Estratégia de diversificação de conglomerados globais de mídia que examinam seus padrões e determinantes

Estratégia de Diversificação de Conglomerados Globais de Mídia: Examinando seus Padrões e Determinantes.

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Karlsson, Charlie & Rouchy, Philippe, 2014. "Clusters de mídia e economia do conhecimento metropolitana", Working Papers 2014/01, Instituto Blekinge de Tecnologia, Departamento de Economia Industrial.

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Integração solta na indústria da música popular.

Por Burkart, Patrick.

O oligopólio da Big Four music pratica o gate-gate cultural para os mercados globais. No entanto, apesar da consolidação no setor, a indústria fonográfica está mais vagamente integrada em relação ao restante da indústria do entretenimento do que nas Cinco Grandes. Como o setor se concentrava, também se diferenciava em duas classes de propriedade. As Quatro Grandes são divididas igualmente, duas com afiliações a conglomerados de entretenimento e duas sem tais afiliações. No entanto, as principais, como um grupo, continuam a compartilhar forte poder de mercado como um cartel. No futuro, a interação das duas díades afiliadas e não afiliadas nos mercados de música on-line pode divulgar regras coordenadas para preços de CD e controle sobre o acesso a catálogos digitais. Este artigo considera a distribuição da música na Internet como uma prática tecnológica que contribui para, e talvez reforça, uma integração frouxa.

Introdução: A posse e controle de canais de distribuição de música.

Ser o porteiro era o lugar mais lucrativo, mas agora estamos em uma metade do mundo sem portões. A Internet permite que os artistas se comuniquem diretamente com seus públicos; não precisamos depender apenas de um sistema ineficiente em que a gravadora promove nossos discos para o rádio, a imprensa ou o varejo, e depois volta e espera que os fãs descubram nossa música. (Courtney Love)

Courtney Love e Dixie Chicks têm desempenhado um papel ativista entre artistas da música popular que, pública e privadamente, desafiam suas relações contratuais com as grandes gravadoras como exploradoras (Philips, "Judge", "Dixie Chicks"). A afirmação do amor de que a Internet não entrará em contato com os principais - foi quase um manifesto para os artistas se livrarem do jugo da indústria e se unirem online em solidariedade. O momento revolucionário nunca chegou para a indústria da música; As vantagens acumuladas de uma indústria com mais de um século de manutenção de portas previsivelmente dominaram os efeitos potencialmente desestabilizadores da distribuição pela Internet (McCourt e Burkart). Além disso, a era do Napster esfriava o zelo inicial de muitos artistas por contornar os rótulos com distribuição direta da Internet aos fãs.

A transformação da indústria da música em uma indústria de serviços, ou uma indústria de bens descartáveis, está bem encaminhada, mas são as grandes gravadoras que a lideram - não os artistas. A distribuição digital de música é uma tendência reforçada pela consolidação do setor, pelas mudanças tecnológicas, pelos ajustes legais ao caso do Digital Millennium Copyright Act e pelo Napster, e pela recessão econômica de 2001-02. A adoção pelo setor de um modelo de e-business não é um exemplo de inovação no setor; de fato, as grandes gravadoras foram arrastadas relutantemente para a distribuição pela internet. Em vez disso, o modelo Celestial Jukebox (ou o modelo "jukebox celestial") (Burkart e McCourt; Mann) é uma estratégia de enfrentamento para uma migração fan-fan de serviços on-line, inicialmente por meio de canais não autorizados da Internet. O modelo Jukebox consolida as vantagens do gargalo de distribuição das quatro grandes gravadoras, pois projeta o controle na Internet através do poder de mercado do oligopólio, o uso de gerenciamento de direitos digitais e a retenção de acesso a catálogos. Tecnologicamente, o Celestial Jukebox contribui para uma reorganização do "poder da rede" na Internet, o que dá à indústria fonográfica novos controles de gargalo no licenciamento e distribuição, ao mesmo tempo em que fortalece uma relação de poder desigual com músicos e fãs.

A Jukebox também é uma caixa de bloqueio, na medida em que fornece tanto um modelo de receita quanto um design tecnológico para proteger o conteúdo on-line como "ativos" valiosos da Web. Para as gravadoras Big Four (UMG, Sony-BMG, EMI e Warner), as vantagens da distribuição de música on-line sobre canais tradicionais de distribuição incluem custos marginais extremamente baixos ou insignificantes de copiar e distribuir arquivos de música digital, a eliminação de inventários sobrecarregados ou obsoletos. e sem perdas de devoluções de produtos ou "encolher" devido a danos. A Jukebox também oferece aos negócios da era industrial alguns controles de idade da informação sobre os processos de negócios, incluindo a produção just-in-time de programação de streaming, informações de vendas em tempo real e a capacidade de automatizar o marketing de envio. Essas vantagens indevidas são especialmente importantes em um ambiente de desaceleração do crescimento de vendas, redução de folhas de pagamento e outras incertezas. Esses provedores de serviço de música removem música do alcance do consumidor como um recurso tangível e colecionável, mesmo quando anunciam suas ofertas como uma maneira altamente íntima e pessoal de consumir e experimentar música (Burkart e McCourt). As práticas de produzir, distribuir e consumir música estão em fluxo.

A seguir, discutirei o modelo Celestial Jukebox no contexto de sua operação com o restante da indústria global de entretenimento. Primeiro, descrevo a dinâmica do mercado contemporâneo como experimentando uma contração simultânea e uma diferenciação incompleta dos conglomerados de mídia integrados verticalmente. A reestruturação criou uma distinção afiliada e não filiada entre os membros do cartel: aqueles afiliados a conglomerados de mídia integrados e aqueles sem tais afiliações. Não obstante essa distinção, a indústria opera como um cartel em busca de aluguéis com legitimação política derivada nos EUA de ramos legislativos e judiciais. Então, eu descrevo o rápido surgimento de downloads e fluxos de música pagos como uma fonte de receita para os principais, e o rápido desinvestimento dos principais dos sites constituintes para o Celestial Jukebox como um afrouxamento adicional de uma indústria fortemente integrada. À medida que os fãs de música vão cada vez mais on-line para baixar músicas, a indústria fonográfica racionaliza e economiza mais com a terceirização da distribuição digital. A entrada do Big Four no e-commerce permite que eles acumulem e centralizem "ativos" de música em câmaras de compensação, além de possibilitar acesso a revendedores autorizados. Na ausência de regulamentação ou legislação que preveja o licenciamento compulsório, a formação de câmaras de compensação centralizadas de música demonstra como as indústrias culturais estão seguindo o setor financeiro para a mobilização do "poder da rede" (Sassen) como estratégia de negócios. A mobilização de poder de rede para vantagens competitivas começou com a criação das lojas de música on-line que preencheram o vácuo deixado pelo desaparecimento do Napster.

Nos últimos dez anos do século XX, a indústria fonográfica tornou-se mais diferenciada dos conglomerados de mídia totalmente integrados, criou e depois vendeu e terceirizou seus canais de distribuição digital, e começou a distribuir bens descartáveis ​​(há muito tempo aperfeiçoou sua produção). O modelo Celestial Jukebox adotado pela indústria é na verdade uma terceirização dupla: o cartel compra dos provedores de serviços de música, entidades criadas para explorar o vácuo deixado pelo Napster. Enquanto isso, os sistemas de gerenciamento de direitos digitais usados ​​pela Jukebox, que podem forçar os arquivos de música a "expirar", restringem o acesso dos fãs à música de forma a forçar os consumidores a comprar música descartável ou a alugar serviços em tempo real. a compra de cópias impressas de música codificada. A migração da distribuição e consumo de música para a Internet marca um período na história da música no qual as redes digitais assumem um papel proeminente na mediação da cultura musical. A centralidade da indústria musical global e a cultura popular global nos EUA contribuem para uma monocultura musical.

Integração solta da música com a indústria do entretenimento.

As megafusões no setor musical têm hoje a mesma justificativa que no passado. Economias de escopo aprimoradas possibilitam que as fusões e aquisições melhorem as eficiências e as previsões de lucratividade em uma empresa, reduzindo as despesas gerais compartilhando recursos e eliminando redundâncias em uma empresa combinada. Perdas nos setores de mídia e telecomunicações introduziram uma nova volatilidade nos ciclos de negócios da indústria fonográfica, de modo que os executivos de corte de custos ficaram ainda mais famintos e a indústria fonográfica tornou-se um lugar cada vez mais difícil de sobreviver, não importando em que ponto da cadeia de valores funcionasse. residir. Fusões criaram ondas de reorganizações, demissões e recompensas de executivos; Na contração, a indústria cortou cerca de 20% de sua força de trabalho entre 2000 e 2002 (Goldsmith et al. Al).

A música como categoria de produto tem enfrentado queda nas vendas e aumento da concorrência de outras mídias, especialmente videogames e DVDs, numa época em que os gastos dos consumidores estavam em declínio e as gravadoras estavam reduzindo suas ofertas (Goldsmith, Global B2; DeLuca). Em um esforço geral para sustentar as vendas atrasadas e, ao mesmo tempo, buscar novas reduções de gastos, a consolidação da indústria da música perseguiu todas as variedades de estratégia de integração - horizontal, mas também vertical e diagonal. As empresas de música estão se consolidando por meio de fusões e aquisições; no entanto, ao mesmo tempo, metade dos Big Four (Warner e EMI) também são separados de conglomerados de mídia integrados.

A maturação dos mercados de música gravada tem uma história de três fases, cada uma dominada por um "tipo diferente de organização" (Garofalo 319).

1. As editoras de música, que ocupavam o centro de poder da indústria quando a partitura era o principal veículo de disseminação da música popular;

2. As gravadoras, que ascenderam ao poder como música gravada, obtiveram dominância; e.

3. Corporações transnacionais de entretenimento, que promovem música como uma série sempre expansiva de "fluxos de receita" - vendas de gravações, receita de publicidade, ligações de filmes, streaming de áudio na Internet - não mais atreladas a uma determinada operadora de som. (Garofalo 319)

Na terceira e atual fase, argumenta Garofalo, os lançamentos de música se transformaram em componentes de grandes franquias de mídia, usadas para promoção cruzada e promoção de marcas em todas as divisões corporativas. A fase final de Garofalo encontra apoio histórico nas fusões da Vivendi - Universal, AOL-Time Warner e Sony-BMG. Com a fusão da SonyBMG concluída, a estrutura de mercado da indústria fonográfica agora é formalmente oligopolística, com menos de cinco empresas e mais de duas empresas compartilhando um mercado (Doyle).

Como mostra a Tabela 1, antes da fusão da Sony-BMG em 2004, o mercado era formalmente competitivo, com cinco grandes players compartilhando mais de 70% do mercado.

Cada uma das principais gravadoras possui empresas de publicação, gravação, marketing e distribuição de música sob uma rede de subsidiárias. Uma indústria da música independente cultural e historicamente significativa também floresce em todo o mundo; na Europa, o grupo Impala na Europa faz lobby na CE e em grupos comerciais em nome das indies. A música indie constitui cerca de 23% do total de vendas de música no mundo, mas apenas cerca de 14% das vendas de música nos EUA. O restante do mercado comercial total de gravações é atendido pelo Big Four.

