Readers:
Some of you might find the article below useful. It was written in September
1997 by the renowned media critic, Professor Robert McChesney. I'll try and
send an updated version of this article.
Ebrima Ceesay
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THE GLOBAL MEDIA GIANTS
The Nine firms that dominate the world
By Professor Robert W. McChesney
A specter now haunts the world: a global commercial media system dominated
by a small number of super-powerful, mostly U.S.-based transnational media
corporations. It is a system that works to advance the cause of the global
market and promote commercial values, while denigrating journalism and
culture not conducive to the immediate bottom line or long-run corporate
interests. It is a disaster for anything but the most superficial notion of
democracy--a democracy where, to paraphrase John Jay's maxim, those who own
the world ought to govern it.
The global commercial system is a very recent development. Until the 1980s,
media systems were generally national in scope. While there have been
imports of books, films, music and TV shows for decades, the basic
broadcasting systems and newspaper industries were domestically owned and
regulated. Beginning in the 1980s, pressure from the IMF, World Bank and
U.S. government to deregulate and privatize media and communication systems
coincided with new satellite and digital technologies, resulting in the rise
of transnational media giants.
How quickly has the global media system emerged? The two largest media firms
in the world, Time Warner and Disney, generated around 15 percent of their
income outside of the United States in 1990. By 1997, that figure was in the
30 percentŠ35 percent range. Both firms expect to do a majority of their
business abroad at some point in the next decade.
The global media system is now dominated by a first tier of nine giant
firms. 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). Besides needing global scope to
compete, the rules of thumb for global media giants are twofold: First, get
bigger so you dominate markets and your competition can't buy you out. Firms
like Disney and Time Warner have almost tripled in size this decade.
Second, have interests in numerous media industries, such as film
production, book publishing, music, TV channels and networks, retail stores,
amusement parks, magazines, newspapers and the like. The profit whole for
the global media giant can be vastly greater than the sum of the media
parts. A film, for example, should also generate a soundtrack, a book, and
merchandise, and possibly spin-off TV shows, CD-ROMs, video games and
amusement park rides. Firms that do not have conglomerated media holdings
simply cannot compete in this market.
The first tier is rounded out by TCI, the largest U.S. cable company that
also has U.S. and global media holdings in scores of ventures too numerous
to mention. The other three first-tier global media firms are all part of
much larger industrial corporate powerhouses: General Electric (1997 sales:
$80 billion), owner of NBC; Sony (1997 sales: $48 billion), owner of
Columbia & TriStar Pictures and major recording interests; and Seagram (1997
sales: $14 billion), owner of Universal film and music interests. The media
holdings of these last four firms do between $6 billion and $9 billion in
business per year. While they are not as diverse as the media holdings of
the first five global media giants, these four firms have global
distribution and production in the areas where they compete. And firms like
Sony and GE have the resources to make deals to get a lot bigger very
quickly if they so desire.
Behind these firms is a second tier of some three or four dozen media firms
that do between $1 billion and $8 billion per year in media-related
business. These firms tend to have national or regional strongholds or to
specialize in global niche markets. About one-half of them come from North
America, including the likes of Westinghouse (CBS), the New York Times Co.,
Hearst, Comcast and Gannett. Most of the rest come from Europe, with a
handful based in East Asia and Latin America.
In short, the overwhelming majority (in revenue terms) of the world's film
production, TV show production, cable channel ownership, cable and satellite
system ownership, book publishing, magazine publishing and music production
is provided by these 50 or so firms, and the first nine firms thoroughly
dominate many of these sectors. By any standard of democracy, such a
concentration of media power is troubling, if not unacceptable.
But that hardly explains how concentrated and uncompetitive this global
media power actually is. In addition, these firms are all actively engaged
in equity joint ventures where they share ownership of concerns with their
"competitors" so as to reduce competition and risk. Each of the nine
first-tier media giants, for example, has joint ventures with, on average,
two-thirds of the other eight first-tier media giants. And the second tier
is every bit as aggressive about making joint ventures. (See chart below for
the extent of joint ventures between media giants.)
