Walter Isaacson Andrew Schwartzman W. Russell Neuman Kurt Andersen Christopher Byron Kurt Andersen Jack Shafer Herb Stein
8:11 a.m. Friday 10/25/96
I've just discovered the meaning of media-conglomerate synergy: I find myself rooting for the Atlanta Braves. Damn Yankees.
Other than that, I agree with our moderator. The march of technology, from Gutenberg to the Internet, makes media more democratic, less vulnerable to central control, and more of a cacophony of diverse voices. In a world of free markets and free minds, we are likely to get, for better or worse, the media we deserve. For what it's worth, I enjoyed this discussion, and put it in the "for better" category.
8:39 a.m. Friday 10/25/96
I end this chat as I started it--an optimist.
I surely agree that technology offers the promise of greater choice and diversity for lower prices. But I do fear that the abundance will not be shared by everyone, and that it is possible that disparities in access will contribute to disunity rather than nationhood.
Content quality is surely better for many reasons, and I see no evidence that it wouldn't be even better if there were more diverse ownership.
As to quantity, the libertarians surrounding me in this discussion don't seem to believe that this might be because of, not in spite of, an antitrust and regulatory scheme which has promoted competition in recent years anyway. I have avoided entering the fray over the Time Warner/Fox brouhaha, but a little historical perspective might help make my point. In the early 1980s, NBC wanted to start an all-news channel, but John Malone of TCI blocked it. In exchange for giving cable carriage for what became CNBC, NBC agreed in writing not to convert it to a general service which would compete with CNN (even then, he and Time Warner controlled Ted Turner's board of directors.) Fast forward to 1996, and the FTC conditioning the Time Warner/TCI buyout of Turner upon carriage of a second news service. Voilà, MSNBC gets carriage.
Professor Stein makes an important point about the limits of the audience. The challenge is to use the technology to make us a more caring, literate, active, self-governing society. I doubt if Disney/Time Warner/Bertellsmann/ ReedElsiever/Infinity, et al., care as much about that as do their smaller competitors. Their product is on the whole blander, less challenging, and centrist. They don't want to foment revolution. That's a shame, because this country got to be as great as it is because that's what the media used to do.
An afterthought: In the previous paragraph, I reference to the European media giants. This will be an international mass media. I am not a xenophobe, so its OK with me, but I doubt that most Americans would like to have editorial decisions on how elections are covered to be directed from the other side of the world. We haven't begun to consider the implications of internationalization.
8:51 a.m. Friday 10/25/96
To My Epistolary Partners:
An unhappy camper here. I think we missed an opportunity this week. Oh, well.
Look over our week's work. We are all chowderheads. We missed the biggest issue of all.
Here we are on the Net. Here we are under the metaphoric banner of Committee of Correspondence--a delightful image of concerned citizens, quill pens in hand, writing about what concerned the man in the field, Jeb Six-Pack, who didn't want his tea taxed.
What did we talk about? Insider gossip. Who fired who? Who owns who? Who's $20 billion in debt? Interesting stuff on Sixth Avenue and Rodeo Drive, I'm sure.
The biggest issue about the MegaMergers is their growing irrelevance as the technology works its wonders, as the definition of professional journalism evolves, as the meaning of ownership evolves. Publishers in the days of the original committee had to set type by hand. The steam-driven roll press and the linotype machine turned journalism into mass marketing and the penny press. Journalism as we now know it evolved. Journalism as we now know it is about to be revolutionized. Every reader is a writer. The mechanism of mass advertising, the economic engine of the Conglomerates, won't disappear, but it will recede. The big guys don't get it. We missed it.
This week was Titanic deck-chair stuff.
Maybe some other week.
9:01 a.m. Friday 10/25/96
Yeah, I'm hopeful, too, in general. But as I passingly suggested earlier in the week, I find I have a bit of the fretful ant-democrat in me concerning the radical decentralization of information sources. Online "microjournalism" is a marvelous, exciting idea when I.F. Stone (his scrupulousness and enterprise, not his politics) is the model--if, after Bill Gates has them killed, Mike Kinsley or Jack Shafer or Jake Weisberg put up their individual Web sites, I'll happily ante up individual micropayments to read what each of them has to say each week. But in fact, much of what passes for information on the Web doesn't achieve or even aim for accuracy. While it may be good that a few poobahs like Henry Luce and Fred Friendly and Abe Rosenthal have much less of a monopoly on determining what is fit to print and broadcast, at least establishment institutions mostly were and are committed to certain reasonable standards of accuracy and truth--if nothing else, they have well-established processes of fact-gathering and verification. On the Web, it is and will remain difficult for user-readers to distinguish between the credible writers and the fraudulent nut-jobs. Thanks to the new technology, the marketplace of ideas is booming; but caveat emptor.
9:11 a.m. Friday 10/25/96
In wrapping up my own contribution to all this, let me start by saying that I really enjoyed this exercise. I think it helped encourage me to think about some of these matters a bit differently than before I started, and that alone made it worthwhile from my point of view. To pick up on the summation points by our moderator:
1. You're right, overleveraging is not a peculiarly media-related problem, but that doesn't make it any less pernicious when it involves the media. And I think you are wrong to conclude that it is not a real drain on economic resources. Look at Disney, which just this last February wrapped up its acquisition of Capital Cities/ABC. Egged into the deal by Warren Buffett, Michael Eisner agreed to pay $19 billion to acquire a company with a market value of only $14 billion and a balance-sheet value of a measly $1 billion. Worst of all, Eisner didn't have the money in the first place, and has now had to dilute his company's stock by 30 percent and issue $8 billion in debt to raise it. That $8 billion will cost Disney $700 million a year in interest charges until well into the next century. And Disney will also have to write off $450 million more annually in goodwill charges for the next 40 years. That's nearly $1.5 billion a year in potential earnings and capital investment by Disney that has been wiped out for the foreseeable future.
