Page 116 - Critical Political Economy of the Media

Concentration and commercialisation 95

first four films. According to Dempsey (2008) ‘[t]hese cross-promotion strategies
often draw more people into the multiplexes at the same time as they’re adding
to the Nielsen ratings of the older titles on the network’. Alliances and joint
ventures usually refer to formal arrangements between firms to pool resources or
otherwise collaborate. Paramount and 20th Century Fox collaborated in financing
and producing Titanic (Croteau and Hoynes 2006). In 2006 Time Warner and
Viacom closed their rival networks WB and UPN then launched their jointly
owned CW network. Co-opetition between firms, at least its public forms, can be
relatively easily catalogued as instances of softening of competition. However,
there is no predictable outcome from joint ventures or alliances per se as to
whether supplier interests predominate over consumer benefits.
As discussed, there have been efforts to distinguish a ‘monopoly capitalism’
analysis, associated with McChesney, from a ‘network capitalism’ approach
(Winseck 2012). The division is overdrawn in my view but does serve to alert us
to differences in explaining the tendencies and forms of capitalist organisation.
For McChesney, joint ventures represent efforts by firms to seek to control and
manage markets. Contrary to litanies for competition, such strategies are anti-
competitive and provide a more accurate insight into firms’ behaviour, combining
competition and collusion according to particular business objectives. In other
accounts, greater emphasis is placed on such network arrangements as defensive
moves, responses to market uncertainty and volatility. Networking relations and
‘alliance capitalism’ for Castells (1996) are core features of modern business
operations, present in high-tech sectors where research and development costs are
huge. Alliances between media industries and Internet/IT companies increased
in the 2000s (Arsenault and Castells 2008; Arsenault 2012). Rather than endorse
these as alternative accounts, they serve to invite us to consider the impact of
specific network arrangements on control and competition in the markets affected.
Another driver for alliances has been global expansion, as multinationals seek
partnerships with foreign companies to secure governmental approval in their
host market. Multinational expansion may be constrained by national rules on
foreign media ownership and investment. This is one reason why firms may seek
strategic alliances with local firms to ‘integrate operational functions, share risks,
and align corporate cultures to achieve a collective market advantage’ (Albarran and
Chan-Olmsted 1998: 334). Alliances can offer the best opportunity to capture an
already developed customer base, or overcome barriers to market entry. Alliances
are also driven by the need of TNCs to localise media content and services.
TNMCs form strategic alliances with NMCs (national media conglomerates) to
obtain assets such as a firm’s position within and knowledge of the relevant
market, distribution systems, regulatory arrangements and links with power
sources. Such alliances can allow TNMCs to avoid the risks and heavy investment
required to establish wholly owned subsidiaries and instead adopt more flexible,
networking arrangements allowing them to spread risks and gain control of new
markets (Mirrlees 2013). TNMCs also form joint ventures to create new com-
panies, such as Walt Disney’s joint venture with South Korea’s SK Telecom