1. Media Concentration and Ownership in Global Comparison Eli Noam Professor of Finance and Economics Garrett Professor of Public Policy and Business Responsibility Director, Columbia Institute for Tele-Information Columbia University Business School Rice University November 2014 1

2. Tnx Send each other our university presidents Owl 2

3. Prof of Fin and Ec My subject is media business and media policy It is not Mexico per se. But I ddid address the mexico situation before, before the Senate in that great new building in mexico city, and before the new regulatory agtency Infetel. Which is perhaps the most qualified regulatory agency in the world. Masters degrees. In contrast to the lot we appoint in washint=gotn, almost all former congressional staffers appointed as a sinecure for past service and to make sure that their congressional bosses sit at the table. My contribution to you today, I hope, will be to provide some global numbers, which will show how Mexico performs relative to the rest of the world. 3

4. Reasons for Comparative Studies Yes, it’s useful to look at a country. But it is also useful to look at the rest of the world 4

5. And if we can identify common trends, we can identify fundamental drivers. Technological, economic, legal, whatever. It’s hard for government policy to deal with fundamental forces People make stories that politicize or personalize what is happening----about how this media mogul, or this government, or that agency, are the culprits. And that but for them, things would be so much better. 5

6. But if one can observe pretty much the same market structure and the same trends around the world, then perhaps the story is more general rather than personality-driven, or country-specific. In those situations governmetn action to change things will be a bit like King Canute stemming the tide. But if we can observe outliers, country-specific abnormalities, then we might have a situation which is not a natural equilibrium, a situation where a government can make a difference. 6

7. So this is what we have done with media oqnership and concentration Our study covers 30 countries. Mexico is one of them. 80% of world by population, and 80% by GDP 7

8. We—that’s about 70 researchers around the world, cover 30 countries, 13 media industries, and 10-25 years. Thousands of companies. What we at Columbia added to the national research teams was the common methodology, so that we could compare. It’s the national teams that did the data work. 8

9. 80% of the World by Population 9

10. 80% of the World by GDP 10

11. 13 Media Industries Investigated 1. Content Media – 1.1 Print Media Newspapers Magazines Books --1.2 Audiovisual Media Radio Broadcast TV Video Channels Film 2. Platform Media Wireline Telecom Wireless Telecom Cable TV and Satellite Multichannel Platforms 3. Internet Media ISPs Search Engines (also in Content) Online News Media (also in Content) 11

12. Methodology 12

13. 8 concentration indices used: The C4 ratio The C1 ratio The Herfindahl-Hirschman Index (HHI) The Power Index (PI) The Net Voice and Net Voice/Capita counts The Noam Media Concentration Index (NI or MOCDI) The averaged C4, C1, HHI, PI, and NI The pooled C4, C1, HHI, PI, and NI 13

14. Where S i = firm's i market share of a given industry j and where firms are ordered by size of market share. 14

15. 15

16. Wheren = number of firms participating in an industry; S i = each firm’s market share i = firm in a given industry 16

17. National Media Power Index 17

18. Power Index “Company Power Index” = Sum of company's HHI scores in 13 media industries “National Media Power Index” = Sum of the “Company Power Index” of the major media companies in a country So it is an indicator for the cross ownership of media ownership. A company with high market shares in several important industries will have a high company power index. A country with several such companies will have a high national media power index. 18

19. National Power Index definition National Power Index is calculated as the sum of the Power Indexes of major firm in that country’s media sphere Power Index, in turn, is calculated as the weighted sum of squared company shares across all media markets) Example, The National Power Index = {[20%²×(200/350)+10%²×(50/350)] + [5%²×(100/350)]} × 10000 = 250 Industry revenue Firm A market share Firm B market share TV20020% Books1005% Film5010% Total Revenue350 19

20. 20

21. Q: Who is the largest owner of media in the world? (Media = Mass media, telecom, internet) 21

22. Chinese Government 22

23. Chinese Government 23

24. Q: Who are the largest private media owners in the world? 24

25. 25

26. 26

27. 27

28. Q: Who are the largest direct personal owners of media in the world? 28

29. 29

30. 30

31. Carlos Slim, #1 31

32. Larry Page, #2 32 Sergey Brin #3

33. Roberts Family 33

34. Masayshi Son 34

35. Liz Mohn 35

36. Rupert Murdoch, #33 36

37. Q: Which organization controls most “news attention” in the world? 37

38. The government of China, through its several media organizations, accesses a truly vast share of global news attention. Almost 19% of global news attention. 38

39. TOP NEWS MEDIA COMPANIES BY ATTENTION SHARE OF WORLD POPULATION, 2004/05 AND 2009-2012 (> 0.1% SHARE, OR #1 IN THEIR COUNTRY) Entity/Company Attention Share (2004 05 2005) – 30 Countries Attention Share (2009 - 2012) – 30 Countries Attention Share (2009- 2012) - World Country of Origin GOV'T OF CHINA 30.97%29.62% 18.96% China CCTV 12.17%11.38% 7.28% China SHANGHAI MEDIA GROUP 4.28%3.64% 2.33% China HUNAN MEDIA GROUP 2.20%1.94% 1.24% China XINHUA 1.78%1.75% 1.12% China PEOPLE'S DAILY 1.26%1.14% 0.73% China CHINA NATIONAL RADIO 0.52%0.38% 0.24% China TRENDS MEDIA GROUP 0.20%0.26% 0.17% China PRASAR BHARATI (PUBLIC) 18.23%18.47% 11.82% India GOV'T OF RUSSIA 1.92%1.76% 1.13% Russia GAZPROM MEDIA 0.77%0.84% 0.54% Russia CHANNEL ONE 1.04%0.51% 0.33% Russia VGTRK 0.63%0.42% 0.27% Russia GOV'T OF EGYPT 1.75% 1.12% Egypt ERTU 1.30%1.36% 0.87% Egypt AL AHRAM 0.18%0.14% 0.09% Egypt AL AKHBAR 0.17%0.14% 0.09% Egypt AL GOMHOURIA 0.09%0.10% 0.06% Egypt NILE TV NETWORK 0.01% Egypt 39

40. Entity/Company Attention Share (2004 05 2005) – 30 Countries Attention Share (2009 - 2012) – 30 Countries Attention Share (2009-2012) - World Country of Origin GLOBO GROUP 1.46%1.71% 1.09% Brazil MURDOCH GROUP 1.19%1.49% 0.95% US 21ST CENTURY FOX 0.00%1.19% 0.76% US NEWS CORP. 1.19%0.30% 0.19% US BCCL 1.15%1.46% 0.93% India GRUPO TELEVISA 1.25%1.21% 0.77% Mexico ZEE ENTERTAINMENT 0.73%1.06% 0.68% India DISNEY 0.57%0.97% 0.62% US COMCAST 0.33%0.88% 0.56% US REDSTONE 0.74%0.76% 0.49% US CBS 0.11%0.50% 0.32% US VIACOM 0.63%0.26% 0.17% US FININVEST 0.60%0.63% 0.40% Italy DOGAN GROUP 1.11%0.59% 0.38% Turkey RAI (public) 0.63%0.55% 0.35% Italy TV AZTECA 0.49%0.53% 0.34%Mexico CTC MEDIA 0.78%0.51% 0.33% Russia NHK (public) 0.54%0.51% 0.33% Japan BERTELSMANN 0.50% 0.32% Germany 40

41. The largest private media firm, by attention time, is Globo in Brazil, with 1.09% for the entire world. Brazil, too, has a large population (192 million) and its media is dominated by Globo. Rupert Murdoch’s two companies combined are the second largest privately owned news providers, by attention, and the largest US-headquartered news firm (, 0.95% for the entire globe). 41

42. Televisa is #8 worldwide #4 worldwide among private companies Larger in news attention than Any US company except for Murdoch Larger than any European media firm 42