We are the world
In some ways, the emerging global commercial media system is not an entirely
negative proposition. It occasionally promotes anti-racist, anti-sexist or
anti-authoritarian messages that can be welcome in some of the more
repressive corners of the world. But on balance the system has minimal
interest in journalism or public affairs except for that which serves the
business and upper-middle classes, and it privileges just a few lucrative
genres that it can do quite well--like sports, light entertainment and
action movies--over other fare. Even at its best the entire system is
saturated by a hyper-commercialism, a veritable commercial carpetbombing of
every aspect of human life. As the C.E.O. of Westinghouse put it
(Advertising Age, 2/3/97), "We are here to serve advertisers. That is our
raison d'etre."
Some once posited that the rise of the Internet would eliminate the monopoly
power of the global media giants. Such talk has declined recently as the
largest media, telecommunication and computer firms have done everything
within their immense powers to colonize the Internet, or at least neutralize
its threat. The global media cartel may be evolving into a global
communication cartel.
But the entire global media and communication system is still in flux. While
we are probably not too far from crystallization, there will likely be
considerable merger and joint venture activity in the coming years. Indeed,
by the time you read this, there may already be some shifts in who owns what
or whom.
What is tragic is that this entire process of global media concentration has
taken place with little public debate, especially in the U.S., despite the
clear implications for politics and culture. After World War II, the Allies
restricted media concentration in occupied Germany and Japan because they
noted that such concentration promoted anti-democratic, even fascist,
political cultures. It may be time for the United States and everyone else
to take a dose of that medicine. But for that to happen will require
concerted effort to educate and organize people around media issues. That is
the task before us.
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This article and the following corporate profiles are based on The Global
Media: The New Missionaries of Corporate Capitalism (Cassell, 1997),
co-authored with Edward S. Herman. The Global Media can be ordered by
calling 1-800-561-7704.
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Time Warner
$25 billion - 1997 sales
Time Warner, the largest media corporation in the world, was formed in 1989
through the merger of Time Inc. and Warner Communications. In 1992, Time
Warner split off its entertainment group, and sold 25 percent of it to U.S.
West, and 5.6 percent of it to each of the Japanese conglomerates Itochu and
Toshiba. It regained from Disney its position as the world's largest media
firm with the 1996 acquisition of Turner Broadcasting.
Time Warner is moving toward being a fully global company, with over 200
subsidiaries worldwide. In 1996, approximately two-thirds of Time Warner's
income came from the United States, but that figure is expected to drop to
three-fifths by 2000 and eventually to less than one-half. Time Warner
expects globalization to provide growth tonic; it projects that its annual
sales growth rate of 14 percent in the middle 1990s will climb to over 20
percent by the end of the decade.
Music accounts for just over 20 percent of Time Warner's business, as does
the news division of magazine and book publishing and cable television news.
Time Warner's U.S. cable systems account for over 10 percent of income. The
remainder is accounted for largely by Time Warner's extensive entertainment
film, video and television holdings. Time Warner is a major force in
virtually every medium and on every continent.
Time Warner has zeroed in on global television as the most lucrative area
for growth. Unlike News Corporation, however, Time Warner has devoted itself
to producing programming and channels rather than developing entire
satellite systems. Time Warner is also one of the largest movie theater
owners in the world, with approximately 1,000 screens outside of the United
States and further expansion projected.
The Time Warner strategy is to merge the former Turner global channels--CNN
and TNT/Cartoon Channel--with their HBO International and recently launched
Warner channels to make a four-pronged assault on the global market. HBO
International has already established itself as the leading subscription TV
channel in the world; it has a family of pay channels and is available in
over 35 countries. HBO President Jeffrey Bewkes states that global expansion
is HBO's "manifest destiny."
CNN International, a subsidiary of CNN, is also established as the premier
global television news channel, beamed via ten satellites to over 200
nations and 90 million subscribers by 1994, a 27 percent increase over 1993.
