MEDIA WATCH: CBS-Viacom merger: bigger doesn’t mean better

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.

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 &

Schuster.



The New York Times was quick to point out the advantages for each

company.



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

consumer.



It appears almost overstated to worry about the consolidation of media

outlets when new ones from the cable and Internet offer more

competition.



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.



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