[Mb-civic] SENDING AGAIN FW: My Beef With Big Media By Ted Turner,

[Barbara Siomos]

Michael..... Ted Turner was on  Charlie Rose (PBS) show the other night
talking about this..... keep an eye out, a lot of times shows are
repeated or shown on other PBS channels in the area. It was a good show
with a lot of laughs.

peace,
barbara
>Date: Mon, Aug 2, 2004, 5:09pm (EDT-3) 
>From: Michael Butler
><michael at michaelbutler.com> 
>To: Civic <mb-civic at islandlists.com>, Governance
>Subject: [Mb-civic] SENDING AGAIN FW: My Beef
>With Big Media By Ted Turner 

Hi, 
I know I have sent this in the past but in case you have not read it I
do strongly suggest that you do so. It affects all of us. A bit long but
worth it. Michael 
------ Forwarded Message 
From: Michael Butler <michael at michaelbutler.com>
Date: Wed, 28 Jul 2004 19:16:46 -0700
To: Civic <mb-civic at islandlists.com>, Governance
<michael at michaelbutler.com>
Subject: My Beef With Big Media By Ted Turner, 
My Beef With Big Media
By Ted Turner, Washington Monthly 
  Posted on July 26, 2004, Printed on July 28, 2004
http://www.alternet.org/story/19327/ 
In the late 1960s, when Turner Communications was a business of
billboards and radio stations and I was spending much of my energy ocean
racing, a UHF-TV station came up for sale in Atlanta. It was losing
$50,000 a month and its programs were viewed by fewer than 5 percent of
the market. 
I acquired it. 
When I moved to buy a second station in Charlotte ­ this one worse
than the first ­ my accountant quit in protest, and the company's
board vetoed the deal. So I mortgaged my house and bought it myself. The
Atlanta purchase turned into the Superstation; the Charlotte purchase
­ when I sold it 10 years later ­ gave me the capital to launch CNN. 
Both purchases played a role in revolutionizing television. Both
required a streak of independence and a taste for risk. And neither
could happen today. In the current climate of consolidation, independent
broadcasters simply don't survive for long. That's why we haven't seen a
new generation of people like me or even Rupert Murdoch ­ independent
television upstarts who challenge the big boys and force the whole
industry to compete and change. 
It's not that there aren't entrepreneurs eager to make their names and
fortunes in broadcasting if given the chance. If nothing else, the 1990s
dot-com boom showed that the spirit of entrepreneurship is alive and
well in America, with plenty of investors willing to put real money into
new media ventures. The difference is that Washington has changed the
rules of the game. When I was getting into the television business,
lawmakers and the Federal Communications Commission (FCC) took seriously
the commission's mandate to promote diversity, localism, and competition
in the media marketplace. They wanted to make sure that the big,
established networks ­ CBS, ABC, NBC ­ wouldn't forever dominate
what the American public could watch on TV. They wanted independent
producers to thrive. They wanted more people to be able to own TV
stations. They believed in the value of competition. 
So when the FCC received a glut of applications for new television
stations after World War II, the agency set aside dozens of channels on
the new UHF spectrum so independents could get a foothold in television.
That helped me get my start 35 years ago. Congress also passed a law in
1962 requiring that TVs be equipped to receive both UHF and VHF
channels. That's how I was able to compete as a UHF station, although it
was never easy. (I used to tell potential advertisers that our UHF
viewers were smarter than the rest, because you had to be a genius just
to figure out how to tune us in.) And in 1972, the FCC ruled that cable
TV operators could import distant signals. That's how we were able to
beam our Atlanta station to homes throughout the South. Five years
later, with the help of an RCA satellite, we were sending our signal
across the nation, and the Superstation was born. 
That was then. 