The long-term goal for CNN International is to operate (or participate in
joint ventures to establish) CNN channels in French, Japanese, Hindi, Arabic
and perhaps one or two other regional languages. CNN launched a
Spanish-language service for Latin America in 1997, based in Atlanta. CNN
International will also draw on the Time Warner journalism resources as it
faces new challenges from news channels launched by News Corporation and
NBC-Microsoft.
Before their 1996 merger, Turner and Time Warner were both global television
powers with the TNT/Cartoon Network and Warner channels, drawing upon their
respective large libraries of cartoons and motion pictures. Now these
channels will be redeployed to better utilize each other's resources, with
plans being drawn up to develop several more global cable channels to take
advantage of the world's largest film, television and cartoon libraries.
Time Warner selected holdings
Majority interest in WB, a U.S. television network launched in 1995 to
provide a distribution platform for Time Warner films and programs. It is
carried on the Tribune Company's 16 U.S. television stations, which reach 25
percent of U.S. TV households;
Significant interests in non-U.S. broadcasting joint ventures;
The largest cable system in the United States, controlling 22 of the largest
100 markets;
Several U.S. and global cable television channels, including CNN, Headline
News, CNNfn, TBS, TNT, Turner Classic Movies, The Cartoon Network and CNN-SI
(a cross-production with Sports Illustrated);
Partial ownership of the cable channel Comedy Central and a controlling
stake in Court TV;
HBO and Cinemax pay cable channels;
Minority stake in PrimeStar, U.S. satellite television service;
Warner Brothers and New Line Cinema film studios;
More than 1,000 movie screens outside of the United States;
A library of over 6,000 films, 25,000 television programs, books, music and
thousands of cartoons;
Twenty-four magazines, including Time, People and Sports Illustrated;
Fifty percent of DC Comics, publisher of Superman, Batman and 60 other
titles;
The second largest book-publishing business in the world, including
Time-Life Books (42 percent of sales outside of the United States) and the
Book-of-the-Month Club;
Warner Music Group, one of the largest global music businesses with nearly
60 percent of revenues from outside the United States;
Six Flags theme park chain; The Atlanta Hawks and Atlanta Braves
professional sports teams; Retail stores, including over 150 Warner Bros.
stores and Turner Retail Group; Minority interests in toy companies Atari
and Hasbro.
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Disney
$24 billion - 1997 sales
Disney is the closest challenger to Time Warner for the status of world's
largest media firm. In the early 1990s, Disney successfully shifted its
emphasis from its theme parks and resorts to its film and television
divisions. In 1995, Disney made the move from being a dominant global
content producer to being a fully integrated media giant with the purchase
of Capital Cities/ABC for $19 billion, one of the biggest acquisitions in
business history.
Disney now generates 31 percent of its income from broadcasting, 23 percent
from theme parks, and the balance from "creative content," meaning films,
publishing and merchandising. The ABC deal provided Disney, already regarded
as the industry leader at using cross-selling and cross-promotion to
maximize revenues, with a U.S. broadcasting network and widespread global
media holdings to incorporate into its activities.
Consequently, according to Advertising Age (8/7/95), Disney "is uniquely
positioned to fulfill virtually any marketing option, on any scale, almost
anywhere in the world." It has already included the new Capital Cities/ABC
brands in its exclusive global marketing deals with McDonald's and Mattel
toymakers. Although Disney has traditionally preferred to operate on its
own, C.E.O. Michael Eisner has announced Disney's plans to expand
aggressively overseas through joint ventures with local firms or other
global players, or through further acquisitions. Disney's stated goal is to
expand its non-U.S. share of revenues from 23 percent in 1995 to 50 percent
by 2000.
Historically, Disney has been strong in entertainment and animation, two
areas that do well in the global market. In 1996 Disney reorganized, putting
all its global television activities into a single division, Disney/ABC
International Television. Its first order of business is to expand the
children- and family-oriented Disney Channel into a global force,
capitalizing upon the enormous Disney resources. Disney is also developing
an advertising-supported children's channel to complement the subscription
Disney Channel.