43. The Main Players in Mexico 43

44. Carlos Slim 44

45. 45

46. 46

47. 47

48. 48 Candidate Enrique Pena Nieto and Televisa owner Emilio Azcarraga

49. 49

50. 50

51. 51

52. 52 Ricardo Salinas Pliego

53. 53

54. 54 O.E.M: Mario Vasquez-Rana

55. 55 O.E.M’s owner Mario Vasquez-Rana with Candidate Enrique Pena Nieto

56. Newspapers Owned by OEM Mexico city and metro area El Sol de Mexico La Prensa ESTO El Sol de Mexico/Mediodia Diario Deportivo Marcador Trato Directo Central region El Occidental[1] - Guadalajara, Jalisco El Occidental[1] El Sol de Guadalajara - Guadalajara, Jalisco ESTO Jalisco - Guadalajara, Jalisco La Prensa Jalisco - Guadalajara, Jalisco El Sol de San Luis - San Luis Potosí, San Luis Potosí El Sol de San Luis La Prensa del Centro - San Luis Potosí, San Luis Potosí ESTO del Centro - San Luis Potosí, San Luis Potosí El Sol de Toluca - Toluca, Estado de Mexico El Sol de Toluca EXTRA de El Sol - Toluca, Estado de Mexico El Sol del Centro - Aguascalientes, Aguascalientes El Sol del Centro El Sol de Morelia - Morelia, Michoacan El Sol de Morelia El Sol de Zamora - Zamora, Michoacan El Sol de Zamora Diario de Queretaro - Querétaro, Querétaro Diario de Queretaro El Sol de Irapuato - Irapuato, Guanajuato El Sol de Irapuato El Sol de Salamanca - Salamanca, Guanajuato El Sol de Salamanca El Sol de San Juan del Rio - San Juan del Rio, Querétaro El Sol de San Juan del Rio El Sol del Bajio - Celaya, Guanajuato El Sol del Bajio Noticias Vespertinas - Leon, Guanajuato Noticias Vespertinas Gulf of Mexico region Diario de Xalapa - Xalapa, Veracruz Diario de Xalapa ESTO de Veracruz - Xalapa, Veracruz El Sol de Cordoba - Cordoba, Veracruz El Sol de Cordoba El Sol de Orizaba - Orizaba, Veracruz El Sol de Orizaba El Sol de Tampico - Tampico, Tamaulipas El Sol de Tampico El Sol de la Tarde - Tampico, Tamaulipas North region El Heraldo de Chihuahua - Chihuahua, Chihuahua El Heraldo de Chihuahua El Heraldo de la Tarde - Chihuahua, Chihuahua El Mexicano - Ciudad Juarez, Chihuahua El Mexicano El Sol de Durango - Durango, Durango El Sol de Durango Diario de Durango - Durango, Durango El Sol de Parral - Hidalgo del Parral, Chihuahua El Sol de Parral El Sol de Zacatecas - Zacatecas, Zacatecas El Sol de Zacatecas Noticias de El Sol de la Laguna - Torreon, Coahuila Noticias de El Sol de la Laguna ESTO del Norte - Torreon, Coahuila East region El Sol de Cuautla - Cuautla, Morelos El Sol de Cuautla El Sol de Cuernavaca - Cuernavaca, Morelos El Sol de Cuernavaca El Sol de Hidalgo - Pachuca, Hidalgo El Sol de Hidalgo El Sol de Puebla - Puebla, Puebla El Sol de Puebla La Voz de Puebla - Puebla, Puebla ESTO de Puebla - Puebla, Puebla El Sol de Tehuacan - Tehuacan, Puebla El Sol de Tehuacan El Sol de Tlaxcala - Tlaxcala, Tlaxcala El Sol de Tlaxcala El Sol de Tulancingo - Tulancingo, Hidalgo El Sol de Tulancingo Pacific coast and northwest region Cambio Sonora - Hermosillo, Sonora Cambio Sonora El Sol de Acapulco - Acapulco, Guerrero El Sol de Acapulco El Sol de Mazatlan - Mazatlan, Sinaloa El Sol de Mazatlan El Sol de Sinaloa - Culiacan, Sinaloa El Sol de Sinaloa El Sol de Culiacan - Culiacan, Sinaloa La Prensa de Sinaloa - Mazatlan, Sinaloa ESTO de Sinaloa - Mazatlan, Sinaloa El Sol de Tijuana - Tijuana, Baja California El Sol de Tijuana ESTO de las Californias - Tijuana, Baja California La Voz de la Frontera - Mexicali, Baja California La Voz de la Frontera El Centinela - Mexicali, Baja California El Sudcaliforniano - La Paz, Baja California Sur El Sudcaliforniano Southeast region Diario del Sur - Tapachula, Chiapas Diario del Sur El Heraldo de Chiapas - Tuxtla Gutierrez, Chiapas El Heraldo de Chiapas ESTO de Chiapas - Tuxtla Gutierrez, Chiapas El Heraldo de Tabasco - Villahermosa, Tabasco El Heraldo de Tabasco 56

57. “Organizacion Editorial Mexicana, also known as OEM, is the largest Mexican print media company and the largest newspaper company in Latin America. The company owns a large newswire service, it includes 70 Mexican daily newspapers, 24 radio stations, 1 TV channel and 44 websites. [1] [1] Organización Editorial Mexicana was founded by Mario Vazquez Raña in 1976. The circulation of the print edition of La Prensa, one of OEM's newspaper is more than 450,000 readers on a daily base. It is considered the most widely read newspaper in Mexico City. According to Alexa.com, the online version of the media company is one of the most visited webpages in Mexico. [2]Mario Vazquez RañaMexico CityAlexa.com [2] Organizacion Editorial Mexicana owned El Sol de Mexico, ESTO and La Prensa. Circulation combined tops every news print media in the Mexican capital. [3]” [3] ““57

58. 58

59. 59

60. 7. What countries have particularly high media concentrations? 60

61. Looking at content media only, China has the highest average concentration at 8,317. Also high are Russia (4,132), South Africa (4,151), Ireland (4,047), and Mexico (3,816). The lowest average content industry concentrations are in the US (1,042), Spain (1,665), Taiwan (1,834), and Japan (1,850). 61

62. For platform media, the list of the highest concentration countries is similar: China (10,000), Turkey (6,439), South Africa (6,570), Egypt (5,882), and Mexico (5,332). The lower concentrations are in US (1,817), India (2,526), the Netherlands (2,840) and Finland (2,929). Not a single country’s platform concentration is below the antitrust standard of “highly concentrated”. 62

63. Finding: Media Concentration in the US is among the lowest in the World. In Mexico, it is among the highest in the world. 63

64. Weighted Average HHI – All Media 64

65. Pooled Average HHI – All Media 65

66. Weighted Average HHI – Content Media 66

67. Pooled Average HHI – Content Media 67

68. Weighted Avg HHI - Platform Media 68

69. Pooled HHI - Platform Media 69

70. Mexico: Top 10 National News Companies in National News Attention Share MEXICO2004/05 2009 or Most Recent Televisa47.74%44.35% TV Azteca18.70%19.47% Organizacion Editorial Mexicana8.73%8.66% El Universal2.00%2.50% Grupo Reforma2.00%1.51% Medios Masivos Mexicanos1.36%1.37% Megacable1.89%1.62% MVS Comunicaciones0.57%1.24% Grupo Multimedios0.86%0.69% La Jornada0.72%0.69% C1084.6%82.1% HHI2,7202,437 70

71. USA: Top 10 National News Companies in National News Attention Share 71 USA2004/05 2009 or Most Recent Comcast4.07%11.87% GE5.82%0.00% Murdoch8.18%9.36% Redstone6.53%9.05% Disney7.36%8.26% Time Warner9.73%5.99% Gannett3.07%2.31% Tribune2.32%1.90% Discovery Communications1.10%1.71% Yahoo2.34%1.69% Advance0.88%1.66% Liberty1.05%1.52% The Washington Post Company1.24%1.39% DirecTV0.00%1.30% AOL0.00%1.29% Hearst1.19%1.24% Time Warner Cable0.00%1.21% New York Times1.19%1.17% Clear Channel1.46%1.17% EchoStar (DISH)0.79%0.98% Cablevision0.73%0.80% C1045.73%54.29% C2053.37%66.36% HHI331427

72. HHI Concentration of News Media (Weighted by Time Spent) 72

73. HHI Concentration of News Media (Weighted by Revenues) 73

74. US News Media C20 74

75. News Media HHI (Weighted By Time Spent) 75

76. News Media C10 76

77. For some reason, the observation of relatively low concentration in the US relative to other countries seems to annoy a heck of a lot of people. They like to find comfort in the belief that out there in Sweden and France and Switzerland and Brazil, media are diverse and open, while in America corporate media conglomerates rule the roost. But the numbers don’t support that at all. 77

78. Mind you, media concentration is not low in the US. And it’s been rising in the past few years. Whereas on average in the world, it’s been declining slightly. I will show that later. But that’s nothing in comparison to most other countries. And not just Italy with Berlusconi who controls TV and is also big time in newspapers and books. It’s France where the biggest defense contractor lagardere was also the biggest media company. Or Brazil, where one family is dominant in TV. 78

79. Or democratic Sweden, where one company holds 95% of all cable TV, and 2 families and two government controlled companies run much of the rest. Where one privileged public broadcast organization accounts for most of radio. 79