Tabela 1 Participação de Mercado Total para Gravações de Música (%)

A crescente concentração de mercado na indústria da música predispõe as Quatro Grandes à conivência, embora os aparatos legais nos EUA e na Europa que foram acusados ​​de detectar conluio tenham sido inconsistentes em suas avaliações a esse respeito. A disputa do MAP (preço mínimo anunciado) e as investigações sobre fixação de preços e limites de publicidade são exemplos contemporâneos de "comportamento interdependente" (Thompson 1) e "domínio coletivo" (Comissão Européia).

O spin-off da Warner Music, da Time Warner, introduziu uma dinâmica contrária à estrutura industrial totalmente integrada que não se alinha com a história de Garofalo. Esse desinvestimento criou uma estrutura de mercado de oligopólio afiliada e não afiliada para a música gravada. Os membros afiliados, Sony-BMG e UMG, estão integrados em conglomerados de mídia e competem com as empresas de música EMI e Warner, que não têm conglomerados de entretenimento como empresas-mãe. A presença de duas grandes empresas não afiliadas entre os Big Four sugere que, salvo novas fusões, a história do setor de Garofalo pode exigir uma atualização no tempo.

A Tabela 2 apresenta os níveis de diversificação de produtos exibidos por quatro dos Big Five, antes das fusões entre a Vivendi-Universal e a Sony-BMG.

O desmembramento do EMI Group pela Thorn EMI em 1996 des diversificou as participações da Thorn e criou uma empresa focada exclusivamente em música que agora compete de forma independente com as outras grandes gravadoras. Este evento iniciou a dissociação contemporânea de música de conglomerados de mídia integrados. EMI e Warner Music são os "pequenos gigantes" entre os oligopolistas dos Quatro Grandes.

O spin-off da Warner Music desmente a importância que a AOL-Time Warner havia inicialmente colocado na integração de todo o conteúdo do catálogo da Warner aos novos canais de distribuição da AOL. Promovido por seus executivos como uma estratégia infalível para combinar, no modelo de convergência de mídia, um rico catálogo de conteúdo de mídia com TV a cabo e canais de distribuição na Internet, os resultados da fusão da AOL-Time Warner em 2000 decepcionaram, começando com o primeiro trimestre financeiro ; em meados de 2002, o preço das ações havia caído 70% desde a fusão, e a empresa passou por turbulências na alta gerência. A Time Warner (assim renomeada pela queda da "AOL" em 2003) liquidou as acusações de fraude com o Departamento de Justiça dos EUA em 2004 por US $ 210 milhões, em um caso envolvendo pagamentos da Bertelsmann (Media Watch). Em um movimento de corte de custos, a Time Warner vendeu a Warner Music para um grupo de investimentos liderado por Edgar Bronfman Jr. em 2003. Tentativas fracassadas de fusão entre a EMI e a BMG, entre a Warner e a BMG e entre a EMI e a Warner entre 2000 e 2003 deixaram a EMI e Warner ainda não afiliado em 2005.

Tabela 2 Receita de Conteúdo dos Conglomerados por Tipo, 2001 (%)

As conseqüências de uma integração mais frouxa entre a indústria da música e os conglomerados de mídia integrados podem ser difíceis de detectar. A interdependência das empresas afiliadas e não afiliadas provavelmente não será interrompida, porque os atores do oligopólio permanecem os mesmos e porque as empresas não afiliadas não enfraquecem os controles de estrangulamento na distribuição compartilhada pelo cartel. Em vez de ficar em casa para conteúdo musical para uma franquia de mídia, a Time Warner terá que ir ao mercado de A & R, promoção e distribuição. As opções de mercado para esses serviços incluem a Warner Music junto com as outras majors.

Depois da Sony-BMG e Universal Music Group, Warner Music e EMI são terceiro e quarto maior do Big Four, respectivamente. O declínio no crescimento de vendas da Warner Music, de 25% em 2004 - muito mais precipitado do que o declínio de 5% da Universal Music Group durante o mesmo período - reflete-se de forma negativa nas perspectivas de independência contínua. A experiência de quase dez anos da EMI como uma empresa de música autônoma e verticalmente integrada fornece uma rede de parcerias entre empresas de tecnologia, mídia e marketing não afiliadas. A fracassada tentativa de fusão sugere que, embora possa haver fortes incentivos financeiros para que a Warner e a EMI combinem organizações, a fusão produziria um resultado que ainda é dissociado dos conglomerados de mídia altamente integrados.

Concorrência em Mercados de Distribuição Digital de Música.

Provedores de serviços de música on-line fornecem um domínio para investigar e avaliar os efeitos do oligopólio nas escolhas e preços de músicas on-line. As fileiras de lojas de música on-line estão crescendo, mas com menos propriedade e controle direto das grandes gravadoras. A Internet surgiu como uma plataforma de distribuição para os Big Five após a vitória sobre o Napster, mas o crescimento inicial da distribuição legal de música online ocorreu durante um período de intensa incerteza sobre a viabilidade da indústria da música como um negócio legítimo. Com o modelo de negócios abalado pelo Napster, o enfraquecimento da qualidade do produto e a queda nas vendas, os Big Five se aventuraram lenta e cautelosamente na distribuição de música digital e "queimaduras". As majors lançaram um duopólio, o MusicNet e o eMusic, logo associados ao Rhapsody, MusicMatch, iTunes e Napster2. O MusicNet, o eMusic e o Napster2 tiveram participação acionária das grandes gravadoras até 2004, quando os grandes distribuidores do Napster2 e do eMusic. O afrouxamento da propriedade e do controle direto das lojas de música pelos Big Five através de alienações deixa a maior parte da distribuição de música através da Internet para operadores independentes, ao mesmo tempo em que concentra controles de direitos autorais e "poder de rede" com os principais.

As lojas de música on-line devem seu sucesso aos acordos de licenciamento cruzado de catálogo musical entre os Quatro Grandes. No entanto, esses acordos de compartilhamento não se estendem além do cartel de música e, nos EUA, não há previsão pública para o licenciamento compulsório de catálogos Big Four para possíveis start-ups e outros novos entrantes no mercado de distribuição de música on-line. A migração do negócio de distribuição, desde a baseada em bens até a baseada em serviços, introduz a possibilidade de um comportamento adicional anticoncorrência, em busca de renda dinâmica, entre as gravadoras que oferecem acesso à música por meio de um serviço baseado em telecomunicações. O acesso dos Big Four ao gargalo da maioria dos catálogos de música comercial do mundo também impõe a escassez administrando o acesso on-line usando gerenciamento de direitos digitais (Burkart e McCourt), e sempre fazendo lobby por controles de direitos de propriedade (IPR) mais fortes do que já desfrutam sob o Lei de Direitos Autorais do Milênio Digital (DMCA). Uma campanha de litígio altamente divulgada contra as redes de compartilhamento de arquivos e seus usuários teve resultados mistos na tentativa de converter a desconfiança da base de clientes em medo de litígios ou de um novo respeito pela autoridade da indústria fonográfica.

Acima e além do status estabelecido da indústria como abusadora de seu tremendo poder de mercado, o cartel da música também é um locatário, porque seus controles exclusivos sobre o acesso a bancos de dados de cultura digitalizada persistem no prazer do Estado. A ação do Estado e a inação do Estado servem tanto para ilustrar como a indústria da música conquistou o direito legal de desempenhar o papel de senhorio cultural. O fracasso do Congresso dos EUA em aprovar legislação de licenciamento compulsório para a música comporta seus altos níveis de cooperação com interesses de lobby em nome das indústrias de entretenimento e farmacêutica, ambas as quais se opuseram ao licenciamento compulsório e outras reformas de direitos de propriedade intelectual.

No judiciário, as preocupações antitruste com os serviços de música surgiram após o lançamento. Uma investigação de 2001 do Departamento de Justiça dos Estados Unidos sobre comportamentos colusivos entre MusicNet e PressPlay concentrou-se na interação dos controles de estrangulamento dos provedores de serviços de música em licenças de música e controle de distribuição de royalties (Pruitt). O DoJ queria descobrir se as práticas de licenciamento das empresas-mãe das lojas de música on-line estavam impedindo o acesso dos concorrentes às suas gravações. Os EUA decidiram contra tomar medidas contra as novas empresas, em parte devido à baixa demanda do consumidor e em parte porque (nas palavras do juiz de decisão) "várias entidades diferentes agora oferecem, ou anunciaram planos para oferecer, uma ampla seleção de grandes gravadoras". conteúdo que pode ser baixado em uma base Ia carte e transferido para dispositivos portáteis ou gravado em CDs "(Pate 2). O raciocínio da "indústria em dificuldade", bem como a alienação dos principais MSPs, foi invocado quando o Departamento de Justiça abandonou sua investigação sobre o conluio entre MusicNet e PressPlay (Pruitt; Wigfield B4). A concentração acionária desencadeou o escrutínio judicial, mas, no final, a ruína da agência estava alinhada com um "princípio geral" de que "as Agências não presumem que a propriedade intelectual cria poder de mercado no contexto antitruste" (DoJ e FTC). A fusão entre Sony e BMG foi aprovada por reguladores europeus e norte-americanos em 2004 e ofereceu uma oportunidade para a Comissão Europeia recusar-se a investigar a distribuição de música online devido à "ausência de sérios problemas de competição" (Comissão Européia).

Adoção da Jukebox Celestial.

As principais empresas podem se beneficiar do crescimento da receita com a distribuição de música on-line. Apesar de uma aceitação inicialmente lenta por parte dos consumidores de serviços de música, o crescimento das receitas do iTunes, MusicNet, Rhapsody e lojas de música online semelhantes representa uma quota de mercado em rápida expansão. Os downloads de mídia digital cresceram de 0% para 2% do total de vendas entre 2002 e 2004, e estão projetados para expandir para 16% em 2007. Os números globais são menos dramáticos, mas significativos: de 0% em 2002 para 7% projetados total global de vendas de música até 2007 ("Metrics"; "Relatórios Predict"; "RIAA Cites"; "Entertainment Revenue"; "UMG Choice").

O caro preço por música para licenciamento de provedores de serviços de música online atrasou a implantação dos primeiros MSPs, eMusic e MusicNet, e o custo ainda permanece alto, dado o spread de 79 a 99 centavos entre os serviços comerciais contemporâneos, incluindo WalMart e iTunes. Um contínuo aperto de preços nas margens para distribuição de música digital ameaça as lojas online. "Os analistas estimam que 60 a 65 centavos de cada centavo são destinados à gravadora. Um adicional de três a oito centavos é encaminhado para a editora da canção" (Hellweg). A especulação é abundante que WalMart e iTunes usam os serviços de música on-line como líderes de perda e promovem vendas mais lucrativas. A economia de custos para os principais da distribuição da Internet sobre a distribuição tradicional é difícil de calcular. Os métodos de contabilidade financeira para serviços (como assinaturas) diferem daqueles para empresas que negociam mercadorias, mesmo intangíveis, como arquivos de música; Além disso, as demonstrações financeiras consolidadas das empresas controladoras dos provedores de serviços de música não dividiram as finanças das divisões de música on-line. No entanto, é relativamente seguro assumir que as principais empresas tenham avaliado esses novos canais de distribuição de música como alternativas legais, lucrativas e estruturalmente seguras à distribuição tradicional de varejo.