Today, media companies are more concentrated than at any time over the
past 40 years, thanks to a continual loosening of ownership rules by
Washington. The media giants now own not only broadcast networks and
local stations; they also own the cable companies that pipe in the
signals of their competitors and the studios that produce most of the
programming. To get a flavor of how consolidated the industry has
become, consider this: In 1990, the major broadcast networks ­ ABC,
CBS, NBC, and Fox ­ fully or partially owned just 12.5 percent of the
new series they aired. By 2000, it was 56.3 percent. Just two years
later, it had surged to 77.5 percent. 
In this environment, most independent media firms either get gobbled up
by one of the big companies or driven out of business altogether. Yet
instead of balancing the rules to give independent broadcasters a fair
chance in the market, Washington continues to tilt the playing field to
favor the biggest players. Last summer, the FCC passed another round of
sweeping pro-consolidation rules that, among other things, further
raised the cap on the number of TV stations a company can own. 
In the media, as in any industry, big corporations play a vital role,
but so do small, emerging ones. When you lose small businesses, you lose
big ideas. People who own their own businesses are their own bosses.
They are independent thinkers. They know they can't compete by imitating
the big guys ­ they have to innovate, so they're less obsessed with
earnings than they are with ideas. They are quicker to seize on new
technologies and new product ideas. They steal market share from the big
companies, spurring them to adopt new approaches. This process promotes
competition, which leads to higher product and service quality, more
jobs, and greater wealth. It's called capitalism. 
But without the proper rules, healthy capitalist markets turn into
sluggish oligopolies, and that is what's happening in media today. Large
corporations are more profit-focused and risk-averse. They often kill
local programming because it's expensive, and they push national
programming because it's cheap ­ even if their decisions run counter
to local interests and community values. Their managers are more averse
to innovation because they're afraid of being fired for an idea that
fails. They prefer to sit on the sidelines, waiting to buy the
businesses of the risk-takers who succeed. 
Unless we have a climate that will allow more independent media
companies to survive, a dangerously high percentage of what we see ­
and what we don't see ­ will be shaped by the profit motives and
political interests of large, publicly traded conglomerates. The economy
will suffer, and so will the quality of our public life. Let me be
clear: As a business proposition, consolidation makes sense. The moguls
behind the mergers are acting in their corporate interests and playing
by the rules. We just shouldn't have those rules. They make sense for a
corporation. But for a society, it's like over-fishing the oceans. When
the independent businesses are gone, where will the new ideas come from?
We have to do more than keep media giants from growing larger; they're
already too big. We need a new set of rules that will break these huge
companies to pieces. 
The big squeeze 
In the 1970s, I became convinced that a 24-hour all-news network could
make money, and perhaps even change the world. But when I invited two
large media corporations to invest in the launch of CNN, they turned me
down. I couldn't believe it. Together we could have launched the network
for a fraction of what it would have taken me alone; they had all the
infrastructure, contacts, experience, knowledge. When no one would go in
with me, I risked my personal wealth to start CNN. Soon after our launch
in 1980, our expenses were twice what we had expected and revenues half
what we had projected. Our losses were so high that our loans were
called in. I refinanced at 18 percent interest, up from 9, and stayed
just a step ahead of the bankers. Eventually, we not only became
profitable, but also changed the nature of news ­ from watching
something that happened to watching it as it happened. 
But even as CNN was getting its start, the climate for independent
broadcasting was turning hostile. This trend began in 1984, when the FCC
raised the number of stations a single entity could own from seven ­
where it had been capped since the 1950s ­ to 12. A year later, it
revised its rule again, adding a national audience-reach cap of 25
percent to the 12 station limit ­ meaning media companies were
prohibited from owning TV stations that together reached more than 25
percent of the national audience. In 1996, the FCC did away with
numerical caps altogether and raised the audience-reach cap to 35
percent. This wasn't necessarily bad for Turner Broadcasting; we had
already achieved scale. But seeing these rules changed was like watching
someone knock down the ladder I had already climbed. 