80. COUNTRIES’ UNWEIGHTED AVERAGE C1 – All Media 80

81. COUNTRIES’ WEIGHTED AVERAGE HHI 81

82. COUNTRIES’ WEIGHTED AVERAGE HHI – Content Media 82

83. COUNTRIES’ WEIGHTED AVERAGE HHI – Platform Media 83

84. COUNTRY MEDIA POWER INDICES – ALL MEDIA 84

85. 85

86. COUNTRIES’ POOLED OVERALL SECTOR C1 – All Media 86

87. COUNTRIES’ POOLED OVERALL SECTOR HHI – All Media 87

88. Power Index Concentration by Country 88

89. Platform Media HHI Concentration and its Trends 89

90. One can readily see how concentrated the platform sub-sector is – its industries are typically in the HHI range of 3,000-6,000. A second observation is that in almost all cases, this concentration is declining, often quite substantially, in the range of 1- 6.5% per year. That reduction is low for the US, but that country also has the lowest concentration as a base. Concentration is both high and rising for the UK, Canada, and Switzerland. 90

91. For Argentina and Brazil, platform concentration is relatively low because the wirleine telecom companies are regional rather than national. 91

92. Content Media HHI Concentration and its Trends 92

93. What you can see here is that content media concentration in Argentina and Brazil has been strongly rising. 93

94. Not a single country is in the South-West quadrant, where concentration is low and falling. Only one country (the US) is in the low concentration sector, though with substantial growth. 94

95. A number of countries are highly concentrated, but the trend is one of a reduction. These are China, Mexico, India, South Korea, Poland, Finland, and Egypt. The problematic cases are Switzerland, Netherlands, Australia, Italy, Turkey, France, Belgium, and Russia. 95

96. 96

97. 8. What are Factors For High National Media Concentration? 97

98. The size of population was a fairly decent-sized negative factor for concentration in the newspaper and multi-channel TV industries. Geographic size of a country was a moderately sized factor for newspapers (a higher concentration) and ISPs (a lower concentration). 98

99. Per capita income in a country was a negative factor for the concentration in mobile and wireless industries, and a positive one for multi-channel platforms. Educational levels were a factor for newspapers and for multichannel (both associated with lower concentration). The “quality of regulation” and a variety of other “good government” metrics showed no statistically significant correlation for any of the industries. 99

100. An analysis would try to capture country-specific characteristics that affect concentration in that industry. A number of variables were hypothesized and tested, such as: Population size Geographical size Income Education level Per Capita Spending Regulatory quality (for regulated media industries) Years as a democracy since 1900. 100

101. FACTORS FOR MEDIA INDUSTRY CONCENTRATION Industry ConstantlnPopulationlnGeoSizelnIncomelnEducationLevel lnPerCapita SpendinglnRegQuality lnYearsAs DemocracyR2R2 Newspapers14.115 -0.412 (-4.30) 0.106 (1.83) 0.47 (1.66) -1.676 (-2.49) -0.284 (-2.19) 0.606 (0.17) -0.192 (-1.59) 0.6432 Books8.841 0.038 (0.10) 0.043 (0.21) 1.933 (1.21) -3.008 (-1.32) -0.213 (-0.34) -3.239 (-1.27) -0.323 (-0.61) 0.4314 Magazines6.833 -0.229 (-1.40) 0.1 (0.94) 0.836 (1.19) -1.087 (-0.90) -0.337 (-1.27) -0.324 (-0.56) -0.104 (-0.55) 0.2331 Radio18.634 -0.179 (-0.95) -0.154 (-1.22) -0.803 (-1.21) 0.531 (0.39) 0.372 (1.26) 0.213 (0.31) -0.219 (-1.06) 0.3300 Broadcast TV14.134 -0.432 (-0.38) -0.916 (-1.15) -0.795 (-1.48) 1.131 (1.11) 0.113 (0.05) 0.279 (0.56) -0.031 (-0.21) 0.4012 Multichannel9.948 -0.277 (-1.98) 0.021 (0.27) 0.769 (1.84) -1.917 (-2.06) -0.177 (-1.02) 0.061 (0.13) -0.062 (-0.25) 0.449 Online News13.48 0.126 (0.73) -0.203 (-1.47) -0.088 (-0.15) -0.891 (-0.77) 0.293 (1.16) -0.624 (-0.71) -0.220 (-1.25) 0.4045 Wireline12.108 -0.025 (-0.37) -0.057 (-1.14) -0.194 (-0.60) 0.372 (0.63) 0.045 (0.27) -0.218 (-0.73) -0.166 (-1.86) 0.4364 Wireless6.845 0.021 (0.58) -0.014 (-0.53) 0.341 (2.42) -0.340 (-1.11) -0.115 (-0.95) 0.011 (0.01) -0.228 (-4.90) 0.5552 ISP7.065 -0.029 (-0.41) -0.137 (-2.74) 0.430 (1.23) 0.001 (0.00) -0.486 (-2.93) 0.451 (1.36) -0.291 (-2.97) 0.6524 Film1.7450.539 (2.37) -0.122 (-0.81) -0.556 (-0.62) 2.311 (1.15) -0.336 (-0.80) 0.465 (0.46) -0.147 (-0.55) 0.6055 101

102. The results show that: Size of population was a fairly decent-sized factor for the concentration in the newspaper and multi-channel TV industries, where it is associated with reduced concentration (negative correlation). Population was not a statistically significant factor in the other industries. 102

103. Geographic size of a country was a moderately sized factor for newspapers (positive) and ISPs (negative). Conceivably (with moderate statistical significance) it was a factor for radio, TV, online news, and wireline. It is a contributing factor in the film industry, perhaps because larger countries are exporters of premium products with high scale effect. 103

104. Per capita income in a country was a negative factor for the concentration in mobile and wireless industries and a positive one for multi-channel Educational levels were a factor for newspapers and for multichannel (both negative). 104

105. Per capita spending on a medium was a negative factor for newspapers and ISPs. The quality of regulation (from an index provided by the World Bank) made no statistical difference for any of the industries. 105

106. Years as a democracy were, interestingly, a factor for platform industries (wireline, wireless, ISPs) but not for content media. We also looked at other variables: government spending (correlation with wireless), R&D spending (correlation with wireline, ISP), economic growth (correlation with online news; wireless; and radio). There was no gain in explanatory power. 106

107. INDUSTRYREGRESSIONR2R2 Newspapers lnHHI = 15.476 – 0.298 lnPop – 0.263 lnGDP/Cap + 0.042 lnGeoSize – 0.172 lnDemocratization (2.475) (1.369) (0.558) (1.284) 0.322 TV lnHHI = 14.872 – 0.094 lnPop – 0.666 lnGDP/Cap – 0.215 lnEcoGrowth + 0.339 lnRegQuality (1.091) (3.739) (1.580) (0.797) 0.402 Multi-channel lnHHI = 13.017 – 0.253 lnPop – 0.135 lnDemocratization + 0.010 lnRegQuality (2.551) (1.072) (0.026) 0.263 Film lnDomesticShare = – 0.057 + 0.533 lnPop – 1.226 lnGovShareGDP + 0.023 lnGDP (2.950) (1.221) (0.118) 0.772 107

108. INDUSTRYREGRESSIONR2R2 Wireline lnHHI = 14.246– 0.127 lnGDP – 0.215 lnRegQuality + 0.138 lnRD% – 0.200 lnDemocratization (2.381) (1.024) (1.291) (3.172) 0.485 Wireless lnHHI = 9.400– 0.029 lnPop – 0.193 lnGovSpendingGDP – 0.041 lnGrowth – 0.041 lnDemocratization + 0.098 lnRegQuality (0.926) (1.078) (0.794) (3.564) (0.671) 0.447 ISP lnHHI = 9.514 – 0.098 lnSpend/Cap – 0.121 lnGeoSize – 0.241 lnDemocratization – 0.277 lnRD% + 0.043 lnRegQuality (1.580) (2.639) (2.944) (1.876) (0.146) 0.548 108

109. Finding: Industry concentrations in countries affected by variables of population, wealth, and governance. 109

110. 110

111. 9. Analyzing the Divergence in Concentration 111

112. We can use these results. when we compare countries, the obvious response is always, yes, ok, but wouldn’t you expect media concentration to be higher in small countries? In poor countries? Etc. So what we say is, yes, let’s take these factors into account. Based on our world-wide regression analysis, let’s predict what a country’s concentration SHOULD be. And then let’s see how much the reality diverges from the predicted value of the model. 112

113. 113 Chile Brazil Argentina

114. 114 Argentina Brazil Chile

115. 115 Chile Argentina Brazil

116. 116 Chile Brazil

117. 117 Chile Argentina Brazil

118. 118 Chile Argentina Brazil

119. 119 Chile Argentina Brazil

120. 120 Brazil Chile Argentina

121. In wireless, China shows a very high divergence in terms of actual vs. expected concentration. Also high are Mexico, Turkey, and Switzerland. India is at the other extreme. For wireline, it is Japan that is at the high end, together with Turkey, Australia, South Africa, Spain, and Mexico. At the low end are the US, the Netherlands, Finland, and India. 121

