Concentration

The media and entertainment industry in the United States and much of the world is highly concentrated, meaning that it is owned and controlled by a small group of powerful companies. The domination of an entire industry by just a few companies is sometimes referred to as an oligopoly, as opposed to a monopoly in which one company dominates an entire industry. Microsoft’s domination of the software industry, for instance, is often considered a monopoly. Oligopolies reduce competition by making it all but impossible for small, independent, or start‐up companies to survive in the marketplace. The big companies typically buy up the small companies or drive them out of business. Once an industry becomes highly concentrated, the few remaining companies function more like a cartel or partners than competitors. They each control such a large piece of the industry pie that the other companies do not constitute a real threat to their success.

Concentration occurs both within particular media industries such as music and film and across the media industry as a whole. The music industry, for instance, which is a $20 billion industry just in the United States, is dominated by three major companies (Warner Music Group, Universal Music Group, and Sony Corporation), who as of 2018 accounted for 71.5% of the total market share in that industry. Similarly, the media industry as a whole in the United States is dominated by six massive corporations, which we have dubbed the “Big Six”; as of 2017, these six companies controlled 90% of all media in the United States.⁷ Each year, Forbes Global 2000 ranks the top 2000 public companies worldwide based on sales, profit, assets, and market value. In 2018, all six of the US‐based media conglomerates made the list: Comcast (#34), The Walt Disney Company (#72), AT&T (#159), CBS Corporation (#626), Viacom (#660), and 21st Century Fox (#1642). As of October 2018, the CBS Corporation and Viacom were both controlled by National Amusements through supervoting shares. So, the Big Six US‐based media conglomerates could reasonably be called the Big Five.

Though there are certainly other large, very profitable US‐based media companies, such as Liberty Media, Clear Channel, Gannett Co., and The Washington Post Company, they are better classified as second‐tier media companies because of their comparatively smaller influence within the media industry than the Big Six, at least presently. As a way of demonstrating the domination of the Big Six, consider the scope and power of AT&T, the third largest entertainment and media conglomerate in the United States behind Comcast and The Walt Disney Company. In 2016, AT&T’s total revenues were nearly $164 billion, a 12 percent increase over the previous year. But where does all this money come from? To answer that question, we need to look at AT&T’s corporate structure, which is divided into 11 major units. Just three of those are: (1) AT&T Communications, LCC (AT&T Mobility, Cricket Wireless, DirecTV, Cingular Wireless, and Alien Vault); (2) Lionsgate (Lionsgate Films, Lionsgate Home Entertainment, Summit Entertainment, Debmar‐Mercury, Starz Inc., and Pilgrim Studios); and (3) WarnerMedia (HBO, Turner Broadcasting System, Warner Bros., and Otter Media), each of which, in turn, owns dozens of brands and subsidiary companies.

WarnerMedia, for instance, consists of HBO, Turner Broadcasting System, Warner Bros., and Otter Media. HBO, or Home Box Office, Inc., which is the oldest and most‐watched premium cable service, had approximately 134 million subscribers in over 60 countries in 2017. It is famous for its original programming, documentaries, comedy specials, championship boxing, and Hollywood blockbusters. A few of its original hit television series include Veep, Girls, Last Week Tonight with John Oliver, The Deuce, Big Little Lies, Westworld, and Game of Thrones, the last of which earned 12 Emmy nominations in 2017. Turner Broadcasting System is a global sports, news, and entertainment company that features networks such as CNN, HLN, TBS, TNT, truTV, Turner Classic Movies, Cartoon Network, Boomerang, and Adult Swim. In 2017, just one of those networks, Adult Swim, was seen in 94 million US households and was the #1 basic cable network with viewers 18–49. Adding to WarnerMedia’s success, Warner Bros. Entertainment celebrated its most profitable year ever in 2017, earning more than $5 billion worldwide in box‐office receipts. A few of its recently released films include Blade Runner 2049, Dunkirk, It, Justice League, Kong: Skull Island, The LEGO Batman Movie, and Wonder Woman. But Warner Bros. is more than just films, having produced more than 70 original television series in 2017, including scripted series such as Arrow, The Big Bang Theory, Black Lightning, Blindspot, DC’s Legends of Tomorrow, Deception, The Flash, Gotham, iZombie, Lethal Weapon, Lucifer, The Middle, Mom, Riverdale, Supergirl, Supernatural, Trial & Error, and Young Sheldon; reality‐based non‐scripted series such as The Bachelor, Bachelor in Paradise, Bachelor Winter Games, The Bachelorette, Ellen’s Game of Games, Little Big Shots, Love Connection, and The Voice; and first‐run syndication series such as The Ellen DeGeneres Show, Extra, The Real, TMZ, and TMZ Sports. Finally, Otter Media is a digital branding and media company that owns Crunchyroll, VRV, Fullscreen, Rooster Teeth, Gunpowder & Spy, and Hello Sunshine. Collectively, Otter Media reaches a monthly audience of 93 million unique consumers, making it one of the largest subscription‐based video‐on‐demand (sVOD) providers in the world.

Conglomeration

A second prevailing and closely related pattern of media ownership is conglomeration, the corporate practice of accumulating multiple companies and businesses through startups, mergers, buyouts, and takeovers. Whereas concentration describes the media industry as a whole and its increasing consolidation into the hands of fewer and fewer corporations, conglomeration describes a corporate structure in which a parent company owns and controls a host of subsidiary companies. Some scholars reserve the term conglomerate to describe large corporations whose media holdings reflect only one dimension of their overall corporate portfolio. AT&T, which is the world’s largest telecommunications company, is a good example in this regard. As previously noted, AT&T owns WarnerMedia, but it also owns numerous companies involved in fixed‐line telephony, mobile telephony, home security, network security, and sports management. Hence, its media holdings are only one dimension of its larger portfolio. Since media companies are among some of the most powerful corporations in the world, we regard each of the Big Six as conglomerates regardless of whether or not the majority of their holdings are restricted to media. Table 2.2 identifies, as of 2018, the six major US‐based media conglomerates, along with a few of their many subsidiaries and corporate holdings.