Meanwhile, the forces of consolidation focused their attention on
another rule, one that restricted ownership of content. Throughout the
1980s, network lobbyists worked to overturn the so-called Financial
Interest and Syndication Rules, or fin-syn, which had been put in place
in 1970, after federal officials became alarmed at the networks' growing
control over programming. As the FCC wrote in the fin-syn decision: "The
power to determine form and content rests only in the three networks and
is exercised extensively and exclusively by them, hourly and daily." In
1957, the commission pointed out, independent companies had produced a
third of all network shows; by 1968, that number had dropped to 4
percent. The rules essentially forbade networks from profiting from
reselling programs that they had already aired. 
This had the result of forcing networks to sell off their syndication
arms, as CBS did with Viacom in 1973. Once networks no longer produced
their own content, new competition was launched, creating fresh
opportunities for independents. 
For a time, Hollywood and its production studios were politically strong
enough to keep the fin-syn rules in place. But by the early 1990s, the
networks began arguing that their dominance had been undercut by the
rise of independent broadcasters, cable networks, and even
videocassettes, which they claimed gave viewers enough choice to make
fin-syn unnecessary. The FCC ultimately agreed ­ and suddenly the
broadcast networks could tell independent production studios, "We won't
air it unless we own it." The networks then bought up the weakened
studios or were bought out by their own syndication arms, the way Viacom
turned the tables on CBS, buying the network in 2000. This silenced the
major political opponents of consolidation. 
Even before the repeal of fin-syn, I could see that the trend toward
consolidation spelled trouble for independents like me. In a climate of
consolidation, there would be only one sure way to win: bring a
broadcast network, production studios, and cable and satellite systems
under one roof. If you didn't have it inside, you'd have to get it
outside ­ and that meant, increasingly, from a large corporation that
was competing with you. It's difficult to survive when your suppliers
are owned by your competitors. I had tried and failed to buy a major
broadcast network, but the repeal of fin-syn turned up the pressure.
Since I couldn't buy a network, I bought MGM to bring more content
in-house, and I kept looking for other ways to gain scale. In the end, I
found the only way to stay competitive was to merge with Time Warner and
relinquish control of my companies. 
Today, the only way for media companies to survive is to own everything
up and down the media chain ­ from broadcast and cable networks to the
sitcoms, movies, and news broadcasts you see on those stations; to the
production studios that make them; to the cable, satellite, and
broadcast systems that bring the programs to your television set; to the
Web sites you visit to read about those programs; to the way you log on
to the Internet to view those pages. Big media today wants to own the
faucet, pipeline, water, and the reservoir. The rain clouds come next. 
Supersizing networks 
Throughout the 1990s, media mergers were celebrated in the press and
otherwise seemingly ignored by the American public. So, it was easy to
assume that media consolidation was neither controversial nor
problematic. But then a funny thing happened. 
In the summer of 2003, the FCC raised the national audience-reach cap
from 35 percent to 45 percent. The FCC also allowed corporations to own
a newspaper and a TV station in the same market and permitted
corporations to own three TV stations in the largest markets, up from
two, and two stations in medium-sized markets, up from one.
Unexpectedly, the public rebelled. Hundreds of thousands of citizens
complained to the FCC. Groups from the National Organization for Women
to the National Rifle Association demanded that Congress reverse the
ruling. And like-minded lawmakers, including many long-time opponents of
media consolidation, took action, pushing the cap back down to 35, until
­ under strong White House pressure ­ it was revised back up to 39
percent. This June, the U.S. Court of Appeals for the Third Circuit
threw out the rules that would have allowed corporations to own more
television and radio stations in a single market, let stand the higher
39 percent cap, and also upheld the rule permitting a corporation to own
a TV station and a newspaper in the same market; then, it sent the
issues back to the same FCC that had pushed through the
pro-consolidation rules in the first place. 
