There is a distinction between ownership patterns in Western and Eastern Europe. The predominance of foreign ownership in different media sector markets across Europe shows different patterns in Western Europe (i.e. the 15 EU Member states) and in Eastern Europe, including the 10 new Member states. Sanchez-Tabernero and Carvajal (2002) show that different media delivery systems exhibit different patterns in foreign or transnational media ownership. In the European Union, new communication technology platforms show the highest rate of penetration of foreign capital or international multimedia companies and their joint ventures.
In cable delivery, the three major groups are NTL Inc., UPC/ UGC Europe, and Callahan Associates / Cable Partners, all with US ownership. Radio is still the mass medium with the least foreign or commercial ownership, i.e. the largest audience market shares is obtained by public radio stations. Although the press sector in Western Europe still remains predominantly national, in Central and Eastern Europe it is largely dominated by foreign media owners. Companies from Western Europe (e.g. WAZ, Axel Springer, etc.) expanded their operations in the 1990?s, mainly by investing in existing media companies (the WAZ model usually includes a 50% shares and the ?golden vote? giving them decision making power in commercial matters), and then expanding the number and type of publications. In Croatia, WAZ invested in this way at the end of the 1990?s in the Croatian media company, Europa Press Holding, publisher of the daily Jutarnji list (around 30% daily newspaper audiences) and Globus, the leader on the market of political weeklies. In the weekly magazine press, EPH holds some 50 per cent of the audience market. The first-ranked by circulation among the daily papers, Ve?ernji list, was acquired by Austrian Styria, with the result that around 70% of the daily newspaper market goes to the media products owned by foreign companies. In Hungary, in 2001, 83% of the daily newspaper marked was owned by foreign investors. The Estonian daily newspaper market is wholly dominated by foreign companies (54% by the Norwegian company Schibsted ASA, 46% the Swedish Bonnier Group).
In commercial radio and television broadcasting in Central and Eastern Europe, it is American, and not European (in the publishing sector it is mainly German, Austrian, and Scandinavian companies) capital that predominates. Companies that have spread furthest in this part of Europe are Central European Media Enterprises (CME), Scandinavian Broadcasting Corporation, and News Corp, owned by Rupert Murdoch, with a smaller number of stations (but public plans for expanding). The largest West European commercial broadcasting company ? RTL (89% owned by the global media company Bertelsmann, and 7 % by WAZ), has recently expanded in Central Europe (in partnership with Croatian companies, it was awarded the second Croatian national commercial television concession in 2003).
Commercial offerings which are part of transnational media groups have nevertheless significant audiences in many European countries. The RTL Group, owned by Bertelsmann, has profitable television stations in ten European countries with audiences reaching 23-35 % in the four top countries. The Swedish MTG runs television stations in seven countries with national audience shares up to 23 %. CME is present in four countries with large audiences (from 20 to 48 %), SBS is active in four countries with audience shares of between 6 and 13 %, and News Corp. International is present in four countries, with the largest audiences in Bulgaria and the UK. Programmes from neighbouring countries also have significant audiences in spill-over areas.
In the newspaper sector, national publishers are dominant in most Western European countries (apart from Denmark, the UK and the French-speaking part of Belgium). In Eastern Europe, the situation is the opposite because almost all daily press markets are dominated by companies with foreign ownership.
Causes of concentration
Concentration of ownership is a general economic trend which is also found in the media sector. Media firms move into other countries when their home market is saturated, to attain critical mass, to pool resources and to share risks. In several cases firms have turned to other countries because the competition authorities refused to let them go ahead with a national merger for fear that it would create a dominant position or a monopoly. Transnational media concentration is established when someone has obtained a substantial ownership position within the media sector in more than one country. This form of Media concentration can be structured into three main categories, when analysing traditional media ownership patterns:
- Ownership of media companies in many countries (broadcasters, newspapers etc). The ownership can be obtained by acquisitions, establishment of new companies or by being granted broadcasting licences or by internal growth.
- Overspill of broadcasting from broadcasters operating in one country into neighbouring countries. It is not technologically possible to stop broadcasting signals at national borders. A certain level of overspill is therefore unavoidable. In many cases such broadcasting signals are retransmitted to make them accessible to a wider audience than those who are covered by the natural overspill.
- Pan-European broadcasting (mainly television).Broadcasting directed towards all or most European countries. Such broadcasting can have many language versions.
Another form of media concentration is that which takes place when a company acquires all or part of a national media enterprise. It is worth noting that even a minority share can give control of the firm, for example when the other partner is a financial concern or a providence fund, which is often the case in Europe. European media services produced in one country and broadcast or disseminated in one or more other countries where the producing company is not established. It is a form of export activity. In the printed press, these exports reflect the editors? desires to expand their sales by selling their publications abroad. The situation is less clear-cut where traditional broadcasting is concerned, as broadcasts can often be received abroad because radio waves do not stop at national boundaries. Direct broadcasting to other countries, which used to be fairly limited, has now grown with satellite broadcasting and cable networks. The specificity of this kind of broadcasting lies in the fact that the scope for interference by national authorities is often limited, having regard in particular to the principle of the free circulation of television services across frontiers enshrined in the Council of Europe Convention on Transfrontier Television and the EU ?Television Without Frontiers? Directive. One example is the commercials broadcast in Switzerland by the German and French broadcasters Sat1 and M6; their purpose is to bring in higher revenues without having to provide any special content for this market. The Internet also offers a form of transfrontier service where national sites are consulted by large numbers of people in other countries.
