Begin forwarded message:
From: h_bray@xxxxxxxxx
Date: August 26, 2005 10:50:54 AM EDT
To: dave@xxxxxxxxxx
Subject: What media monopolies?
News Release |
| FOR IMMEDIATE RELEASE
|
| August 26, 2005
|
| CONTACT: Patrick
Ross or
Amy|
|
Smorodin|
|
202-289-8928|
|
|
|
|
| Media Monopolies Are a Myth
|
| Thierer and English Cite Declining Market
Capitalizations
|
|
|
| WASHINGTON D.C. - If the stock market is any
indication, the
|
| argument that just a few large media conglomerates
control
the|
| market for what we see, hear and read, is completely
without
|
| merit. So conclude Adam Thierer and Daniel English in
the
new
|
| Progress on Point, "Testing 'Media Monopoly' Claims: A
Look
at|
| What Markets Say," released by the Progress & Freedom
|
| Foundation. In their paper, Thierer and English
evaluate the
|
| market performance of five large media outlets and deduce
that|
| declining stock value -- market caps down 52% over the
last
|
| four years -- is a clear indication that the corporations
|
| could not possibly be acting as monopolies.
|
|
|
| According to Thierer, Director of PFF's Center for
Digital
|
| Media Freedom, and economist English, today's media
market
is
|
| more diverse and highly competitive than ever before, a
point
|
| is illustrated by a 200 percent increase in the number of
|
| media outlets over the past forty years. That
competition is
|
| reflected in the market performance of five of the
largest
|
| media operators. "By looking at the performance of
publicly
|
| traded media firms and their stock over the past five
years,
|
| it is readily apparent that monopolists do not
dominate this
|
| marketplace," Thierer and English write. "Indeed,
quite the
|
| opposite is true. Large, traditional media companies are
|
| struggling to adapt to a very rapidly evolving media
market."
|
|
|
| The authors argue that if the media industry is truly
|
| controlled by monopolies, investors would be
clamoring to
buy
|
| media stock. "Our analysis reveals that these five firms
have
|
| lost a combined 52 percent of their value (in terms of
market
|
| capitalization) over the past five years, making it
impossible|
| to conclude that these firms possess excessive market
power.
|
| Simply stated, if this industry was 'monopolistic' or
even
|
| 'oligopolistic,' its top firms would not be losing
that sort
|
| of value."
|
|
|
| Thierer and English also compare the stock
performance of
the
|
| five large media firms with the so called "new media"
|
| companies to further prove that older firms do not
monopolize
|
| the media market. "(T)he media marketplace is far more
dynamic|
| and competitive than critics imagine. If any of these
firms
|
| were 'monopolists,' they would go down in history as
some of
|
| the worst performing monopolists of all time. Not only
have
|
| they failed to recoup 'excessive' profits, but haven't
even
|
| been able to return to value of their stocks to pre-2000
|
| levels. Further, at least in terms of stock market
|
| performance, they are being easily outpaced by 'new
media'
|
| companies such as Yahoo! and Google, who are stealing
away
an
|
| increasingly large share of the advertising revenue pie."
|
|
|
| The issue of media monopolies is also explored in Media
Myths:|
| Making Sense of the Debate Over Media Ownership,
authored by
|
| Adam Thierer and recently published by The Progress &
Freedom
|
| Foundation. Media Myths debunks longstanding
arguments in
|
| favor of aggressive regulation of media ownership.
|
|
|
| The Progress & Freedom Foundation is a market-
oriented think
|
| tank that studies the digital revolution and its
implications
|
| for public policy. It is a 501(c)(3) research &
educational
|
| organization.
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