Exceto por um empreendimento on-line original (MusicNet, pertencente à Real Networks, Warner Music, BMG e EMI), as grandes gravadoras terceirizaram a distribuição de música digital. A MusicNet não atende mais a clientes de varejo, mas atua como uma central de informações para outras lojas on-line, como a Virgin Digital ("MusicNet Dances"). Os três primeiros MSPs - MusicNet, eMusic e Pressplay - foram acordos cooperativos entre os Big Five realizados antes da fusão Sony-BMG. Após desinvestimentos da Sony Music e Universal Music Group da Pressplay / Napster e Universal da eMusic, a MusicNet tornou-se o único MSP afiliado. A MusicNet enfrenta os ex-MSPs junto com as câmaras de compensação de música online, como o iTunes e a loja de música da Microsoft, que desempenham a mesma função de distribuição para as grandes gravadoras, mas também operam independentemente das grandes empresas e não compartilham vínculos de propriedade com os principais . Nos mercados de distribuição de música digital, portanto, surgiu uma dinâmica semelhante à do oligopólio afiliado-não-afiliado, sugerindo um afrouxamento adicional entre as camadas de propriedade e o controle da distribuição de música pelos conglomerados de mídia.

Embora os principais não possam operar diretamente os gargalos de telecomunicações ao acesso de música on-line, preferindo terceirizar a tarefa, os principais, no entanto, controlam o fornecimento e os termos do conteúdo licenciável para os provedores de serviços de música. A posição de mercado da MusicNet como um serviço de clearing house operado por três das Big Four dá a essa empresa o poder de aumentar as taxas de acesso para 47% do mercado global de música comercial, para qualquer provedor de serviços de música novo ou existente, ou negar catálogo acessar completamente. Da constelação de provedores de serviços de música que compõem a Celestial Jukebox, somente a MusicNet desfruta da vantagem de uma afiliação ao conglomerado de mídia, com a Sony-BMG servindo como ligação a uma empresa controladora do conglomerado. A afiliação da MusicNet aos padrões da RealNetworks (para criação de mídia, servidores, players, codecs e gerenciamento de direitos digitais) fornece uma parceria de tecnologia independente da Microsoft, que pode oferecer benefícios inerentes à tecnologia e encontrar popularidade em mercados globais como a UE.

O novo poder de rede da indústria da música.

Embora sua pesquisa sobre redes eletrônicas enfatize o potencial democrático das tecnologias de informação e comunicação, Saskia Sassen escreve sobre variedades de "poder de rede" que podem recriar relações sociais hierárquicas dentro das arquiteturas do ciberespaço e também transformar as relações de poder existentes. O poder que as redes digitais exercem na sociedade deriva da "velocidade, simultaneidade e interconectividade" que proporcionam aos agentes sociais na comunicação (Sassen 54). Sassen argumenta que os usos instrumentais da Internet por corporações privadas, com fins lucrativos, criam uma nova economia política do comércio eletrônico que apresenta uma assimetria de poder entre cidadãos-consumidores e corporações em rede.

Antes de 1991, quando a atividade comercial on-line foi legalizada, o design estudado e deliberado da Internet tornou-a uma plataforma de compartilhamento de informações não comercial, descentralizada, pública e não hierárquica que dispersava o poder da rede. Sua abertura de acesso e compartilhamento de dados coexistia com um anticomercialismo que governava o ciberespaço. Sassen faz uma identificação da sociedade civil com as principais características da Internet original, dispersão de energia e abertura de rede. A desregulamentação e a privatização da infraestrutura e da formulação de políticas da Internet prepararam um novo setor comercial, o e-business, para a mercantilização e legitimaram o uso corporativo da Internet para serviços privados. Ao longo do ciclo de expansão e contração de empresas de milho, o capitalismo global testou os modelos básicos de negócios para o comércio eletrônico, incluindo serviços de dados ("business-to-business" ou "B2B"), varejo ("business-to-business" ou "B2B"). consumidor "ou" B2C ") e leilões (" consumidor para consumidor "ou" C2C "). Experimentalmente e com muita destruição criativa, as empresas iniciantes reformularam a Internet para facilitar "alianças globais entre empresas e concentrações maciças de capital e poder corporativo" (Sassen 53). O poder da rede reforça as hierarquias de poder; por exemplo, a adoção da Internet por instituições de finanças internacionais "produz uma vasta concentração de capital e de lucros e a capacidade de mobilizar esse capital em todo o mundo, muitas vezes instantaneamente" (Sassen 55).

Outras indústrias, além das financeiras que antes eram não-tecnológicas ou antitecnológicas - e, especialmente, a indústria fonográfica - repentinamente adaptaram seus modelos de negócios ao uso da Internet após meados da década de 1990. A prática tecnológica de compartilhamento de arquivos na Internet, que gozou de status social e legal até a descoberta do comércio eletrônico pela indústria fonográfica, foi banida como conseqüência do uso do poder da rede pelas grandes gravadoras. O modelo Celestial Jukebox para o novo negócio de mídia promove adaptações corporativas do poder da rede, em detrimento da sociedade civil e da vida social não comercial.

A energia da rede pode ajudar os Big Four a compensar os efeitos potencialmente desestabilizadores de uma integração mais flexível com o complexo maior das indústrias culturais. O poder da rede pode mobilizar recursos - ativos digitais, business intelligence, capital, produtos de trabalho - em um domínio digital comum que agora é compartilhado por editores de música e impressos, produtores de vídeo e filmes, emissoras, programadores de TV multicanal, operadores de portal, anunciantes, e assim por diante. A conectividade instantânea de bancos de dados e espaços de trabalho permite uma rede flexível e adaptável de relações comerciais gerenciadas on-line.

Conclusão: Estendendo os Controles do Setor fora da Propriedade.

Este artigo argumentou que, no processo de dissociação da indústria fonográfica dos conglomerados de mídia integrados, os Quatro Grandes terão de confiar na manutenção dos aluguéis culturais restringindo o acesso à distribuição de música on-line. O novo oligopólio da indústria da música continua a exercer anti-competitividade ao longo de seus tradicionais gargalos de distribuição. A divisão afiliada e não afiliada dos Big Four nos mercados tradicionais de marketing e distribuição de música pode ser transitória, mas sugere um afrouxamento da integração do negócio da música com os conglomerados globais de mídia por meio da propriedade. A transição para o Celestial Jukebox e a distribuição de música on-line também pode revelar "paralelismos", "comportamentos interdependentes" e outras indicações de comportamento colusivo nos mercados on-line. Enquanto isso, os Big Four determinam os custos de catálogo das lojas de música on-line e muitos outros termos e condições de acesso a catálogos. Embora seus interesses compartilhados em manter a legitimidade de seu domínio global nos mercados de mídia superem as divisões dentro dos grupos, os grupos afiliados e não afiliados entre os cartéis podem vir a utilizar o poder da rede de maneiras distintas para buscar vantagens competitivas. O caso especial da MusicNet alinha o poder de mercado dos proprietários de catálogos Big Four afiliados em uma coruscação do poder da rede. As conseqüências desses desenvolvimentos significam que locatários culturais (consumidores ou "fãs") adicionarão outra conta de serviços públicos de um provedor de serviços de música ou câmara a seu orçamento mensal, e as gravadoras continuarão "a extrair quantidades modestas de dinheiro de um grande número de pessoas "(Amante 41) em uma atividade rent-seeking aprovado pelo estado. O poder de mercado da indústria contemporânea, a integração frouxa com a indústria do entretenimento e a incorporação do poder da rede trabalham juntos para refutar o dito de Courtney Love.

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Newmedia21.eu.

Медиите на 21 век. Онлайн издание за изследвания, анализи, критика. ISSN 1314-3794.

Медиите на 21 век. Онлайн издание за изследвания, анализи, критика.

The International Media System in Transition. A Human Development Perspective.

Nikos Leandros, PhD.

of Communication, Media and Culture.

Panteion University of Social and Political Sciences.

The story of the international media and content industries in recent years has been one of accelerating merger and acquisition activity as content companies, telecommunication operators and technology companies have sought to secure distribution channels, achieve presence in strategic and emerging markets, and for the largest, build a platform for a multimedia strategy. However, despite their strength, traditional media companies are threatened in their core business and traditional model: mass production of content. The ability to actively use the Internet via the many possibilities offered by Web 2.0 to express opinions, establish relationships and pursue individual and collective projects is undoubtedly changing the fundamental experience of media use. As a result a new communication paradigm is emerging characterized by connectivity, interactivity and convergence. For the first time in human history authorities and citizens coexist in the same information environment and compete for attention leading to new phenomena such as public diplomacy, blogging and “citizen journalism”. Legitimacy is much more difficult to obtain and can be easily lost. This paper examines the contradictory nature of these phenomena and the difficult questions they pose for development strategies and public policy.

Mainstream economics have ignored the impact of changes in the information and communication system on the operation of a modern society and its development prospects. In its formal analytics neoclassical orthodoxy treats human behaviour as a manifestation of universal characteristics which can be fully captured within the individualistic, rational-choice, utility maximising model and seeing market equilibria as being relevant to all circumstances regardless of the historical, social or cultural context. Moreover the conceptualisation of economic development as improvement in the material circumstances of the population leaves little or no role for the information and communication system either as a mediating influence on the achievement of material progress or as an element in the structure of social needs and human rights that must be promoted across societies.

Yet, information plays an important role both in setting the stage for market moves and in instigating the moves themselves. Although the news media present themselves as detached observers of market events, they are themselves an integral part of these events. Significant market events generally occur only if there is similar thinking among large groups of people, and the news media are essential vehicles for the spread of ideas (Shiller, 2000).

Asymmetries of information have important consequences in the operation of the market as well as in political processes (Stiglitz, 1998 and 1975). Just as such asymmetries give managers the discretion to pursue policies that are more in their own interest than in the interest of shareholders, so they allow government officials the discretion to pursue policies that are more in their interests than in the interests of the citizenry. Improvements in information and the rules governing its dissemination can reduce the scope for these abuses in both markets and in political processes.

Developed media systems in which independent companies play a significant role not only make abuses of governmental powers less likely, they also enhance the likelihood that people’s basic social needs will be met. Amartya Sen (1980), for instance, has argued that countries with a free press do not experience famine because the free press grows attention to the problem, and people will view a government’s failure to act in such situations as intolerable. Similarly, work at the World Bank (1998) has shown how pollution disclosure requirements can be an effective mechanism for curbing pollution levels. Public opinion can force democratically elected governments to take some actions and circumscribe them from taking other actions.

The current economic crisis and the challenges posed to humanity by climate change forces us to think differently about growth and development. A reorientation of thinking away from a mechanistic, commodity-centred notion of economic development towards a people-centred strategy of human development also entails changes in our understanding of the role and importance of the information and communication system.

