I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here’s the PDF, but I have also pasted the entire thing down below.
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A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
Like James Gattuso, I have a lot of questions about the Federal Trade Commission’s new “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” especially as they apply to bloggers. (And over at Silicon Angle, Mark ‘Rizzn’ Hopkins has been doing a great job keeping tabs on the many questions and hypothetical situations that others have been posing about the new rules). But the one thing I just can’t wrap my head around is how the FTC plans to enforce these rules against those speakers or media outlets who have print publications which are fully protected by the First Amendment. So, I was pleased to see my favorite press critic Jack Shafer of Salon, ask the same question in his latest column on “The FTC’s Mad Power Grab”:
Because of a pesky thing called the First Amendment, the guidelines don’t apply to news organizations, which receive thousands of free books, CDs, and DVDs each day from media companies hoping for reviews. But if the guidelines don’t apply to established media like the New York Review of Books, which also happens to publish reviews on the Web, why should they apply to Joe Blow’s blog? Regulating bloggers via the FTC while exempting establishment reporters looks like a back-door means of licensing journalists and policing speech.
Exactly. Is the FTC just going to ignore such speakers or media organizations but enforce against everyone else? Isn’t that just a bit silly and radically unfair? Moreover, might such a policy end up incentivizing some folks to create token print publications to get around such the regulations? I doubt it, but you never know.
Regardless, as Shafer notes, the rules are so hopelessly open-ended and arbitrary that they are bound to pose problems for whomever they are enforced against: Continue reading →
On this week’s show, we discuss the implications of the FCC’s controversial recent ruling against Comcast in the BitTorrent controversy. This is a topic we have covered previously on our podcast in episodes 34 and 35, and have been writing extensively about on the Tech Liberation Front blog over the last few days. In its decision last Friday, the FCC held that Comcast had engaged in unreasonable network management practices when it delayed access to BitTorrent traffic. Even though BitTorrent Inc. and Comcast have already settled their dispute and indeed are now working collaboratively together on solutions to these issues, FCC Chairman Kevin Martin said that legal action was necessary because others had complained about the practice.
On today’s show we focus on the implications of the FCC’s decision and what it means for the future of net neutrality regulation and communications policy more generally. Joining us for this week’s show are TLF regular contributors Jerry Brito of the Mercatus Center at George Mason University, Hance Haney of the Discovery Institute, Tim Lee of the Cato Institute, Jim Harper of the Cato Institute, James Gattuso of the Heritage Foundation, and Adam Thierer of the Progress & Freedom Foundation who moderates the discussion.
We’re having a little problem with our podcasting plugin, so here’s a temporary way for you to listen. You can download the MP3 here, or use the online player below.
As James Gattuso noted last week, the XM-Sirius merger review has now entered the realm of the theater of the absurd. It’s not just that the FCC has lapped its 180-day merger review shot clock two-and-half times already (we’re over 450 days into the proposed merger, after all), but it’s the fact that there seems to be no end to the list of conditions that some regulatory advocates or policymakers want to extort out of the firms. After all, according to the latest press reports, the FCC has already managed to extract the following “voluntary” concessions out of them: a price cap on programming for potentially 3 years; a la carte programming requirements; new interoperability standards for satellite radio receivers; capacity set asides of something like 4 percent of their spectrum capacity (apparently about 12 channels) for non-commercial educational programming; and potentially the lease of another 4 percent of capacity to minority or women-owned enterprises.
These are astonishing concessions, and one is forced to wonder if the merger was really worth it and whether the merged firm will really be able to survive the intensely competitive media landscape it finds itself in with such constraints in place. Let’s not forget, although both firms have grown their subscriber rolls, they have NEVER found a way to turn a profit! And new audio options continue to pop up seemingly every week and bombard our ears with evermore news, information and entertainment.
