The Federal Communications Commission (FCC) recently voted to ease its restriction on dual ownership of television networks. It is now legal for any of the four major networks – NBC, CBS, ABC, or FOX – to own UPN, WB, or any broadcast network that has come into existence since 1996, but not to merge with each other. This is good news for TV aficionados and, contrary to critics claims, will promote diversity of programming.
The rule that prevented dual ownership was formulated in 1946 to “serve the public interest” and promote programming diversity among the three networks. As history attests, the rule is an abject failure. Far from furthering diversity, the ban on consolidation actually encourages mimicry and formulaic programming.
Networks in direct competition for the same broad-based audience do not innovate, they emulate. When “Gunsmoke” hit the ratings “Bonanza,” the three networks fell all over themselves to fill as many prime time hours with 10-gallon hats and quick-drawing sheriffs as possible. In the 1959-60 season, westerns dominated the prime time lineup with 30 permutations in all.
This dynamic repeated itself with primetime melodramas and sit-coms, and is still evident today. “Survivor’s” success in the summer of 2000 opened the door for “Big Brother,” “Temptation Island,” “The Mole,” and “Boot Camp.” A similar wave of imitations followed ABC’s “Who Wants to Be a Millionaire.” NBC imported “The Weakest Link” from Britain to capitalize on both trends: the trivia show incorporates “Millionaire’s” futuristic trivia set with Survivor-esque voting.
Only Viacom-owned UPN and AOL-Time Warner’s WB cater most of their programming to unique tastes and niche advertisers. UPN boasts two of the most popular shows among African-American audiences, “Moesha” and “The Hughleys,” while WB’s most successful shows are geared specifically for young audiences.
This programming diversity is made possible by dual ownership. If Viacom, which also owns CBS, were forced to shed UPN, it is unlikely that the network – and its diverse shows – would survive. Yet, some Washington policy makers still contend that the dual ownership ban promotes broadcast program diversity.
Not only does this contention fly in the face of broadcasting history, it also contradicts the experience of cable television.
In the less-regulated market for cable television programming, diversity is best served when one firm owns several stations. Consider the example of Viacom: Its holdings include MTV, BET, Showtime, Nickelodeon, and TNN. While these stations may compete for viewers from time to time, all attempt to cater to specific tastes and offer programming unlike their sister channels. Although subject to some internal rivalry, AOL-Time Warner’s television holdings –CNN, HBO, TBS, Cartoon Network, to name a few – operate similarly.
Cable television is attractive to advertisers looking to reach identifiable groups of potential consumers. Sometimes the commercials promote products related to the programming, like an ad for a flea collar during Animal Planet’s “Good Dog U,” but most often they simply match the viewing demographic with products of potential interest. Beer commercials during football games and Mercedes-Benz ads during golf coverage are but two examples.
Of course, critics argue that consolidation will allow the big media firms to use their market power to mistreat independent production companies and producers. But existing antitrust laws already regulate anti-competitive practices and collusion among rivals; the Federal Trade Commission and Justice Department have more than enough authority to investigate any alleged consumer harm that may arise from consolidation.
When informed that the facts contradicted his theory of history, German philosopher GWF Hegel famously replied, “all the worse for the facts.” Policymakers who steadfastly defend the broadcast ownership cap as an effective instrument to promote program diversity sing the same tune today. While ownership caps may make sense in theory, history – and economic analysis – teaches us differently. Consolidation allows television programmers to appeal to different audiences, and, more importantly, attract more advertising revenue through different channels. In this way, the profit motive encourages, rather than stifles, diversity.
Ownership caps did not make sense in 1946 and have no place in the communications market of the 21st century. Dual ownership reform is welcome, but the FCC should not stop until all plural-ownership regulations are completely eliminated.