According to Mahbub ul Haq (1995), Sen (1999) and the economists working for the United Nations Development Program, the objective of human development is interpreted as being to expand the capabilities of people to lead the sorts of lives they desire. A person’s capability refers to the alternative combinations of functionings that are feasible for him/her to achieve. Three broad types of functioning are identified: physical functioning, political and social functioning, intellectual and aesthetic functioning. Clearly, important developments in the information and communication system affect both political and social functioning and intellectual and aesthetic functioning thus changing development prospects and the questions public policy has to address.

A changing media landscape.

Media industries worldwide are in a process of transformation under the impact of technological, economic, regulatory and political developments of crucial importance. The most characteristic and far-reaching of these changes are:

The rapid growth of media companies, the internationalization and differentiation of their activities leading to concentration of capital in many sectors of the industry. The multiplication of media outlets. The advent of the Internet and the creation of cyberspace. The increased ability of individuals to produce content and disseminate information.

Led by television at the beginning and the internet later on, there has been in the past three decades a communication explosion throughout the world. The decisive move as far as broadcasting is concerned was the multiplication of television channels, leading to their increasing diversification. Development of cable television technologies, fostered in the 1990s by fiber-oprtics and digitalization, and of direct satellite broadcasting, dramatically expanded the spectrum of transmission and put pressure on the authorities to deregulate communications in general and television in particular. An explosion of cable television programming followed in the United States and of satellite television in Europe, Asia, and Latin America. Soon, new networks were formed that came to challenge the established ones. Inevitably, governments lost their absolute control in broadcasting leading to deregulation and a new media landscape (Straubhaar, 2007; Sinclair, 2004).

The advent of internet as a global phenomenon changed the media landscape forever and created a basic infrastructure for the emerging Information Society. The number of users increased from only 16 millions in December 1995 or 0.4% of world population to 359 millions in December 2000 (5.8% of world population) and 1,669 millions in June 2009 (24.7% of world population). Of course, internet penetration varies substantially between countries and sections of the population. This is the problem of digital divide which constitutes a major concern for international organizations and national governments[1].

The development of the media system has brought in a multiplicity of channels, brought to life a variety of audiences and so manufactured a variety of information. Of particular importance are the “news” which are transmitted through macro, meso and - to an ever greater extent - micro-media[2]. They shape social values, political beliefs and stereotypes within countries and between nations.

As a result the characteristics of news production, distribution and consumption are changing dramatically in recent years. Audiences now consume news in new ways. They hunt and gather what they want when they want it, use search to comb among destinations and share what they find through a growing network of social media. Traditional media companies, despite their strength, are threatened in their core business and traditional model: mass production of content. This is especially true for newspapers but broadcasting will also be affected in following years (new hubs and companies in developing countries, mobile platforms, YouTube, web-radio, web-TV).

Table 1: Trends in news consumption.

Source: Pew Research Center for the People and the Press (2008b), p.3.

According to a study published in 2008 by the Pew Research Center for the People and the Press, the proportion of Americans saying they read a newspaper on a typical day has declined by about 40% since the early 1990s. Also, the proportion that regularly watches nightly network news has fallen by half (see Table 1).

News is a constructed version of its source material. It is a kind of narrative. It is a media representation. It is a selected version of original events, utterances and behaviors. News, like all public documents, is a constructed reality possessing its own internal validity. It may be argued that the nature of news also makes it inherently ideological. News material is selected from sources and constructed into a text. Sources are dominated by news agencies such as Reuters. Wealthy news operations carry their own teams of reporters and can dispatch these people to events if they do not already have a correspondent geographically near. Press releases and news conferences are also a major source of information. But of course, as with agencies, the material has already been selected and processed. Institutions such as government departments or local councils, which have information that news makers want, do therefore exercise indirect control and power over the production of news (Tumber, 2000; Allan, 1999; von Ginneken, 1998). Seeing the framework denaturalizes the apparent truths of news and exposes its constructedness.

International media conglomerates.

The story of the international media and content industries during the past 15-20 years has been one of accelerating merger and acquisition activity as content companies, telecommunication operators and technology companies have sought to secure distribution channels, achieve presence in strategic and emerging markets, and for the largest, build a platform for a multimedia strategy. Since Time merged with Warner in 1989 to form the biggest “traditional” media conglomerate (see Table 2), the international media and entertainment industries have been undergoing a progressive process of internationalization, differentiation and concentration of capital (Leandros, 2008 and 2000; Chan-Olmsted and Chang, 2003; Croteau and Hoynes, 2001; Demers, 1999; Herman and McChesney, 1997). A number of technological, regulatory, economic and political developments have facilitated the rapid growth of media companies. The most important of these factors are:

Broadcasting markets have been liberalised, making it possible to launch private television channels at the national, regional and local levels. Broadcasters have been allowed to operate abroad, sometimes subject to certain restrictions. The changes in the political and economic systems in the Central and Eastern European countries have eliminated state monopoly in the media sector. In newly competitive markets, economically weak national media companies were ripe for take-overs or bankruptcy. As a result Western companies rushed into the region and established a dominant presence[3]. The advent of the Internet as the basic infrastructure of the emerging Information Society has created many opportunities for media expansion in cyberspace. At the same time, of course, “traditional” media corporations are threatened in their core businesses (especially print newspapers) by new media and software and Internet companies like Microsoft, Google and Yahoo![4]. Digitisation has simplified the broadcasting of content and has increased broadcasting frequencies. Satellite, digital cable and terrestrial digital allow a larger number of channels to be broadcast. The use of broadband for television and Internet offers media enterprises new perspectives for development. Economic integration has eliminated custom fees and excise taxes. The opportunities for a free flow of goods have created new incentives for companies to expand aggressively in all sectors of print media. Advances in skills and the localisation of cultural products in sectors such a magazines or newspapers and the increasing acceptance of generic formats such as in “reality TV” programmes have reduced cultural barriers. Considerable advertising, strategies, subjects and media plans are done in transnational campaigns.

Table 2: Leading media corporations.

Disney Motion Pictures.

Jornal de Wall Street.

FOX TV and studios.

Source: Constructed from company Annual Reports.

Looking at the internal structure and mode of operation of media conglomerates, we can identify four major interrelated trends:

Media ownership is increasingly concentrated. At the same time, media conglomerates are now able to deliver a diversity of products over one platform as well as one product over a diversity of platforms. This fluid movement of communication products across platforms encourages the customization and segmentation of audiences in order to maximize advertising revenues. And finally, the success of these strategies is determined by the ability of internal media networks to achieve optimal economies of synergy that take advantage of the changing communications environment.

Media concentration is not new. History is rife with examples of oligopolistic control over the space of communications. In the United States, the “big three,” ABC, CBS, and NBC dominated both radio and television networks into the 1980s (Leandros, 2000). Though the early 20th Century, the news agencies Reuters (UK), Havas (France) and Wolff (German) formed a “global news cartel,” which maintained rigid control over the transmission of international news stories. Moreover, in most countries outside of the United States, governments traditionally maintained a monopoly on radio and television networks. Control over the space of communication has thus always ebbed and flowed out of complementary and contradictory changes in regulation, economic markets, the political environment, and technological innovations.

However, the digitization of information and the rise of satellite, wireless, and Internet communication platforms have diminished traditional firewalls to ownership expansion. Media conglomerates today operate on a regional and even global scale in different sections of the media industry, entertainment, telecommunications, cyberspace and information retrieval and dissemination. Beginning in the late 1980s, media mergers and acquisitions accelerated to never before seen levels. For example, between 1990 and 1995 as many media mergers took place as in the preceding 30 years combined (Hesmondhalgh, 2007; Greco, 1996).

Until the mid-1980s, almost all US and European leading media companies were specialized, national companies producing mainly for audiences and readers in their own country. Today, not only the leading media conglomerates but also many medium, by international standards, companies have been transformed into highly differentiated, multi-national corporations. This is clearly shown in Table 3 which lists 25 important European media corporations all of which until mid-1980s were specialized firms, without significant international holdings.

The largest media organizations now not only own more properties than ever before, but the content that these companies create is delivered via an increasing number and variety of platforms, many of which they also own. All of the leading firms are vertically integrated. Time Warner, for example, controls Warner Brothers, which accounts for about 10% of the global film and television production (IBIS, 2007: 26). Time Warner also owns the second largest cable TV operator in the United States, 47 regional and international cable channels, and the AOL Internet platform over which these productions are distributed.

Table 3: Activities of important European media firms.

Source: Constructed from company Annual Reports.

News Corp., perhaps the most vertically integrated company of all, owns 47 U. S. TV stations, the MySpace social networking platform, has interests in satellite delivery platforms in five continents, controls 20th Century Fox Studios and Home Entertainment, and maintains numerous regional TV channels.

Vertical integration has increased largely because the ability to distribute products across a wide array of platforms has become a precondition for the success of more and more cultural products. Not surprisingly, today, this integration increasingly includes the Internet. Media organizations are moving into the Internet, while Internet companies are creating partnerships with media organizations and investing in streaming video and audio functionality. America Online’s (AOL) merger with Time Warner in 2000 for a record $165 billion remains a landmark in this process (Leandros, 2008). In recent years, the blurring of boundaries between the Internet, media, and telecommunications companies has only accelerated. In 2005, News Corp. paid $650 million for the MySpace social networking site. NBC and News Corp. launched Hulu in the fall of 2007, in an attempt to compete with Apple’s iTunes video service and Google’s YouTube.

Conversely, digitally-based organizations like Google, Yahoo!, Microsoft, and Apple have stepped up their efforts to compete with more traditional multi-media conglomerates in order to access offline as well as online-audiences. The creation of the U. S. cable news channel MSNBC, launched as a joint venture of Microsoft and NBC in 1996, was only the first landmark in this trend. In October 2006, Google purchased the user-generated streaming video site YouTube for $1.65 billion. That same year, Apple launched AppleTV, a device that makes digital online media content (including YouTube videos) available via traditional TV sets. And in 2007, Google initiated a partnership with Panasonic to launch a high definition television set that will broadcast both traditional television programming as well as Internet content (Hayashi, 2008; Jenkins, 2006).

Traditional barriers between “old” and “new” media companies are disappearing as corporations seek to diversify their portfolios. The digitization of all forms of communication means that the barriers between mobile, media, and Internet networks are decreasing relentlessly. The ability to produce content via mobile devices and upload, exchange, and redistribute this content via the web both widens access and complicates the traditional roles of sender and receiver (Wilkinson et al, 2009).

Media organizations control a broader number of platforms with which to deliver audiences to advertisers; but the process of targeting, distributing, and controlling messaging is simultaneously becoming more complicated. The introduction of time and place-shifting technology has given the consumer greater power to avoid (e. g., fast-forward through) commercial advertising.

Platform diversification, particularly strategic acquisitions of online properties and partnerships with Internet companies like Yahoo! and Google, represent both an attempt by media companies to hedge their bets on what will be the central gateway to audiences and an effort to take advantage of the ability to segment and target audiences.