Let us take a closer look at how a media giant like The Walt Disney Company becomes a conglomerate. Like many conglomerates, The Walt Disney Company has rather humble origins, having been started as a small animation studio in 1923 by brothers Walt and Roy Disney. Early success at Walt Disney Studios (originally Disney Brothers Cartoon Studio) led to the formation of three other companies in 1929: Walt Disney Enterprises, Disney Film Recording Company, and Liled Realty and Investment Company. These companies later merged under the name Walt Disney Productions in 1938. In an effort to expand its business, the company began designing its theme parks in 1952 and formed Buena Vista Distribution to distribute its feature films 2 years later. But Walt Disney Productions did not become The Walt Disney Company until February of 1986, by which time it also included the Disney Channel and a new film label, Touchstone Pictures. Under the leadership of Michael Eisner, the company conducted a series of key acquisitions in the 1990s, including independent film distributor Miramax in 1993, which it sold in 2010 after a 17‐year partnership, and perhaps more importantly Capital Cities/ABC, a $19 billion transaction, in 1996.⁸ During the 1990s, it also established Hyperion, a book‐publishing division. By decade’s end, The Walt Disney Company had grown into a global empire with powerful interests in all four of the mass media industries.

In 2004, Disney narrowly escaped a hostile takeover attempt by Comcast, an event that contributed to Michael Eisner’s replacement as CEO by Robert Iger the following year. Shortly after Iger assumed the reins, Disney acquired Pixar Animation Studios in a transaction worth $7.4 billion. “Disney’s performance during Iger’s first year,” reports the company’s website, “was stellar, with record revenues, record cash flow and record net earnings for fiscal year 2006.”⁹ In 2009, Disney acquired Marvel Entertainment, Inc. for $4.64 billion, and in 2012, it acquired Lucasfilm – the global entertainment company founded by George Lucas and home of the Star Wars franchise – for $4 billion. Presently, Disney is organized into four major business segments: (1) Media Networks (ESPN, Disney, Freeform, ABC TV Network, A&E Television Networks, Vice, ESPN Radio, Radio Disney); (2) Parks and Resorts (Walt Disney World Resort, Disneyland Resort, Aulani, Disneyland Paris, Hong Kong Disneyland Resort, Shanghai Disney, Tokyo Disney Resort, Disney Vacation Club, Disney Cruise Line, Adventures by Disney); (3) Studio Entertainment (Walt Disney Pictures, Pixar, Marvel, Lucasfilm, Touchstone); and (4) Consumer Products & Interactive Media (The Disney Store, shopDisney.com, shop.Marvel.com). Table 2.3 charts The Walt Disney Company’s steadily increasing revenues in each of these areas from 2002 to 2016. As impressive as these numbers are, in March 2019, Disney acquired 21st Century Fox, which had previously been the fourth‐largest media conglomerate, for $71.3 billion.

Integration

Media conglomerates are by definition integrated. Integration is an ownership pattern in which the subsidiary companies or branches within a corporation are strategically interrelated. Corporations can be integrated vertically, horizontally, or both. Vertical integration describes a corporation that owns and controls various aspects of production and distribution within a single media industry like publishing or broadcasting. Vertical integration can significantly increase the profits associated with a media product by allowing the parent corporation to oversee all stages of its development from production and marketing to distribution and exhibition. A media conglomerate that owns music copyrights, record labels, sound recording studios, and record clubs, stores, and/or online distribution outlets would possess strong vertical integration in the music industry, for instance.

The filmed entertainment division at Viacom offers a concrete example of vertical integration. In 1972, Paramount Pictures produced the Oscar‐winning film The Godfather, which had grossed $134 million in the United States by 1973. Domestic box‐office receipts are far from the end of the story, though. Today, Paramount Home Entertainment markets and distributes the film on DVD, Worldwide Television Distribution negotiates its broadcast on TV, and Famous Music licenses the use of its soundtrack. All of these companies, which continue to generate profit from The Godfather franchise, are part of the Paramount Pictures Corporation, a wholly owned subsidiary of Viacom.

The popular, conspiracy‐driven TV drama The X‐Files (1993–2002) provides a second example of the benefits of vertical integration. The Fox Broadcasting Company produced the show, which then aired in first‐run production on the FOX network. In addition to the profits generated by its initial airing, Twentieth Television, a division of Fox Television, syndicated three rounds of reruns on local Fox affiliates and other stations, collecting an additional $35 million a year. Meanwhile, FX, one of Fox’s numerous cable networks, also aired the show in rerun, generating $69 million more in annual profits. In total, Fox’s yearly profits from The X‐Files, after subtracting production costs, of course, exceeded $180 million dollars.¹⁰ Then, in 2016, fourteen years after the original series was cancelled, Fox revived it for a tenth and an eleventh season. Nor is the success of The X‐Files limited just to television, having spun off two feature length films, as well as comic books, novels, video games, and other merchandise.