122. 122

123. 123 Brazil Chile Argentina

124. 124 Brazil Chile Argentina

125. 125 Brazil Chile Argentina

126. 126 Brazil Chile Argentina

127. 127 Brazil Chile Argentina

128. 128 Brazil Chile Argentina

129. 129 Brazil

130. 130 Argentina Chile Brazil

131. 131 Brazil Chile Argentina

132. 132 Brazil Chile Argentina

133. Divergence of Actual National Media Concentration over Predicted Concentration – News HHI 133

134. Divergence of Actual National Media Concentration over Predicted Concentration – Power Index All Media Industries 134

135. 135

136. OECD: mex profit margins double that of oecd average At the same time, the lowest rate of telecom investment Near bottom in per cap lines fixed and mobile. Loss of 30 bil/yr to the national economy. 136

137. 137

138. 10. Are There Different Market Characteristics for Media in the Countries of the North Versus Those of the South? 138

139. Yes. First, In many emerging countries, the media are firmly owned or controlled by governments. Second, Even where media companies are private, In many emerging markets, the top individual news media owners have an amazingly high share in news attention, often well above 40%. These companies have often achieved their strong mindshare by close relations with a government in power that awarded preferential licenses or advertising. 139

140. (This is not limited to developing world: in France, President Mitterand in the 1980s awarded the country’s exclusive pay-TV license to Canal Plus, a company headed by his former chief-of-staff. In the US, the FCC under President Eisenhower, awarded no TV license to any newspapers company that had editorially endorsed his Democratic rival.) 140

141. Once they achieve dominance, the media companies are hard to dislodge by subsequent governments or competitors. Indeed, given their influence over public opinion, they may receive additional benefits. In some cases, their principals become political players themselves, as in the case of Italy, Indonesia, or Thailand. 141

142. The implicit quid-pro-quo of economic favors and media support eradicates the concept of media as “speaking truth to power”. It would be comforting to believe that the role of governments in the media world declines and with it the government’s leverage. But that is not so. On a large range of issues – telecom infrastructure, content production support and protectionism, intellectual property rights, merger approvals, access and interconnection rules and pricing, standards, etc—the role of governments may well be increasing, and with it the potential for favoritism. 142

143. A great deal of attention has been given to the media power of such Murdoch, Redstone, or Berlusconi. It does not, condone such individual media power in rich countries if one also flags the problem of media in developing and emerging countries. In a good number of these countries the market shares and mindshares of domestic media firms are, within their societies, even higher, often by a substantial margin. 143

144. The critique of media power cannot be asymmetric. Developing and emerging countries cannot get a free pass on anti- pluralism. Indeed, they need active media even more than well-developed democracies. In Mexico, three companies dominate their respective market niches, Carlos Slim in telecom (85% in wireline and 71% in wireless), the Azcarraga family in TV (68.3%), and O.E.M. in newspapers (59.4%). 144

145. In many emerging markets, individual news media owners have an amazingly high share in news attention: the Marinho family (Globo, Brazil, 35.3%), Emilio Azcárraga (Televisa, Mexico, 44.4%), the Dogan family (DMG, Turkey, 31.6%), Alexander Rodnyansky (CTC Media, Russia, 15.6%), and the de Noble family (Grupo Clarín, Argentina, (30%). (It is also very high in Italy, where Silvio Berlusconi’s firms hold 37.7% of news attention, and in Sweden, where the Bonnier family holds 21.1%). 145

146. . Of course, a delicate balance must be found to domestically grown content and distribution, but it is not found in the domestic dominance of politically well- connected companies. 146

147. The growth incentives to national media empires in poorer countries is still rising. For now, cross-ownership is higher in well- developed media markets. This suggests that the presence of media firms in multiple media industries rises with economic and media development. In consequence, as countries develop economically and their media grow in technological and business complexity, one should expect further trends to cross- ownership, without necessarily the counter- forces of markets and regulation. 147

148. 148

149. There are several factors that contribute to this: Poorer countries are economically smaller, and hence sustain fewer media firms. Poorer countries tend to be characterized by powerful governments whose TV and press dominate the media. Cause and effect in this relation are intertwined. Crony capitalism. 149

150. In some instances, a strong governmental role in media is rationalized as a defense to offset powerful private media firms. This was the case, for example, in Venezuela, as it had been in France under President Charles de Gaulle. The reverse happens, too, when a strong private media firm is seen as an offset against powerful State media. An example is Italy, where Fininvest has a major share and emerged as an offset to the State RAI. 150

151. The organizations with the greatest news attention are not necessarily those with the highest revenues. The media organizations of China (CCTV, SMG, Xinhua, etc, whether separate or integrated), of India (Prasar Bharati, BCCL, Zee, Sun), Russia (Gazprom Media, CTC), Egypt, Brazil (Globo), Mexico (Televisa), and South Africa (SABC, Naspers) have a vastly greater hold on people’s attention than on revenues. These are the media organizations of the emerging world – the BRICS media. 151

152. In contrast, the leading media organizations of the developed world are a combination of traditional media conglomerates and successful startups. Their hold on attention, large as it is, is dwarfed by the BRICS media. But when it comes to revenues, it is the other way around. Here, the Murdoch Group, Google, Comcast, Disney, Bertelsmann, and Time Warner outpace China. Vivendi and Redstone are nearly as large too. Only one other BRICS media organization is among the top 30 media groups (Globo, #17) 152

153. These media companies are headquartered in OECD countries and among these countries the economically strongest account for 24 of the 30 largest media content firms by revenue: US (12), Japan (5), France (4), and Germany (3). Thus, the emerging media system of the world is one of BRICS vs. Top-OECD, of mindshare vs. marketshare. 153

154. Concentration in news media is associated with less economic development, not with more. (And with a strong state role, as discussed in the preceding section). 154

155. 155

156. 11. Where is the number of “Media Voices” high? 156

157. Voices Here is another way to look at things– to count the ‘voices’. Which we define as a company that has more than 1% of its media market. And where the same company cross-owns media outlets in several media industries, we still count it only as one ‘net voice’, not as several. 157

158. COUNTRIES’ NUMBER OF MEDIA VOICES, (CONTENT COMPANIES WITH 1% OR MORE OF MARKET SHARE IN THEIR MEDIA INDUSTRY) 158

159. COUNTRY’S NUMBER OF VOICES (NET) (COMPANIES WITH >1% OF MARKET SHARE, 2009 OR MOST RECENT) 159

160. Worldwide, while the US has the highest number of voices, on a per capita basis it is actually quite low (0.2 per one million people), due to its population size and higher threshold for a voice definition. Brazil and India, whose net n values are 35 and 54 to China’s 19, are also close to the bottom. In China, it is a combination of state ownership and population that lands it in last place for voices per capita. Even with the average net n that separates out state enterprises, China would still be at the bottom. 160

161. The highest number of voices is by Ireland and Switzerland. Both countries have many media offerings spilling over from neighboring countries, which inflates the number. In the next tier are Finland, Belgium, and Israel (also with major spill-overs). 161

162. So here, the US has among the highest number of voices, behind Russia. Russia’s high number is partly due to its big geography, and mostly due to its multiple language nationalities. So one might conclude that the US is doing fine. Not so fast. If you look at the number of media voices per capita, the picture changes dramatically. 162

163. Countries’ Per Capita N (Number of Voices Weighted by Population), Companies with >1% of Market Share in its Industry, 2009 or Most Recent 163

164. Now, the US is really far down the line. Relative to its population, the number of its media voices is small. And who is high up? Ireland. Israel. Switzerland. Finland It’s the combination of active politics, entrepreneurship, and small population. So it has the highest per capita number of voices. Contrast this with Egypt, China, Mexico, india. 164

165. Other countries with a high count of voices per capita are Finland, Sweden, Ireland, and Portugal. These are all relatively small countries that maintain nevertheless a fairly rich assortment of media voices. On the other extreme are countries that are large as well as poor, and there the number of voices per capita is the smallest– China, India, Egypt, Mexico 165

166. Note also the difference of voices in industrialized countries versus developing countries. 8 times as much. 166

167. COUNTRIES’ PER CAPITA VOICES (COMPANIES WITH >1% OF MARKET SHARE, 2009 OR MOST RECENT) 167

168. REGRESSION OF NET N PER CAPITA, 2009 OR MOST RECENT 168

169. 169

170. 170

171. Who are the world’s most dominant media companies? 171

172. The first way to rank companies is by revenues. Of the world’s top ten media companies by revenues, all are platform telecommunications providers. The top 5 organizations are the Government of China (with the combination of China Mobile, China Unicom, China Telecom, CCTV and other media activities), AT&T (US), Telefónica (Spain), NTT (Japan), Vodafone (UK), Verizon (US) and Deutsche Telekom (Germany). 172