The cutbacks have already started. Disney has now announced, for example, a curtailment in its film-production schedule for the next year. There will be further and steeper cutbacks in the future, count on it. It is ridiculous to say this isn't a real economic cost because, for example, the money is simply being transferred as interest payments to banks, which will spend it instead. This is silly because the banks are not going to use it to increase the output of media goods, which is why the merger was done in the first place.
Finally on this point, I don't necessarily think staff reductions are inefficient at all. What I think is inefficient is when the staff reductions are so severe as to degrade the output--but are made unavoidable nonetheless because of a debt-driven squeeze on margins. This is now happening everywhere in the national media, and I know of no one in the field who hasn't had firsthand experience with it.
2. Regarding the "march of technology." It simply doesn't square with the facts to say that conglomeration is of only "trivial" significance in curtailing access to the "increasing number of sources of information" created by technology. To believe this you have to believe, for example, that John Malone is not a monopolist. Not even John Malone believes that!
3. Sure, there are countless new avenues for creative expression in the media these days. But in the main, they have all the appeal of standing up on a soapbox at Speaker's Corner in London and shouting dirty words about the Queen. Nobody even listens. Who cares if millions of people can now rant all night long on the Internet! Earlier in this panel discussion, one of the members (I think it was either Kurt or Walter) made the point that with such a babble of voices we're losing all coherence. I agree. A competitive, well-capitalized, profitable, and aggressive national media is the glue that makes this country work as a nation of ideas. What we don't much need is a bunch of Generation Xers cruising for cybersex on the Web, then e-mailing their friends about what the experience was like.
Thanks again to all concerned for inviting me to this debate. Regards.
9:13 a.m. Friday 10/25/96
I disagree with Neuman. Maybe looking down from Harvard our week's discussion looked frivolous, which is to say insufficiently abstract. From here, closer to the belly of the beast, it looked smart and frank and interesting.
2:18 p.m. Friday 10/25/96
In the teens and the '20s, newspaper barons fought circulation wars with truncheons and firebombs, ordering their enforcers to crack the heads of rival newsboys and torch their newsstands. By comparison, the current round of name-calling by Rupert Murdoch and Ted Turner over Time Warner's refusal to beam the Fox News channel into Manhattan is almost ... romantic.
The moral of the Murdoch/Turner dispute is that media moguls mostly despise one another and are only too glad to expose the malfeasance--real and imagined--of their competitors. As Christopher Byron noted earlier this week, Murdoch's HarperCollins imprint has already approached him (and others, as I have read in the press) to write a book-length, retaliatory hatchet job on Time Warner chief Gerald Levin. No doubt the Time Warner shop has its knives sharpened for Rupe. So in the short-term--interlocking directorates and Chomskyan self-censorship aside--I think we can expect the media to keep us well-informed about the media and its conflicts of interest and assorted skullduggery. As a creator and voracious consumer of media criticism, I'm prepared to concede that, if anything, the press already keeps us too well-informed on this subject.
Rereading this week's correspondence, I found myself convinced by Christopher Byron's suggestion that the debate over media giantism is moot because of a growing consensus media giants can grow too big for their own good. If you're big and not making a profit, what's the point?
As I back my way out of this week's committee, allow me to return to a theme I sounded at the beginning of the week: Without government intervention, can there be any lasting monopoly? Case in point: TCI has enjoyed two decades of power and profits thanks to monopolies granted by scores of local governments. But now, faced with competition--satellite broadcasters poaching from above and the telcos threatening from below--TCI finds its stock heading south. As broadband Internet services become as ubiquitous as the dial tone; as the manufacturing of books and CDs shifts from the factory to the retail (or even home) level; and other new technologies are invented, look for this script to be replayed. Our seemingly unassailable "media monopolies" are anything but.
2:39 p.m. Friday 10/25/96
Today's comments raise a problem that I had not noticed before. We may have not too few media outlets, but too many. I suppose that this possibility is mainly connected with the Internet, but it is probably not confined to that. What will happen when every reader can be a writer and publisher of his thoughts? For one thing, what will happen to the status of people like our panel and the moderator, who have been enjoying a somewhat exclusive position as professional writers and intellectuals? Of more general import, what terrible kinds of nonsense may go reverberating around cyberspace and upsetting the balance of society?
I think it is possible to exaggerate this problem. Writing and publishing on the Internet may be very cheap. Reading it is not. It takes a lot of time and patience. Readers will seek, not quite deliberately, some way of narrowing down the sources they look to, to those that seem trustworthy from their points of view. So authorities will emerge who certify the information as kosher. Whether these authorities will be better than William Randolph Hearst or Joseph Pulitzer or Henry Luce, I don't know. But I don't think the problem will be qualitatively different.
It is easy to be pessimistic about this. My professor, Frank H. Knight, was author of the law that bad talk drives out good. But he also said that democracy is government by discussion. For those of us who cherish democracy, there is nothing to do but participate in the discussion as honestly and responsibly as we can.
I believe that our panelists have done that this week. They have given mixed grades to media conglomerates and to each other and to the moderator as well. That is fair enough. They have given us all much to think about. I thank them most sincerely for their diligence, patience and spirit.
Andrew Schwartzman W. Russell Neuman Kurt Andersen Christopher Byron Kurt Andersen Jack Shafer Herb Stein
W. Russell Neuman Kurt Andersen Christopher Byron Kurt Andersen Jack Shafer Herb Stein