Global Spread of Market Capitalism Probably one of the most widely agreed upon ideas in economic globalization

Global Spread of Market Capitalism Probably one of the most widely agreed upon ideas in economic globalization

of media is that more and more countries are taking up commercial broad­ cast models under global pressures. Countries adopting a commercial model tend to use certain kinds of television program forms or genres and neglect or even avoid others. To use a concept found in parallel form in both complex­ ity theory and structuration theory (Giddens, 1 984), systemic changes such as a shift toward a more commercial, advertising-driven basis of financing broadcasting redraw the boundaries of what is possible within that system.

Commercial broadcasting is proliferating across the globe. This increas­ ingly global commercial pattern for television is reinforced by several fac­ tors. Perhaps most powerfully, more and more countries are being drawn into a world capitalist or market economy (Herman & McChesney, 1 997;

Wallerstein, 1979). Within this global market economy, both national and global firms pressure broadcasters to allow, indeed to rely on, advertising

(Fox, 1 975; Herman & McChesney, 1 997). Lee ( 1 980, p. 91) asserted that a crucial difference existed between endoge­ nous or domestic pressures toward using a commercial broadcasting model and exogenous or foreign pressures. McAnany ( 19 84) considered this too simplistic; in fact, he said, one must consider the role of domestic advertisers

who are influenced by or dependent on foreign interests. However, in writing about Latin American cultural industries, particularly television in Brazil,

McAnany was perhaps too pessimistic about the chances of domestic adver­ tisers and other pressure groups acting independently of foreign pressure

(Mattos, 1984; Straubhaar, 1 984). Certainly the increasing commercializa­ tion of television in Britain results from a complex mixture of interests among both domestic and multinational advertisers. Poor countries like Mozambique often start with state-dominated, development-oriented media but find them­ selves pressured toward commercializing cultural industries by the loss of rev­ enues available to the state. Ironically, they often turn to advertising out of

need to support continued broadcasting but find that their markets are too poor to support much advertising. Many become newly dependent on donor countries in the West to support media, although support from development

agencies can reverse pressures toward commercialization and refocus media on the development issues in which international donors are interested (inter­

views with international donor representatives, Maputo, April 2002). When new systems started in the past 1 0 to 1 5 years, they were often commercial. A number of state and public systems in Europe, Asia, and Africa have also been fully or partially privatized, which nearly always

results in commercial operation (Herman & McChesney, 1 997). Some

Creating Global, U.S., and Transnational Television Spaces

remaining public systems are essentially commercialized by a need to rely on advertising for support, even though the government or a public corporation is still the owner. For example, Radio Television Mozambique is still owned by the state but has increasingly sought advertising support since the early

1 990s, even though it still tries to concentrate programming on development objectives (conversations with RTM executives and programmers, 2000). In the 1990s, European countries, for instance, moved from largely non­ commercial public service systems toward increasingly commercialized ones.

A general movement toward liberalization of competition by private inter­ ests and privatization of national public or state channels is discussed more thoroughly later. National commercial media interests wanted to enter the potentially profitable television business (Ferguson, 1 995). The European Union (EU) was interested in creating a more dynamic set of media industries to compete in global markets and resist cultural imports into Europe (Schlesinger, 1 993). Those commercial systems need to draw the largest possi­ ble audiences to satisfy advertisers. As a result, several cherished forms of pro­

gramming are diminished, including long-form documentaries, one-off or single-episode dramas, and high cultures, because they fall out of bounds in the

new commercial logic of television (Herman & McChesney, 1997). However, local or national cultural boundaries also shape the form media capitalism takes within any specific nation or culture. Experience in Latin America, Asia, and, recently, Eastern Europe shows that national govern­ ments may maintain a great deal of power to shape private, commercial

broadcasting by manipulating licensing of frequencies, by manipulating advertising (especially from government-controlled firms), by providing

infrastructure, and by co-opting new commercial elites into power sharing (Morris & Waisbord, 200 1 ) . Cultural preferences themselves will push new

commercial broadcasters toward providing what local audiences prefer, which tends to be local versions of popular global genres and formats

(Moran, 2004). Global Economics and Advertising

One of the economic binding or boundary-setting forces most closely related to media and to cultural identity is advertising and the creation of con­ sumer desires. Forces of economic globalization in almost all countries have established advertising as a dominant media economic base. Many companies

want to sell the same goods or services throughout the globe. Janus ( 1 981) and Mattelart ( 1 99 1 ) argued that multinational firms had pushed particularly hard to commercialize systems and introduce advertising because they were used to promoting goods with advertising in other markets.