173. In the content media, the Murdoch Group (News Corp and 21 st Century Fox combined) is the largest private media organization with the highest revenues, at $42.8 billion. In 2004/05, the company with the highest content revenues was Time Warner with more than $35 billion. However, after several spin-offs, Time Warner’s revenues had dropped to $12 billion and seventh place position. 173

174. Google, with just $3 billion in 2004/05, became the company with the second highest content revenues in 2010, with $24.8 billion. With its enormous growth rate, it either is or will be shortly the world’s largest content company. Google already is the content company with the highest Power Index with a score of 288 in content. 174

175. The second way to rank media organizations is by the Power Index. The content company with the highest power index was Google with a score of 288. Its market shares around the world are huge, and it effectively dominates the search engine industry. The content producer with the second highest global power index in the world is the Government of China, with a PI of 170. The Murdoch Group is third with 108. For details, see the chapter on “Companies.” 175

176. TOP 10 MEDIA COMPANIES BY REVENUE 176

177. TOP 50 PLATFORM MEDIA COMPANIES Top 50 Platform Companies by Revenue Company/Organization Total 2009 Platform Revenues (mil US$) Total Global Power Index Government of China141,710905 China Mobile 90,013 446 China Telecom21,04874.1 China Unicom 30,649 45.0 AT&T (US) 143,965 312 Verizon (US) 102,176 166 NTT (Japan) 77,163 330 Telefónica (Spain) a a 59,144191 Vodafone (UK) 58,496 112 Deutsche Telecom (Germany) 52,956 192 Comcast (US)46,07057.2 Orange (France) 45,749 170 Softbank (Japan)44,94044.1 Telstra (Australia)39,02263.7 Telemar Participações (Oi, Brazil) (incl. Portugal Telecom) 32,434 80.4 America Móvil/ Grupo Carso (Mexico) 31,49283.8 DirecTV (US)28,80922.4 Time Warner Cable (US)25,20920.0 177

178. TOP 10 CONTENT MEDIA COMPANIES BY REVENUE 178

179. Top 10 Platform Media Companies by Revenue 179

180. Top 20 Platform Companies by Total Global Power Index Company Total Global Power Index Government of China356 NTT (Japan)352 AT&T (US)328 Telefónica (Spain)228 Deutsche Telekom (Germany)204 Vodafone (UK)164 Orange (France)136 Telecom Italia (Italy)98 Verizon (US)95 Grupo Carso (Mexico)91 Telemar Participações (Oi, Brazil)87 Telstra (Australia)67.7 Svyazinvest (Russia)52.7 21st Century Fox (US)50.5 Oger Group (Turk Telekom, Saudi Arabia)50.5 British Telecom (UK)50.5 Telkom (South Africa)48.9 Softbank (Japan)48.7 Comcast (US)46.7 Bell Canada Enterprises/CTV (Canada)45.7 [1] [1] Separates out the 45% share that Vodafone (UK) has in Verizon. This 45% is counted towards Vodafone, above. 180

181. Top 20 Content Companies by Total Global Power Index Company Total Global Power Index Google (US)233.7 News Corp. (US)57.2 Comcast (US)52.5 21st Century Fox (US)48.0 Globo Group (Brazil)33.7 Lagardère (France)33.3 Disney (US)31.0 ARD (Germany)30.2 Bertelsmann (Germany)30.2 BBC (UK)29.8 Fininvest (Italy)28.4 Time Warner (US)28.0 Liberty (US)25.5 Government of China25.5 PRISA (Spain)25.1 Prasar Bharati (India)23.2 ProSiebenSat.1 (Germany)19.6 France Télévisions (France) 18.3 RAI (Italy)17.3 Televisa (Mexico)15.6 181

182. 182

183. 183

184. 184

185. 185

186. Here, too, does the US end up fairly low in the ranking 186

187. We can also calculate the power index for individual companies, across the world. We do this by taking their national power index, and aggregate it across countries, accounting for the different size of countries by a weighting. Who is, in that antitrust sense, the most powerful company in the world??? 187

188. Google! Not by revenues. By revenues lots of companies are ahead of it. But by the high shares in many countries in a still moderately sized business. And its not just bigger in terms of an index, it’s hugely bigger. And its overall index has been growing enormously. And the runners up are? No great surprize– the major media firms news corp, Time Warner, Disney, vivendi, Bertelmann; And the major european tlecom companies telefonica, FT, vodafone, 188

189. Companies with Highest Power Index 189

190. Top 20 Content Companies by Total Global Power Index 190

191. Top 20 Platform Companies by Total Global Power Index 191

192. 192

193. Concentration of News Media 193

194. U. Which companies dominate the attention for news? 194

195. The combined share of firms that are top in news attention is enormous everywhere. The C10 in news attention in 8 countries is above 90%. It is between 80-90% in ten countries. It is nowhere below 50%. Thus, in most of the world, the top 10 firms command over 80% of news attention. The share of the top firm in terms of news attention is, on average, 30%. 195

196. The government of China In the aggregate, it has 29.6% of the 30-country world news attention in 2013, and 19.8% of the entire globe. CCTV alone would still command 11.5%) of the world’s news attention (and 7.3% for the entire globe) and be the second largest news media company in the world. 196

197. The largest private media firm, by news attention time, is Globo in Brazil, with 1.09% for the entire world (1.71% for our 30 countries). India’s BCCL is the third-largest privately owned media firm in the world, with 0.93% for the entire world of global news attention share in 2012. 197

198. Rupert Murdoch’s two companies combined are the second largest privately owned news providers, holding a global attention share of 1.49% of the 30-country world and 0.95% of the entire world. It is the largest US-headquartered news firm. 198

199. Most other large firms dominate large, single-country markets. Televisa of Mexico is the third largest private news firm in world news attention (1.21% for 30 countries and 0.77% for the world). 199

200. WEIGHTED AVERAGE HHI – NEWS MEDIA (WEIGHTED BY REVENUE) 2004/52009 or Most Recent China 82627217 Egypt 53394511 Mexico 49604286 Italy 34543999 Russia 45353993 Ireland 39813941 South Africa 40333850 South Korea 44783744 India 41593371 Chile 33573212 Portugal 34393172 Belgium 31483120 Australia 27493029 WORLD AVG30602912 Israel 31362875 Finland 34682870 Turkey 28532817 Netherland 22382439 Germany 25322420 Brazil 20922412 Switzerland 19232377 France 23582355 Taiwan 23852152 Sweden 18572030 UK 21642027 Argentina 17271877 Japan 16211690 Canada 14501683 Poland 17241591 Spain 16651487 US 710804 200

201. Top 3 National News Companies in National News Attention Share (Short Version) Country#1#2#3C10HHI ArgentinaGrupo Clarin30.3 Telefonica (Spain) 9.2 Albavision (Mexico) 8.372.51182 BrazilGlobo Group35.3Folhapar9.4Estado Group6.972.81453 ChileTVN (public)17.5 Universidad Catholica / Luksic Group 14.1El Mercurio11.791.51006 Mexico Grupo Televisa 44.4TV Azteca19.5OEM8.782.12437 SpainPRISA20.0 RTVE (public) 13.9Planeta9.970.4878 UKBBC (public)28.6 Murdoch (News Corp.+ 21st Century Fox, US) 14.2ITV8.867.21142 USComcast11.9Murdoch (News Corp.+ 21st Century Fox) 9.4Redstone (CBS + Viacom) 9.154.3427 201

202. NATIONAL NEWS MEDIA CONCENTRATION (HHI WEIGHTED BY ATTENTION) 202

203. In most of the world, then, the top 10 firms command over 80% of news attention. And nowhere do they command less than 50%. In terms of HHI, concentrations are high in China (9,200) and Egypt (8,037), Russia (3,113), India (4,322), Ireland (2,905), Italy (2,855), Finland (2,706), Portugal (3,503), and Mexico (2,437) 203

204. The share of the top firm (C1) in terms of news attention is, on average, 30%. Very high HHIs exist where governments control media operations and hold a very high C1 share of the news attention: – Government of China (95.9%) – Government of Egypt (89.5%) – Government of Russia (53.3%) 204

205. In many countries, the public service broadcasters are strong at the number 1 spot: – India (Prasar Bharat, 65.4%) – Ireland (RTE, 50.9%) – Finland (YLE, 47.5%) – Portugal (RTP, 33.9%) – South Africa (SABC, 40.5%) 205

206. Private media firms are at the #1 spot in: – Mexico (Televisa, 44.4%) – Brazil (Globo, 35.3%) – Turkey (Dogan, 31.6%) – Argentina (Grupo Clarín, 30.0%) – Spain (PRISA, 20.0%) – Israel (Channel 2, 19.8%) – Australia (Seven Network, 16.9%) 206