Horizontal integration describes an ownership pattern in which a corporation dominates one stage (or level in the value chain) of the production process. This typically takes one of two forms. Some firms achieve horizontal integration through ownership of multiple media outlets in one market, thereby reducing competition. A company like Comcast, for instance, which owns 26 television stations, some of which are in the same markets, has strong horizontal integration. If a company were to control all or nearly all the radio stations, TV stations, or newspapers within a market, then it would have a horizontal monopoly in that market.¹¹ As we will see in Chapter 4, the 1996 Telecommunications Act, which eliminated or relaxed ownership restrictions in the United States, has increased this form of integration. A second way for a corporation to achieve horizontal integration is to own and control companies across various media industries, but typically at the same level of production, distribution, or exhibition.¹² This corporate structure is sometimes referred to alternatively as cross‐media ownership. Like vertical integration, horizontal integration can have tremendous financial benefits, namely by enhancing synergy, a concept we will explore shortly. Table 2.4 shows the horizontal integration of the Bix Six US‐based media conglomerates in January 2013. We have chosen to include this table in addition to Table 2.2, which is more up‐to‐date, because we want readers to see how rapidly and dramatically the media landscape can change due to buyouts and mergers. In 2018, AT&T controlled most of the assets formerly owned by Time Warner Inc., which it acquired for $108.7 billion in 2016. Just a year earlier, AT&T had acquired DirecTV for $48.5 billion. So, in a very short period of time, AT&T, the world’s largest telecommunications company, also became a major leader in the media and entertainment industry. Another insight to be gleaned by comparing Tables 2.2 and 2.4 is the declining importance of print media to the overall portfolio of these companies.

Multinationalism

A fourth pattern of contemporary media ownership is multinationalism, or a corporate presence in multiple countries, allowing for the production and distribution of media products on a global scale. Multinationalism should not be confused with globalization. As we saw in Chapter 1, globalization is a complex set of economic and political processes, and while globalization may be contributing to the rise of multinational corporations, it cannot be reduced to this ownership trend. Multinational media conglomerates, also known as transnational corporations (TNCs), do not simply (re)distribute a static, pre‐packaged product developed in one locale to various countries around the globe, nor do they completely reinvent the proverbial wheel each time. National differences in regulatory policies as well as cultural values means that TNCs often partner with national media companies to produce and distribute media that will be successful in that country or region. In some cases, the “foreign” companies owned by TNCs are former local or independent media that they have simply bought out. For most media conglomerates, international markets represent potential profits that are just too tempting to resist.

The German‐based media conglomerate Bertelsmann provides an excellent example of a powerful multinational media conglomerate. It is made of eight units or divisions: RTL Group, Penguin Random House, Gruner + Jahr, BMG, Arvato, Bertelsmann Printing Group, Bertelsmann Education Group, and Bertelsmann Investments. Consider the expansive reach of Bertelsmann’s broadcasting production and distribution company, RTL Group:

RTL Group is a leader across broadcast, content and digital, with interests in 56 television channels and 31 radio stations, content production throughout the world, and rapidly growing digital video businesses. The television portfolio of RTL Group includes RTL Television in Germany; M6 in France; the RTL channels in the Netherlands, Belgium, Luxembourg, Croatia and Hungary; and Antena 3 in Spain. The Group’s flagship radio station is RTL in France, and it also owns or has interests in other stations in France, Germany, Belgium, the Netherlands, Spain and Luxembourg. Fremantle Media is one of the largest international creators, producers and distributors of multi‐genre content outside the United States. Combining the on‐demand services of its broadcasters, the multi‐platform networks BroadbandTV, StyleHaul, Divimove, United Screens and Fremantle Media’s 296 YouTube channels, RTL Group has become the leading European media company in online video.¹³

Like RTL Group, Bertelsmann’s book publishing division Penguin Random House is a global giant that prides itself on penetrating foreign markets:

With more than 250 imprints and brands on six continents, over 15 000 new titles, and more than 600 million print, audio and e‐books sold annually, Penguin Random House is the world’s leading trade book publisher. Penguin Random House is committed to publishing adult and children’s fiction and nonfiction print editions and is a pioneer in digital publishing. Its book brands include storied imprints such as Doubleday, Viking and Alfred A. Knopf (United States); Ebury, Hamish Hamilton and Jonathan Cape (United Kingdom); Plaza & Janés and Alfaguara (Spain); Sudamericana (Argentina); and the international imprint DK. Its publishing lists include more than 60 Nobel Prize laureates and hundreds of the world’s most widely read authors.¹⁴

Bertelsmann’s global domination in the book‐publishing industry is mirrored by News Corporation’s massive international newspaper empire, Thompson Reuters’ global supremacy in providing electronic information, and Viacom’s global reach in the television industry, which includes “approximately 4.3 billion cumulative television subscribers in 183 countries and 43 languages, via 300 locally programmed and operated television channels.”¹⁵

While all of the Big Six US‐based media companies are multinational conglomerates, perhaps none of them possesses the global reach of The Walt Disney Company. Here is what Reuters reported about Disney’s worldwide influence as of October 1, 2016:

[T]he Company operated over 100 Disney branded television channels, which were broadcasted in 34 languages and 163 countries/territories … ESPN owned 19 television networks outside of the United States that allowed ESPN to reach sports fans in over 60 countries and territories in four languages … [T]he Company owned and operated 223 stores in North America, 78 stores in Europe, 48 stores in Japan and one store in China … Hungama is a general entertainment cable network for kids in India, which features a mix of animation, Hindi‐language series and game shows. The Company also operates UTV‐ and Bindass‐branded cable television networks in India. The networks include UTV Action and UTV Movies, which offer Bollywood movies, as well as Hindi‐dubbed Hollywood movies. Bindass is a youth entertainment channel, and the networks also include Bindass Play, which is a music channel.¹⁶

In addition to its media assets in India, namely Hungama, the report mentions Europe, Japan, and China, which are all places in which Disney operates parks and resorts. Through its media content, worldwide resorts and theme parks, and unparalleled toy merchandizing capability, Disney is truly a global force in entertainment. The Walt Disney Company is not alone, of course, as all six of the major US‐based media companies are fully integrated, multinational conglomerates.