The ability to successfully leverage economies of scale, diversity of platforms, and customization of content in service of sustainable corporate expansion is determined by economies of synergy (Croteau and Hoynes, 2001). Thus, the configuration of the internal network organization of major media organizations is critical. In global network enterprises we can find multiple (and proliferating) styles of control and decision-making being tolerated in different parts of the network, so long as those at the centre of the web can gain from allowing a particular practice and/or organizational arrangement to exist in a part of their networked ‘empire’. News Corp. is often identified as both the most internationalized media business in terms of holdings with the most sustainable internal networking management strategy (Flew, 2007; Gershon, 2005).

In recent years internet has entered a new phase of its development, often described as Web 2.0. This term is commonly associated with web applications which facilitate interactive information sharing, interoperability, user-centered design and collaboration on the World Wide Web. Examples of Web 2.0 include web-based communities, hosted services, web applications, social-networking sites (eg, facebook and myspace), video-sharing sites (eg. YouTube), wikis, blogs and folksonomies[5].

A Web 2.0 site allows its users to interact with other users or to change website content, in contrast to non-interactive websites where users are limited to the passive viewing of information that is provided to them. In other words, Web 2.0 websites allow users to do more than just retrieve information. They can build on the interactive facilities of „Web 1.0“ to provide „Network as platform“ computing, allowing users to run software-applications entirely through a browser. Users can own the data on a Web 2.0 site and exercise control over that data. These sites may have an „Architecture of participation“ that encourages users to add value to the application as they use it. The concept of Web-as-participation-platform, captures many of these characteristics.

Perhaps the most well-known form of Web 2.0 activity is blogging which appeared in 2004 and grew very quickly. As blogs mature and their influence and readership grow, the medium is emerging as a powerful tool for journalists and activists alike (Pew Research Center’s Project for Excellence in Journalism, 2009). Blogging’s growing influence became apparent during the 2009 protests of the presidential election in Iran. During the contested Iranian elections, Iran banned journalists from moving around the country and blocked Facebook, Twitter, and a host of other popular websites. In this setting, disenfranchised Iranians have often turned to the blogosphere to engage in commentary critical of the regime. However, this tactic is not without its risks, as in 2003 Iran became the first nation to imprison a blogger for blogging[6]. Nevertheless many bloggers see the protests of the Iranian revolution as a watershed moment for the medium – deeming the blogosphere both a key driver of the protests and a news source more reliable than the traditional media on the topic.

In the United States, blogging was an integral piece of the 2008 presidential campaign, where it was a key forum for citizen commentary on everything from Sarah Palin’s clothes to healthcare policy. In many ways, the story of Obama’s campaign was the story of his supporters, whose creativity and enthusiasm manifested through multitudes of websites and YouTube videos online (Pew Research Center’s Project for Excellence in Journalism, 2008a). On MyBarackObama, 2 million profiles were created. In addition, 200,000 offline events were planned, about 400,000 blog posts were written and more than 35,000 volunteer groups were created — at least 1,000 of them on Feb. 10, 2007, the day Obama announced his candidacy. Some 3 million calls were made in the final four days of the campaign using MyBO’s virtual phone-banking platform. On their own MyBO fundraising pages, 70,000 people raised $30 million (Vargas, 2008).

Another segment of online media that underscores the growing role of citizens is online video and social networking sites. YouTube, founded by Chad Hurley, Steve Chen and Jawed Karim in February 2005 and purchased by Google in November 2006, is by far the most popular online video site but there are other video sites that also attract significant audiences (eg, Metacafe, Break).

These citizen-based Web sites began largely as places to post compelling material, much of it from the mainstream media with added content from users. As popularity grew, these sites began rivalling news sites for breaking news. Newsmakers themselves, from the Pentagon to the presidential candidates to humanitarian and activist groups, began placing content directly on YouTube and MySpace as a way of countering what might be in the mainstream press or even beating the press to the punch.

And there are other players now, as well. As an example, Twitter, launched in 2006, combines traditional social networking features and micro-blogging, a feature that allows users to publish short postings from either a computer or phone. These postings can then be seen by the general public or restricted to certain users. Producers of content have found value in offering one-line descriptions that link to larger pieces of work. News audiences turned to Twitter feeds for eyewitness accounts of real-time events. When gunmen stormed hotels and other sites in Mumbai in November, twitter was flooded with entries from users in the city who provided updates based on their observations on the ground. Users typed regular updates with information or commentary on the crisis, turning a service that specializes in distributing short, personal updates to tight networks of friends and acquaintances into a way for people around the world to tune into personal, real-time accounts of the attacks (Caulfield and Karmali, 2008).

Twitter also became a popular tool for reading real-time accounts of the 2008 political conventions, the Israeli invasion of Gaza that began in December 2008 and the January 2009 crash-landing of a US Airways passenger jet in the Hudson River. Google bought a service in 2007 similar to Twitter called Jaiku, which allows users to view messages in chronological order across a timeline.

Moreover we must point out that with large and growing usage, mobile phones seem destined to become a major mode of information delivery. Two challenges face news companies as a consequence. First, they must compete with the dozens of other applications available for smartphones, such as navigational aids, music sites, games and video viewers. Second, they need to find a way to make money on a platform that may be even less suited than computers to display advertising. Still, several major players have moved to accommodate the mobile technology (Grant and Wilkinson, 2009). The New York Times and the Associated Press have invested heavily in delivery options for users of smart phones. Both are primarily focused on attracting mobile users to their content with the hope that a model for making money will follow[7].

Mainstream news web sites also have to change in an effort to adapt to the new much more competitive environment. For instance, in recent years they are breaking down the “walled garden,” which allowed linking to outside organizations or stories both on their home pages and even more so inside stories (link to appropriate place in report). With the idea that a new role of journalism is to guide people to the information they want, and that people are going to get to these other places anyway, many mainstream news Web sites are consciously choosing to help send people elsewhere.

These developments are changing the way we communicate and they affect almost every aspect of economic and social life. As a result not only are more people getting their news from the Internet, but they also are doing it in new and different ways, much of it enabled by news organizations developing more ways of disseminating their content. Mobile viewing, the sharing of stories on social networks and video sites, and posts on a multitude of microblogs are becoming more widespread while earlier tools like e-mails and RSS[8] remain popular. By compiling, sharing and customizing the news they consume, people in a sense are becoming not only their own editors, but also critical agents in the trajectory of a news story.

In the second half of the 1990s a new electronic communication system started to be formed out of the merger of globalized, customized mass media and computer-mediated communication. The new system is characterized by the integration of different media and by its interactive potential. It appears to be supporting a social/cultural pattern characterized by widespread differentiation , leading to the segmentation of the users/viewers/readers/listeners. Not only are the messages segmented by markets following senders’ strategies, but they are also increasingly diversified by users of the media, according to their interests, taking advantage of interactive capacities. The formation of virtual communities is but one of the expressions of such differentiation.

Development strategies and public policies have to take into account that the new information and communication system, which is still evolving, is characterized by a number of global trends. Of course there are also contradictory forces and inertia associated with habits, practices, legal obstacles and economic interests associated with the “old” regime. As a result, change is often much more difficult in practice than expected and takes longer to materialize.

These changes and trends have become possible because of digitization and networking brought about by the Internet. The latter has emerged as a technology which, thanks to its capacities of adaptation to, and interaction with, other technologies plays a central role in the emerging new communication paradigm. The rise of integrative information, communication, and community-building Internet platforms such as blogs, wikis, or social networking sites has not only prompted the development of new concepts – Web 2.0, “citizen journalism”, social media, etc –, but also a novel quality of communication in contemporary societies. Web 2.0 technologies empowered consumers to produce and distribute their own content. This gives rise to unprecedented autonomy for communicative subjects to communicate at large.

Yet, this potential autonomy is shaped, controlled, and curtailed by the growing concentration and interlocking of corporate media and network operators around the world. Under these circumstances, the contemporary Internet is shaped by a conflict between the global multimedia business networks that try to commodify the Internet and the “creative audience” that tries to establish a degree of citizen control of the Internet and to assert their right of communicative freedom without corporate control.

At the same time, the existence of too many choices is fragmenting audiences and triggering closure and social isolation. More and more audiences are made up of ‘fans’ or ‘sects’ that have little contact with one another and tend to be exclusive of other modes of thinking. The danger of such a phenomenon is that it can lead to a ‘false diversity’, masking the fact that people are actually only communicating with those who share the same cultural frames of reference. In some cases, this can lead to the ‘tribalization’ of cultural consumption, the dangers of which are obvious since they contravene any attempt to promote intercultural dialogue and mutual understanding. Moreover, this may also contribute to the reinforcement of stereotypes about others. Such diversity amounts to little more than a juxtaposition of parallel singularities.

In general, we can argue that we have moved away from the structured media environment of the 1970s and early 1980s into a rapidly changing, even chaotic media environment. For the first time in human history authorities and citizens coexist in the same information environment and compete for attention leading to new phenomena such as public diplomacy, blogging and “citizen journalism”. Legitimacy is much more difficult to obtain and can be easily lost. The problem of quality of information becomes much more important than in the past.

In this condition, formal education and the informal experimentation of the media play a fundamental role in our society, for only they can guarantee expansion of the number of those who will exercise full citizenship in all its multiple dimensions, from the civic to the economic dimension, and, consequently, the social and economic development of their societies.

Public policies should protect pluralism which is threatened by the expansion of media conglomerates and encourage the development of alternative distribution systems and platforms. Moreover, policies for public support of content production that meets specific domestic social, cultural and political goals should be developed recognising that the entire range of content producers can provide services that help meet those objectives.

In the emerging information and communication environment, supply side regulations become less effective. Thus, governments need to make concerted efforts to promote greater understanding of media systems, providers and use among the population. Education assumes a more critical role in helping the public make effective content consumption.

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[1] At the end of June 2009, internet usage was estimated at 73.9% in North America, 60.1% in Australia/Oceania and 50.1% in Europe but only 18.5% in Asia and 6.7%in Africa. Within continents there are also major differences between countries. Data obtained from internetworldstats/stats. htm.

[2] Tehranian (1999) suggests classifying the media as micro (television satellites and the Internet) , meso (print, cinema and broadcasting) and macro-media of communication (mobiles, blogs, personal pages in social networking sites, Twitter), with a view to identifying different media related to individual empowerment in the field of communicative and socio-political autonomy. If the macro-media have facilitated globalization, the micro-media have given empowerment to peripheral resistance and opposition.

[3] For instance, the Swiss publishing company Ringier points out in its web site: At the end of the 80’s Ringier seized the opportunity to invest in the deregulated markets of Central and Eastern Europe. Ringier now publishes and prints over 70 newspapers and magazines in Germany, Hungary, Romania, Serbia, Slovakia and the Czech Republic. Today Ringier is a multinational media company with around 7000 employees in China, Croatia, Czech Republic, Germany, Hungary, Romania, Serbia, Slovakia, Switzerland and Vietnam. Worldwide, Ringier publishes more than 120 newspapers and magazines and produces and markets more than 20 TV programmes. The company also holds considerable stakes in television and radio stations and operates about 80 websites and mobile platforms. It has eleven printing plants. See URL, ringier/index. cfm? kat=9.

