Abstract
Scott Fitzgerald’s study of three of the largest media companies in the world may appear to be the same old story: powerful mega-corporations dominating cultural industries by mergers and profit-seeking strategies. But even if you’re tired of hearing that story, I would recommend a closer look at this book, which presents a nuanced and theoretically sophisticated discussion of corporations and cultural industries.
Fitzgerald focuses on global media giants Time Warner, Bertelsmann and News Corporation, carefully dissecting each corporation’s history and current status. He describes strategies and processes of commercialization, commodification, synergy, integration and convergence/deconvergence in detailed discussions of these key media companies. This type of discussion may not be surprising, given the book’s strong allegiance to critical political economy. However, Fitzgerald does not merely assume corporate infallibility or monopoly/oligopoly power as he thoroughly explores these companies in light of thorny issues such as competition, regulation and financialization. Through the careful, critical analysis of these different corporations, he presents the kind of work that represents what both celebratory media industry scholars, as well as a few political economists, have called for, that is detailed, empirical analysis of individual media corporations.
But, perhaps more importantly, the book analyses these corporations within the context of capitalism and neoliberalism. In other words, Fitzgerald considers these developments as ‘inseparable from the wider history of capitalism’. This is a welcome relief from some of the work that has been devoted to the study of media industries that either celebrates the market system or ignores it altogether. The discussion not only takes into account the changing nature of capitalism, but recognizes specific national/regional models and trends. In other words, Fitzgerald does not accept a static ‘one size fits all’ model of capitalist development.
The study takes seriously various theoretical discussions that have been swirling around political economy and media studies for a few years. The issue of competition is a good example. Fitzgerald does not accept the commonly accepted views about the absence of competition in monopoly capitalism and reviews various approaches to this tricky concept. Ultimately, he observes and expertly documents competition between and within corporations and media sectors.
The case of Time Warner illustrates well these different forms of competition, specifically intra-sectional and intra-corporate rivalries. The book gives countless examples of how the various components of Time Warner have competed among themselves, as well as with other media corporations.
The Time Warner case also exemplifies the increasing role of financialization in the goals and motivations of corporations in a neoliberal economy. Fitzgerald concludes that, ‘The reliance on outside financing and management of debt, together with growing influence of the stock market, were all shown to have a major impact on strategies and patterns of growth that have characterized Time Warner’ (p. 238). An illustration is Time Inc.’s president’s description of the company as ‘a superb collection of franchises in key market positions’ (p. 239).
Interestingly, Fitzgerald’s discussion of Time Warner’s ongoing difficulties with synergy since the colossal merger sets the stage for more recent moves by the company to spin off or sell its magazine holdings. While the company has been dominant in the US magazine market, the move is an attempt to shield its cable networks and film studio from the publishing industry’s recent difficulties adjusting to digital outlets and declining advertising rates. News Corp. made a similar move in 2012, separating its entertainment and publishing businesses.
Even though these corporations may adapt similar strategies, they are different in various ways. For instance, News Corp. represents the classic ‘mogul-dominated’ media corporation. It is obvious that the story of News Corp. is the story of Rupert Murdoch, who has maintained ownership as well as operational control. The company has grown in only 40 years from an Australian newspaper publishing enterprise to a global media conglomerate that has especially benefited from vertical integration strategies. The story of Murdoch’s efforts to maintain control over the company is not necessarily new. But it is important to understand News Corp. as the type of corporation that ‘fits clearly into the Liberal Market model for economic firms’.
Murdoch has often benefited from favourable regulatory policies that sometimes even singled out News Corp. for special treatment. Fitzgerald discusses ‘Murdoch exceptionalism’: ‘Rupert Murdoch has been credited with the deft negotiation through the shifting balances of power expressed in changing regulatory patterns and broader political alliances. Nonetheless, News Corp. has relied significantly on the cultivation of specific national and local relationships and, as with all successful multinational capitals, those with particular state apparatuses have been central’ (p. 352).
The book also points to News Corp.’s shift of operations to the US, compared to Bertelsmann, for instance, which has remained more globally oriented. Fitzgerald’s analysis of Bertelsmann is especially interesting since the company is often overlooked (or inconspicuous), even though it was the third largest media company in the world through the 1990s. Despite its global activities, Fitzgerald wisely discusses Bertelsmann within the context of the German corporate model. Similar to some other German companies, Bertelsmann has been characterized by decentralization, ‘almost to the point of concealment’ (p. 260). Bertelsmann’s subsidiaries operate quite independently, as ‘profit-centres’ for the corporation. Thus, ‘Bertelsmann is a deliberately low-key managerial company, strictly decentralized and allowing its brands to retain their separate identity’ (p. 261).
The company has been family-owned and operated since its establishment in 1835, representing the German tendency of high concentration in ownership. The company also represents other trends of German corporations such as a social partnership between the company and its workers and an active foundation that stresses ‘public-interest’ obligations. Nevertheless, Bertelsmann also has been moving more towards utilization of equity capital, a characteristic that has not been a strong tradition for German companies. As Fitzgerald observes, the corporation’s engagement with international debt markets has increased, leading to an increased ‘capital market focus’ (p. 310).
The contrasting strategies and moves by these corporations make for interesting and important reading. But it is also important to point out that the book does not present them as omnipotent and all-powerful. An important conclusion is worth citing here: ‘Indeed, what is striking when reviewing the individual and collective histories of these corporations is how often uncertainty, failure and crisis have marked their strategies and operations. The shift in their corporate forms in the last decade continues to reflect the uneven and crisis ridden nature of capitalist development and more specifically the complex and contradictory commercialization and industrialization of cultural production’ (p. 400).
As Fitzgerald suggests in his concluding paragraph, further research will be needed to track these contradictions and how they evolve. Overall, this book makes an important contribution to the understanding of this complex terrain. The study is an empirically solid and theoretically impressive analysis of these three super media companies. The extensive survey of current and past literature that has been dedicated to analysing the political economy of media and cultural industries in itself makes this book useful and important for anyone interested in understanding corporations’ involvement in media. And in light of the continuing corporate presence in media developments worldwide, this should include all of us.