Media Conglomeration

Media Conglomeration :

Media Conglomeration can be described as the process of creating a conglomerate. Conglomerate stands for the process of acquiring the subsidiaries by a big parent company. This conglomeration often results in a new company that is a large multi-industry, multinational company. A conglomerate is a large company composed of a number of smaller companies engaged in generally unrelated businesses. A company is allowed to diversify its revenue structure or stream and can reduce the market risk in case of Conglomeration. Often, conglomeration refers to a time phase when many conglomerates are formed simultaneously. A media conglomerate, media group, or media institution is a company that owns numerous companies involved in mass media enterprises, such as television, radio, publishing, motion pictures, theme parks, or the Internet. According to the magazine Nation, "Media conglomerates strive for policies that facilitate their control of the markets around the world."

BRIEF UNDERSTANDING

A media conglomerate,bya company that owns numerous companies involved in mass media enterprises, is something that not many people even know of, but it is crucial in understanding where your news is coming from. These enterprises consist of television, radio, publishing, motion pictures, theme parks and the internet. Some media conglomerates use their access in multiple areas to share various kinds of content such as: news, video and music, between users. The media sector's tendency to consolidate has caused formerly diversified companies to appear less diverse to prospective investors in comparison with similar companies that are traded publicly and privately. Therefore, the term media group may also be applied, however, it has not yet replaced the more traditional term. A conglomerate is the combination of two or more business entities engaged in either entirely different or similar businesses that fall under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company and is often large and multinational.

FROM THEN, TILL NOW

Conglomeration started to become common in the 1950s because it was and still is a convenient way for parent companies to operate several related or complementary firms in conjunction with each other. In theory, conglomerates offer economies of scale through greater access to capital markets and a cheaper source of funding. Conglomeration became increasingly popular in the 1960s due to a combination of low interest rates and a repeating bear-bull market, which allowed the conglomerates to buy companies in leveraged buyouts, sometimes at temporarily depressed values. In 2007, it was questioned whether media companies actually are unrelated. Some media conglomerates use their access in multiple areas to share various kinds of content such as news, video and music between users. The media sector's tendency to consolidate has caused formerly diversified companies to appear less diverse because, compared with similar companies, it isn't diverse. Therefore, the term media group may also be applied, however, it has not yet replaced the more traditional term. In the 2016 Forbes Global 2000 list, Comcast was America's largest media conglomerate in terms of revenue, with The Walt Disney Company, Time Warner, CBS Corporation & Viacom (both are controlled by National Amusements through supervoting shares), and 21st Century Fox comprising the top six . Like the United States, Canada, Australia, and New Zealand also experience the concentration of multiple media enterprises in a few companies. This concentration issue is an ongoing concern for the Canadian Radio-television and Telecommunications Commission, the Australian Communications and Media Authority and New Zealand's Broadcasting Standards Authority.

WORKING SCENARIO

Media corporations such as Viacom, CBS, News Corporation, NBC, Disney, and Time Warner dominate modern day media. Not only do these conglomerates own broadcast networks and local stations, but they also possess a large percentage of cable companies. These companies become more competitive by piping in the signals of their competitors and the studios that produce programming individuals receive. Despite an increase of wealth in these corporations, conglomeration is a serious problem for nearly every American business. Independent and entrepreneurial media businesses often offer top notch programming and ideas despite their size. Within a local community, the basis for these industries focuses on the consumer, not so much on the money. Small business ownerships debate they offer just as much socioeconomically as a store like Wal-Mart does in discounted merchandise. Although conglomerates benefit from their billion dollar revenue, according to consumers, they lack meeting the programming needs of local communities and diversity. Advertisers enjoy the amount of airtime offered by big media, currently taking up nearly half of every show on air. Capitalistic conglomerates seize economic advantage by focusing on national programming, new technology, and competition. However, smaller businesses lose their own advantages in society, and have limitations restricting them or their rights. From the effects of this merging media, a purely capitalistic society relentlessly forms, diminishing individual rights in a free nation.

ADVANTAGES and DISADVANTAGES

The diversification in the case of media conglomerate can definitely treated as an advantage. The diversity in the media conglomeration can reduce the risks of both unforeseen events and and differing effects of businesses. Diversification can, however, have disadvantages. Perhaps the key one is that the specialist skills built up in the original company or group of companies may not be relevant in the newly-acquired entities. This means that with overall control being exercised by a management that does not fully comprehend the forces that drive success in some of its component parts, a conglomerate can become a confusing and dysfunctional entity that is not maximizing all of its potential. In the same way, one advantage of a conglomerate is that it is better equipped to retain a general position and be less affected by adverse fluctuations. Also a conglomerate can create internal capital market if one of the external companies are not developed fully. A conglomerate can also show the growth of earnings, this is by acquiring companies who have shares that are more discounted then their own. As a conglomerate grows and acquires more companies, it can increasingly take advantage of the greater flexibility it has to develop newly-bought companies and increase their size and profitability. Although the acquisition of more and more companies may potentially enable better overall performance during business cycle fluctuations, this may not always be the case. Culture clashes can destroy the value of the company; the extra layers of management can increase costs. A conglomerate may keep its poorly performing units for the purposes of diversification, but in doing so, these poor performers may dampen the performance of its more successful parts. Similarly, an overall return will not highlight problems that may exist in some of the component companies, which may increasingly inhibit profitability.

CRITICISM

The common criticism of conglomeration is the added layers of management, lack of transparency, corporate culture issues, mixed brand messaging, and moral hazard brought on by too big to fail businesses. When a handful of companies have so much control, diversity of news and entertainment is limited; minorities' viewpoints are often locked out; the cross-media mindset of executives turn media outlets into formidable publicity machines, which limits smaller voices; problems with corporation may not be covered. Conglomeration of media made corporations care about the business part of the media more than the ethics of the profession. Conglomeration of media also caused media bias and loss of objectivity in delivering the news to the public. Critics have accused the large media conglomerates of dominating the media and using unfair practices. There is also criticism that the concentration of media ownership reduces diversity in both ownership and programming of TV shows and radio programs. Because there are fewer independent media, there is less diversity in news and entertainment and therefore less competition. This can result in the reduction of different points of view as well as vocalization about different issues. Because these conglomerates have so much power and influence, critics bring up the question of whether that amount of power is justifiable. It can be and is easily abused. Some wonder if it's better to lessen the amount of conglomerates to reduce the likeliness of unfair practices.  

                    

                                  - Shruti Nag