98 Chapter 4 Major manufacturers and service groups conduct global marketing

campaigns and global operations. Their desire to advertise global goods promotes the growth of advertising as the primary economic support for television in most countries (Janus, 1 983; Mattelart, 1 991 ) . Viewing publics also tend to push for more programming choices, as with British television in the 1 950s, and this demand is often met by allowing more commercial channels.

Commercial television systems, like commercial film studios before them, require that cultural products succeed in drawing a large, profitable audience. In television, like film before it, these demands for commercial

success lead to the emergence and standardization of certain successful for­ mulas. Schatz ( 1988) noted that Hollywood's early film experimentation settled into a pattern of standard formulas or genres for producing films on an industrial scale that had the best predictable success with the audience.

Although constraints from economic systems are a real issue, various critics of globalization believe overly simplistic assumptions are being made about the causality of economics, particularly the global spread of capital­

ism, in globalization. They fear a new wave of economic reductionism, which might oversimplify cultural phenomena (Boyne, 1 990; Ferguson,

1 992). Direct Investment and Partnerships

To a number of political economists in communication in the mid-

1 990s, globalization was most often seen as the globalization of ownership, creating "world barons of the mass media" (Herman & McChesney, 1 997). Economists argued that the consolidation of ownership, accelerating in the

1 990s, profoundly changed the face of the world media system. They saw massive amounts of control being centered in less than a dozen large global conglomerates: Time Warner, Disney-ABC, AT&T-TCI, Rupert Murdoch's

News Corporation, Bertelsmann, Sony, and Vivendi-Universal (McChesney, 1999). Figure 4.1 gives a list of some of the largest global media conglomerates. For some theorists, the power of these media conglomerates is sym­ ptomatic of a broader change toward a new form of empire, combining economic interests of major states, such as the United States, and the trans­ national media corporations.

They tend to make nation-states merely instruments to record the flow of the commodities, monies, and populations they set in motion. The transnational

corporations directly distribute labor power over various markets, functionally allocate resources, and organize hierarchically the various sectors of world production. (Hardt & Negri, 2001, pp. 3 1-32)

Creating Global, U.S., and Transnational Television Spaces

2005 Revenue Corporation

Nationality

of Ownership

(U.S. $)

Time Warner

News Corporation

Australian/U.S.

$23.859 billion

Bertelsmann A.G.

CBS Corporation

U.S.

$14.536 billion

Sony Film/TV

Japan/U.S.

$12.6 billion

NBC Universal

U.S.

$12.437 billion

(General Electric Co.) DirecTV Group

Gannett Corporation

Pearson, PLC

British

$7.514 billion

Cox Communications

U.S.

$7.054 billion

Tribune Company

U.S.

$5.73 billion

Fuji TV

Japan

$5.141 billion

Mediaset (Berlusconi)

Axel Springer

Warner Music

Canada (Bronfman)

$3.50 billion

Nippon Television

Japan

$2.96 billion

Tokyo Broadcasting System

Japan

$2.665 billion

TV Globo

Hong Hong

$0.53 billion

Figure 4.1 Major Global Conglomerates

Sources: Corporate reports, Advertising Age Top 100, Variety Global 50.

100 Chapter 4 Certainly global ownership, investment, and partnerships have created

major global media operating entities and dispersed commercial media patterns. The United States, Britain, and France made considerable invest­ ments in colonial and other Third World newspapers in the 1 920s, in movies in the 1 920s and 1 930s, in radio in the 1 930s and 1 940s (Schwoch, 1 990), and in TV in the 1960s and 1 970s (Beltran & Fox de Cardona, 1 979). However, the most visible and probably most significant global consolida­ tion via partnerships has taken place since the 1 990s.