For the most part, Disney's success has been restricted to English-language
channels in North America, Britain and Australia. Disney's absence has
permitted the children's channels of News Corporation, Time Warner and
especially Viacom to dominate the lucrative global market. Disney launched a
Chinese-language Disney Channel based in Taiwan in 1995, and plans to launch
Disney Channels in France, Italy, Germany and the Middle East. "The Disney
Channel should be the killer children's service throughout the world,"
Disney's executive in charge of international television states.
With the purchase of ABC's ESPN, the television sports network, Disney has
possession of the unquestioned global leader. ESPN has three U.S. cable
channels, a radio network with 420 affiliates, and the ESPN Sports-Zone
website, one of the most heavily used locales on the Internet. One Disney
executive notes that with ESPN and the family-oriented Disney Channel,
Disney has "two horses to ride in foreign markets, not just one."
ESPN International dominates televised sport, broadcasting on a 24-hour
basis in 21 languages to over 165 countries. It reaches the one desirable
audience that had eluded Disney in the past: young, single, middle-class
men. "Our plan is to think globally but to customize locally," states the
senior VP of ESPN International. In Latin America the emphasis is on soccer,
in Asia it is table tennis, and in India ESPN provided over 1,000 hours of
cricket in 1995.
Disney plans to exploit the "synergies" of ESPN much as it has exploited its
cartoon characters. "We know that when we lay Mickey Mouse or Goofy on top
of products, we get pretty creative stuff," Eisner states. "ESPN has the
potential to be that kind of brand." Disney plans call for a chain of ESPN
theme sports bars, ESPN product merchandising, and possibly a chain of ESPN
entertainment centers based on the Club ESPN at Walt Disney World. ESPN has
released five music CDs, two of which have sold over 500,000 copies. In late
1996, Disney began negotiations with Hearst and Petersen Publishing to
produce ESPNSports Weekly magazine, to be a "branded competitor to Sports
Illustrated."
Disney selected holdings
The U.S. ABC television and radio networks;
Ten U.S. television stations and 21 U.S. radio stations;
U.S. and global cable television channels Disney Channel, ESPN, ESPN2 and
ESPNews; holdings in Lifetime, A & E and History channels;
Americast, interactive TV joint venture with several telephone companies;
Several major film, video and television production studios including
Disney, Miramax and Buena Vista;
Magazine and newspaper publishing, through its subsidiaries, Fairchild
Publications and Chilton Publications;
Book publishing, including Hyperion Books and Chilton Publications;
Several music labels, including Hollywood Records, Mammoth Records and Walt
Disney Records;
Theme parks and resorts, including Disneyland, Disney World and stakes in
major theme parks in France and Japan;
Disney Cruise Line;
DisneyQuest, a chain of high-tech arcade game stores;
Controlling interests in the NHL Anaheim Mighty Ducks and major league
baseball's Anaheim Angels;
Consumer products, including more than 550 Disney retail stores worldwide.
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Bertelsmann
$15 billion - 1996 sales
Bertelsmann is the one European firm in the first tier of media giants. The
Bertelsmann empire was built on global networks of book and music clubs.
Music and television provide 31 percent of its income, book publishing 33
percent, magazines and newspapers 20 percent, and a global printing business
accounts for the remainder. In 1994 its income was distributed among Germany
(36 percent), the rest of Europe (32 percent), the United States (24
percent) and the rest of the world (8 percent).
Bertelsmann's stated goal is to evolve "from a media enterprise with
international activities into a truly global communications group."
Bertelsmann's strengths in global expansion are its global distribution
network for music, its global book and music clubs, and its facility with
languages other than English. It is working to strengthen its music holdings
to become the world leader, through a possible buyout of--or merger
with--EMI and through establishing joint ventures with local music companies
in emerging markets. Bertelsmann is considered to be the best contender of
all the media giants to exploit the Eastern European markets.
