Despite increasingly vocal opposition, the FCC approved changes in media ownership regulations on June 2, 2003 that are expected to lead to a new series of mergers as media companies seek to expand and enter into new combinations in local markets across the U.S. Changes the FCC made included raising the percentage of the nation's TV households one company can reach from 35% to 45%. It lifted a 28-year band on allowing newspaper and broadcast combinations in larger markets and is also allowing one company to own more radio stations locally. The vote split along party lines 3-2, with three Republication commissioners voting for the change and two Democrats objecting. The FCC did not touch the ban on mergers among the four major TV networks, but they do stand the most to gain from the vote. The FCC received more than 750,000 pieces of mail -- the most related to any one issue in the history of the FCC. Many critics claim that further consolidation will drown out minority viewpoints and destroy competition. Some say it will lead to more unemployment in the entertainment industry.
The following industry people and corporate entity spokesman had this to say about the ruling:
Viacom spokesperson:Today's decision is a first step in responding to Congress's and the court's mandate that the FCC's broadcast ownership rules reflect the rapidly evolving, highly competitive and diverse media landscape. It will help ensure that free, over-the-air broadcasting continues to be available across America, while enabling media companies to succeed as they always have by serving local communities.
Rick Mischel, ceo, Mainframe Entertainment:Consolidation of television stations will make it harder for independent producers and studios to secure broadcast space, as vertically-integrated conglomerates will have incentive to show their own in-house developed programming rather than programming from independents. More consolidation means independents will have a harder time hanging on to the rights to their shows. Consolidation means that advertising rates could climb, and original production of animated commercials could decline. strict enforcement of anti-trust laws should prevent this.
Neil Court, partner/executive producer, DECODE Entertainment Ltd.:Loosening up local media ownership rules in the U.S. has no immediate impact on us or on the independent animation business in the U.S. However, it's evidence of the republican's belief in "bigger is better." Bigger media usually means bad things for indies, since it leads to fewer buyers and less competition. But practically, for independent animation companies, our buying community (large free TV networks and cable channels) are already fully vertically integrated 10-ton gorillas, so the FCC changes won't make any real difference to us.
News Corp.:The decision is an important step toward recognizing the realities of today's broad and competitive media market.
Harvey Harrison, ceo/co-founder, Catalyst Agency:This move continues the consolidation of media ownership in fewer and fewer entities thus squashing competition and innovation. This means fewer and fewer opportunities in the major media so that independents will need to resort to new and fresh ways to reach an audience such as online. For example, see www.homestarrunner.com and www.maddox.xmission.com as two examples of some splendid work.
Andrew Fitzpatrick, chairman, Monster Distributes Ltd.:Planning to stay away from the pub tonight and save my Euros for a bid for Disney. No, really, consolidation of media ownership is always bad for independent producers and distributors as it reduces outlets for programming, reduces prices and leads to increasing vertical integration with large media concerns wanting to own the content they broadcast.
NBC:While today's decision by the FCC to update its media ownership rules is a first step in the right direction, we have much further to go before there is a level playing field between free TV and pay TV.
Ian Dawson, exec producer at Steele VFX:In the immediate future it may provide new work as these entities look to rebrand themselves after consolidation, but in the long run it hurts us all. It prevents competition, which may raise prices to consumers while lowering profits for vendors and independent producers since the big fish will have more negotiating power and the ability to extend payments out beyond 90 days. For commercials, it may increase the amount that a corporation will have to pay for advertising time, which will put more pressure on agencies and the production process to produce same quality creative for less. Alternatively, it may force some agencies to find alternative ways to advertise their clients products, which will hurt the production and post-production markets.
Writers Guild of America, West:Today's 3-2 FCC vote is profoundly troubling. The television programs, which have over many years had the greatest impact on the American public, have traditionally come from a broadly diverse group of independent writers and producers speaking with individual voices. Today's FCC's vote opening the door to even more deregulation and media consolidation at the same time further closes the door to independent voices. The creativity, diversity and quality of American television will suffer as a consequence.
The winners today were five media giants. The losers were the American people. The networks currently exercise both creative and financial control over virtually all television, including that which comes from people they call independent. This imbalance belies the fundamentals of competition and diversity and restricts what ideas the public will see in both news and entertainment. The Writers Guild and the American people must not be silent while the FCC allows action by which independent voices are further silenced.