In reaching its 2003 decision, the FCC did not argue that its policies
would advance its core objectives of diversity, competition, and
localism. Instead, it justified its decision by saying that there was
already a lot of diversity, competition, and localism in the media ­
so it wouldn't hurt if the rules were changed to allow more
consolidation. Their decision reads: "Our current rules inadequately
account for the competitive presence of cable, ignore the
diversity-enhancing value of the Internet, and lack any sound bases for
a national audience reach cap." Let's pick that assertion apart. 
First, the "competitive presence of cable" is a mirage. Broadcast
networks have for years pointed to their loss of prime-time viewers to
cable networks ­ but they are losing viewers to cable networks that
they themselves own. Ninety percent of the top 50 cable TV stations are
owned by the same parent companies that own the broadcast networks. Yes,
Disney's ABC network has lost viewers to cable networks. But it's losing
viewers to cable networks like Disney's ESPN, Disney's ESPN2, and
Disney's Disney Channel. The media giants are getting a deal from
Congress and the FCC because their broadcast networks are losing share
to their own cable networks. It's a scam. 
Second, the decision cites the "diversity-enhancing value of the
Internet." The FCC is confusing diversity with variety. The top 20
Internet news sites are owned by the same media conglomerates that
control the broadcast and cable networks. Sure, a hundred-person choir
gives you a choice of voices, but they're all singing the same song. 
The FCC says that we have more media choices than ever before. But only
a few corporations decide what we can choose. That is not choice. That's
like a dictator deciding what candidates are allowed to stand for
parliamentary elections, and then claiming that the people choose their
leaders. Different voices do not mean different viewpoints, and these
huge corporations all have the same viewpoint ­ they want to shape
government policy in a way that helps them maximize profits, drive out
competition, and keep getting bigger. 
Because the new technologies have not fundamentally changed the market,
it's wrong for the FCC to say that there are no "sound bases for a
national audience-reach cap." The rationale for such a cap is the same
as it has always been. If there is a limit to the number of TV stations
a corporation can own, then the chance exists that after all the
corporations have reached this limit, there may still be some stations
left over to be bought and run by independents. A lower limit would
encourage the entry of independents and promote competition. A higher
limit does the opposite. 
Triple blight 
The loss of independent operators hurts both the media business and its
citizen-customers. When the ownership of these firms passes to people
under pressure to show quick financial results in order to justify the
purchase, the corporate emphasis instantly shifts from taking risks to
taking profits. When that happens, quality suffers, localism suffers,
and democracy itself suffers. 
Loss of Quality 
The Forbes list of the 400 richest Americans exerts a negative influence
on society, because it discourages people who want to climb up the list
from giving more money to charity. The Nielsen ratings are dangerous in
a similar way ­ because they scare companies away from good shows that
don't produce immediate blockbuster ratings. The producer Norman Lear
once asked, "You know what ruined television?" His answer: when The New
York Times began publishing the Nielsen ratings. "That list every week
became all anyone cared about." 
When all companies are quarterly earnings-obsessed, the market starts
punishing companies that aren't yielding an instant return. This not
only creates a big incentive for bogus accounting, but also it inhibits
the kind of investment that builds economic value. America used to know
this. We used to be a nation of farmers. You can't plant something today
and harvest tomorrow. Had Turner Communications been required to show
earnings growth every quarter, we never would have purchased those first
two TV stations. 
When CNN reported to me, if we needed more money for Kosovo or Baghdad,
we'd find it. If we had to bust the budget, we busted the budget. We put
journalism first, and that's how we built CNN into something the world
wanted to watch. I had the power to make these budget decisions because
they were my companies. I was an independent entrepreneur who controlled
the majority of the votes and could run my company for the long term.
Top managers in these huge media conglomerates run their companies for
the short term. After we sold Turner Broadcasting to Time Warner, we
came under such earnings pressure that we had to cut our promotion
budget every year at CNN to make our numbers. Media mega-mergers
inevitably lead to an overemphasis on short-term earnings. 