[4] In 2009, four out of the six leading Internet news sites belonged to software and Internet companies and not to “traditional media”. See stateofthemedia/2010/specialreports_nielsen. php.

[5] In 1876, Melvil Dewey devised an elegant method for categorizing the world’s books. The Dewey Decimal System divides books into 10 broad subject areas and several hundred sub-areas and then assigns each volume a precise number. But on the Internet, a new approach to categorization is emerging. Thomas Vander Wal, an information architect and Internet developer, has dubbed it folksonomy – a people’s taxonomy. So a folksonomy is a system of classification derived from the practice and method of collaboratively creating and managing tags to annotate and categorize content.

[7] The Associated Press’s Mobile News Network, opened in May 2008, provides access to international, national and local news from a network of local media sources and its own Washington and foreign correspondents. Mobile phone users can access the Mobile News Network by visiting its mobile site (Irwin, 2008).

[8] Many of those who customize their news use RSS, which stands for really simple syndication. The technology allows users to create their own news pages that automatically update such things as the score of favourite sports teams, news stories on topics or by certain sources, local traffic conditions, blogs and other material. The more time people spend with news online, the more likely they are to create such self-tailored page. About a third (36%) of Internet news users say they have a customizable Web page. But among the heaviest Web news consumers — those who go online for news daily — fully 44% say they have a customizable web page that incorporates news items. See Pew Research Center for the People and the Press (2008b).

Leandros, Nikos. The International Media System in Transition. A Human Development Perspective. In: Newmedia21.eu. Медиите на 21 век: Онлайн издание за изследвания, анализи, критика [online], 16 март 2011 [cited 11 April 2018]. Available from: newmedia21.eu/analizi/the-international-media-system-in-transition-a-human-development-perspective/

Leandros, Nikos. The International Media System in Transition. A Human Development Perspective. // Newmedia21.eu. Медиите на 21 век: Онлайн издание за изследвания, анализи, критика, 16.03.2011.

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Media Management and Economics 2002 Abstracts.

Media Management and Economics Division.

“Many Will Play, Few Will Win”: Global Strategies and Content Characteristics of Web Portals of Transnational Internet Media Corporations • Debashis “Deb” Aikat, North Carolina at Chapel Hill • Inspired by their success in the United States, transnational Internet media corporations have launched international Web portals by forging global partnerships or starting localized subsidiaries to market their products and vision worldwide. Based on a survey and a content analysis incorporating information theories and concepts related to Internet economics, this study analyzed the global strategies and content characteristics of Web portals and examines media management practices.

Change and Stability in the Newspaper Industry’s Journalistic Labor Market • Lee B. Becker, Tudor Vlad and Hugh J. Martin, Georgia • Among the common assumptions made about the journalistic labor market is that it hierarchical, with entry-level hiring done almost exclusively by smaller organizations. Individuals are thought to be able to gain employment at larger media organizations only after they have served time in smaller ones. The assumed normal career progression for a newspaper journalist is from a small newspaper, perhaps even a weekly, to a larger one and on up the chain, with employment at larger organizations open only to those who have served their time at the lower levels of the employment chain.

Measuring Radio Program Diversity in the Era of Consolidation • Todd Chambers, Texas Tech University • This paper addresses the issue of market structure in the top 50 radio markets and the different types of program diversity measures. The study used a secondary analysis of ownership information, format information and song information to analyze the research questions and hypotheses. Overall, the study confirmed previous research related to an increase in format diversity with an increase in the number of competitors. Likewise the findings showed a negative relationship between ownership concentration and radio program diversity.

Diversification Strategy of Global Media Conglomerates: Examining Its Patterns and Drivers • Sylvia M. Chan-Olmsted and Byeng-Hee Chang, Florida • This paper reviews the diversification patterns of the leading global media conglomerates and proposes an analytical framework for examining the factors that influence these strategic choices. Using a case-study approach, we analyzed the top seven global media conglomerates’ product and international (geographic) diversification strategies. Combining both the industrial economics and resource-based view of strategic management, we further devise a system of drivers that might affect the extent, direction, and mode of diversification for global media conglomerates.

The Emerging Broadband Television Market: Assessing the Strategic Differences between Cable Television and Telephone Firms • Sylvia Chan-Olmsted and Jae-Won Kang, Florida • This paper compared the strategic differences between telcos and cable television firms based on a proposed strategic architecture that depicts the roles of various channel members and the interrelationships between them in the emerging broadband television industry. We found that M&As were practiced more frequently than other types of alliances and cable was a more attractive target as well as an active acquirer in M&A alliances. Also, “relatedness” appeared to be a more important M&A strategy for the cable firms as the telcos focused on a resource alignment strategy, allying with firms in the information services and software sectors.

The Dual Structure of Global Networks in the Entertainment Industry: Interorganizational Linkage and Geographical Dispersion • Bum Soo Chon, Kyunggido, Korea and George A. Barnett, SUNY-Buffalo • This paper describes the contour of the global media networks in terms of interorganizational linkages and spatial distribution of foreign direct investment in the entertainment industry. The results of the multiple network analyses revealed that there were significant differences in the positional structures of global media networks in the entertainment industry. However, in the case of the structural relationships between the interorganizational and geographical dispersion networks, the QAP analyses revealed structural similarities between both networks in the entertainment industry.

Measuring the Financial Success of Motion Pictures: A Study Integrating the Economic and Communication Theory Perspectives • Bryan Greenberg, Syracuse University • Prior research into movie attendance has fallen into two camps. The first, economic, revolves around financial measurements and how these measurements correlate with attendance. The second perspective, known as the communication theory or psychological approach, focuses on the processes undertaken by the audience in choosing an entertainment option. While these two perspectives differ on the surface they in fact share certain similarities, most notably an assumption of an active audience influenced by and interacting with outside variables.

Ownership and Barriers to Entry in Non-metropolitan Daily Newspaper Markets • Stephen Lacy, Michigan State University; David C. Coulson, Nevada-Reno and Hugh J. Martin, Georgia • This exploratory study found that private ownership of dailies was negatively associated with the number of weekly newspapers and with the penetration of paid and all weeklies within the county. This is consistent with the prediction that privately held newspapers keep prices and profits lower and quality higher than publicly held dailies. The strategy of lower prices and higher investment in quality could discourage weeklies from starting and would lower weekly penetration.

A Case-Study Analysis of Divestiture Determinants & Strategies of Major Media Firms, 1996-2000 • Daphne Eilein Landers, Florida • The Telecommunications Act of 1996 has stimulated media firms to restructure their operations, relative to new opportunities. The deregulatory law has led firms to engage in extensive mergers and acquisitions. Nevertheless, media firms also have divested numerous operations. The goal of this exploratory research paper, therefore, is to ascertain what have been the divestiture strategies – and divestiture determinants – of major media firms since the Telecommunications Act of 1996. Divestiture strategies and motivations are reviewed and applied to recent media divestiture activity.

Switching Radio Stations While Driving: Magnitude, Motivation and Measurement Issues • Walter McDowell, Miami and Steven J. Dick, Southern Illinois University • Rather than examining what attracts radio audiences to a station, this study looked at what turns audiences away. Among the findings of a general public self-report survey of over 350 people were that, while driving a car or truck, there is considerable station switching within a mere quarter-hour listening span and that avoidance of commercials (or zapping) was by far the most influential motivator.

Free Riders and Pretenders: Media Industry Organizations and Collective Action • Jennifer H. Meadows, Design California State University, Chico and August E. Grant, Focus25 Research & Consulting • This study uses collective action theory to examine membership in media industry organizations. In particular it examines the free riders, those actors who benefit from the services of a media industry organization such as lobbying but do not participate. A survey of members and non-members of a media organization was conducted to measure dimensions of collective action. A third group, pretenders, non-members who indicate that they are members, was found. Differences among members, non-members and pretenders are examined.

Anatomy of a Death Spiral: Newspapers and Their Credibility • Philip Meyer and Yuan Zhang, North Carolina at Chapel Hill • Editors have long believed in their hearts that the economic success of newspapers depends on their credibility. We find evidence to support this belief by examining 21 counties where newspaper credibility has been measured. The more people believe what they read in the papers, the greater the robustness of circulation penetration over a recent 5-year period. Unfortunately, both credibility and readership are falling in what appears to be a classic reinforcing process.

DonÕt I Know You? Understanding and Serving Audiences for Special-Interest Publications • Allison Morgan, Middle Tennessee State University • Using a case study approach, this paper considers how media managers working for special interest publications can seek to hold and maintain their readers’ loyalty. Specifically, this study explored the challenges faced by the communications department of Tennessee Farmers Cooperative, a farm-supply organization that publishes a monthly special-interest newspaper for its agricultural audience.

Digital Cinema Goes to Hollywood: The Economic Effects of Digital Technology on the Motion Picture Industry • Siho Nam, The Pennsylvania State University • Situated within economic and industrial contexts, this research aims to examine how digital technology differs from other preceding film technologies and to assess the economic effects of digital cinema at this stage of development by utilizing some secondary statistical data. It also pays specific attention to the technical and economic barriers that inhibit digital cinema’s rapid diffusion. Finally, a possibility of the Internet as a new film exhibition venue is briefly discussed.

Must-Carry: An Economic Consideration • Namkee Park, Southern California • In Turner Broadcasting System v. FCC (1994 & 1997), the US Supreme Court justified and affirmed the constitutionality of the “must-carry” restrictions of the Cable Act of 1992 by referring to the cable operators’ “bottleneck, or gatekeeper control over most of the television programming.” However, an economic analysis focusing on the current conditions for competition, relevant market analysis, and concentration and vertical integration data suggests that the Court’s ruling was based upon faulty reasoning.

Managing Innovation: Newspapers’ and the Development of Online Editions • Shashank Saksena and C. Ann Hollifield, Georgia • Media managers in the 21st century will need to constantly assess and respond to emerging technologies that have the potential to disrupt the industry. This project examined the innovation management processes that the newspaper industry used to respond to the Internet, using an analytical framework of recommended innovation management technues derived from previous research. The study found that newspapers’ innovation-management processes were generally haphazard and that industry executives should be better prepared in the future to manage innovation.

Business Models Of Online News Organizations: Endgame For Global Media Dominance? • Frederick Schiff, and Jefferson Gaskin, Houston • The study compares leading news websites. Results show that content factors and market factors are both important in predicting the size of the unue audience attracted to news sites. The most important market factor seems to be paying attention to news consumers outside the area of the core product strength of established media firms. Content characteristics also predict online performance of news organizations, especially business models that optimize information retrieval and storage, and interactive networking.

Competition and/or Coexistence?: The Relationship between Local Television Stations and Their Websites at the Macro and Micro Levels • Tae-Il Yoon and Glen T. Cameron, Missouri-Columbia • In an attempt to explore the relationship between traditional television media and the new Internet media, this study will use market survey data of local television stations in a city within the framework of the niche theory framework. The findings of the current study suggest that the relationship between local TV stations and their websites are more complicated than practitioners and researchers assume. Their relationship depends on the context in which the two media work.

Loose Integration in the Popular Music Industry.

By Burkart, Patrick.