207. Private media firms with more than 30% exist rarely: – Mexico (Televisa, 44.4%) – Brazil (Globo, 35.3%) – Turkey (Dogan, 31.6%) – Argentina (Grupo Clarín, 30.0%) – Italy (Fininvest, 35.7%) 207

208. 208

209. Company Shares in Global News Media Attention 209

210. TOP NEWS MEDIA COMPANIES BY ATTENTION SHARE OF WORLD POPULATION, 2004/05 AND 2009-2012 (> 0.1% SHARE, OR #1 IN THEIR COUNTRY) Entity/Company Attention Share (2004 05 2005) – 30 Countries Attention Share (2009 - 2012) – 30 Countries Attention Share (2009- 2012) - World Country of Origin GOV'T OF CHINA 30.97%29.62% 18.96% China CCTV 12.17%11.38% 7.28% China SHANGHAI MEDIA GROUP 4.28%3.64% 2.33% China HUNAN MEDIA GROUP 2.20%1.94% 1.24% China XINHUA 1.78%1.75% 1.12% China PEOPLE'S DAILY 1.26%1.14% 0.73% China CHINA NATIONAL RADIO 0.52%0.38% 0.24% China TRENDS MEDIA GROUP 0.20%0.26% 0.17% China PRASAR BHARATI (PUBLIC) 18.23%18.47% 11.82% India GOV'T OF RUSSIA 1.92%1.76% 1.13% Russia GAZPROM MEDIA 0.77%0.84% 0.54% Russia CHANNEL ONE 1.04%0.51% 0.33% Russia VGTRK 0.63%0.42% 0.27% Russia GOV'T OF EGYPT 1.75% 1.12% Egypt ERTU 1.30%1.36% 0.87% Egypt AL AHRAM 0.18%0.14% 0.09% Egypt AL AKHBAR 0.17%0.14% 0.09% Egypt AL GOMHOURIA 0.09%0.10% 0.06% Egypt NILE TV NETWORK 0.01% Egypt 210

211. Entity/Company Attention Share (2004 05 2005) – 30 Countries Attention Share (2009 - 2012) – 30 Countries Attention Share (2009-2012) - World Country of Origin GLOBO GROUP 1.46%1.71% 1.09% Brazil MURDOCH GROUP 1.19%1.49% 0.95% US 21ST CENTURY FOX 0.00%1.19% 0.76% US NEWS CORP. 1.19%0.30% 0.19% US BCCL 1.15%1.46% 0.93% India GRUPO TELEVISA 1.25%1.21% 0.77% Mexico ZEE ENTERTAINMENT 0.73%1.06% 0.68% India DISNEY 0.57%0.97% 0.62% US COMCAST 0.33%0.88% 0.56% US REDSTONE 0.74%0.76% 0.49% US CBS 0.11%0.50% 0.32% US VIACOM 0.63%0.26% 0.17% US FININVEST 0.60%0.63% 0.40% Italy DOGAN GROUP 1.11%0.59% 0.38% Turkey RAI (public) 0.63%0.55% 0.35% Italy TV AZTECA 0.49%0.53% 0.34%Mexico CTC MEDIA 0.78%0.51% 0.33% Russia NHK (public) 0.54%0.51% 0.33% Japan BERTELSMANN 0.50% 0.32% Germany 211

212. The government of China, through its several media organizations, accesses a truly vast share of global news attention. In the aggregate, it has 29.6% of the 30- country world news attention in 2013. If we include the population of other countries beyond the 30 that are covered, it would still be a huge share, almost 19% of global news attention. 212

213. Even if we unbundle China’s news organization, CCTV alone would still command 11.4% of the 30-country world’s news attention (and 7.28% of the global news attention) and be the second largest news media company in the world. The explanations for these high shares are simple: a huge population (1.3 billion) and state control over most news media outside several online portals and print magazines. 213

214. The largest private media firm, by attention time, is Globo in Brazil, with 1.71% (1.09% for the entire world). Brazil, too, has a large population (192 million) and its media is dominated by Globo. Rupert Murdoch’s two companies combined are the second largest privately owned news providers, by attention, and the largest US-headquartered news firm (1.49% for 30 countries, 0.95% for the entire globe). 214

215. The combined global news share of those top five US companies (technically, seven companies) is 4.7%. in the 30-country world, and 3% for the whole world. The combined share of all US media firms in Table 37.14 is 6.44% of the 30-country world and 4.05% globally. The combined news share of EU- headquartered media firms is 5.97% in the 30- country world, and 3.63% in the global market. 215

216. Of individual owners, the largest controls over news attention are held by the Marinho family (Globo), Rupert Murdoch (News Corp and 21 st Century Fox), Emilio Azcárraga (Televisa), Silvio Berlusconi (Fininvest), Brian Roberts (Comcast), Alexander Rodnyansky (CTC Media), Sumner Redstone (CBS and Viacom), S. Narsing Rao (BCCL), and Subhash Chandra (Zee). 216

217. 217

218. 14. Where is there a strong role of public (state) ownership in media concentration? 218

219. Public (i.e. state and state-corporate) ownership has been decreasing, for all media, from 18.4% in 2004 to 15.2% in 2012. Public ownership for content fell from 17.8% to 17.5%. For platforms, it fell from 18.2% to 14.4%. It is highest in countries where public incumbents, usually in platform industries, control the national infrastructure. 219

220. In radio, even after liberalization in the 1980s, the national market shares of public service radio broadcasters remained quite high (55.2% for the BBC in the UK, 36.5% for the ARD regional stations in Germany, 49% for RAI in Italy). This is remarkable insofar as these shares are not based on a formal monopoly. 220

221. The countries with the lowest percentage of public owned market share are Belgium, Argentina, Brazil, Mexico, and the US, all of which had less than 1%. 221

222. The World Bank study mentioned earlier (Schleifer et al., 2001/Djankov, 2003) reviewed 97 countries and identified a state ownership, on average, of 29% of major newspapers, 60% of TV stations, and 72% of the top radio stations. Twenty-one percent of the countries had a government monopoly on newspapers, and 44% on TV stations. 222

223. In Africa, governments control 61% of the top five newspapers (by circulation) and 84% of TV audiences, with 71% of countries having a state monopoly. In the Middle East, and North Africa, in 2001 all countries had a state monopoly over TV broadcasting, and held 90% of newspapers by circulation. (The exception was Israel.) 223

224. % PUBLIC OWNERSHIP IN COUNTRY MARKETS – ALL MEDIA 224

225. Of the regiuons of the world, governmental ownership of media is lowest in Latin America 225

226. Mex needs public media as a yardstick and alternative. 226

227. Public (State) Media Share of News Attention 227

228. % Public Ownership of News Media (News Attention) 228

229. 229

230. 16.What countries have a high foreign ownership of its media? 230

231. Foreign ownership of media has been increasing in most countries, rising from a world average of 21.9% in 2005 to 26% in 2013 for all media industries. The growth has been driven primarily by internationalization in telecom, especially in mobile, and in the non-broadcast audiovisual media, enabled by lowering of laws favoring domestic ownership. 231

232. The countries with the highest percentage of foreign-ownership of media are Ireland (53.6%), Chile (65%), Argentina (66.8%), Brazil (60.2%), the UK (50%), and Turkey (49.9%). 232

233. % FOREIGN OWNERSHIP IN COUNTRY MARKETS – ALL MEDIA 233

234. % FOREIGN OWNERSHIP IN COUNTRY MARKETS – CONTENT MEDIA 234

235. % Foreign Ownership of News Media (By News Attention) 235

236. % FOREIGN OWNERSHIP IN COUNTRY MARKETS – PLATFORM MEDIA 236

237. 237

238. 17.What countries are high exporters of media? 238

239. Top Global Media Exporters (by %) CompanyExport Percentage Vodafone (UK)89.0% Pearson (UK)86.7% Google (US)79.4% America Movil77.1% TeliaSonera (Sweden/Finland)72.8% Liberty (US)72.0% MTN (South Africa)70.4% Naspers (South Africa)70.4% 21st Century Fox (US)68.9% Softbank (Japan)67.9% Telefónica (Spain)64.8% Bertelsmann (Germany)63.9% Vimpelcom61.0% News Corp. (US)61.0% Viacom (US)59.9% Bauer (Germany)59.7% Bonnier (Sweden)44.9% Telecom Italia42.2% Turkcell (Turkey)41.1% Deutsche Telekom (Germany)39.3% British Telecom (UK)39.0% Time Warner (US)35.3% Disney (US)34.8% PRISA (Spain)34.0% SK Group (South Korea)29.9% 239