You can see this overemphasis in the spread of reality television. Shows
like "Fear Factor" cost little to produce ­ there are no actors to pay
and no sets to maintain ­ and they get big ratings. Thus, American
television has moved away from expensive sitcoms and on to cheap
thrills. We've gone from "Father Knows Best" to "Who Wants to Marry My
Dad?", and from "My Three Sons" to "My Big Fat Obnoxious Fiance." 
The story of Grant Tinker and Mary Tyler Moore's production studio, MTM,
helps illustrate the point. When the company was founded in 1969, Tinker
and Moore hired the best writers they could find and then left them
alone ­ and were rewarded with some of the best shows of the 1970s.
But eventually, MTM was bought by a company that imposed budget ceilings
and laid off employees. That company was later purchased by Rev. Pat
Robertson; then, he was bought out by Fox. Exit "The Mary Tyler Moore
Show." Enter "The Littlest Groom." 
Loss of localism 
Consolidation has also meant a decline in the local focus of both news
and programming. After analyzing 23,000 stories on 172 news programs
over five years, the Project for Excellence in Journalism found that big
media news organizations relied more on syndicated feeds and were more
likely to air national stories with no local connection. 
That's not surprising. Local coverage is expensive, and thus will tend
be a casualty in the quest for short-term earnings. In 2002, Fox
Television bought Chicago's Channel 50 and eliminated all of the
station's locally produced shows. One of the cancelled programs (which
targeted pre-teens) had scored a perfect rating for educational content
in a 1999 University of Pennsylvania study, according to The Chicago
Tribune. That accolade wasn't enough to save the program. Once the
station's ownership changed, so did its mission and programming. 
Loss of localism also undercuts the public-service mission of the media,
and this can have dangerous consequences. In early 2002, when a freight
train derailed near Minot, N.D., releasing a cloud of anhydrous ammonia
over the town, police tried to call local radio stations, six of which
are owned by radio mammoth Clear Channel Communications. According to
news reports, it took them over an hour to reach anyone ­ no one was
answering the Clear Channel phone. By the next day, 300 people had been
hospitalized, many partially blinded by the ammonia. Pets and livestock
died. And Clear Channel continued beaming its signal from headquarters
in San Antonio, Texas ­ some 1,600 miles away. 
Loss of democratic debate 
When media companies dominate their markets, it undercuts our democracy.
Justice Hugo Black, in a landmark media-ownership case in 1945, wrote:
"The First Amendment rests on the assumption that the widest possible
dissemination of information from diverse and antagonistic sources is
essential to the welfare of the public." 
These big companies are not antagonistic; they do billions of dollars in
business with each other. They don't compete; they cooperate to inhibit
competition. You and I have both felt the impact. I felt it in 1981,
when CBS, NBC, and ABC all came together to try to keep CNN from
covering the White House. You've felt the impact over the past two
years, as you saw little news from ABC, CBS, NBC, MSNBC, Fox, or CNN on
the FCC's actions. In early 2003, the Pew Research Center found that 72
percent of Americans had heard "nothing at all" about the proposed FCC
rule changes. Why? One never knows for sure, but it must have been clear
to news directors that the more they covered this issue, the harder it
would be for their corporate bosses to get the policy result they
wanted. 
A few media conglomerates now exercise a near-monopoly over television
news. There is always a risk that news organizations can emphasize or
ignore stories to serve their corporate purpose. But the risk is far
greater when there are no independent competitors to air the side of the
story the corporation wants to ignore. More consolidation has often
meant more news-sharing. But closing bureaus and downsizing staff have
more than economic consequences. A smaller press is less capable of
holding our leaders accountable. When Viacom merged two news stations it
owned in Los Angeles, reports The American Journalism Review, "field
reporters began carrying microphones labeled KCBS on one side and KCAL
on the other." This was no accident. As the Viacom executive in charge
told The Los Angeles Business Journal: "In this duopoly, we should be
able to control the news in the marketplace." 
