriStat. (Thussu, 98-99; Auletta) In the same year, Times Inc. united with Warner Communications, forming Time Warner. Turner Broadcasting System was incorporated in 1995. Disney purchased Capital Cities/ American Broadcasting Corporation (ABC) in 1995. It thus added a broadcasting system to a conventional entertainment corporation. Seagram obtained Universal Studios in 1995 and in 1998 purchased music company Polygram (Thussu, 98-99; Auletta). Viacom purchased Blockbuster video sharing and in 1994 Paramount and Bertelsmann bought Random House in 1998. In the twenty-first century, such tendencies towards media consolidation are expected to decrease the number of conglomerates managing both content and delivery globally. Fewer than ten corporations, the majority of them based in the USA, form most of the world’s media industries. The AOL-Time Warner is at the front position, pursued by Walt Disney, Viacom-CBS, Bertelsmann, New Corporation, Telecommunication Inc. (TCI), Sony and National Broadcasting Corporation (NBC), which entered into joint venture with the Paris-based Vivendi Universal in 2003 to form NBC-Universal. The current scenario finds the media industry across the world dominated by mainly the corporations based in US. These media houses work towards a global market promotion and subduing the culture which is not convenient for their long term stay and flourish. Even in the 80s the media market was nationally based in terms of scope. This mainly pertained to the main media forms like newspaper industries and broadcasting systems which were regulated. In 1990 the market was dominated by Time Warner and Disney who achieved 15 percent of their income from regions outside USA. New satellite and digital technologies further encouraged the flourish of the transnational corporations in the media industry. By 1997 he two media corporations were earning 30-35 percent income from outside America. In the next few years the companies were gaining most of their businesses from outside their homeland. The first tier consists of nine companies in the first tier – “The five largest are Time Warner (1997 sales: $24 billion), Disney ($22 billion), Bertelsmann ($15 billion), Viacom ($13 billion), and Rupert Murdoch's News Corporation ($11 billion)”. (McChesney) The idea is to expand to such an extent that they would lie outside competition and other firms cannot buy out these giants. Involvement in key media sectors The United States productions mainly focused on films, television shows, controlled theatre screens, and television sets around the world. Foreign productions offered little competition. Sony of Japan and Bertelsmann of Germany are few strong competitors in foreign multimedia industry and they try to match against the United States media conglomerates. Yet US companies still control a bulk of foreign sales in the worldwide media market. They are also increasing through regional joint ventures, international corporations, or absolute takeovers. Vertical integration and benefits Some of the media companies belong to the entertainment industry and are vertically integrated. Such companies may operate across different verticals like toys, distribution networks and manufacture of retail goods. Once this kind of integration was looked upon with concern but currently, “government has become sympathetic to dominant vertical corporations that have merged into ever larger total systems. These corporations, including those in the media, have remained largely unrestrained” (Shah). Such integration helps in enhancing market power and dominance and enable cross selling and promotions. An example of vertical integration may be taken from “the film, Beavis and Butt-Head Do America, based on the MTV cartoon series, cost $11 million but generated a profit of $70 million dollars.” (Shah) This may explain the popularity of such integration. The media conglomerates of the United States, with their advertising products and services have flooded only a few peripheral countries. However the majority of the peripheral countries lack the necessary technological infrastructure, capability of providing security, or adequate disposable income to make it reasonably worthwhile to establish main activities in these areas. Simultaneously, some of the peripheral countries are seeking to avoid communication with the United States media culture since they are trying to defend and promote their original native culture. This indigenous culture comprises of low technology, religious convictions, authoritarian administrations or antidemocratic leaders (McPhail, 91). But the role of cultural variations cannot be neglected and the media companies cannot ignore its role as a major influence on the global culture. Second tier companies After this tier there is a second tier of firms which do business in the range of $1 to $8 billion annually in the media industry. This list of firms includes CBS, New York Times, Bloomberg, Comcast etc. they mainly come from North America while some are also from East Asia and Latin America. (McChesney) They mainly do business in the niche markets but are often not opposed to the global framework. Companies like Brazil’s Globo, Venezuela’s Cisneros Group and Televisa from Mexico are amongst the seventy biggest media houses that dwell in their national and regional markets. These companies are often tied up with the global TNCs based in US. (Cottle, 33) Why go international? Owing to the popularization of mergers and acquisitions in the media industry there has been a line of players with global characteristics where decision making and foreign direct investments are based upon considerations of economic efficiencies rather than concerns about national boundaries. The main reason behind such investments centers on profitability and growth potential of the