WMU News

Book explores media mergers

May 29, 1997

KALAMAZOO--While scholars and critics have been increasingly suspicious of the recent string of high-profile media mergers, a Western Michigan University faculty member attempts to take a more objective look in a text exploring the business logic behind such global decision-making.

Dr. Richard A. Gershon, WMU associate professor of communication, is the author of "The Transnational Media Corporation: Global Messages and Free Market Competition." The book offers an in-depth business analysis of the forces that cause a media company to become global, and once it does, how that impacts the cost, availability and quality of information and entertainment it provides.

"There is a public perception that such companies are huge, monolithic entities that are systematically trying to control the marketplace of ideas and I would argue just the opposite is true," says Gershon, who teaches telecommunications management courses. "Companies like Microsoft and Disney are very dominant in certain areas, but no one company can control it all -- try as it might. The most successful companies in media and telecommunications tend to be highly individualistic and entrepreneurial in their approach to business."

Gershon defines the transnational media corporation as a company that operates globally with information and entertainment as its principal commodity. An evolution of the multinational corporations of the 1960s and '70s, today's transnational company is characterized by a corporate center that is often unknown to the general public and a corporate culture reflected by those who founded the corporation. The transnational company also operates in specific markets, with a obvious preferences toward its home. However, Gershon notes that this doesn't influence strategic decision making and resource allocation, which is based on economic goals and not national boundaries.

Divided into two parts, Gershon's book not only examines the regulatory and economic reasons that prompt companies to become transnational, but it also illustrates these concepts through case studies of five leading media giants, including Time Warner, Sony, Bertelsmann A.G., the Walt Disney Co. and News Corp. Ltd. For instance, Gershon uses News Corp., owner of the Fox Television Network, TV Guide and 20th Century Fox, to illustrate how a company can strategically promote its own interests by integrating these multiple resources.

The book also gives a thorough explanation of the business philosophies and histories of these fierce competitors. Readers can learn how the Walt Disney Co. transformed itself from an ailing business into a $22 billion giant, how Fox became a serious network, capturing the television rights to the National Football League, and how the German company Bertelsmann A.G. grew from a printer of religious hymnals to the second largest transnational media corporation in the world, owning Doubleday Publishing and RCA Records.

Gershon also uses the book to highlight the unique if not humble beginnings of these firms, refuting several popular myths concerning large-scale companies.

"People don't realize that most of these companies didn't set out with the intention of becoming global titans," he says. "Instead, as they became bigger, competitive pressures forced them to develop an international business strategy."

While Gershon was primarily interested in providing a business analysis of the transnational media corporation, he does devote a significant portion of the book to discussing the consequences of media mergers and how they affect what he calls the "marketplace of ideas." He argues that there is limited evidence to support the claim that these companies will use their media concentration to promote a particular corporate agenda. In fact, he says the result has been quite the opposite, with many of the companies adopting an attitude of neutrality and refusing to make any judgments over whether media products are appropriate for public consumption in order to protect their profits.

"It's almost a cultural mainstreaming where it's safer to do something middle of the road rather than push the edge for unique and innovative products," he says. "Also, rather than being civic-minded in terms of what's an acceptable product, companies will sometimes do what sells and that's always a potential hazard."

Gershon says probably the primary issue to emerge in the years to come, as the number of media leaders becomes even smaller, will be the issue of cultural preservation. With the globalization of television, and people the world over watching CNN, "The Simpsons" and MTV, there's the risk that cultures will become homogenized. Gershon believes countries will recognize this and will put more effort into preserving their unique qualities. Overall, he believes that deregulation will ultimately be beneficial.

"The free market forces a level of accountability that a controlled marketplace doesn't," he says. "Are we better off for having a 24-hour news network? I think so. It brought competition to the floor and made all of the other news organizations better."

Published by Lawrence Erlbaum Associates, Publishers, of Mahwah, N.J., the book is available from the company in softcover for $22.50 or hardcover for $49.95.

Gershon has been a WMU faculty member since 1989 and teaches courses in telecommunications management, law and regulation and international communication. His articles have appeared in such publications as Telecommunication Policy, Communication and the Law, Journal of Media Economics and Telephony Magazine.

Gershon holds his master's degree from the University of Vermont and his doctoral degree from Ohio University.

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