The Threat of Monopolies

Edward Schumacher. Editor of Wall Street Journal

29 January 2003

Monopolies are the threat to journalism. International media or alliances, to the extent they are not a monopoly, are not a threat. If anything, they add to the diversity of voices and often to quality.

The debate is much like that over chains of local newspapers or television stations. Local owners are often too close to the local power establishment to be independent. The building of newspaper chains inside Spain, like inside the United States, for example, has improved the quality of local and regional newspapers. The downside is that outside owners may have a limited commitment to the community in times of crises or a poor economy. My experience, however, is that you are just as likely to find an irresponsible local owner as outside owner.

At the national level, governments fear international owners of media because they cannot politically control them. At least not as easily. That government self-interest is combined with nationalism, which is not always the most rational of forces. And t hen you have the interests of local media groups, who fear competition.

That combination is why many, if not most, countries have limits on foreign media ownership, especially in television. Even the United States limits foreign ownership to 25% in television, though there are no limits in radio and print. A country like Brazil is far more restrictive. A new law there is just now allowing foreigners to own up to only 30% in print, television or radio.

But in television and radio, governments have licensing power over the airwaves, no matter who the owner is, making the issue a little bit of a false one. Rupert Murdoch, for example, beams satellite television into China but has been careful not to offend Chinese authorities with his news coverage. Print media are more able to be independent.

International media has been a force in professionalizing local media in many countries. Pearson through its ownership stake in Grupo Recoletos raised the bar for the quality of business journalism in Spain. My own publications of The Wall Street Journal appear as daily supplements inside leading newspapers in every country in Latin America and in Spain and Portugal. The section is cited by the owners of almost all those papers, as well as by journalists and journalism schools, as a model to learn from.

[*D Information and power *]

This is separate from the value of the content myself. If information is power, then I see my mission as giving the same information to readers in countries far from the financial and multinational corporate centers that readers in those centers have. It is a globalization of information, and in that way I hope that I am helping to level the playing field. Other international media do the same thing.

Nationalism enters in the fear of propaganda, either overt or in the form of more subtle cultural imperialism, and that somehow the metropolis is going to control the minds of people everywhere. That might be a concern if an international media had a monopoly. But, again, it is the monopoly that is bad. Readers, viewers and listeners prefer their local media to international media if the local quality is bearable. Not even equal. Just bearable. The same is true of entertainment. U.S. television shows and music, for example, have been steadily dropping in international market share for years, as the production and artistic quality of local TV and music have improved. That is in entertainment. In news, there is the additional barrier of the public’s sensors being up precisely for any supposed manipulation by outsiders. CNN and the BBC, for example, are at most a supplement to the news given by national television networks in most countries. When Al Jazeera emerged as an independent Arab source of news with decent production values, it quickly replaced CNN and the BBC in the region. The exception comes when the local media are heavily controlled by the government, as in the former Soviet republics or in many Arab countries today. Then citizens go looking for a CNN, BBC, RAI, TVE - or Al Jazeera - as another, presumably more independent outside source of news.

A greater concern should be the consolidation of local media taking place inside most countries by large, domestic media groups. The trend has helped improve professionalism and quality in most countries. But a local monopoly, should they get it, is just as bad or worse than an international one.

The bottom line is that pluralism is growing in media precisely because of the growth of international media. Add the internet and you have virtual anarchy in the media. The issue for citizens in the democratic, free market world today is arguably not too few choices of news, but too many in their daily lives.

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