market. Five reasons may be identified for the media corporations going international – “natural resources and proprietary assets, foreign market penetration, production and distribution efficiencies, overcoming regulatory barriers to entry, and empire building” (Gershon, 17). Size is a major concern for TNMCs and helps in obtaining economic efficiency and makes the long term investments sustainable in nature. Globalization enables access to a wide range of sources of finance. For such businesses usually adherence to political relationships is not as important as making profits. Main players in global media industry Time Warner, Disney, Viacom, News Corporation and General Electric symbolize the general US media employers that control many international media products or worldwide media associated markets (McPhail, 59; Herman and McChesney, 75). Time Warner became the main media company of the world through a long-standing deliberate plan involving key mergers. In 1989, it united with Warner Communications. (McPhail, 59; Herman and McChesney, 75). In 1996, it united with Turner Broadcasting. Disney is the world’s second largest communication realm, after Time Warner, with yearly revenues of US $27 billion. Disney initiated early last century under the management of Walt Disney, who had an expert vision of employing animated cartoons and feature films as main commercial undertakings. In May 2000, the Federal Communication Commission (FCC) supported the amalgamation of Viacom with CBS. Viacom, as a part of consolidation in the broadcasting business, was competent to buy CBS Corp for US $30 billion. This straight away gave Viacom control over 35 percent of the US broadcasting market. In 2004, News Corporation, the 4th largest media company declared that it was reincorporating in the US market, substantiating the status of the US as the most significant media base in the planet (McPhail, 78). News Corporation is a worldwide media firm with noteworthy interests in TV, films, books, newspapers, magazines, satellites, cable structures and sports. In the mid 1990s, News Corporation got hold of STAR TV. In 1998, STAR TV purchased Hong Kong’s Hutchvision Hong Kong Ltd. The STAR TV channel provides both subscription and free-to-air television services. It has been reaching over 300 million families across Asia. India and the Middle East have the wide market, which helps STAR to be distinctive among the broadcasters. These data signifies the drastic shift of the transnational media companies and how these firms tried to capture more market share to operate profitably. Media conglomerates: today’s dinosaurs? The industry of mass media is developed on the basis of few large media corporations making the content for a wide range of audience. Till date the scenario has been dominated by a few companies. The audience is in fragments and this has made it easier for these companies to make the niche markets their target. The power and dominance of the media conglomerates are concerning the experts and critics on two grounds. First, as new technologies are coming up more people would come up as media producers instead of consumers. These new producers will eat away the market shares of these big conglomerates. Again with exchange of media becoming a cheap process owing to the internet, low cost digital equipments and the social networking sites, the production explosion of media content will take place outside these media conglomerates. This might gradually lead to an extinction of these big houses and therefore make them today’s dinosaurs (Devereux, 51). With the up rise in digital allocation, a whole range of new income opportunities has surfaced since the media and telecommunication sector interweave globally. The increasing bandwidth, coupled with the rapid popularity of permanent and mobile networks, have significantly helped global media. In addition to this, digitized content and increased use of personal computers internationally have significantly contributed to the process of globalization of the communication system. Multinationals dealing with the communication sector were about to make the most out of emerging markets and tried by introducing new media products. According to a 2005 report ordered by NBC-Universal, copyright based industries were the most significant drivers for acceleration in the U.S. economy, contributing to almost 60 percent of the increase in the U.S. exportable products and services. In 2003, the “core” copyright companies contributed roughly $33 billion to export revenues (Thussu, 99; Aris and Bughin, 268). Is cultural diversity under threat? In the month of June in the year 1999 Bhutan officially became the last nation to come under the influence of transnational media. (Norris, Inglehart, 3). It actually marked the era of globalization of communication in the country when the king of Bhutan lifted the ban as a significant part of a radical plan to modernize his kingdom. The subject of study would be to ascertain how well these regions or for that matter, the diversified culture maintain their uniqueness despite the constant penetration of mass media into their core cultural aspects. The starting point of the study is about the crucial observation that the international mass communication system is actually hugely affected by the broader phenomenon called globalization. As observed so far, the process of expansion of network has practically eradicated the concept of national boundaries and eventually has generated a swift flow of ideas, services, people and most importantly money. The process of globalization through the system of transnational media and communication actually tries to encompass multidimensional aspects of globalization. The media tries to take the essence of the economic, political and social aspect of that particular