Thursday, December 09, 2004


The Big Ten

The Big Ten (no, not the college football league, nor the comandments) media corporations are the focus of this article on media giants.
Facts about the most successful media outlets (AOL/TimeWarner, GE, Viacom, News Corp., Bertelsmann, Vivendi, Disney, Liberty Media, Sony and AT&T) can be found here.

This is something The Nation loves to hate, and the Big Ten are often given a lot of attention in books by Robert McChesney (Rich Media, Poor Democracy) and Ben Bagdikian.
And the power of persuation is probably strong among these big ten businesses. But let's look at it from another point of view, if nothing else so for the sake of the argument. Let' say that we have ten established firms on a market of information, strategically spread out over the market.


What follows is the old game of ice cream stands on a beach. To get into the market, you have to squeeze in between already existing ice cream stands. So to cram in a stand, say [3<x>4], is going to have an effect, not only on 3 and 4, but also on the rest of the stands, when the chain reaction starts to have an effect on all ice cream stands... (3 moves closer to 2, moves closer to 1; 4 moves closer to 5 et c.)

Add to this a very high entrance fee (initial profit loss to capture market shares), which has proven to be a fact in media businesses (see Picard, Robert 1997. "Modelling the Problem", in Newspaper Research Journal, 18 (3-4): 94-109) and gains from economies of scale. And all of a sudden it is easy to explain why established media outlets are effective strongholds on the market. It has very little to do with conspiracy theory, or persuasion tactics, or evil capitalist tycoons interested in silencing the "common people". It can all can be explained by simple economics. No more. No less.

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