Synergy

The first key strategy of media conglomerates is synergy, or the involvement of multiple subsidiary companies in the cross‐development, production, and distribution of a media brand for the purpose of “exploiting it for all the profit possible.”¹⁸ Synergy is made possible by horizontal integration, and since all six of the major US‐based media conglomerates are horizontally integrated, the examples are virtually endless. AT&T, which owns WarnerMedia, for instance, publishes over 900 comic book titles, including those of DC Comics, which features such well‐known characters as Batman, the Flash, Green Arrow, Superman, and Wonder Woman. In 2017, Warner Bros. released three films based on DC Entertainment characters, Justice League, The LEGO Batman Movie, and Wonder Woman; in 2018, it released Aquaman and Teen Titans GO! to the Movies; and, in 2019, it released Shazam! On television, Warner Bros. aired nine live‐action series during the 2017–18 season based on DC characters (Arrow, Black Lightning, DC’s Legends of Tomorrow, The Flash, iZombie, Krypton, Lucifer, Gotham, and Supergirl).¹⁹ Iconic DC characters such as Superman and Batman, who started out as comic book heroes, have repeatedly found their way on to the big screen in feature films produced and distributed by Warner Bros. Entertainment. The television series Smallville, which also taps the Superman mythology, was produced by Warner Bros. Television and aired on the Warner Bros. network. Similarly, the Academy Award‐winning 1989 film Batman, which grossed a record‐setting (at the time) $40 489 746 during its opening weekend, was released in conjunction with two albums.²⁰ The first was Prince’s Batman soundtrack on Warner Brothers Records, which debuted at number one on the Billboard 200 charts and went multi‐platinum, selling 11 million copies worldwide. The second, also released on Warner Bros. Records, featured the original score composed by Danny Elfman. In short, the DC universe allows for synergy across comic books, films, television, and music, as well as video games and other merchandizing. Even more remarkably, it is only one of WarnerMedia’s major brands, which also includes Harry Potter, Looney Tunes, and Hanna‐Barbera.

Increasingly, the summer blockbuster lies at the heart of cross‐promotional efforts. In fact, big‐budget films often only get made today if they can demonstrate strong cross‐promotional potential. Typically, this means a film that will appeal to a wide audience and can be marketed to children through toy lines and the fast‐food industry. While no media conglomerate has perfected this formula better than Disney, MCA/Universal offers one compelling example: the 1993 mega hit Jurassic Park. Created by Steven Spielberg and based on the Michael Crichton book by the same name, Jurassic Park cost Universal Studios a whopping $56 million to produce.²¹ So, MCA/Universal could not take any chances and undertook a $65 million licensing and promotional campaign, which involved making deals with over 100 companies, from Kenner and Kellogg’s to SEGA and Ocean Software, to market 1000 products.²² The marketing hype paid off and Jurassic Park cleared a record $50 million its first weekend, passed $100 million in 9 days, and eventually grossed over $350 million in the United States and Canada. But, as Thomas Schatz notes, “Its overseas box‐office performance was even stronger, and together with its huge success on video cassette [distributed by MCA/Universal Home Video], pay‐cable, and other ancillary markets pushed the film’s revenues to well over a billion dollars.”²³ The film’s international success was due in part to screenings of its trailer in Japan through Panasonic, a company owned by Matsushita Electric Industrial Co. and the parent corporation of MCA/Universal. Nor did the profits end with the film. In 1996, a year after the Canadian media conglomerate Seagrams purchased MCA/Universal from Matsushita, Jurassic Park – The Ride opened at Universal Studios Hollywood, boosting attendance at the park by 40 percent compared with the previous year.

Planned obsolescence

One of the central challenges faced by the media industry is getting consumers to consume media continuously, especially when the content endlessly being churned out is formulaic rather than creative (see the section on the Logic of Safety). One strategy designed to accomplish this is planned obsolescence. According to The Economist, planned obsolescence “is a business strategy in which the obsolescence (the process of becoming obsolete – that is, unfashionable or no longer usable) of a product is planned and built into it from its conception. This is done so that in [the] future the consumer feels a need to purchase new products and services that the manufacturer brings out as replacements for old ones.”²⁴ As Giles Slade explains in his 2006 book, Made to Break: Technology and Obsolescence in America, planned obsolescence typically takes one of two forms: technological or psychological.²⁵ Technological obsolescence occurs when a development in technology causes the previous generation of that technology to become obsolete, such as how CDs made cassette tapes obsolete and digital music is now making CDs obsolete. Psychological obsolescence arises not when a new technology replaces an older one, but when a new style or product replaces an older style or product, such as the way new music is endlessly turned into hits through frequent radio play. Let us look at both of these processes in more detail.

Technological obsolescence is a mainstay of the media industry. The sound recording and film industries are forever releasing their content in new formats, which requires users both to regularly upgrade their playback equipment and to repurchase media content they already own in the new format. Just as the shift in audio from LP record to cassette tape to CD to digital file forced the serious music collector to reinvest in an entirely new music library, so the shift in video from VHS tape to DVD to Blu‐ray Disc to digital video is causing serious movie collectors to restock their libraries. Table 2.5 demonstrates the shift in consumer spending on home video rental and sales across these formats in the United States over the decade of the 2000s. In 2000, VHS sales were an $11.4 billion industry, but by the end of the decade sales had dropped to virtually zero. On the other hand, the Blu‐ray Disc, which did not exist until 2006, had become a $2.3 billion industry by the end of the decade.