country or region in which they are trying to reach. But it is being observed that in most of the cases the media and the communication network fail to be global in the true sense. (Norris, Inglehart, 3). Most of the communication networks are focusing on the basic aspects like increasing its network and its reach, whereby they can generate reasonable returns. This attempt taken on the part of the media and transmission companies are actually making the territorial boundaries more vulnerable to external elements. According to analysts the concentrated expansion process is making most of the places similar to the popular nations with ample exposures and less concentrated on the cultural aspects of the isolated regions across the globe. (Norris, Inglehart, 3). For this particular reason the global effect of media, more often than not is identified with the help of the concepts like “modernization”, “westernization” and finally “Americanization”. (Norris, Inglehart, 3). It somehow spoils the greater effect of globalization and many distant cultures observe this gradual process as a threat to their diversity. In some countries like Sweden, Holland and Australia it is being observed that the basic values are shifting with the influence of media as the social and cultural changes are sometimes identified as Americanization. The process of globalization in media also had its positive effects. The transnational media successfully connected many isolated and remote places of the world and has importantly participated in their issues. (Norris, Inglehart, 6). The speed and accuracy of delivery of global, national and even local news has definitely helped many parts of the globe to stay connected. Promotion of various cultures also in many aspects helps in the formation of a cosmopolitan culture in the most remote places of the world. According to the analysts this penetration also helps in the growth in the acceptance level of the people. As already described earlier the multiple level of developments have actually expanded the volume and the pace of the flow of information across the boundaries. This concept of cosmopolitan communication actually emphasizes on the issue of connecting people who are living in distant and diverse communities. In the recent years the core concept of cosmopolitan actually signifies the importance of the concept of the “global citizen” and tries to bind the core values of each and every diverse cultures of the world. (Norris, Inglehart, 7). The basic idea of a transnational media in this cosmopolitan world is to redefine the process of democracy for the purpose of extending the principles to the international lifestyle. (Norris, Inglehart, 7). But the main issue is how the citizens of those different regions react and the by which they interpret the attempt of the transnational media system. It is also not the question of acceptance but more often than not, it is the local authority who determines the degree of exposure. This means that attempt should not be exaggerated but it should follow a continuous process through which mutual exchange of cultural ideas takes place. Cultural Intrusion and Confrontations to National Sovereignty: In a transnational economic system, the deliberate decision making and distribution of resources are based on economic aims and effectiveness with little regard given to the national borders. As the world economy becomes more completely privatized, the aims of the nation states and the Transnational Corporations will progressively find themselves on a conflicting route. It is the rationale of the nation states to reinforce the cause of political and economic sovereignty. On the other hand, the main objective of any Transnational Corporation is to involve itself in profitable business deals. It has to be considered that the Transnational Corporations stand to provide the host nation with considerable opportunities for economic development in terms of probable jobs, sharing of resources, and tax revenues. More often than not the facility to go abroad through by a Transnational Corporations can have far-reaching effects on the social aspects of the country. The exact nature of these influences and the degree to which they cause immense good or harm to the society is occasionally hard to evaluate. It is expected that the Transnational Corporations is both encouraged and side by side are also feared by the host administrations. It is quite obvious as these companies symbolize such a large assembly of management, know-how and resources (Gershon, 116; Thussu). The problem of different goals between multinational conglomerates and host administrations has long been the issue to be assessed. What differentiates the transnational media corporation (TNMC) from other kinds of Transnational Corporation is that the main product that is being sold is information and amusement based. Yet, the monetary imperatives that force TNMCs are not always well matched with the political and economic aims of the host country. The issue is the control over the global marketplace of thoughts, confrontations to national sovereignty, the probable loss of national culture and scientific and commodity reliance (Gershon, 4-5). These US media corporations have huge libraries of television and feature films that have by now paid for themselves as first-run productions in the vast US household market. They can compete globally with an arsenal of video and audio products that jointly can inundate any foreign system or production house through absolute volume (McPhail, 92). But side by side these media companies should take special cares regarding the cultural aspects of the nations which they are concentrating on. The management of these companies should take special care so that they do not become a social evil mostly in the regions