[IP] What media monopolies?
Begin forwarded message:
From: Robert Lee <robertslee@xxxxxxxxxxx>
Date: August 27, 2005 1:05:25 PM EDT
To: dave@xxxxxxxxxx
Subject: RE: [IP] What media monopolies?
Reply-To: robertslee@xxxxxxxxxxx
The notion that one can infer whether a company is a monopoly from
its stock
price is not only true, it is fatuous and disingenuous. It almost
deserves
no response, but not responding is playing into their game.
Stock price is a very complex subject. I assume the lying liar that
wrote
this article would have us infer that a monopoly's stock would rise
like a
nickel rocket (but unlike a nickel rocket, would not fall to earth). In
fact most mature monopoly stocks do not do that. They tend to be market
performers or laggers. They also tend to be dividend payers.
We are all techies here. Look at Microsoft. It is a monopoly. It
has so
goddamned much money that it could buy a country. Let us look at its
price.
It is half of what it was 5 years ago. Why? Because it has
saturated its
market, the third planet from the sun and has no where to go from
here. How
much do you pay for a pile of money that is not being deployed? If
you are
a monkey, a lot. We are not monkeys.
How fast did Philadelphia Electric Company stock rise?
How fast did Bell Atlantic stock rise?
Abercrombie and Fitch put them all to shame.
Monopolies are not growth engines. By definition they have nowhere
to grow
into. Instead they tend to grow fat, management enriching themselves,
while charging enough to keep management in double chins but not
awake the
sleeping regulators. Too, they tend to be unionized (because there
is no
soul in the company...no psychic income for working there) and they sign
adverse labor deals with unions because the costs can be merely
passed on.
Monopolies simply enjoy the lack of competition. They have no
research and
development divisions, they have no marketing divisions. They clip
coupons.
Nothing monopolies do would ever create a gradient for a quickly rising
stock price.
And these people know that. That is the horrid part. They are
purposely
lying. To whom? To people who can't read? No. To people who can?
Obviously. But how many people who know how to read and read things
like
this do not know the truth? I don't know. But monopolies have all this
money they can spend on specious and ridiculous stuff like this and a
press
release like this is a sure sign of a monopoly.
Now that is a premise that you can bank on.
Robert Lee
-----Original Message-----
From: David Farber [mailto:dave@xxxxxxxxxx]
Sent: Friday, August 26, 2005 1:48 PM
To: Ip Ip
Subject: [IP] What media monopolies?
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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