These transfrontier services are usually targeting those countries which share the same language: the United Kingdom exporting to Ireland, France to Belgium and Switzerland, Germany to Austria and Switzerland. Exchanges are also possible between Scandinavian countries with similar languages. Generally speaking publications and programmes in foreign languages are less widely disseminated.
Acquisition of broadcasting rights
When broadcasters in different countries acquire the rights to the same films, series and documentaries, the result is a form of ?upstream? concentration. Acquiring the rights to make or broadcast certain types of programme, such as ?Big Brother?, for example, falls into this category, as do licences to publish free daily newspapers which have managed to make their mark on the market (?Metro? and ?240 Minutes?, for example).
Consequences of transnational concentration
The risk of distorting competition to the detriment of small national publishers and Broadcasters Measures taken by large firms can undermine their rivals? activities and even force them out of business, in various ways, especially much smaller firms. The danger is all the greater when the firm is vertically integrated and has a transnational activity. It can deny access to platforms or offer unfavourable rates or slots to its competitors. The acquisition of exclusive broadcasting rights for several countries can hurt broadcasters in the countries concerned by depriving them of attractive content that might otherwise boost their ratings on their home market.
Weakening of public service broadcasters
Their status prevents public service broadcasters from expanding their activities abroad, placing them at the mercy of major foreign broadcasters active in several countries. Where foreign broadcasters acquire exclusive broadcasting or advertising rights for several countries, national authorities are not always able to defend the interests of their public service broadcasters, making it more difficult for them to fulfil their public service mission. It should not be forgotten that public broadcasters in small countries have to face competition from major foreign channels with budgets ten times larger than theirs.
The particular situation in central and eastern Europe
The shift from a planned to a liberal economy has deeply affected the media in these countries. American and European groups have swiftly taken over from the state-run media, launching western-style publications and television channels. These firms are now so well established that the new businessmen in these countries who have been prepared for the free market economy are finding it difficult to carve out a place for themselves on their own markets. The situation in these countries is so unusual that it merits a separate study.
An increasingly commercial approach to programmes
Transnational concentration mainly involves large groups competing fiercely for their share of markets where business potential still exists. In order to win the confidence of advertisers, their sole source of income, they have to have good ratings, so they show programmes that appeal to the largest possible audience, sometimes pandering to poor taste, which is perhaps not what one expects of a broadcaster.
It should be noted, however, that in addition to the major commercial channels, a large number of theme channels exist today which make a valuable contribution to opinion forming and culture in general. The main drawback is that, for technical reasons, these channels are not yet available. With the development of digital broadcasting, audiences thirsting for politics and culture will have a wider choice alongside the purely commercial programmes.
Thoughts on the effects of media concentration on competition
Assessing power on the market
The notion of ?power on the market? must be distinguished from that of ?dominant position?. One feature of transnational concentration is that a firm can win power at the European level thanks to its power to negotiate broadcasting and advertising rights, but without becoming dominant in its market. Furthermore, legislation governing competition does not condemn power as such but only its abuse. The authorities are often powerless against dominant positions that are the result of internal growth in dynamic businesses (Microsoft is an example), or when firms are left in a dominant position because their competitors go out of business. In a market economy, we must not penalise firms that have become powerful because they are more dynamic than their competitors.
When measuring media concentration at the European level, we observe that monopoly situations arise more frequently in smaller countries, at least regarding national television. This is because on such small markets there is often not enough room for two operators large enough to be commercially viable because of insufficient advertising resources.
Economic competition and journalistic competition
Economic competition is waged between firms which are economically and legally independent of one another. Journalistic competition can occur non only between different firms but also between independent editorial teams within the same group, provided that they have been granted editorial status. The competition authorities are interested only in economic competition, whereas journalistic competition is very important in assessing pluralism.
- The Council of Europe should initiate ongoing monitoring of transnational media concentrations, paying attention to the evolution of the media landscape and the way the public uses the media. The conclusions of this monitoring should be published in a yearly report and made easily accessible to the public.
- In view of the rapid development of transnational media concentrations, action at the international level is necessary. The Council of Europe should urgently study the appropriate means, including a convention, to prevent the negative impact that this phenomenon may have on freedom of expression, pluralism and diversity.
- Member States of the Council of Europe should support public service broadcasters, as specific providers of diverse content, also as content producers on new technological platforms.
- Member Sstates should encourage the development and strengthening of the contribution of community media in a pluralistic media landscape.
- Member States should include the contribution to freedom of expression and information and pluralism of opinions as an obligatory objective when granting broadcasting licences.
- Member States should enforce a clear separation between political authorities and the media and ensure that all decisions taken by public authorities regarding the media are transparent.
- Member States should strengthen their action to secure media pluralism and the editorial independence of the media through legislation or other means.
- In addition, media organisations should adopt functioning self-regulatory mechanisms to safeguard editorial independence.