Since 2010, the way users consume entertainment has continued to change dramatically. Table 2.6 highlights US home entertainment spending by category in recent years. While the purchase and rental of VHS, DVD, and Blu‐ray Discs has declined precipitously from 2010 to 2017, video‐on‐demand (VOD) and subscription streaming services (sVOD) like Netflix, Hulu, and Amazon have grown dramatically. This change in consumption habits has fueled the adoption of 4 K ultra‐high‐definition (UHD) TVs. According to the Digital Entertainment Group’s (DEG) Year‐End 2017 Home Entertainment Report, “More than 14.6 million 4 K UHD TVs were sold in 2017, bringing the total households [with this technology] to more than 30 million.”

Though the strategy of technological obsolescence can be found in all sectors of media, it is particularly evident in the video game industry, where new game consoles are released every couple of years. Many of these systems are specifically designed to prevent backwards compatibility, meaning that the newer systems will not play older games. In 2010, about 41 percent of US households owned a seventh‐generation game console, which includes Microsoft’s Xbox 360, Nintendo’s Wii, and Sony’s PlayStation 3, and about 23 percent owned a handheld console like the Nintendo DS or Sony PSP.²⁶ The current generation of consoles/handheld games has hurt the PC game market and made previous generations of game consoles obsolete. When was the last time you heard someone say, “Hey, wanna come over tonight and play Atari?” Forecasters predict it will not be long, however, before online and wireless gaming overtakes the console market, thereby making consoles obsolete. Technological obsolescence in the music, video, and gaming industries ensures that customers must continually “upgrade” (i.e. replace) their playback devices. After all, media producers eventually stop producing media in older formats, effectively rendering the technology that plays the older formats obsolete.

Whereas technological obsolescence is closely tied to innovations in technology, psychological obsolescence is linked to the manipulation of time. “This was the great achievement of the newspaper,” explains Nicholas Garnham, “which, by creating rapidly decaying information, created thereby a constant need to re‐consume.”²⁷ The production of daily news in newspapers, then morning and afternoon news on broadcast TV, and finally up‐to‐the minute news on 24‐hour cable news networks has created a media product (“the news”) that must be continuously updated, making older news obsolete. When was the last time you read a week‐old newspaper or digitally recorded the news to watch at a later date? Nor is psychological obsolescence limited to the news media. The ongoing success of the music industry depends upon consumers continuously developing an interest in new artists. Thus, new musical artists must constantly be discovered, packaged, and sold by the music industry as “the next big thing.” Horizontal integration has allowed media conglomerates to fulfill the need for the next big thing in music through singing competitions on television. American Idol, The X Factor, and The Voice are designed not so much to find stars as to create them, which in turn creates new “hit” music to purchase.

Logic of safety

A third strategy of profit maximization is the logic of safety, which is based on two principles: the belief that “nothing succeeds like success” and the idea that “change” and “innovation” are financially risky. Because of the first principle, when a format or concept meets with financial success, media companies have a strong incentive to replicate it (often endlessly). Since exploiting proven formulas is driven by risk avoidance, media companies are, in most circumstances, reluctant to produce highly original, innovative, or creative content. The reward for trying something new and unproven, which may fail, is simply not worth the financial risk. Hence, the major media conglomerates have perfected the art of imitation, which comes in three basic flavors: sequels, remakes, and spin‐offs. Let us begin with movies, which are especially costly to make. In 2016, the average cost to produce and distribute a Hollywood film was $61.1 million (with another $40 million in marketing).²⁸ If a studio is going to invest that kind of money upfront, then it wants a guarantee of success, or as close to a guarantee as it can get. So, in 2009, when the action‐thriller Taken (distributed by 20th Century Fox), starring Liam Neeson, which cost a comparatively small $25 million to produce, grossed $227 million worldwide, scoring the best‐ever opening day for a Super Bowl weekend, a sequel was a safe bet. And when the sequel, Taken 2 (2012), grossed $376 million in box‐office receipts worldwide, out‐earning the original, it ensured that – despite how badly it sucked (and it really sucked!) – the franchise would be, at least, a trilogy. The virtually unwatchable Taken 3 was released in 2015.

Taken was itself a rehash of a familiar Hollywood formula, the renegade‐with‐special‐skills‐rescues‐an‐innocent‐in‐distress film. As it turns out, that basic formula underlies a lot of Hollywood films, and even a lot of successful Hollywood franchises. Table 2.7 lists the 10 most successful movie franchises of all time based on worldwide box‐office receipts. Many of them are superhero films and, hence, rescue narratives, and the others – while perhaps not explicitly rescue narratives – stage epic battles between good and evil (Star Wars, Harry Potter, and Lord of the Rings). The Jurassic Park franchise is both a rescue narrative and an epic battle between good and evil; evil just happens to take on a nonhuman form. Following a proven formula is not the only way Hollywood reduces risk, however. Sometimes, film production houses show even less originality, recycling not just a generic formula, but actual films. A few US films that drew their inspiration from foreign cinema are the 2018 film Puzzle, which is a remake of the 2010 Argentine film of the same name; the 2017 film The Dinner, which is a remake of the 2013 Dutch film Het Diner; the 2011 mystery thriller The Girl with the Dragon Tattoo, which is a remake of the 2009 Swedish film Män Som Hatar Kvinnor; and the 2006 Oscar‐winning film The Departed, which is a remake of the 2002 Hong Kong crime‐thriller Infernal Affairs. And when Hollywood is not replicating foreign titles, it is quite content simply to copy itself, as suggested by recent remakes such as A Star is Born (2018/1937), Beauty and the Beast (2017/1991), Flatliners (2017/1990), The Jungle Book (2016/1994/1942), Poltergeist (2015/1982), RoboCop (2014/1987), Carrie (2013/1976), Total Recall (2012/1990), Footloose (2011/1984), The Karate Kid (2010/1984), and Clash of the Titans (2010/1981).

