"A Few Big Companies Are Taking Over the World’s Media"

No. Much of the debate on media structure is too black-and-white. A merger of Time Inc. with Warner Communications and then with America Online dominates headlines, but the incremental growth of smaller companies from the bottom does not. Breakups and divestitures do not generally receive front-page treatment, nor do the arrival and rapid growth of new players or the shrinkage of once influential players.

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In the United States, today’s top 50 largest media companies account for little more of total media revenue than did the companies that made up the top 50 in 1986. CBS Inc., for example, was then the largest media company in the United States. In the 1990s, it sold off its magazines, divested its book publishing, and was not even among the 10 largest U.S. media companies by the time it agreed to be acquired by Viacom, which was a second tier player in 1986. Conversely, Bertelsmann, though a major player in Germany in 1986, was barely visible in the United States. By 1997, it was the third largest player in the United States, where it owns book publisher Random House. Companies such as Amazon.com, Books-A-Million, Comcast, and C-Net were nowhere to be found on a list of the largest media companies in 1980. Others, such as Allied Artists, Macmillan, and Playboy Enterprises, either folded or grew so slowly as to fall out of the top ranks.

Indeed, media merger activity is more like rearranging the furniture: In the past 15 years, MCA with its Universal Pictures was sold by its U.S. owners to Matsushita (Japan), who sold to Seagram's (Canada), who sold to Vivendi (France). Vivendi has already announced that it will divest some major media assets, including textbook publisher Houghton-Mifflin. Bertelsmann also has had difficulty maintaining all the parts of its global enterprise: It recently fired its top executive and is planning to shed its online bookstore. There is an ebb as well as a flow among even the largest media companies.

The notion of the rise of a handful of all-powerful transnational media giants is also vastly overstated. Some media companies own properties internationally or provide some content across borders (for example, Vivendi's Canal+ distributes movies internationally), but no large media conglomerate owns newspapers, book publishers, radio stations, cable companies, or television licenses in all the major world markets. News Corp. comes closest to being a global media enterprise in both content and distribution, but on a global scale it is still a minor presence -- that is, minor as a percentage of global media revenue, global audience, and in the number of markets it covers.

Media companies have indeed grown over the past 15 years, but this growth should be understood in context. Developed economies have grown, so expanding enterprises are often simply standing still in relative terms. Or their growth looks less weighty. For example, measured by revenue, Gannett was the largest U.S. newspaper publisher in 1986, its sales accounting for 3.4 percent of all media revenue that year. In 1997, it accounted for less than 2 percent of total media revenue. Helped by major acquisitions, Gannett's revenue had actually increased by 69 percent, but the U.S. economy had grown 86 percent. The media industry itself had grown 188 percent, making a "bigger" Gannett smaller in relative terms. Similar examples abound.

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