The Big Four music oligopoly practices cultural gate-keeping for global markets. However, in spite of consolidation in the sector, the music industry is more loosely integrated vis--vis the rest of the entertainment industry than it was under the Big Five. As the sector concentrated, it also differentiated into two ownership classes. The Big Four are evenly split, two with affiliations with entertainment conglomerates and two without such affiliations. However, the majors as a group continue to share strong market power as a cartel. In the future, the interaction of the two affiliated and unaffiliated dyads in online music markets may divulge coordinated rules for CD pricing and controlling over access to digital catalogs. This paper considers Internet distribution of music as a technology practice contributing to, and perhaps reinforcing, loose integration.

Introduction: The Ownership and Control of Music Distribution Channels.

Being the gatekeeper was the most profitable place to be, but now we're in a world half without gates. The Internet allows artists to communicate directly with their audiences; we don't have to depend solely on an inefficient system where the record company promotes our records to radio, press or retail and then sits back and hopes fans find out about our music. (Courtney Love)

Courtney Love and the Dixie Chicks have played an activist role among popular music artists who publicly and privately challenge their contractual relationships with the major labels as exploitative (Philips, "Judge", "Dixie Chicks"). Love's dictumthat the Internet shall disintermediate the majors-was very nearly a manifesto for artists to throw off the yoke of the industry and join online in solidarity. The revolutionary moment never arrived for the music industry; the accumulated advantages of an industry with more than a century of gate-keeping predictably held sway over the potentially destabilizing effects of Internet distribution (McCourt and Burkart). Moreover, the Napster era chilled many artists' initial zeal for bypassing the labels with direct Internet distribution to fans.

The transformation of the music industry into a service industry, or a disposable goods industry, is well under way, but it is the major labels that are leading it-not the artists. Digital distribution of music is a trend reinforced by industry consolidation, technological changes, the legal adjustments to the Digital Millennium Copyright Act and Napster case, and the economic recession of 2001-02. The industry adoption of an e-business model is not an example of innovation in the sector; indeed, the major labels were dragged reluctantly into Internet distribution. Rather, the Celestial Jukebox model (or the "heavenly jukebox" model) (Burkart and McCourt; Mann) is instead a coping strategy for a fan - led migration to online services, initially through unauthorized Internet channels. The Jukebox model consolidates the advantages of the Big Four record labels' distribution bottleneck, as it projects control into the Internet through oligopoly market power, the use of digital rights management, and withholding of catalog access. Technologically, the Celestial Jukebox contributes to a reorganization of "network power" on the Internet that gives the record industry new bottleneck controls on licensing and distribution, while strengthening a lopsided power relationship with musicians and fans.

The Jukebox is also a lock-box, insofar as it provides both a revenue model and a technological design for protecting online content as valuable Web "assets." For the Big Four labels (UMG, Sony - BMG, EMI, and Warner), online music distribution's advantages over traditional channels for distribution include extremely low or negligible marginal costs of copying and distributing digital music files, the elimination of overstocked or obsolescent inventories, and no losses from product returns or "shrink" due to damage. The Jukebox also offers an industrial-age business some information-age controls over business processes, including just-in-time production of streaming programming, real-time sales information, and the ability to automate push marketing. These unue advantages are especially important in an environment of slowing sales growth, shrinking payrolls, and other uncertainties. These music service providers remove music from the consumer's reach as a tangible, collectible asset, even while they advertise their offerings as a highly intimate and personal way of consuming and experiencing music (Burkart and McCourt). The practices of producing, distributing, and consuming music are in flux.

In what follows, I shall discuss the Celestial Jukebox model in the context of its operation with the rest of the global entertainment industry. First, I describe the dynamics of the contemporary market as experiencing a simultaneous contraction and incomplete differentiation from vertically integrated media conglomerates. The restructuring has created an affiliated - unaffiliated distinction between cartel members: those affiliated with integrated media conglomerates and those without such affiliations. Notwithstanding this distinction, the industry operates as a rent seeking cartel with political legitimation derived in the US from legislative and judicial branches. Then, I describe the rapid emergence of paid music downloads and streams as a revenue source for the majors, and the majors' rapid divestment from the constituent sites for the Celestial Jukebox as a further loosening of a tightly integrated industry. As music fans increasingly go online to download music, the music business further rationalizes and economizes by outsourcing digital distribution. The entry of the Big Four into e-commerce permits them to accumulate and centralize music "assets" in clearing houses, and mete out access to authorized resellers. In the absence of regulation or legislation providing for compulsory licensing, the formation of centralized music clearing houses demonstrates how the culture industries are following the financial industry into the mobilization of "network power" (Sassen) as a business strategy. The mobilization of network power for competitive advantages began with the creation of the online music stores that filled the vacuum left by Napster's demise.

In the last ten years of the 20th century, the music industry became more differentiated from the fully integrated media conglomerates, created and then sold and outsourced its digital distribution outlets, and began distributing disposable goods (having long ago perfected their production). The Celestial Jukebox model adopted by the industry is actually a double outsourcing: the cartel buys out of the music service providers, which were entities created to exploit the vacuum left by Napster. Meanwhile, the digital rights management systems used by the Jukebox, which can force music files to "expire," restrict fans' access to music in ways that force these consumers to buy disposable music or lease ongoing access to music services, rather than benefit from the purchase of hard copies of encoded music. The migration of distribution and consumption of music to the Internet marks a period in musical history in which digital networks take a prominent role in mediating musical culture. The US-centricity of the global music industry and global popular culture contribute to a musical monoculture.

Music's Loose Integration with the Entertainment Industry.

Mega-mergers in the music business have the same justification today as they did in the past. Improved economies of scope make it possible for mergers and acquisitions to improve efficiencies and profitability forecasts in a firm, reducing overheads by sharing resources and eliminating redundancies within a combined enterprise. Losses in media and telecommunications sectors introduced a new volatility into the recording industry's business cycles, such that cost-cutting executives got even hungrier and the music business became an increasingly difficult place to survive, no matter where in the value chain one happened to work and reside. Mergers created waves of reorganizations, lay-offs, and executive pay-offs; in the contraction, the industry cut about 20% of its workforce between 2000 and 2002 (Goldsmith et al. Al).

Music as a product category has faced declining sales and increasing competition from other media, especially video games and DVDs, at a time when consumer spending was declining and the record labels were cutting back their offerings (Goldsmith, "Global" B2; DeLuca). In a general effort to shore up lagging sales while pursuing new expenditure cutbacks, music industry consolidation has pursued all varieties of integration strategy-horizontal, but also vertical and diagonal. Music companies are consolidating through mergers and acquisitions; however, at the same time, half of the Big Four (Warner and EMI) are also detached from integrated media conglomerates.

The maturation of markets for recorded music has a history of three phases, each dominated by a "different kind of organization" (Garofalo 319).

1. Music publishing houses, which occupied the power center of the industry when sheet music was the primary vehicle for disseminating popular music;

2. Record companies, which ascended to power as recorded music achie\ved dominance; e.

3. Transnational entertainment corporations, which promote music as an everexpanding series of "revenue streams"-record sales, advertising revenue, movie tie-ins, streaming audio on the Internet - no longer tied to a particular sound carrier. (Garofalo 319)

In the third and current phase, Garofalo argues, music releases have developed into components of larger media franchises, used for cross-promotion and branding across corporate divisions. Garofalo's final phase finds historical support in the mergers of Vivendi - Universal, AOL-Time Warner, and Sony-BMG. With the SonyBMG merger completed, the record industry's market structure is now formally oligopolistic, with fewer than five firms and more than two firms sharing a market (Doyle).

As Table 1 illustrates, before the Sony-BMG merger in 2004, the market was formally competitive, with five major players sharing more than 70% of the market.

Each of the major labels owns music publishing, recording, marketing, and distribution businesses under a network of subsidiaries. A culturally and historically significant independent music industry also flourishes worldwide; in Europe, the Impala group in Europe lobbies the EC and trade groups on behalf of the indies. Indie music constitutes about 23% of total music sales globally, but only about 14% of US music sales. The rest of the total commercial market for recordings is served by the Big Four.

Table 1 Total Market Share for Music Recordings (%)

The growing market concentration in the music industry predisposes the Big Four to collusion, although the legal apparatuses in the US and Europe that have been charged with detecting collusion have been inconsistent in their assessments in this regard. The MAP (minimum advertised price) dispute and investigations into price fixing and advertising limits are contemporary examples of "interdependent behavior" (Thompson 1) and "collective dominance" (European Commission).

The Warner Music spin-off from Time Warner introduced a countervailing dynamic to the fully integrated industry structure that does not align with Garofalo's history. This divestiture created an affiliated-unaffiliated oligopoly market structure for recorded music. The affiliated members, Sony-BMG and UMG, are integrated into media conglomerates, and compete with stand-alone music companies EMI and Warner, which do not have entertainment conglomerates as parent companies. The presence of two unaffiliated majors among the Big Four suggests that, barring new mergers, Garofalo's history of the sector may require updating in time.

Table 2 presents the levels of product diversification exhibited by four of the Big Five, prior to the Vivendi-Universal and Sony - BMG mergers.

Thorn EMI's spin-off of EMI Group in 1996 de-diversified Thorn's holdings, and created a focused music-only company which now competes independently with the other major labels. This event initiated the contemporary decoupling of music from integrated media conglomerates. EMI and Warner Music are the "little giants" among the Big Four oligopolists.

The Warner Music spin-off belies the importance AOL-Time Warner had initially placed on integrating all Warner catalog content with new AOL distribution channels. Promoted by its executives as a foolproof strategy for combining, on the media convergence model, a rich catalog of media content with cable broadcast TV and Internet distribution channels, the results of AOL-Time Warner's 2000 merger disappointed, beginning with the very first financial quarter; by mid-2002 its stock price had declined by 70% since the merger, and the company experienced turmoil in top management. Time Warner (so renamed by dropping "AOL" in 2003) settled securities fraud charges with the US Justice Department in 2004 for $210 million, in a case involving payments from Bertelsmann (Media Watch). In a cost - cutting move, Time Warner sold Warner Music to an investment group led by Edgar Bronfman Jr. in 2003. Failed merger attempts between EMI and BMG, between Warner and BMG, and between EMI and Warner between 2000 and 2003 left both EMI and Warner still unaffiliated by 2005.

Table 2 Conglomerates' Content Revenues by Type, 2001 (%)

The consequences of a looser integration between the music industry and integrated media conglomerates may be difficult to detect. The interdependence of the affiliated and unaffiliated firms is not likely to be disrupted, because the oligopoly players remain the same, and because the unaffiliated firms do not weaken the bottleneck controls on distribution shared by the cartel. Rather than staying in-house for musical content for a media franchise, Time Warner will have to go to the market for A&R, promotion, and distribution. The market choices for these services include Warner Music along with the other majors.

