Page 192 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

182 Communication, Commerce and Power

The other kind of DBS system that is likely to succeed can be
termed 'global narrowcasting.' A core reason for the slowdown in
the growth of television advertising revenues has involved TV's tarn-
ished image in relation to its past status as the ideal medium for
reaching potential consumers. Television programers have responded
by seeking better ways in which to satisfy corporate demands for more
efficient buys. Unprecedented pressures have surfaced, compelling
programers to guarantee the delivery of a specified group of targeted
consumers to the advertiser-client. With the development of digital
compression and increasingly secure encryption technologies, both
DBS and cable-based systems constitute ideal vehicles for gathering
large groups of consumers who share both common interests and
consumer lifestyles. Especially in regions where cable infrastructures
are relatively underdeveloped, DBS will enable broadcasters to charge
high advertising fees in return for the delivery of an international
audience that is both interested in luxury or specialized products
and is financially able to purchase these types of goods and services.
A corporation that controls software but not the accompanying
means of distribution is vulnerable in relation to competitors who
control distribution. In the film, television and video sector, for
instance, distribution has become the essential component of business
activities. As New York investment analyst, Michael Garin, puts it,
'you produce to feed a distribution machine. ' 69 Survival in emerging
information-based production and distribution activities depends on
the integratio.n of all aspects of the production process, involving
production, distribution and consumption. Increasingly, this involves
the capacity to control the entire process through, for example, News
Corp's control over the encryption technology used by Astra and its
use on Star TV. In this case, News Corp has positioned itself to
coordinate much of the world's DBS-based production, distribution
and viewing activities. In 1996, News Corp entered into partnerships
with the second largest telecommunications company in the world,
British Telecom (second largest, next to AT&T, as a result of its 1996
acquisition of MCI). Also that year, News Corp signed agreements
with European-based mass-media TNCs Canal Plus and Bertelsmann.
These and other agreements aim to make Rupert Murdoch's News
Corp the core agent through which others must deal when seeking
access onto the digital information highway. 70 According to Vinton
Bower, Vice President of HBO Satellite Services, through its tele-
satellite, software and encryption holdings, News Corp has 'built a
system that basically gives ... [it] a captive audience.' 71