With the neoliberal trend toward deregulation in the 1 990s, direct foreign investment in television picked up again in some countries (Herman & McChesney, 1 997). However, the actual investment patterns in the 1 990s and 2000s already show some change toward a postdependency diversity,

with Hong Kong media investing in Indonesia and Malaysia, Mexican media corporations investing in Chile and Guatemala, and Brazilian television networks investing in Portugal and Mozambique. There are also resurgent

postcolonial activities, such as Spain's Telefonica investing in Latin American telecommunications firms.

Rupert Murdoch is perhaps the most visible example of the current global media mogul, moving from a base in Australia to acquire a variety of print media in Britain and the United States. He has started or acquired broad­

cast media (Fox Channel); film production and distribution companies, and satellite and cable TV systems in Asia (Star TV, Channel V), Britain (Sky Channel, now B-Sky-B), and the United States (Fox Networks) . He is also partnering with other major players, such as America's TCI, Mexico's

Televisa, and Brazil's TV Globo in Sky Latin America. He has invested considerably in direct global reach via satellite television.

Time Warner has taken a different focus, directing global reach with

a number of specific satellite channels (CNN, TBS, TNT, HBO, etc.), AOL's Internet operations, Warner films, music distribution, television program sales, and a number of key magazines. Disney also has direct global reach

with satellite television channels (Disney, ESPN), film distribution, music distribution, and television program sales.

Not all conglomerate growth represents a lasting or sustainable accum­ ulation of economic power. Vivendi Universal acquired satellite TV channels (Canal+, USA Networks), film distribution, considerable magazine and print distribution, a substantial share of global music distribution, and television pro­

gram sales starting in the late 1990s but had to sell most of its media assets after 2002, when it lost more than $12 billion (Public Broadcasting Service, 2002).

Viacom has global reach with film distribution, publishing, and cable oper­ ations. Its major global television operation, MTV, started its own regional operations in Asia, Europe, and Hispanic/Latin America. It partnered with TV

Creating Global, U.S., and Transnational Television Spaces 101

Abril in Brazil for MTV Brasil and with Star TV for MTV Asia, then withdrew from Star TV to control its own operation, while Star TV adapted the concept in its own Channel V. Sony is heavily involved in global video game distribution, media and computer hardware sales, film, and music distribution.

These global giants tend to spread out into new national or regional markets in several ways. All sell their productions directly to a number of

national and regional markets, usually the first step in international business operations (Duarte, 2001 .) A number of other smaller companies now join in direct global sales: the BBC (Britain), TBS (Hong Kong), Televisa (Mexico), TV Globo (Brazil), and many others. Television program sales are still asym­ metrical, dominated by a few global firms. However, entry to the program

sales business is opening up, becoming less dominated by American firms and more open to a variety of firms from Europe, Asia, and Latin America.

The next step in internationalizing media business is to get involved in producing or distributing media abroad (Duarte, 2001). Companies can start their own operations, start a joint venture with a national or regional partner, or license their format or material to a local partner. Foreign investment is still asymmetrical, dominated by firms from the industrialized core nations.

Figure 4.1 shows 30 top media companies. It clearly shows that the largest conglomerates in media, noted above, are still U.S., European, or Japanese. However, that is changing somewhat, as companies from countries such as Mexico and Venezuela invest in broadcast or cable operations in countries such as Chile, Guatemala, or Argentina. Figure 4. 1 also shows that

a number of media companies in developing nations now figure in the world's top 30. Most of these kinds of investments could probably be considered regional, with the outside firm investing in markets within the cultural-linguistic region rather than in truly global operations. The asym­ metry of investment and partnering is most visible at the global level and most likely to change within regional markets.

Resisting Liberalization and Privatization Some countries resisted pressures to privatize and liberalize. For example,

in Egypt, the state has developed and still owns 30 television channels, which are addressed to national audiences, provinces within Egypt, and via satel­ lite to other audiences throughout the Arabic-speaking world. In 1999, the information minister said, "The Egyptian media are not for sale. I'm not in favor of privatizing the media, nor for selling the tools that shape the

Egyptian mind and protect it against the challenges facing our developing country" (Safwat Sheriff, quoted in Sabra, 1 999). However, some content, Egyptian mind and protect it against the challenges facing our developing country" (Safwat Sheriff, quoted in Sabra, 1 999). However, some content,

broadcaster retains distribution rights over such programs to protect its con­ trol and economic sustainability.