Bertelsmann has two severe competitive disadvantages in the global media
sweepstakes. It has no significant film or television production studios or
film library, and it has minimal involvement in global television, where
much of the growth is taking place. The company began to address this
problem in 1996 by merging its television interests (Ufa) into a joint
venture with Compagnie Luxembourgeoise de Telediffusion (CLT), the
Luxembourg-based European commercial broadcasting power. According to a
Bertelsmann executive, the CLT deal was "a strategic step to become a major
media player, especially in light of the recent European and American
mergers."
Bertelsmann selected holdings
German television channels RTL, RTL2, SuperRTL and Vox;
Part ownership of Premiere, Germany's largest pay-TV channel;
Stakes in British, French and Dutch TV channels;
50 percent stake in CLT-Ufa, which owns 19 European TV channels and 23
European radio stations;
Eighteen European radio stations;
Newspaper and magazine publishing, including more than 100 magazines;
Book publishing, with some 40 publishing houses, concentrating on German-,
French- and English-language (Bantam and Doubleday Dell) titles;
Major recording studios Arista and RCA;
Leading book and record clubs in the world.
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Viacom
$13 billion - 1997 sales
C.E.O. Sumner Redstone, who controls 39 percent of Viacom's stock,
orchestrated the deals that led to the acquisitions of Paramount and
Blockbuster in 1994, thereby promoting the firm from $2 billion in 1993
sales to the front ranks. Viacom generates 33 percent of its income from its
film studios, 33 percent from its music, video rentals and theme parks, 18
percent from broadcasting, and 14 percent from publishing. Redstone's
strategy is for Viacom to become the world's "premier software driven growth
company."
Viacom's growth strategy is twofold. First, it is implementing an aggressive
policy of using company-wide cross-promotions to improve sales. It proved
invaluable that MTV constantly plugged the film Clueless in 1995, and the
same strategy will be applied to the Paramount television program based on
the movie. Simon & Schuster is establishing a Nickelodeon book imprint and a
"Beavis and Butthead" book series based on the MTV characters. Viacom also
has plans to establish a comic-book imprint based upon Paramount characters,
it is considering creating a record label to exploit its MTV brand name and
it has plans to open a chain of retail stores to capitalize upon its
"brands" la Disney and Time Warner. In 1997 Paramount will begin producing
three Nickelodeon and three MTV movies annually. "We're just now beginning
to realize the benefits of the Paramount and Blockbuster mergers," Redstone
stated in 1996.
Second, Viacom has targeted global growth, with a stated goal of earning 40
percent of its revenues outside of the United States by 2000. As one Wall
Street analyst puts it, Redstone wants Viacom "playing in the same
international league" with News Corporation and Time Warner. Since 1992
Viacom has invested between $750 million and $1 billion in international
expansion. "We're not taking our foot off the accelerator," one Viacom
executive states.
Viacom's two main weapons are Nickelodeon and MTV. Nickelodeon has been a
global powerhouse, expanding to every continent but Antarctica in 1996 and
1997 and offering programming in several languages. It is already a world
leader in children's television, reaching 90 million TV households in 70
countries other than the United States--where it can be seen in 68 million
households and completely dominates children's television.
MTV is the preeminent global music television channel, available in 250
million homes worldwide and in scores of nations. In 1996 Viacom announced
further plans to "significantly expand" its global operations. MTV has used
new digital technologies to make it possible to customize programming
inexpensively for different regions and nations around the world.
Viacom selected holdings
Thirteen U.S. television stations;
A 50 percent interest in the U.S. UPN television network with Chris-Craft
Industries;
U.S. and global cable television networks, including MTV, M2, VH1,
Nickelodeon, Showtime, TVLand and Paramount Networks;
A 50 percent interest in Comedy Central channel (with Time Warner);
Film, video and television production, including Paramount Pictures;
50 percent stake in United Cinemas International, one of the world's three
largest theater companies;
Blockbuster Video and Music stores, the world's largest video rental stores;
Book publishing, including Simon & Schuster, Scribners and Macmillan;
Five theme parks.
