Mexico's Media Concentration and Ownership in Global Comparison
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Mexico’s Media Concentration and Ownership in Global Comparison Eli Noam Professor of Finance and Economics Garrett Professor of Public Policy and Business Responsibility Director, Columbia Institute for Tele-Information Columbia University Business School April 2014 Speaker’s Draft – Preliminary A. Introduction In the information age, the diversity, openness, competitiveness, pluralism, and innovativeness of the means of communication are central to societies and economies. Therefore, the market structures of media industries is a central question. The media business is big business. Content media account for a combined $676 billion, about 1% of the world's GDP. Platform media accounted for $1.6 trillion, 2.3% of world GDP. Add media devices and media retailing, and the total rises to $3.6 trillion, or 5.9% of world GDP. Of discretionary spending, (i.e., excluding food, housing, medical, education, transportation to work), the media spending (including telecom connectivity), accounts for almost 20%. It is even higher in terms of discretionary time – beyond the time spent for work, sleep, and meals. In the US, average annual media consumption per person, as listed by the U.S. Census Bureau, has been measured to be an astonishing 3,545 hours per year for 2005-2009, not including time for e- mail and telephone calls, or 9.7 per day. This number implies that media consumption-- including background music, multi-tasking, and multi-media, but not including email and phone time, -- would occupy or overlap with 60% of all non-sleep time, including work time. Thus, the control over such large components of wallet and time are important just as a business matter, even beyond the role of media for politics, culture, and society. Our study identifies as one of the major issues in global media concentration the concentration of media in the emerging countries. Mexico is at the front line of this issue. But for most media intellectuals around the world arguing in favor of media pluralism, the focus of attention is on advanced world media moguls such as Rupert Murdoch, Silvio Berlusconi, or the Hollywood film majors. These are indeed problems. But usually overlooked are the dominant media companies in the emerging and developing countries where most of the world’s people live. My contribution to you today will be to provide some global numbers, which will show how Mexico performs relative to the rest of the world. 1 It is, of course, useful to look at the data for a single country. But it is also useful to look at the rest of the world. Because if we can identify common trends we can distinguish between fundamental drivers of change and country-specific situations. It’s hard to deal with fundamental forces. But for country-specific variations policy intervention may make a difference. Our work covers 30 countries. 80% of world by population, and 80% by GDP. The study involved 70 researchers around the world, covering 30 countries, 13 media industries1, over a period of 10-25 years. They covered thousands of companies. What we at Columbia University added was the common methodology and the overarching data analysis. B. Who are the largest owners of media in the world? The world’s largest media owners are listed in Table 1. Carlos Slim is the single largest individual owner, trailing only large governments (China, Japan, and Germany) and several large institutional owners (Several major mutual and hedge funds managed by State Street, Vanguard, etc.). Table 1: Top Media Owners Worldwide (as of Sept. 2013) Owner or Asset ManaGer Value of Media HoldinGs ($ billions) Government of China 317.2 Government of Japan 67.2 State Street (US) 64.8 Vanguard (US) 63.8 Fidelity (US) 46.5 Capital Group (US) 35.2 Government of Germany 29.9 Carlos Slim (Telmex, America Movil, Carso, Mexico) 29.2 Larry Page (Google, US) 26.7 Government of France 26.4 T. Rowe Price Assoc. (US) 26.1 1 We investigated 13 Media Industries: Newspapers; Magazines; Books; Radio; Broadcast TV; Video channels; Wireline telecom; Mobile telecom; Internet service providers; Film; Search engines; Online newspapers. 