Some states have created corporations to operate their television networks while the state retains ownership. In this case, a state-owned insti­ tution becomes a commercial venture, seeking most or all of its revenue through advertising, sales, or other means typically ascribed to commercial media; these ventures are often required to show a profit, taking in more rev­ enue than they spend in expenses. A good example of this is Singapore. It

started radio as a British colony in 1 936, started television as a government­ owned national department within the Ministry of Culture in 1 963, became

a quasi-government corporation (Singapore Broadcasting Corporation) in 1980, and became a government-owned corporation (MediaCorp) in 1994, when limited competition was also allowed as part of overall economic lib­ eralization (Pong, personal communication, 2006). Some states have liberal­ ized or privatized only very recently. Cape Verde, one of the smallest African states, an island where Portuguese is spoken, announced its first private tele­ vision channel and its first cable television system in 2006; these will com­ pete with government-owned television (lnfopress, 2006).

Globalization via International Trade Regimes and Multilateral Governance

There is a good deal of accuracy in descriptions of the world economy as increasingly neoliberal. One of the main macroframes applied to analyses of global media flows and comparative media structures in the late 1980s and

1 990s was changes in rules for production and trade, particularly under the banner of free trade. A number of the rules and techniques designed to fos­ ter national production and import substitution in television programs were

ruled illegal or illegitimate, starting in the 1 990s, especially after the World Trade Organization began to limit the previous exception to trade rules that had been given to cultural industries. This changed many of the national government practices for fostering cultural industries discussed in Chapter 3

(Roncagliolo, 1995; Sanchez-Ruiz, 200 1 ; Sinclair, 200 1 ) . New international trade rules discourage nation-states from subsidiz­ ing cultural industries. The impact of this has been most drastic for film industries because those in many developing countries and in Europe depended on considerable government subsidies (Grantham, 2000). Cuts in subsidies have also hurt television in some places, although it is often easier to hide subsidies to television in the form of state advertising and subsidized telecommunications infrastructure for distributing broadcasts

Creating Global, U.S., and Transnational Television Spaces

New trade rules often prohibit quotas requiring certain proportions of national or regional production to be included in broadcasts or movie theaters. Again, this discussion has been most visible in the fight between Hollywood and some European countries, such as France, over quotas for theatrical film exhibition {Grantham, 2000). However, quotas for national content in television have been imposed by the European Union as a whole

(Schlesinger, 1 987) and by countries as diverse as Canada, China, Great Britain, South Korea, and Taiwan.

Changes in multilateral rules about media technology standards also reduce national government controls. States cannot use standards as trade barriers against imported hardware or software. Previously, a national television technical standard could be a tacit barrier against importing both television sets and television programs on video, for example. Now, nation­ states cannot as easily promote certain producers as national champions or encourage import substitution. Widely shared technical standards also facil­ itate the direct flow of media, such as videotapes, satellite television, or the Internet, across borders.

The intellectual property aspects of new trade regimes also make it harder for national or regional cultural industries to simply borrow a good program idea from elsewhere and localize or adapt it to create a national or regional version. Considerable change has moved toward formal licensing agree­ ments in which broadcasters actually pay for the formats they are adapting. The owners of such intellectual property now have considerably more power to require formal agreements and adequate payment. The World Intellectual

Property Organization and the World Trade Organization have pressed developing countries to follow copyright rules to gain access to other trade benefits, such as lowered tariff barriers for developing countries' goods. To combat plagiarism and copying of such programs, the Formats Recognition and Protection Association (FRAPA) was formed in 2000 (Moran, 2004). The United States, the European Union, and other culture-exporting nations have pressed those international organizations to adopt these measures.

These examples show us that cultural factors work with economic ones. The next section looks at migration, which combines both major economic and cultural impacts.