Alas, all those concessions appear not to be enough to satisfy some on Capitol Hill. According to today’s Washington Post:
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Last week a scad of stories from Reuters to News.com covered the growing push for a “Do Not Track” registry similar to the “Do Not Call” list that serves to protect US households from mid-dinner sales calls. While I understand the concerns expressed by folks like Marc Rotenberg of EPIC and Jeff Chester of the Center for Digital Democracy, who were both cited by Anne Broache in the News.com piece from last week, I think that asking the government to hold a master list of IPs and consumer names is a bad idea, or at least one that won’t do much to really protect consumers.
First, tracking people online is a bit different from calling folks in their homes. Telemarketing, while highly effective in terms of sales produced per dollar of marketing money spent, is still orders of magnitude more expensive than spamming or collecting data online without consent. Both of these activities are illegal today, but they still occur. They occur so much that spam-filtering technology contains some of the most advanced natural language recognition and parsing software created. Cory Doctorow has mused that the first artificial intelligences will emerge from Spam and anti-Spam computer arrays.
So this list wouldn’t be the magic wish that privacy advocates and legislators might dream it to be. It would cause law-abiding companies like Google, AOL, and Microsoft to stop collecting data, but so could privately developed and enforced systems.
Anne Broache notes that cookies are a bad solution for stopping data tracking as many anti-spy-ware programs delete cookies, since cookies are often used for the purpose of data tracking. But why not just create a new variety of cookie? Call it a cake, a brownie, a cupcake–maybe even a muffin. Whatever you call it, just specify that a standards-compliant browser must contain a place for something similar to a cookie to be placed that will opt consumers out of tracking schemes. This isn’t a technological problem at all, it’s just a matter of industry deciding to follow this course.
My other concern is something that fellow TLFer and former CEI staffer James Gattuso pointed out in a 2003 piece in regard to the “Do Not Call” list, namely that the government will likely exempt itself from the rules. In our post-9/11 world (whatever that means) we should expect government–the supposed protector of our rights–to make these sorts of moves. But you don’t have to trust my assertion, look no farther than Declan McCullagh’s Wednesday post at New.com. The FBI is pushing hard for Internet companies to retain data so that they can later sift through it. It’s doubtful that the government will place itself on “Do Not Track” list if they believe they can gain useful intelligence by tracking people online.
So, by and large, this proposed registry seems unnecessary and ineffective. Industry can easily work out a way to allow consumers to opt-out and the two groups I’m most afraid of–the Russian Mob and the U.S. Government–won’t pay heed to any registry anyway.
Instead or wringing our hands over advertisers tracking what duvet covers we buy, can we turn our attention to what our freewheelin’ executive branch is trying to pull-over on us? Seems to me they’re cooking up exemptions to more than just this registry–a few of my favorite Constitutional Amendments spring to mind.
Justine Bateman may have grabbed the headlines, but she wasn’t the only witness from Hollywood at yesterday’s Senate hearing on neutrality regulation. Nor did she have the most interesting resume. That honor goes to Patric Verrone, the president of the Writer’s Guild of America, west, whose own writing credits include work for everything from The Simpson’s and Futurama to Rugrats and the Muppets. As Verrone himself put it, “I am the only panelist to have written a film about a robot poker tournament in space Vegas in the year 3009 so I think my expertise in the area is unquestionable.”
Strangely enough, I first came into contact with Verrone not from his WGA work, or even from 31st century poker tournaments, but from Ebay, where he sells miniature figures of U.S. presidents and other notable individuals. My six-year old son Peter and I have become avid collectors of the figurines.
Verrone is no stranger to market power – being the only known vendor of the pricey presidents. (Although I suspect the demand side is rather thin as well).
Outside of the tiny figurine world, Verrone is best known for leading Hollywood writers through a 100-day strike, which finally ended in February of this year. Oddly, however, Verrone, in his testimony, uses that experience as evidence of the need for Internet regulation.
Continue reading →
Update: Note the change in venue below.