2 Sergey Brin (Google, US) 26.0 Government of Russia 25.4 BlackRock (US) 24.3 Cox family (Chambers, Kennedy, Parry- Sheden, Anthony) (Cox Communications (US) 24.0 Michael Bloomberg (Bloomberg LP, US) 24.0 David Thompson family (Thompson Reuters, Canada) 20.3 Marinho family (Globo, Brazil) 20.0 Dodge & Cox (US) 20.0 Government of India 19.8 Mark Zuckerberg (Facebook, US) 19.0 Massachusetts Finance (US) 18.7 Brian Roberts family (Comcast, US) 18.5 JP Morgan Chase (US) 17.9 Newhouse family (Advance Publications, US) 17.1 Government of Norway 16.2 Wellington Management (US) 14.0 Government of the UK 13.9 Janus Group (US) 13.8 Goldman Sachs (US) 12.3 Government of Taiwan 12.1 Sawiris Family (Orascom, Egypt) 12.0 Murdoch family (News Corp./21st Century Fox, US) 11.6 Government of South Africa 11.6 3 C. Who is the larGest media orGanization in the world? a. By Revenues Graph 1: Top 10 Content Media OrGanizations by Revenue 35000.000 33076.000 30000.000 25872.000 25000.000 22770.000 20000.000 15,537 15000.000 12,804 11,702 9,737 10000.000 8,148 7,933 6,990 5000.000 0.000 b. News Attention Time A second way is to rank media companies is by news attention time. Table 2: TOP NEWS MEDIA COMPANIES BY ATTENTION SHARE OF WORLD POPULATION, 2004/05 AND 2009-2012 (> 0.1% SHARE, OR #1 IN THEIR COUNTRY) Attention Country of Entity/Company Share (2009- OriGin 2012) - World GOV'T OF CHINA 18.96% China CCTV 7.28% China SHANGHAI MEDIA GROUP 2.33% China 4 HUNAN MEDIA GROUP 1.24% China XINHUA 1.12% China PEOPLE'S DAILY 0.73% China CHINA NATIONAL RADIO 0.24% China TRENDS MEDIA GROUP 0.17% China PRASAR BHARATI (PUBLIC) 11.82% India GOV'T OF RUSSIA 1.13% Russia GAZPROM MEDIA 0.54% Russia CHANNEL ONE 0.33% Russia VGTRK 0.27% Russia GOV'T OF EGYPT 1.12% Egypt ERTU 0.87% Egypt AL AHRAM 0.09% Egypt AL AKHBAR 0.09% Egypt AL GOMHOURIA 0.06% Egypt NILE TV NETWORK 0.01% Egypt GLOBO GROUP 1.09% Brazil MURDOCH GROUP 0.95% US 21ST CENTURY FOX 0.76% US NEWS CORP. 0.19% US BCCL 0.93% India GRUPO TELEVISA 0.77% Mexico ZEE ENTERTAINMENT 0.68% India DISNEY 0.62% US COMCAST 0.56% US REDSTONE 0.49% US CBS 0.32% US VIACOM 0.17% US FININVEST 0.40% Italy DOGAN GROUP 0.38% Turkey RAI (public) 0.35% Italy TV AZTECA 0.34% Mexico CTC MEDIA 0.33% Russia NHK (public) 0.33% Japan 5 BERTELSMANN 0.32% Germany The government of China, through its several media organizations, accesses a truly vast share of global news attention. Almost 19% of global news attention. Even if we unbundle China’s news organization, CCTV alone would still command 7.28% of the global news attention and be the second largest news media company in the world. The explanations for these high shares are simple: a huge population (1.3 billion) and state control over most news media outside several online portals and print magazines. The largest private media firm, by attention time, is Globo in Brazil, with 1.09% for the entire world. Brazil, too, has a large population (192 million) and its media is dominated by Globo. Rupert Murdoch’s two companies combined are the second largest privately owned news providers, by attention, and the largest US-headquartered news firm (0.95% for the entire globe). Mexico’s Televisa is #8 worldwide, and #4 worldwide among private companies. It is larger in news attention than any US company except for Murdoch. It is larger than any European media firm. c. Market Power A 3rd Approach is to ask: who is the largest media company by market power? Who is, in an antitrust sense, the most powerful company in the world? It is Google. By revenues, several companies are well ahead of it. But it holds high market shares in its industry in many. And its overall index has been growing enormously. The runners up are the major media firms News Corp, Time Warner, Disney, Vivendi, Bertelsmann. And the major European telecom companies Telephonica, Orange, Vodafone. 6 Graph 2: Companies with Highest Power Index 6000 5000 4000 3000 2009/8 Weighted Global Power Index 2000 2005/4 Weighted Global Power Index 1000 0 7 Graph 3: Countries’ Pooled Overall Sector C4 – All Media Pooled C4 - All Media 100.0 90.0 80.0 70.0 60.0 2004/5 50.0 40.0 2009 or Most Recent 30.0 20.0 10.0 0.0 US UK Italy India Chile Israel Spain Brazil Egypt China… China… Japan Russia France Turkey Poland Ireland Taiwan Mexico Finland Canada Sweden Belgium Portugal Australia Germany Argentina World Avg Switzerland South Africa South Korea Netherlands D. Global Concentration LeVels What are the levels of media concentration? The world average is a very high 3,241 and up from 3,134 in 2004/05. The arithmetic average, which reduces the weight of large (by GDP or population) countries such as the US, China, and India, is 3,904. In 2013, the five countries with the highest average media industry HHIs were China (9,840), South Africa (6,242), Turkey (5,990), Egypt (5,544), and Mexico (5,042). On average, the pooled C4 (i.e. the top 4 companies in the overall combined market (13 industries) for the world is 56.6% (up from 52.3% in 2004), which means that on average, four companies control over one half of each country’s 13 national media industries, combined.