This ongoing series has explored the increasing ability of consumers to “cut the cord” to traditional video distributors (cable, satellite, etc.) and instead receive a mix of “television” programming and other forms of video programming over the Internet.  As I’ve argued, this change not only means lower monthly bills for those “early adopter” consumers who actually do “cut the cord”, but, in the coming years, a total revolution in the traditional system of content creation and distribution on which the FCC’s existing media regulatory regime is premised.   

This revolution has two key parts:

1. Conduits: The growing inventory—and  popularity—of sites such as Hulu, Amazon Unboxed and the XBox 360 Marketplace (or software such as Apple’s iTunes store), that allow users to view or download video content.  Drawing an analogy to the FCC’s term “Multichannel Video Programming Distibutor” or MVPD (cable, direct broadcast satellite, telco fiber, etc.), I’ve dubbed these sites “Internet Video Programming Distributors” or IVPDs.
2. Interface:  The hardware and software that allows users to display that content easily on a device of their choice, especially their home televisions.

While much of the conversation about “interface” has focused on special hardware that brings IVPD content to televisions through set-top boxes such as the Roku box or game consoles like the XBox 360, at least one company is making waves with a software solution.  From the NYT:

Boxee bills its software as a simple way to access multiple Internet video and music sites, and to bring them to a large monitor or television that one might be watching from a sofa across the room. Some of Boxee’s fans also think it is much more: a way to euthanize that costly $100-a-month cable or satellite connection. “Boxee has allowed me to replace cable with no remorse,” said Jef Holbrook, a 27-year-old actor in Columbus, Ga., who recently downloaded the Boxee software to the $600 Mac Mini he has connected to his television. “Most people my age would like to just pay for the channels they want, but cable refuses to give us that option. Services like Boxee, that allow users choice, are the future of television.” …. Boxee gives users a single interface to access all the photos, video and music on their hard drives, along with a wide range of television shows, movies and songs from sites like Hulu,Netflix, YouTube, CNN.com and CBS.com.

With 200,000 users thus far, Boxee is quickly taking off and made a big splash at CES this year.  Boxee may be a scrappy start-up but is founder realizes the revolutionary implications of his product:

Mr. Ronen also shared what he called his “politically incorrect” vision of how the Internet would upset the television business by giving people on-demand access to the array of Web content. “The challenge for the cable industry is how they grapple with the fact that this is in some way a substitution for some of the things they do,” he said.

The NYT rightly observes that, whether Boxee really takes off as the Next Big Thing, its success thus far is at least driving other “consumer electronics companies to move faster to bring the Internet to their devices.”  I suspect that what we’re seeing now is a “tipping point” on both sides of the business:  As IVPDs gain popularity and larger inventories, “interface” developers like Boxee (or others on the hardware side) will proliferate rapidly.

[This represents a bit of a departure from the traditional format of my ongoing “Media Deconsolidiation Series,” but you will see how it ties in…]

So, some guy from the (Un)Free Press — the activist group that wants to regulate every facet of the media and broadband universe — has created a scary looking chart about “Information Control” [seen below]. It’s based loosely on the Periodic Table of Elements, you know, to give it the aura of science and fact. In reality, it’s just another silly scare tactic that tells us very little about the true nature of our modern media marketplace.

The chart is accompanied by the typical Free Press gloom-and-doom rhetoric about the unfolding media apocalypse. “Nearly everything you see, hear and read that isn’t from a friend — whether on TV, the radio, or even on the Web — comes from a for-profit gatekeeper.”  And then comes the obligatory A.J. Liebling quote about how “Freedom of the press belongs to those who own one,” followed quickly by the typical punch line about how just a handful of companies (in this case 55 of ’em) are puppeteering all our thoughts in America today:

Combined, these 55 powerful media and telecommunications companies raked in total revenues in excess of $700 billion in 2007. Together they own over 540 TV stations, 2000 radio stations, 430 newspapers, 230 magazines, and 80 major cable channels in the United States. They provide paid TV service to approximately 52 million subscribers and broadband Internet service to over 57 million subscribers. They’re the bottlenecks through which our news, our entertainment, and our political discourse must travel. What they want to promote becomes prominent; what they suppress stays out of the mainstream. As such, these companies are the elements of information control.

Oh my God! We are all just brainwashed sheep!

