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Concentration of Media Ownership in Latin America

P.J. Worsfold, 5/31/2007

Contents

Increasingly, since the early 1980s, the global media market has followed in the steps of the automotive and the oil industries by demonstrating that, when left unchecked, open markets tend to close. Led by the U.S. and spurred on by the 'failure' of communism, which was punctuated by the end of the Cold War, neo- liberalism, with its pro-business emphasis on deregulation and the free movement of goods, has become the standard of global politics and economic relations. The world's largest media operations have been strong proponents of this development. Thanks to the deregulation of communications and cultural sectors coupled with digital era media convergence, the media giants' profits have soared. The tremendous competition to access and dominate newly available markets has precipitated a flood of mergers and acquisitions. McChesney observes, "across the globe there has been a shakeout in national and regional media markets, with small firms getting eaten by medium firms and medium firms being swallowed by big firms" (McChesney). Today, the following nine companies control the vast majority of the world's media output: Disney, CBS, Time Warner, News Corp, Bertelsmann AG, Viacom, General Electric, the Lagardère Group and Vivendi SA.

With its capacity to inform and create opinions, the media is vastly different from any of the other products that make up our consumable world. Thus, we must hold the maneuverings of media companies to a stricter set of rules than that which we would use to judge the actions of electronics retailers or coffee shops. The term media concentration tends to elicit one of the following three blanket responses: acceptance, indifference, or rejection. However, the risks of media concentration depend on the nature of the audience and the media system, both of which may vary greatly according to region. Thus, while probably never ideal, concentrated media ownership could be acceptable in one region and unacceptable in another, such is the case when one compares the state of media ownership in the western world with that of Latin America.

My intent with this paper is to explore the nature of media concentration in Latin America. By doing so, I will illustrate the recurring and influential role that foreign involvement and elite control have played in shaping Latin American media. This paper will have two main sections. In the first, I will address the issue of why media concentration poses a greater risk to Latin America than it does to the western world. This process will involve a summary of the factors differentiating western and Latin American media concentration, as well as a discussion on the origins and development of Latin America's media system. The second section of this paper will summarize key events of Latin American media concentration from the mid-1990s onward. This part of the discussion will highlight the roles that governments, domestic enterprises, and foreign conglomerates have played in facilitating Latin American media concentration. Finally, I will end this discussion by commenting on what impact media concentration has had on the various components of Latin America's media system.

Before I proceed, it is important to note that both from a media perspective and from a broader socio-economic perspective, Latin America is a very diverse region. With that said, the majority of recently published and easily available English language research on the region's media tends to focus on Latin America's wealthier countries. Consequently, I shall focus my observations on matters relating to televised media from wealthier nations such as Argentina, Brazil, Chile, and Mexico. However, it should be understood that a more balanced account of the issue would, among other things, delve into the social, economic and media related disparities that exist in the region. Additionally, it should be understood that, while my discussion will highlight negative aspects of Latin America media, I am not suggesting that honest, high quality journalism does not exists in the region. My arguments are based on the general trend of the mainstream media; there are of course exceptions to this trend that, as Waisbord points out, include, poignant "watchdog journalism, intelligent telenovelas, rebellious and pleasurable music, community radio, [and] eye-opening documentaries" (Waisbord).

Section 1 Western and Latin American Media Concentration: the Differentiating Factors

Aside from the U.S., whose propensity towards commercialism allowed the process to happen more quickly, concentration of media ownership amongst western nations has taken a similar tack. Amidst criticism from those who long for a media based around public service as opposed to consumption, established media outlets have competed against, merged with, and acquired each other at a pace so fast that policymakers and the public have had little time to react. While many western nations have enacted measures to ensure some level of cultural protection, for the most part, media concentration in the western world has been allowed to continue unabatedly.

