February 23, 2004
It’s remarkable in this election year how many of the issues that shape people’s lives are never raised: vanishing pensions, relaxed immigration controls, swollen numbers of working poor, soaring college fees.
Campaign logic steers politicians not necessarily to the issues that matter most, but to those where they smell electoral advantage. Others are shunted to the margins of public discourse. They become nonpolitical matters and are managed, invisibly, by bureaucracies or businesses.
Case in point: The continuing realignment of the country’s mass media, the latest instance being cable giant Comcast’s stunning plan to buy the Walt Disney Co. This would be the first true assertion of unitary corporate control across the full range of media available in the Internet age.
Already in the past nine months, we saw first a sweeping regulatory move to roll back safeguards against ownership concentration. Then Rupert Murdoch’s News Corp. – which owns Fox Network among many other media properties worldwide – would buy the top U.S. direct-to-home satellite broadcaster, DirecTV.
Now we’ve hit the trifecta with news that the country’s biggest cable owner, Comcast Corp., wants to acquire Disney. The deal would create the country’s largest media company, with $47 billion in annual revenues, well above Time Warner’s $40 billion.
What would go under one roof? First, the vast Disney-branded entertainment juggernaut and the media empire assembled under the nearly 20-year Michael Eisner reign – Miramax, Touchstone and Buena Vista films, the sprawling ESPN sports franchise, ABC television, big pieces of A&E, Lifetime and E!.
Then, add the Comcast side of the ledger: 21 million cable subscribers, the largest swath of households in the industry and, of perhaps greater importance, 5.3 million subscribers to high-speed Internet service, which make Comcast the country’s leading provider of broadband online access.
So this is a deal with even greater weight than the 2000 Time Warner AOL merger, which was supposed to have married the world of old media to the emerging universe of Internet comestibles. After all, AOL was not a player in high-speed Internet access, which is where all the action is, and Time Warner has neither a broadcast network nor a national delivery system.
With Comcast-Disney, it’s all there: Movies, TV production, top cable networks (the crown jewel is ESPN, which is pulling up to $2 a month out of your cable bill whether you watch sports or not), assured national distribution via broadcasting and cable, downstream syndication and a vast network of overseas affiliations.
And down the line is the advent of interactive TV, nationwide video on demand and all sorts of Internet applications – which is why the Mother of all Media Monopolies, Microsoft, spent $1 billion to buy a substantial 7.4 percent stake in Comcast in 1997.
Why does this matter? A single entity will be able to orchestrate the full range of media activity: originating content (from Finding Nemo to Nightline) or buying content on advantageous terms, deciding on its distribution, choosing the technology to exhibit it, setting a price for it – everything short of compelling an audience to watch it – without any effective competitive constraint.
(A slight exaggeration: You might be able to ditch the Comcast/Disney/Microsoft option in favor of Murdoch/Fox/DirecTV. Welcome to 21st Century consumer choice.)
Vertical integration on this scale – when one colossus controls the whole process, soup to nuts, by which something is made, distributed and sold – is breathtaking. It also eludes most antitrust scrutiny, which looks at unhealthy influence over a single market, not unhealthy sequential influence within a series of markets.
And what about the marketplace of ideas? The engineers of this deal will say they are interested in your money, not your mind. That’s a comfort.
But the things that make it a good deal economically – the many advantages of centralization – make it a bad deal for the life of culture and ideas. It could be that a diversity of ownership is the closest thing a privately-owned media industry can offer to duplicate the checks and balances built into this country’s political structure.
But that is not a question we’ll see debated this, or any, electoral season.