The Historical Development of Neoliberalism in the Media Industry - Essay Example

The historical development of Neo-liberalism in media industry Introduction Historically, media enterprises were publicly owned. Post-Second World War policies deregulated national markets and created opportunities for commercialization of global media (Harvey 2005, p. 50). The global market provided profitable opportunities for export and import of books, films, music and television shows. However, large music recording companies, book publishing multinational companies and TV production companies still dominate the modern commercial global media market. Major film firms control about seventy of the total US market but still derive more than half of their revenues from the foreign market. This trend has led to commercialization of the media and deregulation of the industry. Monetarist policies of 1970s initiated neo-liberal discourse and market deregulation policies that were geared at reducing monopoly dominance of vital industries and creating market competition (Harvey 2005, p.110). Neo-liberalism in media industry aimed at making commercialization of media industry easier. Accomplishment of the mission requires removal to barriers of global media industry business such as regulations, tariffs and other restrictions on the free flow of capital investments (Jenkins 2008, p. 44). Historical development of neo-liberalism in media industry Neo-liberalism policies entrenched market rules that ensured free movement of capital, services and goods thus resulting to self-regulation of the prices by market forces of demand and supply. Privatization of national media enterprises and reduction of public expenditure on social services such as media created opportunities for entrepreneurs to offer integrated media services. Neo-liberalism in global media market has created new forms of auction due to transaction-intensity in the market. Radio frequencies such as UMTS frequencies can now be auctioned instead of initial allocation of media frequencies to few media enterprises by the governments. Initial licensing of radio frequencies was associated with ownership problems due to the scarcity of the pubic resource. National media industries such as radio and television were initially protected from the competition as national social resources, but current global media industry is different since competition for consumers and profitability is the leading driving force in the industry. For instance, cable and satellite television technologies have created new channels of media distribution. An example is Hollywood studios that have doubled their revenues for global TV rights for the films. The well established companies in the television industry have ensured their dominance on channel ownership while aggressively entering new markets with a global edition of their channels. Their transnational interests in media business have led to the establishment of satellite systems in Europe, Asia, Africa and Latin America (Dwyer 2010, p. 67). The impact of international institutions The development of ne-liberalism in media industry was partly enhanced by leading nations such as Britain and United States of America. Global trade agreements such as World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) formed the base for entry in to foreign markets by the media firms (Chorev and Babb 2009, p. 464). The logic of global expansion was to increase profitability through entering the unexploited markets and also diversifying risks associated with declining home markets (Giroux 2011, p.18). Most of the governments have eliminated trade barriers in media industry. For instance, the British government eliminated the voluntary levy on film theater revenues that was mainly directed at Hollywood films thus enhancing the supply of programming in the movie and film industry from foreign media firms. Another clear example is a ruling by WTO in 1997 that asserted that Canada could not restrict Time Warner’s sports from publishing a Canadian edition of the same magazine. In some countries such as Argentina, the courts of justice have ruled in favor of international treaties even when the national governments enact laws that restrict competition or tend to preserve unique cultural objectives (Couldry 2010, p. 89). For instance, dominant media companies implemented their international expansion strategies. The educational book publishing industry in the US that was initially controlled by two firms in the 1980s now is flooded by several multinational companies. Since 2000, the number of foreign acquisitions, mergers and new capital investments by global telecommunication firms in different market segments such as internet business, teleconferencing and voice communications has exceeded US $ 1000 billion. In several media industries such as film business, the global market is still dominated by several multinationals like News Corporation, Vivendi, Sony, AOL-Time Warner and Disney. These firms rank among the most profitable businesses in the world. Though not all firms are headquartered in the US, majority of them have operational presence in the US market and other continents. The firms have also acquired several film studios in the US but can hardly control the entire entertainment industry due to the emergence of satellite broadcasting and modern forms of media such as internet movies (Ward 2008, p. 122). Current trends in global media industry Global media system has continued to press for policies that ensure equal regulation across all markets, but some media conglomerates still dominate the key markets in the world due to strong traditions and cultural industry. For instance, some countries like Mexico, South Africa and Norway have protected their small national film production industries through the provision of subsidies and tax barriers on foreign film industries. Domestic film industries in countries such as India have realized the importance of going global. Media recording companies that have dominated the global markets such as Sony have begun aggressive strategies of establishing subsidiaries in emerging markets such as Brazil and acquiring local independent music companies. Some WTO gatherings such as Stockholm meeting in 1998 concluded that it was possible to protect the national culture and exempt it from global trade transactions. The European Union (EU) has also condemned countries that offer subsidies to public broadcasting companies since they are non-competitive. However, with the rise in a global market economy, media firms have capitalized on avaiklable advertising opportunities to enter new markets. For instance, multinational companies like General Electric and Nike commit a sizeable portion of their budget to advertising on ABN-CNBC global television network. Global media systems have become more commercialized and globalized through partnerships with local companies if the population prefers the local media content (Heron 2008, p. 97). Conclusion Neo-liberalism of media industry has led to conversion of the public interest and ownership of media houses in to profitable market based multinational enterprises. According to proponents of neo-liberalism of media industry, the cultural barriers and national regulations deny the consumers variety in media production. The subsidies also reduce the competitiveness in media firms. Multinational media companies have entered in numerous merger and acquisition agreements with small emerging media firms in emerging markets in order to ensure market share growth and increase profitability. The formation of international institutions such as World Trade Organization (WTO) provided the impetus and structures of opening up the media industry to private enterprises. International trade bodies are geared at removal of any tariffs or other forms of restrictions that hinder the cross border flow of global media investments. Dominant companies like News Corporations, Sony, and Disney have subsidiaries in other continents and media products that cater for the unique needs of the local population. Modern forms of media such as internet videos and social networking platforms have challenged the traditional news delivery channels thus many companies have implemented diversity in media product offerings and embraced technology in the delivery of the services. Neo-liberalism in global media industry was mainly driven by global economic restructuring that aimed at initiating competition in industries that were predominantly owned by national governments and also reducing public spending on social services such as TV broadcasting. The European Union has implemented restrictions on trade practices that curtail free market competition in media industry across its member countries. Media giants such as TV networks like ABC-CNBC network are fully committed to increasing profitability through global advertisements and partnership agreements in foreign markets. Bibliography: Chorev, Nitsan and Babb, Sarah. (2009).The Crisis of neoliberalism and the future of international institutions: A comparison of the IMF and the WTO, Theory and Society, 38: 5, 459-484. Couldry, Nick , (2010). Why Voice Matters: culture and politics after neo-liberalism, London: Sage. Dwyer, Tim. (2010). Media Convergence, Maidenhead: McGraw-Hill Giroux, Henry .(2011). The Crisis of Public Values in the Age of the New Media, Critical Studies in Media Communication, 28: 1, 8-29. Harvey, David. (2005). A Brief History of Neo-Liberalism, Oxford: OUP. Heron, Taitu .(2008). Globalization, Neo-liberalism and the Exercise of Human Agency, International Journal of Politics Culture and Society, 20: 1-4, 85-101. Jenkins, Henry. (2008). Convergence Culture: Where Old and New Media Collide, New York: New York University Press. Ward, David. (2008). Television and Public Policy: Change and Continuity in an Era of Global Liberalization, New York: Lawrence Erlbaum. Read More