After Sony-BMG and Universal Music Group, Warner Music and EMI are third and fourth largest of the Big Four, respectively. Warner Music's sales growth decline of 25% in 2004-far more precipitous than Universal Music Group's 5% decline during the same period - reflects poorly on the prospects for continued independence. EMI's nearly ten years' experience as a vertically integrated, standalone music company provides it with a mesh of partnerships among unaffiliated technology, media, and marketing firms. The failed merger attempt suggests that, while there may be strong financial incentives for Warner and EMI to combine organizations, the merger would produce a result that is still decoupled from the highly integrated media conglomerates.

Competition in Markets for Digital Distribution of Music.

Online music service providers provide a domain for investigating and evaluating the effects of oligopoly on online music choices and pricing. The ranks of online music stores are growing, but with less ownership and control directly by the major labels. The Internet emerged as a distribution platform for the Big Five after the victory over Napster, but the early growth in legal online music distribution occurred during a period of intense uncertainty about the viability of the music industry as a legitimate business. Their business model shaken by Napster, their product quality softening, and their sales slumping, the Big Five ventured slowly and cautiously into digital music distribution-streaming and "burns." The majors launched a duopoly, MusicNet and eMusic, soon joined by Rhapsody, MusicMatch, iTunes, and Napster2. MusicNet, eMusic, and Napster2 all had equity participation by the major labels until 2004, when majors divested from Napster2 and eMusic. The loosening of direct ownership and control of the music stores by the Big Five through divestitures leaves the bulk of music distribution through the Internet to independent operators, even as it concentrates copyright controls and "network power" with the majors.

The online music stores owe their success to music catalog cross - licensing arrangements between the Big Four. However, these sharing arrangements do not extend outside the music cartel, and in the US there is no public provision for compulsory licensing of Big Four catalogs to would-be start-ups and other new entrants to the online music distribution market. The migration of the distribution business from goods-based to services-based introduces the possibility of an additional anti-competitive dynamic-rent-seeking behavior among music labels offering access to music through a telecommunications-based service. The Big Four's bottleneck access to the majority of the world's commercial music catalogs also imposes scarcity by managing online access using digital rights management (Burkart and McCourt), and by forever lobbying for stronger international property rights (IPR) controls than they enjoy already under the Digital Millennium Copyright Act (DMCA). A highly publicized litigation campaign against file-sharing networks and their users has had mixed results in an attempt to convert the suspiciousness of the customer base into a fear of litigation or a newfound respect for the authority of the music business.

Above and beyond the industry's established status as an abuser of its tremendous market power, the music cartel is also a rent - seeker, because its exclusive controls over access to databases of digitized culture persist at the pleasure of the state. State action and state inaction both serve to illustrate how the music industry has won the legal right to play the role of cultural landlord. The US Congress's failure to pass compulsory licensing legislation for music comports with its high levels of cooperation with lobbying interests on behalf of the entertainment and pharmaceutical industries, both of which have opposed compulsory licensing and other intellectual property rights reforms.

In the judiciary, antitrust concerns with the music services emerged upon their roll-out. A 2001 US Department of Justice (DoJ) investigation into collusive behaviors between MusicNet and PressPlay focused on the interaction of the music service providers' (MSPs') bottleneck controls on music licenses and control of royalty distribution (Pruitt). The DoJ wanted to discover if the licensing practices of the online music stores' parent companies were denying competitors access to their recordings. The US decided against taking action against the start-ups, partly because of low consumer demand and partly because (in the words of the deciding judge) "several different entities now offer, or have announced plans to offer, a broad selection of major label content that can be downloaded on an a Ia carte basis and transferred to portable devices or burned to CDs" (Pate 2). The "ailing industry" rationale, as well as the majors' divestiture from MSPs, was invoked when the DoJ dropped its investigation of collusion between MusicNet and PressPlay (Pruitt; Wigfield B4). Ownership concentration triggered judicial scrutiny, but, in the end, the agency's ru\ling was in line with a "general principle" that "the Agencies do not presume that intellectual property creates market power in the antitrust context" (DoJ and FTC). The Sony-BMG merger passed muster with both European and US regulators in 2004, and afforded an opportunity for the European Commission to decline to investigate online music distribution due to "the absence of serious competition problems" (European Commission).

Adoption of the Celestial Jukebox.

The majors stand to benefit from revenue growth from online music distribution. Despite an initially slow take-up by consumers of music services, revenue growth from iTunes, MusicNet, Rhapsody, and similar online music stores represents a rapidly expanding market share. Digital media downloads grew from 0% to 2% of total US sales between 2002 and 2004, and are projected to expand to 16% by 2007. Global figures are less dramatic, but significant: from 0% in 2002 to a projected 7% of total global music sales by 2007 ("Metrics"; "Reports Predict"; "RIAA Cites"; "Entertainment Revenue"; "UMG Choice").

Expensive per-song pricing for licensing by online music service providers delayed the roll-out of the first MSPs, eMusic and MusicNet, and the cost still remains high, given the 79 to 99 cent price spread among the contemporary commercial services, including WalMart and iTunes. A continuing price squeeze on margins for digital music distribution threatens the online stores. "Analysts. estimate that 60 to 65 cents of every 99-cent single goes to the record label. An additional three to eight cents is forwarded to the song's publisher" (Hellweg). Speculation is rife that WalMart and iTunes use the online music services as loss leaders, and to promote more profitable sales. The cost savings to the majors of Internet distribution over traditional distribution is difficult to calculate. The financial accounting methods for services (such as subscriptions) differ from those for businesses that trade in goods, even intangible ones like music files; moreover, the consolidated financial statements of the parent companies of the music service providers did not break out financials for online music divisions. However, it is relatively safe to assume that the majors have vetted these new distribution channels for music as legal, profitable, and structurally safe alternatives to traditional retail distribution.

Except for one remaining original online venture (MusicNet, owned by Real Networks, Warner Music, BMG, and EMI), the major labels have outsourced digital music distribution. MusicNet no longer serves retail customers, but acts as a clearing house for other online stores, such as Virgin Digital ("MusicNet Dances"). The beginning three MSPs-MusicNet, eMusic, and Pressplay-were cooperative arrangements between the Big Five conducted before the Sony-BMG merger. After divestitures by Sony Music and Universal Music Group from Pressplay/Napster and Universal from eMusic, MusicNet became the lone affiliated MSP. MusicNet faces the former MSPs along with the online music clearing houses, such as iTunes and the Microsoft music store, which perform the same distribution function for the major labels, but which also operate independently of the majors and share no ownership linkages back to the majors. In markets for digital music distribution, therefore, a dynamic similar to the affiliated-unaffiliated oligopoly has emerged, suggesting a further loosening between layers of ownership and control of music distribution by media conglomerates.

Although the majors may not operate the telecommunications bottlenecks to online music access directly, preferring instead to outsource the task, the majors nevertheless control the supply and terms of licensable content to the music service providers. MusicNet's market position as a wholesale clearing-house service operated by three of the Big Four gives that firm the power to raise the access fees to 47% of the global market for commercial music, for any new or existing music service provider, or deny catalog access altogether. Of the constellation of music service providers comprising the Celestial Jukebox, only MusicNet enjoys the advantage of a media conglomerate affiliation, with Sony-BMG serving as the linkage to a conglomerate parent company. MusicNet's affiliation to the RealNetworks standards (for media creation, servers, players, codecs, and digital rights management) provides a technology partnership independent of Microsoft, which may offer inherent technology benefits and find favor in global markets such as the EU.

The Music Industry's New Network Power.

Although her research on electronic networking stresses the democratic potentials of information and communication technologies, Saskia Sassen writes of varieties of "network power" that can recreate hierarchical social relationships within the architectures of cyberspace, and can also transform existing power relationships. The power that digital networks exert in society derives from the "speed, simultaneity, and interconnectivity" that they provide social agents in communication (Sassen 54). Sassen argues that the Internet's instrumental uses by private, for-profit corporations create a new political economy of e-commerce that features a power asymmetry between networked citizen-consumers and corporations.

Before 1991, when online commercial activity was legalized, the Internet's studied and deliberate design had rendered it a non - commercial, decentralized, public, nonhierarchical information - sharing platform that dispersed network power. Its openness of access and data sharing coexisted with an anti-commercialism that governed cyberspace. Sassen makes a civil society identification with the main characteristics of the original Internet, power dispersal and network openness. Deregulation and privatization of the Internet's infrastructure and policy-making prepared a new commercial sector, e-business, for commodification, and legitimated the corporate use of the Internet for private utility. Over the course of the dot-corn boom-and-bust cycle, global capitalism has tested the basic business models for e-commerce, including data services ("business-to-business" or "B2B"), retail ("business-to - consumer" or "B2C"), and auctions ("consumer-to-consumer" or "C2C"). Experimentally and with much creative destruction, start-up ventures retooled the Internet to facilitate "global alliances among firms and massive concentrations of capital and corporate power" (Sassen 53). Network power reinforces power hierarchies; for example, the adoption of the Internet by institutions of international finance "produces a vast concentration of capital and of profits and the capacity to mobilize this capital around the globe, often instantaneously" (Sassen 55).

Other industries besides finance that were previously non - technological or antitechnological-and, especially, the recording industry-suddenly and meaningfully adapted their business models to the use of the Internet after the mid-1990s. The technology practice of file sharing on the Internet, which had enjoyed social and legal status until the record industry's discovery of e-commerce, has been banned as a consequence of the exertion of network power by the major labels. The Celestial Jukebox model for the new media business promotes corporate adaptations of network power, to the detriment of civil society and non-commercial social life.

Network power can help the Big Four compensate for the potentially destabilizing effects of looser integration with the larger complex of culture industries. Network power can mobilize resources-digital assets, business intelligence, capital, work products-in a common digital domain that is now shared by music and print publishers, video and film producers, broadcasters, multi - channel TV programmers, portal operators, advertisers, and so on. The instant connectivity of databases and work spaces permits a flexible and adaptable web of business relationships managed online.

Conclusion: Extending Industry Controls outside Ownership.

This paper has argued that, in the process of the music industry's decoupling from the integrated media conglomerates, the Big Four will have to rely on maintaining cultural rents by restricting access to online music distribution. The new oligopoly in the music business continues to exert anti-competitiveness throughout its traditional distribution bottlenecks. The affiliated - unaffiliated division of the Big Four in traditional markets for music marketing and distribution may be transitory, but suggests a loosening of integration of the music business with the global media conglomerates through ownership. The transition to the Celestial Jukebox and online music distribution may also disclose Big Four "parallelisms,""interdependent behaviors," and other indications of collusive behavior in online markets. In the meantime, the Big Four determine online music stores' catalog costs and many other terms and conditions of catalog access. Although their shared interests in maintaining the legitimacy of their global dominance in media markets trump in-group divisions, the affiliated-unaffiliated groups among the cartel may come to utilize network power in distinct ways to vie for competitive advantages. The special case of MusicNet aligns the market power of affiliated Big Four catalog owners in a coruscation of network power. The consequences of these developments mean that cultural renters (consumers or "fans") will add another utility bill from a music service provider or clearing house to their monthly budget, and record labels will continue "to extract modest amounts of money from vast numbers of people" (Lovering 41) in a rent-seeking activity approved by the state. The contemporary industry's market power, loose integration with the entertainment industry, and incorporation of network power work together to disprove Courtney Love's dictum.

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