Except we’re not. It amazes me how these “information control” and “media monopoly” myths keep getting widespread circulation. But the first thing to note is how the media reformistas can’t get even their story straight when it comes to how many “monopolists” are supposedly out there today. As I noted in my 2005 book, Media Myths: Making Sense of the Debate over Media Ownership, the critics seem to just pull their numbers out of a hat. Some say as few as 3 companies control everything. Others says 5 or 6. Still others say it might be a few dozen. And now this guy says its 55. Hey, that’s progress that even the Free Press should love!

Regardless of the number, does this really represent the totality of our modern media universe? Do those 55 companies really “own most of the 21st-century presses in America” as the “Info Control” website states? Answer: NOT. EVEN. CLOSE.  Here are the facts. [I happened to have compiled them for a PFF special report entitled Media Metrics: The True State of the Modern Media Marketplace to debunk myths just like this.]

In the table above, I have taken the number of media outlets owned by the 55 companies and then divided it by the total number of media outlets. This gives us the actual percentage of media outlets owned by the 55 media providers listed in the “Information Control” chart.  Needless to say, it’s hard to see how anyone can claim “bottleneck” control or “media monopoly” when an average of just 18% of all those outlets are owned by the 55 companies! And what that number doesn’t tell you is that — as my “Media Deconsolidation” series has been illustrating over the past two years — America’s media marketplace has been growing less concentrated with each passing month. Media companies are selling off and shedding assets and divisions faster than ever. There’s a 24-hour death watch going on over at Twitter these days on the “Media is Dying” thread if you care to follow the carnage in less than 140 characters at a time.

Oh, here’s another problem with the “Information Control” chart: Where exactly does the Internet fit into the picture? Answer: It doesn’t. They’ve conveniently left out the Net, online media, blogging, social networking, podcasting, and other bottom-up, user-generated content and forms of communication.

But let’s ignore the Internet and all those new Digital Age options for a moment. Let’s say this guy had it right and that only 55 companies really did control “Nearly everything you see, hear and read.”  The fact is, that really wouldn’t be the end of the world. 55 competitors would be considered a luxury in just about any other major economic sector.  Care to draw up a “Periodic Chart” for autos, airlines, supermarkets, or semiconductors? If one did, there would be far fewer squares on it. The fact is, even if we accepted the artificial limitations of this chart, we’d still have a lot of choices at our disposal.

But we need not accept those limitations. We live in a different world; a better world. With far more choices and diversity than this silly chart indicates. Indeed, by every conceivable measure we have more media options and diversity than we did 30 years ago. Magnitudes more. I bet the guy who put this chart together isn’t even old enough to remember when three old white guys in bad suits delivered us a half-hour of news each night at 6:30, and if we weren’t lucky enough to be sitting in front of our TVs at that exact moment, then we were screwed. Compare that pre-1980 reality to today and the unprecedented information cornucopia at our disposal. In my lifetime (I’m 40) we have seen the death of mass media and the end of “appointment-based” media consumption.  Media providers no longer call the shots; we the viewing and listening public do.

But shhhhh… we’re not suppose to talk about these meddlesome things called facts. You see, the entire media policy drama in this country is based on a glorious set of mega-myths. There’s a handful of nefarious schemers aiming to program our little minds with corporate propaganda, or so the story goes. They must be stopped. At all costs. Luckily, the enlightened few at the Free Press and other media reformista outfits have managed to avoid the corporate brainwashing — My God, how did they ever do it! — and so they are ready to lead us to the media promised land. But to get there, we must first burn the village to save it. We must destroy free media (as in free-market, for-profit media) to rebuild free media (as in media controlled by government masters). Only then will we enter Information Nirvana and liberate our minds from our evil corporate overlords!

Or so the story goes.

(P.S. Brian Anderson and I recently penned a book to counter these fantasies and the efforts by the media reformistas to remake the media marketplace in their preferred image. See: A Manifesto for Media Freedom, Encounter Books, 2008).

My ongoing media DE-consolidation series represents an effort to set the record straight regarding one of the leading myths about the media marketplace today: the notion that rampant consolidation is taking place and that operators are only growing larger and devouring more and more companies.