with diverse culture. That is the reason why before broadcasting or transmitting any kind of information or entertainment package the company should be well aware about its consequences in those parts of the world. For that reason it is always advisable to promote such kind of packages which would be locally popular as well as it would not mean any harm to the society of that particular country. Local resistance: If the local sentiments are hurt there might be oppositions from the lawmakers and common people as well. The nations like India and Pakistan have kept some components of media public and privatized the rest (Thomas, 77-78). The indigenous crowd and marginalized societies are opting for greater degree of cultural diversities, autonomy and access to cultural resources. Since the poor and marginalized communities are not a major part of the consumer segment, they are not considered while structuring the products. Television programming itself is oriented towards the upper middle class and rich ones. Hence the local media needs to be more vocal and express people’s oppositions and demands. The activities of multinational conglomerates require strict monitoring. Critique against media monopolies should be highlighted. The Internet may also be used to promote local sentiments against the lack of cultural diversities in the media products. Global media can also be a source of mass deception by lying about certain trends and news which the consumers and viewers of television are made to believe. People need to come forward and protest against this expressing their personal choices and hence the lawmakers and strategists would frame the policies for these corporate houses of the media industry (George). Conclusion: For the last few years, transnational corporations have been making regional markets and regional recognitions, which surpass the dreams of the most positive regionalists of the past two centuries. Latin America and the Arab world are exceptionally adapted to benefit from the alterations underway owing to bonds of lingo and culture which make regionalism fit for these countries. What makes for unison among individuals, however, does not inevitably make for union among administrations. In order to benefit from the alterations underway, the administrations of Latin America and the Arab world will have to redefine their associations to their individuals and among themselves, and do so with comparative speed. Such a fundamental alteration in domination is perhaps the greatest confrontation of all (Alterman). As can be seen from the consequences of media globalization, the actual media is mostly dominated by commercialization and its effect on the public domain. In case of smaller and less economically developed nations, there is a further drive of gaining efficiencies and scientific and promotional sophistication that immensely facilitate media and cultural infiltration. The media conglomerates are much more inclined to offer audience appealing programs related to sex and violence instead of providing much emphasis to the public service programs (Bartlett and Ghoshal, 288) Conversely, the globalizing media treat viewers as customers, not as citizens and they are most conscientious to those with high earnings. If this trend continues the other minor cultures of different nations will be suppressed and the global modernized culture will prevail. As discussed above, going by the consumer demands there is little or no scope for local resistance. Banning some particular channels would lead to tapping and over-the-counter businesses as long as consumer demands are there. In a global set up it is practically impossible to ignore the preferences of consumers when they are given a common choice set. Thus finally it is the role of the management of these transnational media corporations to understand the local level of sensitivity. If they somehow manage to localize their production and promotion they might be more successful and in long term they will fetch more revenue. But before implementing this strategy the companies should focus on gathering more information about the local culture and the society. Both as a social element and a business entity the mass media should try to be more locally sensitive for successful and smooth operation. The nations might try to oppose this interference with their culture and traditions by simply making laws against certain activities and imposing limitations. However, in this digital age it is not only the media conglomerates which can allure the consumers, but it is also the internet and the digital world which attracts the common people towards a global and liberal culture. The opposition can only be effective if the consumers ban the use of such products and services by themselves. Lawmakers might allow the second tier media houses to enter their markets and work with local media houses instead of establishing their independent office. In this fast expanding industry and liberalization of people’s tastes it is very difficult for local region to raise any opposition to the expanding TNMCs from intervening into their specific cultures. Works Cited 1. Alterman, Jon B. “Transnational Media and Regionalism”. TBS Archives, Issue 1, 1998. Retrieved on December 10, 2009 from: http://www.tbsjournal.com/Archives/Fall98/Articles1/JA1/ja1.html 2. Aris, Annet, Bughin, Jacques. Managing Media Companies. New York: John Wiley, 2009. 3. Auletta, Ken. Media Man: Ted Turner’s Improbable Empire. New York: Norton, 2004. 4. Bartlett, Christopher A, Ghoshal Sumantra. Managing Across Borders: The Transnational Solution. Harvard: Harvard Business School Press, 2002. 5. Chalaby, Jean K. Transnational Television in Europe: Reconfiguring Global Communications Networks. London: I.B. 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