This ability to control the news is especially worrisome when a large
media organization is itself the subject of a news story. Disney's boss,
after buying ABC in 1995, was quoted in LA Weekly as saying, "I would
prefer ABC not cover Disney." A few days later, ABC killed a "20/20"
story critical of the parent company. 
But networks have also been compromised when it comes to non-news
programs which involve their corporate parent's business interests.
General Electric subsidiary NBC Sports raised eyebrows by apologizing to
the Chinese government for Bob Costas's reference to China's "problems
with human rights" during a telecast of the Atlanta Olympic Games.
China, of course, is a huge market for GE products. 
Consolidation has given big media companies new power over what is said
not just on the air, but off it as well. Cumulus Media banned the Dixie
Chicks on its 42 country music stations for 30 days after lead singer
Natalie Maines criticized President Bush for the war in Iraq. It's hard
to imagine Cumulus would have been so bold if its listeners had more of
a choice in country music stations. And Disney recently provoked an
uproar when it prevented its subsidiary Miramax from distributing
Michael Moore's film Fahrenheit 9/11. As a senior Disney executive told
The New York Times: "It's not in the interest of any major corporation
to be dragged into a highly charged partisan political battle." Follow
the logic, and you can see what lies ahead: If the only media companies
are major corporations, controversial and dissenting views may not be
aired at all. 
Naturally, corporations say they would never suppress speech. But it's
not their intentions that matter; it's their capabilities. Consolidation
gives them more power to tilt the news and cut important ideas out of
the public debate. And it's precisely that power that the rules should
prevent. 
Independents' day 
This is a fight about freedom ­ the freedom of independent
entrepreneurs to start and run a media business, and the freedom of
citizens to get news, information, and entertainment from a wide variety
of sources, at least some of which are truly independent and not run by
people facing the pressure of quarterly earnings reports. No one should
underestimate the danger. Big media companies want to eliminate all
ownership limits. With the removal of these limits, immense media power
will pass into the hands of a very few corporations and individuals. 
What will programming be like when it's produced for no other purpose
than profit? What will news be like when there are no independent news
organizations to go after stories the big corporations avoid? Who really
wants to find out? Safeguarding the welfare of the public cannot be the
first concern of a large publicly traded media company. Its job is to
seek profits. But if the government writes the rules in a way that
encourages the entry into the market of entrepreneurs ­ men and women
with big dreams, new ideas, and a willingness to take long-term risks
­ the economy will be stronger, and the country will be better off. 
I freely admit: When I was in the media business, especially after the
federal government changed the rules to favor large companies, I tried
to sweep the board, and I came within one move of owning every link up
and down the media chain. Yet I felt then, as I do now, that the
government was not doing its job. The role of the government ought to be
like the role of a referee in boxing, keeping the big guys from killing
the little guys. If the little guy gets knocked down, the referee should
send the big guy to his corner, count the little guy out, and then help
him back up. But today the government has cast down its duty, and media
competition is less like boxing and more like professional wrestling:
The wrestler and the referee are both kicking the guy on the canvas. 
At this late stage, media companies have grown so large and powerful,
and their dominance has become so detrimental to the survival of small,
emerging companies, that there remains only one alternative: Bust up the
big conglomerates. We've done this before: to the railroad trusts in the
first part of the 20th century, to Ma Bell more recently. Indeed, big
media itself was cut down to size in the 1970s, and a period of
staggering innovation and growth followed. Breaking up the reconstituted
media conglomerates may seem like an impossible task when their grip on
the policy-making process in Washington seems so sure. But the public's
broad and bipartisan rebellion against the FCC's pro-consolidation
decisions suggests something different. Politically, big media may again
be on the wrong side of history ­ and up against a country unwilling
to lose its independents. 
  © 2004 Independent Media Institute. All rights reserved. View
this story online at: http://www.alternet.org/story/19327/