Page 114 - Critical Political Economy of the Media

Concentration and commercialisation 93

media players such as Kirsch, Adelphi, Knight Ridder and Can West had a variety of
causes including overdependence on forms of production and delivery in struggling
sectors, increased competition, as well as internal problems of over-indebtedness,
over-expansion or poorly performing investments. News publishing businesses
have faced the greatest decline as websites such as newspaperdeathwatch.com
and papercuts.org report, while the music industry and advertising-financed FTA
television have also suffered.

Deconvergence

The 1980s was a period in which many firms expanded operations through
multisectoral growth and overseas trade and acquisitions. The 1990s saw leading
firms diversify into digital infrastructure and services to manage risks and to position
themselves for rapidly evolving and uncertain markets. The Time Warner–AOL
merger in 2000 is emblematic of a transition between phases of convergence. From
the 2000s a deconvergence trend has been evident, with companies consolidating
activities in a few core activities and selling off operations in other areas. One
driver has been investor impatience with problems in realising value from
acquisitions and convergence, especially in heavily debt-laden conglomerates
who are driven to package and sell off divisions and assets to serve the high levels
of capital return demanded (Winseck 2012). Fitzgerald (2011) identifies increasing
pressures from investors on media conglomerates to generate high returns for
shareholders, with less support for the arguments regarding long-term positioning
and investments used to justify the earlier phase of corporate convergence.
Alongside still considerable merger activity, Jin (2012) identifies a rising trend of
spin-offs and demergers, with a peak in 2005 (442). One example is News Cor-
poration, which split its satellite TV and film businesses off as 21st Century Fox
from its newspapers and other publishing businesses in 2013, the latter becoming
the new News Corporation. The deconvergence of News Corp. was multicausal
and complex, reactive to investors concerned about the underperformance of the
newspapers (and the toxicity of a phone-hacking scandal) compared to the
stronger growth prospects for the TV and audiovisual side. Murdoch carefully
retained power as Chairman of both companies, although shoring up the family
dynasty remains as uncertain as ever.
Patterns of ownership, then, have not simply been towards corporate integration
and consolidation but also disaggregation, the creation of new kinds of net-
working and interdependencies between firms. Hollywood has adopted strategies
described as ‘decentralized accumulation’ (Wayne 2003a: 84, 2003b) whereby
the power and logic of domination by a small number of vast entities is achieved
via a globalising network of sub-contracted firms and individuals, mediated
through trade unions, employer associations, education and the state. ‘Holly-
wood’ production has been increasingly globalised within a ‘new international
division of cultural labour’ (Miller et al. 2005). While the precise patterns vary
across industries and genres, cultural industries have adopted strategies of