With such a small pool of ownership, a narrowing of available perspectives within the media is unavoidable. Each of the media giants are managed under essentially the same free market principles and each of the media giants derive a significant portion of their revenues from the same group of advertisers. Thus, the conclusion that the general tenor of mass media content tends to support pro-capitalist organizations and consumerist values is quite logical. However, with the exception of left-leaning political activists and media scholars, the issue of media concentration is frequently absent from public discourse in the west. Moreover, in researching the matter, I have noticed a dearth of empirical evidence documenting the negative effects of media concentration in major western markets.

The apparent failure of the fears associated with media concentration to come to fruition is perhaps partially attributable to the fact that the media giants tend to tailor their content to align with the status quo. However, it is my contention that this failure also speaks to the media literacy of western audiences and the west's longstanding tradition of media acting in the public service. With this in mind, I am led to concur with the often-heard argument that, from a western perspective, media concentration is not inherently bad, but rather that there are significant risks in allowing the control of something so vital to fall into the hands of so few.

While in the west, we can view media concentration as a concern rather than an immediate threat, the situation is markedly different in developing regions, where the factors that mitigate the dangers of media concentration are not always present. Compounding the situation is the fact that dominance in the emerging markets of wealthier developing nations will be vital to the ongoing success of transnational media giants. Commenting on the importance of expansion into the developing world, Viacom CEO, Sumner Redstone suggested, "companies are focusing on those markets promising the best return, which means overseas" (McChesney). Frank Biondi, the former chair of Vivendi's Universal Studios, concurs with Redstone and adds that "99 percent of the success of [major media] companies [in the] long-term is going to be [attributable to] successful execution offshore" (McChesney).

With its large population, cultural similarities, and emerging middle class, in the last 15 years, Latin America has become a hotbed for transnational media mergers and acquisitions. Global media corporations and large investment firms have found that the combined effect of eager advertisers, new democracies, local operations in need of foreign capital and a public eager to enjoy western style consumption, is irresistible. While mature western markets offer the potential for only "incremental expansion" (McChesney), Latin America, may well be a vital component to lasting success; particularly if the world's economic axis begins to shift towards today's emerging middle powers, as many predict it will.

The Origins and Development of Latin America's Media System

In a striking similarity to Aird's vision for Canadian broadcasting, pioneers of Latin America's media originally saw a strong broadcast infrastructure as a means to create and promote national and regional identity. Discussing early Latin American media, Fox observes, "the media, along with roads, railways, telegraph networks and telephones, helped to create a commonality of culture that helped to bring together very different peoples and cultures and interests within the 'national project'" (Fox 8). However, while Canadian wealth allowed its policymakers a considerable level of control over the course of its media development, from the outset, Latin American nations were forced to rely on both foreign investment and foreign technology to build their media systems.

Becerra notes that, in the 1920s, Latin America's reliance on American assistance determined the "commercial logic, tending to the concentration of stations and networks," (Becerra 3) that characterized its radio infrastructure. However, American influence was most keenly felt with the introduction of television to Latin America in the 1950s and 1960s. Major American networks, such as the Time-Life group (4), invested in "practically all countries" (3) of the region. Consequently, in 1950, Mexico became the sixth country in the world to have a television system, Brazil, Argentina and Venezuela followed suit in 1950, 1951, and 1953 respectively (3). Throughout its formative years, Latin America's media system was both ideologically and technologically dependent on western, primarily American, models of operation.

Historically, Canadian policymakers, as well as their counterparts in many European nations, have supported some form of public service in their media systems, while Latin America's dependence on the U.S. has resulted in an almost exclusively commercial system. However, over the years, Latin America has not been without those who believed that the media could teach as well as entertain. The notion of public service broadcasting managed to resurface amidst nationalist sentiment in the late 1950s and 1960s. Fox observes that the UNESCO, the Alliance for Progress, and the Organization of American States funded a variety of initiatives intended to use mass media for health, education and rural development (Fox & Waisbord 304). Additionally, in 1966 and 1968 respectively, Colombia and Mexico each launched education television projects (304).