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News Corporation
$10 billion - 1996 sales
The News Corporation is often identified with its head, Rupert Murdoch,
whose family controls some 30 percent of its stock. Murdoch's goal is for
News Corporation to own multiple forms of programming--news, sports, films
and children's shows--and beam them via satellite or TV stations to homes in
the United States, Europe, Asia and South America. Viacom CEO Sumner
Redstone says of Murdoch that "he basically wants to conquer the world."
And he seems to be doing it. Redstone, Disney CEO Michael Eisner, and Time
Warner CEO Gerald Levin have each commented that Murdoch is the one media
executive they most respect and fear, and the one whose moves they study.
TCI's John Malone states that global media vertical integration is all about
trying to catch Rupert. Time Warner executive Ted Turner views Murdoch in a
more sinister fashion, having likened him to Adolf Hitler.
After establishing News Corporation in his native Australia, Murdoch entered
the British market in the 1960s and by the 1980s had become a dominant force
in the U.S. market. News Corporation went heavily into debt to subsidize its
purchase of Twentieth Century Fox and the formation of the Fox television
network in the 1980s; by the mid-1990s News Corporation had eliminated much
of that debt.
News Corporation operates in nine different media on six continents. Its
1995 revenues were distributed relatively evenly among filmed entertainment
(26 percent), newspapers (24 percent), television (21 percent), magazines
(14 percent) and book publishing (12 percent). News Corporation has been
masterful in utilizing its various properties for cross-promotional
purposes, and at using its media power to curry influence with public
officials worldwide. "Murdoch seems to have Washington in his back pocket,"
observed one industry analyst after News Corporation received another
favorable ruling (New York Times, 7/26/96). The only media sector in which
News Corporation lacks a major presence is music, but it has a half-interest
in the Channel V music television channel in Asia.
Although News Corporation earned 70 percent of its 1995 income in the United
States, its plan for global expansion looks to continental Europe, Asia and
Latin America, areas where growth is expected to be greatest for commercial
media. Until around 2005, Murdoch expects the surest profits in the
developed world, especially Europe and Japan. News Corporation is putting
most of its eggs in the basket of television, specifically digital satellite
television. It plans to draw on its experience in establishing the most
profitable satellite television system in the world, the booming British Sky
Broadcasting (BSkyB). News Corporation can also use its U.S. Fox television
network to provide programming for its nascent satellite ventures. News
Corporation is spending billions of dollars to establish these systems
around the world; although the risk is considerable, if only a few of them
establish monopoly or duopoly positions the entire project should prove
lucrative.
News Corporation selected holdings
The U.S. Fox broadcasting network;
Twenty-two U.S. television stations, the largest U.S. station group,
covering over 40 percent of U.S. TV households;
Fox News Channel;
A 50 percent stake (with TCI's Liberty Media) in several U.S. and global
cable networks, including fx, fxM and Fox Sports Net;
50 percent stake in Fox Kids Worldwide, production studio and owner of U.S.
cable Family Channel;
Ownership or major interests in satellite services reaching Europe, U.S.,
Asia, and Latin America, often under the Sky Broadcasting brand;
Twentieth Century Fox, a major film, television and video production center,
which has a library of over 2,000 films to exploit;
Some 132 newspapers (primarily in Australia, Britain and the United States,
including the London Times and the New York Post), making it one of the
three largest newspaper groups in the world;
Twenty-five magazines, most notably TV Guide;
Book publishing interests, including HarperCollins;
Los Angeles Dodgers baseball team.
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Sony
$9 billion - 1997 sales (media only)
Sony's media holdings are concentrated in music (the former CBS records) and
film and television production (the former Columbia Pictures), each of which
it purchased in 1989. Music accounts for about 60 percent of Sony's media
income and film and television production account for the rest. Sony is a
dominant entertainment producer, and its media sales are expected to surpass
$9 billion in 1997. It also has major holdings in movie theaters in joint
venture with Seagram. As Sony's media activities seem divorced from its
other extensive activities--Sony expects $50 billion in company-wide sales
in 1997--there is ongoing speculation that it will sell its valuable
production studios to vertically integrated chains that can better exploit
them.