Nothing could be further from the truth. Over the past 3 to 5 years, traditional media operators and sectors have been coming apart at the seams in the face of unprecedented innovation and competition. The volume of divestiture activity has been quite intense, and most traditional media operators have been getting smaller, not bigger. “Traditional media’s numbers are shrinking,” argued FCC Commissioner Robert McDowell in a recent speech. “The ironic truth is,” McDowell continued, that “in many cases, media consolidation has actually become media divestiture. Companies… have been shedding properties to raise capital for new ventures.”

And so that trend continues today with the announcement from Cox Enterprises that it will be selling almost all its newspapers. According to the The Atlanta Journal-Constitution:

Cox Enterprises, the Atlanta-based media conglomerate that built a multibillion-dollar business from a single Ohio newspaper, announced Wednesday that it plans to sell all but three of its newspaper holdings. The company will retain flagship newspapers in Dayton, Ohio; West Palm Beach, Fla.; and Atlanta — including The Atlanta Journal-Constitution — but sell dozens of daily and weekly newspapers in Colorado, North Carolina and Texas. Company officials did not disclose an asking price for the properties but said revenue from the sales will be used to pay down debt and free up capital for other investments. Cox will also sell Valpak, the company’s nationwide direct-mail advertising division, officials said. Sandy Schwartz, the Cox president over the newspaper division, said the company has no plans to sell its newspapers in Atlanta, Dayton and West Palm Beach, which are moving aggressively to contain costs and establish strong online readerships. The sale comes amid slumping revenues and declining values for newspapers across the country as print media lose market share to the Internet.

Once again we see how life in the newspaper business can be a turbulent affair with grim long-term growth prospects. Nonetheless, let’s not lose sight of the fact that traditional media operations are once again growing smaller, just like all the media critics supposedly want. So, I eagerly look forward to the press releases from Free Press and Media Access Project noting that fact. But something tells me I shouldn’t hold my breath in anticipation of those statements since we know the media reformistas have a far more ambitious and radical “reform” agenda in mind.

Faithful readers will recall that, several months ago, I penned a 7-part “Media Metrics” series that took a hard look at the health of the media marketplace. Today, the Progress & Freedom Foundation is releasing a greatly expanded version of these essays that I have put together with my PFF colleague Grant Eskelsen. In this 100-page special report, “Media Metrics: The True State of the Modern Media Marketplace,” we begin by noting that heated debates about the state of the media marketplace continue to rage in Washington, and opinions seem to range from grim to outright apocalyptic. As we note on pg. 1:

Many people—including a large number of legislators and regulators—argue that America’s media marketplace is in a miserable state. Some claim that citizens lack choice in media outlets and that options are just as scarce as ever. Others believe that media “localism” is dead or that many groups or niches go underserved because of a lack of true “diversity” in media. Others argue that the market is hopelessly over-concentrated in the hands of a few evil media barons who are hell-bent on force-feeding us corporate propaganda. And still others say that the quality of news and entertainment in our society has deteriorated because of a combination of all of the above. It all sounds quite troubling, but is any of it true?

After taking an objective look at the true state of America’s media marketplace, we conclude that such pessimism is unwarranted. Indeed, a careful review of the facts reveals that—contrary to what those media critics suggest—we have more media choice, more media competition, and more media diversity than ever before. Indeed, to the extent there was ever a “golden age” of media in America, we are living in it today. The media sky has never been brighter and it is getting brighter with each passing year. We come to this conclusion by looking beyond the rhetoric that has for too long governed debates about media in American and providing a comprehensive look at a variety of media sectors such as audio, video, print and online media. Our survey contains over 70 charts and exhibits illustrating facts and figures on such diverse topics as advertising revenue, company market share, audience trends, and areas of growth in the sector. We will also aim to periodically updated the report to reflect the rapidly evolving media industry.

We encourage readers to provider input about how to improve and expand the report going forward in an attempt to refine and improve the metrics. And we look forward to future debates on this subject–debates that we hope will be guided by facts instead of fanaticism and by evidence instead of emotion. The hyperbolic rhetoric, shameless fear-mongering, and unsubstantiated claims that have driven policy debates in recent years have no foundation in reality and should be rejected as the debate over media policy continues.

This and future installments of “Media Metrics: The True State of the Modern Media Marketplace” will be available on the PFF website at www.pff.org/mediametrics. I have also embedded the entire document below as a Scribd file so that those interested in the topic can peruse the report immediately.