240. Top Global Media Exporters (by Revenue) CompanyExport Vodafone (UK)65681 Telefónica (Spain)53872 America Movil45731 Google (US)39829 Softbank (Japan)34497 Deutsche Telekom (Germany)30494 21st Century Fox (US)21168 News Corp. (US)20561 Telecom Italia16610 AT&T (US)14095 Vimpelcom14068 Verizon (US)13176 TeliaSonera (Sweden/Finland)11791 British Telecom (UK)11466 Bertelsmann (Germany)10259 Time Warner (US)9865 Liberty (US)8775 Viacom (US)8316 MTN (South Africa)8213 Pearson (UK)7841 Government of China7448 Telstra (Australia)6299 Disney (US)4826 China Mobile 4312 Comcast (US)4094 240

241. Top US Media Exporters (by Percentage) CompanyExport Percentage Google (US)79.4% Liberty (US)72.0% 21st Century Fox (US)68.9% News Corp. (US)61.0% Viacom (US)59.9% Time Warner (US)35.3% Disney (US)34.8% Yahoo (US)23.3% Hearst (US)21.3% Dish Network (US)18.5% CBS Corporation (US)11.9% Verizon (US)11.4% AT&T (US)10.9% Comcast (US)6.7% Advance (US)6.1% CenturyLink (US)1.9% Time Warner Cable (US)0.0% 241

242. TOP MEDIA COMPANIES BY EXPORT PERCENTAGE, 2009 OR MOST RECENT (> 10% OF TOTAL REVENUE FROM EXPORTS) Company Total Revenue (mil $) Non-domestic revenues (Export) (mil $)Export% Vodafone (UK) a 73,76665,68189.0 Pearson (UK)9,0437,84186.7 Google (US)50,17539,82979.4 America Móvil (Mexico)59,30045,73177.1 Liberty (US)12,1978,77572.0 MTN (South Africa)11,6678,21370.4 Naspers (South Africa)2,7191,91470.4 Softbank (Japan)50,80434,49767.9 Murdoch Group (US)64,42441,79264.8 - 21st Century Fox 30,71821,16868.9 - News Corp. 33,70620,56161.0 Bertelsmann (Germany)16,06510,25963.9 242

243. Top US Media Exporters (by Revenue) CompanyExport Google (US)39829 21st Century Fox (US)21168 News Corp. (US)20561 AT&T (US)14095 Verizon (US)13176 Time Warner (US)9865 Liberty (US)8775 Viacom (US)8316 Disney (US)4826 Comcast (US)4094 Dish Network (US)2633 Hearst (US)1910 CBS Corporation (US)1731 Yahoo (US)1160 Advance (US)413 CenturyLink (US)333 Time Warner Cable (US)0 243

244. Top Export Countries (All 13 Industries) CountryExport RevenueShare (of Total Export Revenue) UK7685928% US5483020% Germany3952714% Spain3849714% Mexico3215012% France174236% Italy83043% Australia45992% Japan21891% Ireland *21271% Sweden17711% Finland1450% Total278420100% *: 1913 of 2127 is accounted by SingTel (Singapore), current owner of Eircom 244

245. COUNTRY SHARES OF WORLD MEDIA EXPORTS, 2013 Country Country's Share of World Media Exports Country’s Share of World Media Market US23.9% 35.4% UK14.8% 5.7% Spain9.5% 3.9% France9.2% 4.5% Mexico8.0% 1.1% Germany7.5% 6.7% Japan6.4% 8.8% South Korea3.5% 3.9% Italy3.2% 3.0% Russia2.7% 2.1% Sweden2.3% 0.9% South Africa1.8% 0.9% 245

246. The US is highest, at 23.9% in world share of non-domestic media activities. However, The US world export share is much smaller than its share in the overall world media market, which is 35.4%. That means that the domestic role of US media is much higher than the world average, and the export activity, while large in absolute terms, is lower than world average. 246

247. Export “over-achievers” are the UK (14.8% vs. 5.7%) Spain, France, Mexico (8.0% vs. 1.1%, mostly due to Carlos Slim’s America Movil), Sweden, and South Africa. 247

248. For the top 50 media companies, the average share of exports (defined as non- domestic revenues) as part of their overall turnover was 38.6% in 2013. The company with the greatest share of revenue outside of its home country was Vodafone (89% of revenue outside of the United Kingdom). Pearson (UK, 86.7%), Google (US, 79.4%), America Móvil (Mexico, 77.1%), and Liberty (US, 72%). 248

249. Is there a common denominator for these export-intensive companies? Several are based in rich and large countries where media firms expand globally from positions of success. Others originate in less developed countries, with companies, mostly with a protected secure and often national base, seek expansion by moving beyond their borders. Companies also originate in different industries. If one industry is singled out, it would be mobile telecom with 4 of the top 10 companies that have the highest export intensity. 249

250. However, The US world export share is much smaller than its share in the overall world media market, which is 35.3%. That means that the domestic role of US media is much higher than the world average, but its export activity, while large in absolute terms, is below average, in comparison to GDP, and relatively low in comparison to domestic media activity. 250

251. 251

252. S. Is there a convergence in market structure among the various media industries? 252

253. We find a convergence in the concentration of media industries relative to each other. High-concentration industries have mostly been trending downwards, while low-concentration industries have risen (the exception are search engines.) The standard deviation – the measure of the industries’ divergence from the average -- in the concentration of the 4 media industry sectors dropped from 1,512 in 2000 to 1,026 in 2013. 253

254. Finding : The Content Media Sector’s Concentration Trend is converging with that of Platform media. 254

255. 255

256. 21. Who are the media owners, and what do they own? 256

257. There are major differences in the ownership of content media and platform media. 257

258. Few of the top 20 platform companies have major individual owners. The main exception is America Movil with Carlos Slim holding 52%. Several other large platform firms have a high individual ownership stakes but originated as a media or internet company with a presence in platforms. Most of these companies have a dual stock structure. 258

259. US institutional investors have good- sized ownership stakes in many of the top 20 platform companies around the world, though rarely over 5%. Content firms tend to be privately owned. Most of the top content companies have major individual owners 259

260. A World Bank study (Shleifer et al, 2001) of major media enterprises in 97 countries finds that only 4% of them were widely held by shareholders. 2% were owned by employees. In contrast, families control 57% of newspapers and 34% of TV stations. 260

261. What are the reasons for such high levels of individual or family ownership? Economists, going back to Demsetz (1989) concluded that the non-financial “amenity potential” of controlling media outlets, such as fame, influence, and favorable policy are high and therefore create incentives to acquire control. 261

262. Control is often assured by preventing a shareholder democracy, through ‘super- voting’ share categories. Great discrepancies exist for the equity percentage and voting percentage of many major content companies: Google; News Corp/21 st Century Fox; Comcast; Lagardère; Bertelsmann; Liberty; Televisa; Bouygues; CBS; Viacom; etc. In each case, a founder or his heirs protect their control through complex stock structures. 262

263. 263

264. What are the priority problems in Media Concentration? 264

265. 1. The Problem of Growing Content Media Concentration 265

266. 3. The China Problem 266

267. 5. The Developing Countries and BRICS Problem 267

268. P.Are there different market characteristics for media in the countries of the North versus those of the South? 268

269. News Concentration, Poverty, and Economic Development 269

270. 270

271. There are several factors that contribute to this: Poorer countries are economically smaller, and hence sustain fewer media firms. Poorer countries tend to be characterized by powerful governments whose TV and press dominate the media. Cause and effect in this relation are intertwined. Crony capitalism. 271

272. In some instances, a strong governmental role in media is rationalized as a defense to offset powerful private media firms. This was the case, for example, in Venezuela, as it had been in France under President Charles de Gaulle. The reverse happens, too, when a strong private media firm is seen as an offset against powerful State media. An example is Italy, where Fininvest has a major share and emerged as an offset to the State RAI. 272

273. The organizations with the greatest news attention are not necessarily those with the highest revenues. The media organizations of China (CCTV, SMG, Xinhua, etc, whether separate or integrated), of India (Prasar Bharati, BCCL, Zee, Sun), Russia (Gazprom Media, CTC), Egypt, Brazil (Globo), Mexico (Televisa), and South Africa (SABC, Naspers) have a vastly greater hold on people’s attention than on revenues. These are the media organizations of the emerging world – the BRICS media. 273

274. In contrast, the leading media organizations of the developed world are a combination of traditional media conglomerates and successful startups. Their hold on attention, large as it is, is dwarfed by the BRICS media. But when it comes to revenues, it is the other way around (see Table 37.9). Here, the Murdoch Group, Google, Comcast, Disney, Bertelsmann, and Time Warner outpace China. Vivendi and Redstone are nearly as large too. Only one other BRICS media organization is among the top 30 media groups (Globo, #17) 274

