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Major Merger Could Alter Media Landscape

Major Merger Could Alter Media Landscape

The latest proposed mega-merger is poised to create a stir in Hollywood and on Capitol Hill.  This one involves two of the largest media companies in the world, 21st Century Fox and Time Warner Inc.  Fox is looking to acquire Time Warner, which would combine two of the power players in both film and television content.  "There's going to be a lot of people looking at this and saying this is not going to be good for competition," says longtime Houston business professor Dennis Adams.  Indeed, the New York Times points out the merger would reduce the number of major Hollywood studios from six to five, and the number of major television producers from five to four.

Beyond the traditional anti-trust concerns regarding control over market share and pricing, there are further dangers when two media companies consolidate.  "Media is meant to bias people," says Adams.  "It's meant to not only inform people, but to do so in a way that moves them."  With just six companies now owning 90% of the media content consumed by Americans, Adams says this merger has the potential to further limit the number of voices in the marketplace.  "If we see a handful of people controlling 90 percent of the market, who could all fit in a small room in my house, and they can decide what we're going to see and ultimately what we're going to think....ultimately that can be a pretty powerful set of people and, I think, potentially kind of dangerous."

On the other hand, Adams expects the companies will likely argue that Americans now have more media options than ever in the digital age, which is why traditional media companies like Fox and Time Warner need to consolidate just to survive.  Similarly, the explosion in popularity of Netflix has been mentioned as a factor in this year's disappointing summer box office season. The companies will say...there is a huge amount of competition in the broadcast television business," says Adams.  "It's not coming from television, but it's coming from the Internet and YouTube and all these other places...this is just a reaction to that."

 

 

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