Sony was foiled in its initial attempts to find synergies between hardware
and software, but it anticipates that digital communication will provide the
basis for new synergies. Sony hopes to capitalize upon its vast copyrighted
library of films, music and TV programs to leap to the front of the digital
video disc market, where it is poised to be one of the two global leaders
with Matsushita. Sony also enjoys a 25 percent share of the
multi-billion-dollar video games industry; with the shift to digital formats
these games can now be converted into channels in digital television
systems.
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TCI
$7 billion - 1996 sales
TCI (Tele-Communications Inc.) is smaller than the other firms in the first
tier, but its unique position in the media industry has made it a central
player in the global media system. TCI's foundation is its dominant position
as the second biggest U.S. cable television system provider. C.E.O. John
Malone, who has effective controlling interest over TCI, has been able to
use the steady cash influx from the lucrative semi-monopolistic cable
business to build an empire.
Malone understands the importance of the U.S. cable base to bankroll TCI's
expansion; in 1995 and 1996 he bought several smaller cable systems to
consolidate TCI's hold on the U.S. cable market. TCI faces a direct and
potentially very damaging challenge to its U.S. market share from digital
satellite broadcasting. It is responding by converting its cable systems to
digital format so as to increase channel capacity to 200. TCI is also using
its satellite spin-off to position itself in the rival satellite business
and retain some of the 15 to 20 million Americans expected to switch from
cable broadcasting to satellite broadcasting by 2000. In addition to owning
two satellites valued at $600 million, TCI holds a 21 percent stake in
Primestar, a U.S. satellite television joint venture with the other leading
U.S. cable companies, News Corporation and General Electric, which already
had 1.2 million subscribers in l996.
TCI has used its control of cable systems to acquire equity stakes in many
of the cable channels that need to be carried over TCI to be viable. TCI has
significant interests in Discovery, QVC, Fox Sports Net, Court TV, E!, Home
Shopping Network and Black Entertainment TV, among others. In 1996, TCI
negotiated the right to purchase a 20 percent stake in News Corporation's
new Fox News Channel in return for access to TCI systems. Through its
subsidiary Liberty Media, TCI has interests in 91 U.S. program services.
Nor does TCI restrict its investments to cable channels and content
producers. It has a 10 percent stake in Time Warner as well as a 20 percent
stake in Silver King Communications, where former Fox network builder Barry
Diller is putting together another U.S. television network.
TCI has applied its expansionist strategy to the global as well as domestic
media market. On the one hand, TCI develops its core cable business and has
become the global leader in cable systems, with strong units in Britain,
Japan and Chile. Merrill Lynch estimates that TCI International's cable base
outside of the United States will increase from 3 million subscribers in
1995 to 10 million in 1999.
On the other hand, TCI uses its cable resources to invest across all global
media and to engage in numerous non-cable joint ventures. "When you are the
largest cable operator in the world," a TCI executive states, "people find a
way to do business with you." It already has 30 media deals outside of the
United States, including a venture with Sega Enterprises to launch computer
game channels, a joint venture with News Corporation for a global sports
channel, and a 10 percent stake in Sky Latin America.
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Universal (Seagram)
$7 billion - 1997 sales
Effectively controlled by the Bronfman family, the global beverage firm
Seagram purchased Universal (then MCA) from Matsushita for $5.7 billion in
1995. Matsushita was unable to make a success of MCA and had refused to go
along with MCA executives who had wanted to acquire CBS in the early l990s.
Universal is expected to account for approximately half of Seagram's $14
billion in sales in 1997.
Over half of Universal's income is generated by the Universal Studios'
production of films and television programs. Universal is also a major music
producer and book publisher and operates several theme parks. As many of the
broadcast networks and cable channels vertically integrate with production
companies, Universal has fewer options for sales and is less secure in its
future. It owns the cable USA Network and the Sci-Fi Network, after buying
out its uneasy partner Viacom.
