Page 115 - Critical Political Economy of the Media

94 Critical investigations in political economy

sub-contracting, working with SMEs, globalising business processes to reduce
manufacturing and labour costs but also to tap specialist resources and expertise
in fast-developing digital services. This reflects broader processes whereby pro-
duction has shifted to the global South, with TNCs developing supply chains
from low-wage countries for goods aimed primarily at the global North, with
‘the surplus seized in considerable part by the omnipresent multinational firms
themselves’ (Foster and McChesney 2012: 26). CPE scholars have foregrounded the
appalling labour standards and exploitation, notably in merchandising manu-
facturing, that coexist with the glamorous creativity celebrated in business
literature (Miller et al. 2005).

Networks, alliances and joint ventures
Media integration has been examined above as a form of corporate ownership,
whereby subsidiary businesses are subject to control by parent companies.
However, there are other ways in which firms manage production flows, services
and relationships with other, legally separate organisations. This includes forms
of sub-contracting with small firms but also joint ventures with other media
conglomerates.
Such co-operative arrangements between firms have significance for many of
the contemporary debates about media ownership. Alliances and joint ventures
provide alternatives to establishing a controlling interest through mergers and
acquisition, highlighting more complex patterns of control. It is also the focus of
critical arguments that media markets can be dominated by interlocking interests
that ‘soften’ competition and can increase cartel behaviour amongst dominant
firms. The result, argues McChesney is far from ‘text-book’ accounts of eco-
nomic competition and represents what is dubbed ‘co-opetition’. Herman and
McChesney (1997: 104) describe how the major global firms:

operate in oligopolistic markets with substantial barriers to entry. They com-
pete vigorously on a non-price basis, but their competition is softened not only
by their common interests as oligopolists, but also by a vast array of joint
ventures, strategic alliances, and cross-ownership among the leading firms.

Bagdikian (2004: 9) found a total of 1,441 joint ventures between the dominant
five US media conglomerates. In the Harry Potter franchise, for instance, there are
joint ventures such as the collaboration between Warner Bros and the Universal
Orlando resort on the theme park, The Wizarding World of Harry Potter. At
the other end of the spectrum there are sales between separate, competing firms,
such as the telecasting of the Time Warner films on US cable networks including
Disney, ABC Family, Cinemax and HBO and ABC (Nielsen 2007). Yet here too
there is co-opetition for mutual benefit. Tom Zappala, a senior ABC executive,
announced he would work with WB to help launch the theatrical release of
Harry Potter and the Half Blood Prince (in July 2009) by running a marathon of the