Nor is the film industry alone in playing it safe by trying to replicate past successes. In the music industry, remakes or “covers” are exceedingly common. A few notable covers in just 2018 include:

• Lady Gaga’s cover of Elton John’s “Your Song”
• Lorde’s cover of Frank Ocean’s “Solo”
• Morgan Saint’s cover of Cardi B’s “Thru Your Phone”
• Calumn Scott’s cover of Robyn’s “Dancing on My Own”
• Charlie Puth’s cover of Sean Mendes’ “In My Blood”
• Jorja Smith’s cover of Drake’s “Get It Together”

Television is also known for remakes, like its recent reboots (or returns) of Charmed, Dynasty, Dallas, Roseanne, Will & Grace, MacGyver, and Queer Eye. US television also often adapts successful British shows like The Office, Pop Idol (as American Idol), and Who Wants to be a Millionaire? But the more common strategy is what sociologist Todd Gitlin calls “recombinancy.” Television is a particularly formulaic medium. Audiences can count not only on popular genres such as the game show, drama, situation comedy, and reality TV, but on subgenres with very specific traits; primetime would simply not be complete without a medical drama, crime drama, legal drama, and police drama, for instance. In many instances, when a show is nearing the end of its run, producers will simply create a spin‐off that focuses on a popular or even secondary character from the original. All in the Family spun off The Jeffersons, Mary Tyler Moore spun off Lou Grant, Happy Days spun off Laverne & Shirley, and Dallas spun off Knots Landing, to name just a few. More recently, when a show has been particularly successful, producers have spun off additional versions of the same thing, as has happened with NBC’s Law and Order and CBS’s CSI, Criminal Minds, and NCIS.

Thus, movie sequels, music covers, and television remakes and spin‐offs all share the logic of safety. When “innovation” does emerge in the media industry, it is typically because a small, independent producer has “broken the rules.” The “emergent rules” are then quickly co‐opted and endlessly reproduced by the large conglomerates, or else the smaller company is simply bought out. This is precisely what happened at Miramax. After the unlikely success of controversial films like sex, lies, and videotape (1989), Tie Me Up! Tie Me Down! (1990), and The Crying Game (1992), Disney acquired Miramax in 1993. Releasing future films such as Pulp Fiction (1994), Chasing Amy (1997), and Kill Bill (2003) under the Miramax label allowed Disney to branch into more risqué filmmaking without endangering its wholesome, family image.

Celebrity and spectacle

A fourth strategy of profit maximization involves the deeply interconnected concepts of celebrity and spectacle. Whereas the logic of safety could be said to rule the form of media (suggesting what general formats, formulas, and patterns to follow), celebrity and spectacle might be said to govern the content of media (suggesting what particular ingredients to include). The concept of celebrity refers to “those people who are well known for their well‐knownness.”²⁹ This includes high‐profile public officials, popular entertainers and artists, and others who seize, if only momentarily, the public spotlight. If history has proven anything in the media industry, it is that audiences will pay to consume virtually anything that features celebrity personalities. Celebrity, it should be noted, has nothing to do with talent, only with well‐knownness. Consequently, socialite Kim Kardashian West gained media fame in 2007 after a sex tape of her and singer Ray J went public. Interest in the tape and the lawsuit that ensued allowed Kardashian to spin her newfound fame into the successful reality TV series Keeping Up with the Kardashians. As of 2016, Kim Kardashian West was the highest‐paid woman in reality TV, making roughly $51 million per year; Forbes estimates Kardashian West’s worth to be $350 million, ranking her no. 54 on the fourth annual list of America’s Richest Self‐Made Women.³⁰

When celebrities are unavailable or too expensive to feature in media, the media industry frequently resorts to its other proven content strategy: spectacle. The concept of spectacle describes the media’s obsession with the sensational and arresting, scandalous and shocking dimensions of a situation or context. It refers to that which grabs hold of our attention either because it is tantalizing or because it is startling. So prevalent is the role of spectacle that Guy Debord argues in his 1967 book, The Society of the Spectacle, that our whole society submits to its logic. In its opening pages, Debord explains:

Understood in its totality, the spectacle is both the outcome and the goal of the dominant mode of production. It is not something added to the real world – not a decorative element, so to speak. On the contrary, it is the very heart of society’s real unreality. In all its specific manifestations – news or propaganda, advertising or the actual consumption of entertainment – the spectacle epitomizes the prevailing mode of social life. It is the omnipresent celebration of a choice already made in the sphere of production, and the consummate result of that choice.³¹

For Debord, our whole society has become little more than spectacle – mere exhibition and display. Through the endless reproduction of shocking images, be they of sex or of violence, and glitzy promotions, the media collapses news into entertainment and entertainment into life. The production of a hyper‐sensational world through spectacle ensures that viewers will attend to media. After all, its depiction of life is more compelling than life itself. Consider gangsta rap’s creation of what Debord calls a “real unreality,” in which multi‐million‐dollar artists who drive luxury automobiles, cover themselves in bling, and work for transnational media conglomerates rap about gang violence, growing up in the hood, and stickin’ it to “the man.” While all of these are very real social phenomena, gangsta rap glamorizes them, pimps them as lifestyles or commodities that can be attained and lived at the level of style and appearance. Life imitates art, which imitates nothing at all.