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NBC (GE)
$5 billion - 1996 sales
General Electric is one of the leading electronics and manufacturing firms
in the world with nearly $80 billion in sales in 1996. Its operations have
become increasingly global, with non-U.S. revenues increasing from 20
percent of the total in 1985 to 38 percent in 1995, and an expected 50
percent in 2000. Although NBC currently constitutes only a small portion of
GE's total activity, after years of rapid growth it is considered to be the
core of GE's strategy for long-term global growth.
NBC owns U.S. television and radio networks and 11 television stations. It
has been aggressive in expanding into cable, where it now owns several cable
channels outright, like CNBC, as well as shares in some 20 other channels,
including the A&E network. The most dramatic expression of GE's
media-centered strategy is its 1996 alliance and joint investment with
Microsoft to produce the cable news channel MSNBC, along with a
complementary on-line service. From this initial $500 million investment,
NBC and Microsoft plan to expand MSNBC quickly into a global news channel,
followed perhaps by a global entertainment and sports channel. NBC and
Microsoft are also developing a series of TV channels in Europe aimed at
computer users.
-----------------------------------------------------------------------
The Second Tier
Below the global giants in the media food chain is a second tier of
corporations that fill regional or niche markets. Some of these firms are as
large as the smaller global companies, but lack their world-wide reach. A
few second-tier companies may attempt, through aggressive mergers and
acquisitions of like-sized firms, to become full-blown first-tier global
media giants; others will likely be swallowed by larger companies amassing
ever greater empires.
U.S.
Westinghouse $5 billion
Advance Publications $4.9 billion
Gannett $4.0 billion
Cox Enterprises $3.8 billion
Times-Mirror $3.5 billion
Comcast $3.4 billion
McGraw Hill $3 billion
Reader's Digest $3 billion
Knight-Ridder $2.9 billion
Dow Jones $2.5 billion
New York Times Co. $2.5 billion
Tribune Co. $2.2 billion
Hearst $2 billion
Washington Post Co. $1.8 billion
Cablevision $1.1 billion
DirecTV (Owned by General Motors)
DreamWorks
Canada
Thomson $7.3 billion
Rogers Communications $2 billion
Hollinger
Latin America
Cisneros Group (Venezuela) $3.2 billion
Globo (Brazil) $2.2 billion
Clarin (Argentina) $1.2 billion
Televisa (Mexico) $1.2 billion
Europe
Havas (France) $8.8 billion
Reed Elsevier (Britain/Netherlands) $5.5 billion
EMI (Britain) $5.4 billion
Hachette (France) $5.3 billion
Reuters (Britain) $4.1 billion
Kirch Group (Germany) $4 billion
Granada Group (Britain) $3.6 billion
BBC (Britain) $3.5 billion
Axel Springer (Germany) $3 billion
Canal Plus (France) $3 billion
CLT (Luxembourg) $3 billion
Pearson PLC (Britain) $2.9 billion
United News & Media (Britain) $2.9 billion
Carlton Communications (Britain) $2.5 billion
Mediaset (Italy) $2 billion
Kinnevik (Sweden) $1.8 billion
Television Francais 1 (France) $1.8 billion
Verlagsgruppe Bauer (Germany) $1.7 billion
Wolters Kluwer (Netherlands) $1.7 billion
RCS Editori Spa (Italy) $1.6 billion
VNU (Netherlands) $1.4 billion
Prisa Group (Spain)
Antena 3 (Spain)
CEP Communications (France)
Asia/Pacific
NHK (Japan) $5.6 billion
Fuji Television (Japan) $2.6 billion
Nippon Television Network (Japan) $2.2 billion
Cheil Jedang (Korea) $2.1 billion
Tokyo Broadcasting System (Japan) $2.1 billion
Modi (India) $2 billion
Asahi National Broadcasting Co. (Japan) $1.6 billion
Toho Company (Japan) $1.6 billion
PBL (Australia) $750 million
TVB International (China)
Chinese Entertainment Television (China)
Asia Broadcasting and Communica-tions Network (Thailand)
ABS-CBN (Philippines)
Doordarshan (India)
Chinese Central Television (China)
Most sales figures are for 1996, but some are as early as 1993.
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