Over the last two years, our Alcohol Liberation Front happy hours have become a venerable DC institution. (See here, here, and here for reports from previous ALF events.) We’re going to have our fifth semi-annual ALF on Monday, and it promises to be our best ever, because we’ll be joined by libertarian hero Brooke Oberwetter. Most of us talk a good talk about defying the state, but on Saturday, Brooke walked the walk, getting arrested by humorless park police for silently (and soberly) dancing in honor of Thomas Jefferson’s birthday.
In addition to Brooke, we’ll be joined by the usual TLF gang, James Gattuso’s groupies, and a few interns we’ll bring along to make our turnout look more impressive. Unfortunately, Cord Blomquist has to stay home for a hot date with “Call of Duty 4.” But for the rest of us, it’ll be from 5:30-7:30 at the 18th St. Lounge Science Club on Monday, April 21. Please leave a comment if you’re planning to join us so we know to keep an eye out for you.
The Washington Post was ecstatic. Having won six Pulitzer Prizes for journalism, it featured the news on the front page of yesterday’s edition, accompanied by a photo of applauding Post staff. And they certainly deserved credit – the half-dozen prizes were the second-most won by a newspaper since the annual awards began in 1917.
But one thing was missing in the Post photo: a newspaper. There’s a computer screen in the foreground, being watched by the applauding staffers. And a TV in the background. But there wasn’t an actual newspaper to be seen.
The photo says a lot about the changing face of journalism, and the rise of electronic media. The traditional newspaper is quickly losing ground to newer forms of communication, notably the Internet. Only two weeks ago, the Newspaper Association of America reported that print advertising had plummeted in 2007 by almost 10 percent, the largest one-year drop ever.
But despite these changes, the Pulitzer remains largely a paper-and-ink affair, limited mostly to traditional newspapers. To its credit, the Pulitzer committee did change the rules a few years ago, allowing online journalism to be considered. Thus, a number of winning entries have had significant online components. But – except for the two“breaking news” categories – the rules still require that stories appear in print as well as online.
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Broadcasting & Cable notes that:
“The fraternity of the nation’s television critics at daily newspapers was once a thriving milieu, dominated by a great diversity of committed voices. The critics’ opinions were sought, revered — in many cases, even feared — and blurbed in network on-air promos. That reality has changed drastically of late as the ranks of critics have grown noticeably leaner. Caught in the financial turmoil roiling the newspaper industry, they have become a beleaguered lot, a growing part of the collateral damage of the digital revolution. In the past two years, more than one-dozen longtime critics at major-market dailies — including the Dallas Morning News, Seattle-Post Intelligencer, New York Newsday, New York Daily News and Houston Chronicle — have been either let go, shunted to different beats or been forced to take the ubiquitous buyout…”
This is not altogether surprising. I think there are three main culprits:
(1) Growing outlet competition and audience fragmentation: There’s just a lot more to read, watch and listen to now, so something’s got to give.
(2) Continued decline of newspaper business in general: For reason #1, newspapers are hurting and losing revenue. [see James Gattuso's recent post on this]. That has meant ongoing staff cuts, and critics (TV, music, art, or otherwise) are likely to be the first with their heads on the chopping blocks.
(3) Explosion of independent voice & critics via blogosphere: Finally, anyone can be a critic these days. That does not mean anyone can be a good critic–there are plenty of blithering idiots out there in the blogosphere when it comes to armchair media criticism–but there are many “amatuers” who do a fine job critiquing mass media programming (especially television).
So, while I am sad to seem some mainstream critics struggling, I just don’t see this newspaper beat surviving much longer.
I have said that the threat of regulation is a credible deterrent to prevent unreasonable discrimination by broadband service providers and we don’t need a new regulatory framework with the unintended consequences which always flow from regulation.
And James Gattuso, noting that Comcast and BitTorrent were already working with one another on a solution to their network problems “long before this story broke,” correctly chided me for overlooking how public opinion is also a credible deterrent. James is right, particularly when there is a competitive market. And like it or not, the broadband market is competitive.
A “duopoly,” you say?
Continue reading →
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