On some rare occasions, celebrity and spectacle collide, creating hyper‐spectacles or self‐perpetuating media frenzies that dominate all forms of media for an extended period of time. The O.J. Simpson trial (1995), Princess Diana’s funeral (1997), the Monica Lewinsky–Bill Clinton sex scandal (1998), and the reality show presidency of Donald Trump are all examples of such hyper‐spectacles. What separates these hyper‐spectacles from ordinary spectacles is (1) the intersection of celebrity and spectacle, (2) the scope and intensity of the media coverage (i.e. the story’s ability to dominate all media and to disrupt normal programming), and (3) the resistance of the story to information decay. Take the O.J. Simpson case as an example. According to Paul Thaler, “From June 1994 through October 1995, the Simpson story overtook our culture, sweeping away all other news – in fact, virtually all other public discussion – in its path.”³² This hyper‐spectacle began on June 17, 1993 with the nationally televised low‐speed chase of Simpson’s white Bronco 5 days after the brutal murder of his ex‐wife, Nicole Brown Simpson, and her friend, Ronald Goldman. The three major broadcast networks (ABC, NBC, and CBS) and CNN all interrupted their regular programming to cover the police chase live. In the days and weeks following the chase, there was an explosion of newspaper headlines, magazine articles, books, and primetime TV specials. Diane Furno‐Lamude offers this summary of the media coverage:

In the Los Angeles Times, the Simpson story appeared on the front page for more than three hundred days after the murders. Additionally, when the criminal trial began, every local Los Angeles station except one carried it live. The major evening news broadcasts devoted more time to the Simpson case than they had given to Bosnia and the Oklahoma City Bombing combined.³³

Low‐cost to produce and capable of capturing the attention of large audiences for long periods of time, hyper‐spectacles are profit‐generating machines, which suggests that the media industry has a vested interest not just in covering them, but in creating them.

Joint ventures

Given the high costs of television, sound, and film production, media conglomerates often undertake joint ventures to reduce financial risks. By splitting the costs of a new venture, neither corporation has to bear the full financial burden should it fail. In 2004, the major media conglomerates had, according to Ben Bagdikian, “a total of 141 joint ventures, which makes them business partners with each other.”³⁴ Today, two US television networks are the result of such partnerships. Prior to the late 1980s, a 24‐hour all‐comedy cable network had never been tried. So, it was hardly a surprise when Time Warner’s The Comedy Channel merged with Viacom’s HA! to form Comedy Central in 1991. For 12 years, both companies retained 50 percent ownership in the network. The venture was so successful that Viacom had to pay Time Warner a massive $1.2 billion to acquire its share in 2003. A second joint television venture is The CW Television Network, which is owned in equal parts by the CBS Corporation and AT&T (WarnerMedia). The CW was launched in 2006 following the collapse of CBS’s UPN and WarnerMedia’s WB networks. While neither company was able to sustain a sixth major network on its own, the partnership has allowed both to continue to appeal to a younger audience, with an average viewer aged 34 years: 10 years younger than that of their nearest competitor, FOX (44 years old). This is an attractive demographic for advertisers.³⁵ A more recent example of a joint venture is Hulu, the popular streaming service, whose chief competitors include Netflix and Amazon. While Hulu was jointly owned by The Walt Disney Company (30%), 21st Century Fox (30%), Comcast (30%), and AT&T (10%), Disney’s acquisition of 21st Century Fox gave it a controlling stake.

Another reason media conglomerates might join forces is to expand their control in a particular industry. In 2004, for instance, Sony Music Entertainment (a Sony Corporation company) merged with Bertelsmann Music Group (a Bertelsmann company) to form Sony BMG Music Entertainment. Sony BMG immediately joined EMI, Universal, and Warner as one of the – at that point – Big Four music companies. The merger also reportedly allowed the two parent companies to cut roughly 2000 jobs, saving them nearly $350 million a year. Sony Corporation of America, a subsidiary of Japan’s Sony Corporation, acquired Bertelsmann’s 50 percent stake in Sony BMG in 2008, adopting the Sony Music Entertainment label once again. As of September 2018, Sony Music Entertainment ranks as one of the Big Three record companies, along with the French‐owned Universal Music Group, a subsidiary of Vivendi, and the US‐owned Warner Music Group, a subsidiary of WarnerMedia. Partnerships like those described in this section are fairly common, due, at least in part, to the fact that major media conglomerates often have interlocking directorates. Each of the Big Six conglomerates is overseen by a board of directors whose board members often sit on multiple boards, making them interlocked. The people deciding what is good for one media conglomerate, then, are likely to be some of the same people deciding what is good for another. One consequence is joint ventures.

Reduction of diversity

Concentration, which severely restricts competition, integration, which leads to the development of some projects and not others, and the logic of safety, which drastically limits creativity, collectively result in the homogenization of media. Despite the plethora of media outlets and the apparent array of choices today, media products such as music, television, and film are overwhelmingly similar in form and content. The uniformity of media has long been recognized by media scholars and can be traced back to the Frankfurt School, an institute for social research established in Weimar, Germany in 1923. The Frankfurt tradition found its way to the United States in the 1930s when German scholars immigrated there following the rise of National Socialism in Germany. Influenced by Marxism, scholars such as Herbert Marcuse, Theodor Adorno, and Max Horkheimer saw the mass media and popular culture as rigid, formulaic, highly standardized, and clichéd. They argued that media’s unending sameness had a pacifying effect on audiences, eliminating the possibility for critical thought, and thereby producing our very consciousness. Though the Frankfurt School has been critiqued for promoting the idea of false consciousness, the belief that the masses are duped into blindly accepting the prevailing ideology, their criticisms of standardization are not entirely without merit.

