As the Internet and cable industries create new consumer choices, the traditional media titans continue to concentrate their power. The announcement that Viacom was planning to buy CBS signified another step taken in a major restructuring of the media industry.
As the Internet and cable industries create new consumer choices,
the traditional media titans continue to concentrate their power. The
announcement that Viacom was planning to buy CBS signified another step
taken in a major restructuring of the media industry.
Accompanied with the familiar fanfare of greater choice and quality, the
announced merger generated a mass of headlines but little more than a
shrug of the shoulders from the avid TV fanatic. CARMA examined the
media coverage and looked at the consumer implications.
CBS chairman Mel Karmazin presented the merger as ’the first 21st
century media company’ (Chicago Tribune, September 8). Numerous articles
described the merger as a ’cradle-to-grave’ entertainment company, with
TV attractions for the very young like ’The Rugrats’ to the older loyal
audience of ’60 Minutes.’ The media projects that what the Viacom-CBS
merger misses from TV, it will make up with radio, movie, Internet and
outdoor advertising, not to mention Paramount studios, Blockbuster
video, cable network Comedy Central and the book publisher Simon &
The New York Times was quick to point out the advantages for each
As one analyst summarized, ’They have now created a company that is so
big that the relative performance of next week’s new movie and next
week’s TV show is diminished. You’ve insulated the stock from weak
performance’(The New York Times, September 8).
Despite the fanfare, a number of editorials pointed out some weaknesses
in the logic behind the merger. In a veiled attack on the media
industry, the Los Angeles Times blamed a looser regulatory environment,
pressures to combine the making of content along with distribution and
the increasing globalization of the entertainment industry. Dan
Schiller, a UC communications professor, accused Time Warner, Walt
Disney, News Corp. and Viacom of ’cementing (their) control over
production and distribution globally. What we need to have is a full-
scale inquiry into whether this kind of concentration serves the
national interest’ (Los Angeles Times, September 8).
The media also drew several parallels with Disney’s purchases of
ABC/Capital Cities four years ago. The failures of Disney’s move were
well documented in the coverage, which highlighted the lack of success
in multimedia advertising.
Steve Grubbs from BBDO commented, ’I don’t know that anybody has done a
real effective job of offering cross-media deals. Agencies and some
advertisers aren’t structured for them’ (USA Today, September 9). A case
in point described in the press coverage was Disney buying ABC to create
a promotion platform with ESPN, but it still hasn’t worked.
With the merger creating such a vast entertainment empire, the move can
be seen as having a greater impact on the shareholder than the
It appears almost overstated to worry about the consolidation of media
outlets when new ones from the cable and Internet offer more
It seems when it comes to media companies, bigger does not mean better -
it merely means more of the same.
- Evaluation and analysis by CARMA International. Media Watch can be
found at www.carma.com.