275. These media companies are headquartered in OECD countries and among these countries the economically strongest account for 24 of the 30 largest media content firms by revenue: US (12), Japan (5), France (4), and Germany (3). Thus, the emerging media system of the world is one of BRICS vs. Top-OECD, of mindshare vs. marketshare. 275

276. Concentration in news media is associated with less economic development, not with more. (And with a strong state role, as discussed in the preceding section). 276

277. In many emerging markets, individual news media owners have an amazingly high share in news attention: the Marinho family (Globo, Brazil, 35.3%), Emilio Azcárraga (Televisa, Mexico, 44.4%), the Dogan family (DMG, Turkey, 31.6%), Alexander Rodnyansky (CTC Media, Russia, 15.6%), and the de Noble family (Grupo Clarín, Argentina, (30%). (It is also very high in Italy, where Silvio Berlusconi’s firms hold 37.7% of news attention, and in Sweden, where the Bonnier family holds 21.1%). 277

278. Around the world, the organizations with the greatest news attention are not those with the highest revenues. The media organizations in BRICS countries have a vastly greater hold on people’s attention than on revenues. These are the media organizations of the emerging world – the BRICS media. 278

279. In contrast, the leading media organizations of the developed world – “OECD media” – consist of a combination of traditional media conglomerates and successful startups. Their hold on national and international attention, large as it is, is dwarfed by the BRICS media. 279

280. But when it comes to revenues, such ranking is quite the other way around. Now, the Murdoch Group, Google, Comcast, Disney, Bertelsmann, and Time Warner outpace China. Vivendi and Redstone are nearly as large too. Only one other BRICS media organization is among the top 30 media groups (Globo, #17). 280

281. 281

282. In many emerging markets, the top individual news media owners have an amazingly high share in news attention, often well above 40%. These companies have often achieved their strong mindshare by close relations with a government in power that awarded preferential licenses. 282

283. (This is not limited to developing world: in France, President Mitterand in the 1980s awarded the country’s exclusive pay-TV license to Canal Plus, a company headed by his former chief-of-staff. In the US, the FCC under President Eisenhower, awarded no TV license to any newspapers company that had editorially endorsed his Democratic rival.) 283

284. The implicit quid-pro-quo of economic favors and media support eradicates the concept of media as “speaking truth to power”. It would be comforting to believe that the role of governments in the media world declines and with it such leverage. But that is not so. On a large range of issues – telecom infrastructure, content production support and protectionism, intellectual property rights, merger approvals, access and interconnection rules and pricing, standards, etc—the role of governments may well be increasing, and with it the potential for favoritism. 284

285. The critique of media power cannot be asymmetric. Developing and emerging countries cannot get a free pass on anti- pluralism. Indeed, they need active media even more than well-developed democracies. In Mexico, three companies dominate their respective market niches, Carlos Slim in telecom (85% in wireline and 71% in wireless), the Azcarraga family in TV (68.3%), and O.E.M. in newspapers (59.4%). 285

286. Supporting a media protectionism that serves as a shield for major domestic companies under the guise of media souvereignty does no favor to these societies. Of course, a delicate balance must be found to domestically grown content and distribution, but it is not found in the domestic dominance of politically well- connected companies. 286

287. Implications for media management analysis Economists have increasingly been modeling media as engaged in a two-sided markets– selling content to audiences and audiences to advertisers. But now, in the sitution of having to please governments, the analytical issue is one of a three-sided market– with the firm having to optimize with respect to audiences, advertisers, but also governments. To government they have to offer positive impressions on voters. In return they get from government, in effect, market shares and thus pricing power. But this favorable treatment also lowers tv audince satisfaction and thus audiences and thus advertising profits. TVGlobo in Brazil is an example. 287

288. 7. The Internet Problem 288

289. Finding: The Internet Media Are Rapidly Rising in Concentration 289

290. The internet has been the great hope for media pluralism. It is supposed to open established powerful media and create pluralism around the world, impervious to efforts by governments to control it. This optimistic scenario is unlikely to happen. First, because governments can control its use, as China has demonstrated. More fundamentally, the underlying economics of the internet media is one of great economies of scale, and of high network effects. 290

291. Our findings, more generally, show that differences in the concentration levels of different media industries are correlated with the capital intensity of that media industry. 291

292. The consequence is that if media become more capital-intensive in the future, their industry concentration will rise. The internet will play a positive role in niche markets of the ‘long tail’, where entry becomes easier and scale is low, and competition from large players is not a major factor. But off the long tail – at the center of media activities, with general news, mass entertainment, infrastructure, and central nodes such as clouds—the opposite is the case. 292

293. The internet raises capital intensity of key segments of media. Companies such as Netflix, Apple iStore, Amazon.com, Google, and its YouTube, have global market shares that far exceed those of conventional media. Successful internet companies with high market share in some of their operations are also able to extend them into other media activities, as Apple or Google have demonstrated. 293

294. This goes beyond online. The example of Jeff Bezos’ (founder of Amazon.com) buying the Washington Post might be part of a broader pattern. Thus, the internet, far from being the solution to media power, will prove to be part of the problem. 294

295. 12. The Fundamental Economics Problem 295

296. The fundamental problem is that the underlying economics of the media sector are those of high fixed costs, low marginal costs, 296

297. And thus there are high economies of scale and high network effects. And this means oligioply, at best. So if you do not like that equilibrium – and I do not– then the conclusion has to be that of some structural regulation 297

298. Which means some regulatory ceilings and interventions in media markets And now the question is, how to prevent governments and administrations from using this as a tool to pressure media to conform. 298

299. And the problem is, that the underlying economics result in equilibria which we do not like And these fundamental economics are quite powerful, and show themselves globally, so they are not just due to some particularly greedy empire builder, or a pliant and complacent regulator, or a legally corrupt legislature. 299

300. Ratio of Avg Total Assets to Avg Total Revenue 300

301. Media equilibrium structure likely to assume oligopoly structure Fundamental economic reasons: – High fixed costs – Low marginal cost – Competition – Leads to over-investment, price deflation, failure, consolidation to achieve price stability 301

302. This convergence tendency suggests that the mass media sector, from a relatively lower level of concentration, will move to a higher level that is more similar to that of the overall information sector. 302

303. And what’s more, this will get worse, inevitably. The tech and economic trends are those of high fixed costs, low marginal costs, and thus favor size. So the equilibria of market structure will shift to higher concentration. Just watch what will happen in the newspaper business. 303

304. And the related challenge is that though media concentration in the US has been going up— I’ll talk about that--the HHI numbers for most media industries are not low, they are often not in the high concentration range, either. The industries are more oligopolies than monopolies. And this then creates problems if one wants to use antitrust for media reform. 304

305. Which means some regulatory ceilings and interventions in media markets And now the question is, how to prevent governments and administrations from using this as a tool to pressure media to conform. 305

306. And the problem is, that the underlying economics result in equilibria which we do not like And these fundamental economics are quite powerful, and show themselves globally, so they are not just due to some particularly greedy empire builder, or a pliant and complacent regulator, or a legally corrupt legislature. 306

307. And therefore, if we do not like this, and I do not, the question is what to do. changing this will be very difficult. It’s bucking very fundamental tides. And We don’t want government to have power, and worse– power plus discretion--- in this area. 307

308. 13. The Problem of Low Impact Regulation 308

309. Earlier in this presentation, in the statistical estimation of correlations with a country’s level of media concentration, neither the variable “quality of regulation” nor several other “good government” metrics showed statistically significant association with concentration. This is a disappointing result from a good-government perspective. It points out to the problem of media control. 309

310. It is generally undesirable to give governments a strong role in the structure or behavior of media, since such powers are inevitably abused or corrupted. Just look at what is happening in Argentina To that principled objection is added one of practicality. Media regulation was easier accomplished before digital convergence and global information flows. But now, tools such as licenses, ownership ceilings, cross-ownership rules, etc. are becoming ineffectual. 310

311. How would they deal with the market power of Google? With quality issues of Skype? The internet replaces a tight national oligopoly with a less tight but international one. There would be more diversity but less national content? How would one deal with that? 311

312. In the end, the most effective tool for government to assure pluralism, outside of curbing clear abuses, is to help generate alternative media, and to protect their access and interconnection. It is important for academics, public-policy analysts, NGOs, companies, and governments to think creatively about new approaches to these issues, balancing innovation, investment, and the public interest in the emerging environment. 312

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315. Conclusion So to conclude: 1. Mexico’s media concentration is extreme, even in a world where media is often highly concentrated. 2. the technology trends and the economic trends add further concentration outlook 3. While one may do something about the concentration of traditional media, such as by ceilings and merger prohibitions etc, it becomes harder to intervene in the online world. So this is not good news, and it requires smart and courageous policy. And I hope that this discussion here today will help them. 315

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317. The End Thank you! noam@columbia.edu 317

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