While examples of standardization can be found in any of the media industries, the music industry – and, especially, pop music – provides a compelling example. In 1941, Adorno argued that popular music was successful because it was simultaneously standardized (i.e. it was all the same and therefore required no thought or effort to enjoy) and pseudo‐individualized (i.e. it was cloaked in the false appearance of uniqueness). Adorno explained:

The necessary correlate of musical standardization is pseudo‐individualization. By pseudo‐individualization we mean endowing cultural mass production with the halo of free choice or open market on the basis of standardization itself. Standardization of song hits keeps the customers in line by doing their listening for them, as it were. Pseudo‐individualization, for its part, keeps them in line by making them forget that what they listen to is already listened to for them, or “pre‐digested.”⁴⁹

If Adorno’s critique sounds overly harsh, allow us to cite an example. In 2009, the Canadian‐born singer Justin Bieber became a pop sensation with the breakout hit, “Baby.” Featuring scintillating lyrics such as, “And I was like baby, baby, baby oh / Like baby, baby, baby no / Like baby, baby, baby oh / I thought you’d always be mine (mine),” “Baby” appeared on the EP My World (2009) and again on the studio album My World 2.0 (2010), which debuted at number one on the Billboard 200 and went triple platinum in the United States. Justin Bieber, along with the near‐endless iteration of boy bands and pop queens like Ariana Grande, Selena Gomez, Katy Perry, and Taylor Swift, would suggest that musical innovation and diversity are not only atypical, but also unnecessary for success.

Restriction of democracy

A second social consequence of ownership patterns and profit‐maximization strategies in the media industry is the decline of democratic ideals. Democracy is premised on the notion of egalitarianism, the free and open exchange of ideas, and the participation of diverse publics.

But, until the relatively recent development and spread of new media, it was virtually impossible for ordinary citizens to share their ideas and opinions with large, remote audiences. Thus, only those who owned and controlled the means of production truly had a “public” voice. Even as access is gradually becoming more democratic through personal and political blogs, for instance, the major media conglomerates continue to function as powerful gatekeepers. Gatekeeping is a filtering practice that determines what makes it into the media and what does not. Media such as radio, television, and film remain almost entirely inaccessible to ordinary citizens. And even more democratic media platforms such as YouTube (owned by Google) and Instagram (owned by Facebook) are being bought up by the major conglomerates. Often, what starts out as creative, independent art is later co‐opted for corporate profit.

By controlling what is included in (and thus excluded from) both news and entertainment media, the major media conglomerates also exercise an agenda‐setting function. Agenda‐setting refers to the power of the media to influence what people are concerned with or care about. By covering some news stories and not others, or by treating some scenarios, themes, and issues in entertainment media and not others, the media greatly influence what the public regards as important. The idea of agenda‐setting asserts that media do not influence what audiences think, so much as they influence what audiences think about. Typically, agenda‐setting is discussed in relation primarily to the news media. But entertainment media also exercise an agenda‐setting function. The sheer prevalence of cop shows and crime dramas ensures that violence will be viewed as a serious social concern, while the absence of environmental dramas has the opposite effect. Sex and violence are seen as social concerns, in part, because there is so much sex and violence in the media. Meanwhile, genocide and sex trafficking around the globe are of little concern to many Americans because they receive little to no attention in the media.

In addition to gatekeeping and agenda‐setting, the major media conglomerates exercise an important framing function. Framing describes the viewpoint or perspective that is employed by the news and entertainment media when covering social and political issues. Just as the lens of a camera frames its subject, so media frames create particular windows through which audiences view issues. The news media’s repeated framing of political issues around a conservative/liberal or left/right binarism, for instance, greatly limits the scope of public debate by marginalizing non‐centrist or alternative perspectives. During political campaigns, third‐party candidates are rarely taken seriously by the media. The naming and, hence, framing of third‐party candidates as “on the fringe” works to ensure that they will remain there. In short, the gatekeeping (filtering), agenda‐setting (focusing), and framing (structuring) functions of the major media conglomerates consistently undermine democratic principles and ideals.

Spread of cultural imperialism

A third consequence of contemporary ownership patterns and profit‐maximization strategies is cultural imperialism. Cultural imperialism describes the exporting of US values and ideologies around the globe, usually to the detriment of local culture and national sovereignty. While local culture certainly inflects upon and influences the media products such as television, film, and music imported from predominantly US‐centered media conglomerates, the cultural imperialism hypothesis is rooted in the idea of unequal flow. This idea holds that, while cultural beliefs and values are flowing in both directions, the inward flow is so much greater than the outward flow that over time it causes cultural erosion in poorer countries with less‐developed media industries. In some cases, exposure to outside cultural values can have devastating effects on local cultures. There was a significant rise in infant deaths in a number of countries in Africa, for instance, when mothers switched from breast‐feeding to bottle‐feeding after seeing it repeatedly featured in European and US television programs and advertising. The mixing of infant formula with unsanitary water in this particular region resulted in an epidemic.⁵⁰ Furthermore, given the financial resources behind the Big Six, it is often difficult for independent, local production companies to compete with multinational conglomerates. The increasing concentration of highly integrated media companies along with the drive to make profit is clearly not without significant social consequences.