Sadly, for proponents of the public service model, as various Latin American dictatorships began to embrace free market economics in the 1970s, interest once again switched from public service, to entertainment-based broadcasting (304). Governments knew that by helping to create and continuing to control entertainment oriented private media systems, they could pacify the masses and reap the benefits of market economics. Fox points to Brazil's TV Globo as a potent example of this phenomenon (304).

While Latin America adopted American-style commercialized broadcasting, its governments practiced ironfisted media control. For the most part, the governments' approach was quite simple, if media outlets towed the party line and allowed politically neutral sporting and entertainment coverage to dominate their headlines and programming schedules, they were protected from competition and free to pursue their bottom lines. Commenting on Chilean media in the 1970s, Gilbert argues that the abundance of sports, crime, and celebrity scandals in the country's media was simply a government "attempt to keep people unaware of what, in fact, [was] taking place in Chile and other places" (Gilbert 53). Latin American regimes ensured media cooperation through a variety of techniques, which ranged from allocation of state advertising funds and the implementation of licensing requirements to outright censorship, verbal intimidation and physical force. Mastrini observes, "we may say that the relationship between governments and media owners was mostly characterized by the governments' inability to establish policies directed at media owners, in exchange for a certain politically docile commercial system" (Becerra 3).

Although governments set the agenda, the media elite seemed happy to go along with it as long as their monopolies remained secure. In 1991, Emilio Azcarraga, the founder of Mexico's Televisa, the largest Spanish-speaking media company in the world, underscored the primacy of entertainment in Latin American media and his dedication to the government's priorities. Azcarraga remarked, "Mexico is a country of a modest, very fucked class [of people], which will never stop being fucked. Television has the obligation to bring diversion to these people and remove them from their sad reality and difficult future" (McChesney). Contrary to western perspectives, which acknowledge the media's capacity to facilitate public debate and celebrate freedom of the press, Latin American media has been predicated on control and manipulation. Pointing to Peron's Argentina, Pinochet's Chile, and the PRI's Mexico, Waisbord argues that since the 1930s, "party leaders, military officers, and captains of the industry ruled over mini-media empires of broadcasting stations and newspapers" (Waisbord).

Media concentration in Latin America is a much greater threat than the ownership situation in the west, because Latin American media lacks a strong tradition of integrity and public service and furthermore, for the last eight decades, the region's audiences have been conditioned by commercial values and government propaganda. In order to mitigate the effects of media concentration, audiences need, at the minimum, an established alternative to the dominant media system. Such an alternative does not exist in Latin America. Becerra's words aptly summarizes the inherent danger of Latin America's media concentration. He suggests, "in the concrete field of communication, only those countries with a solid public service tradition manage to attenuate market concentration in very few hands" (Becerra 8). This tradition, Becerra continues, "contradicts the fundamentalist 'invisible hand' motto which spread all over Latin America" (8).

Section 2 Latin American Media Concentration from the Mid-1990s

By the mid-1990s, democracy had almost completely engulfed Latin America; in all the twenty Latin American countries except Cuba, democratic political regimes were in power (Cole 245). The privatization, liberalization and deregulation that "profoundly reshaped media structures and dynamics world-wide" (Fox & Waisbord 305) quickly took hold of Latin America. Given the eagerness of the region's governments and businesses to enter into the global economy and the fact that the region "had long been open to international capital and programming flows," (305) foreign media giants and other transnational corporations easily made their presence felt in the region.

The 1994 Argentina-United States trade agreement of reciprocal investment, which granted the American cable companies, TCI and Liberty Media access to the Argentinean market (307) is an excellent example of the foreign investment that characterized the era. Similar instances of foreign involvement and ownership consolidation occurred in Brazil, when the government passed the 1995 Cable Law, which allowed up to 49% foreign ownership of Brazilian media companies and put an end to the country's tradition of media protectionism (308).

Given Latin America's long tradition of government sponsored media monopolies, one would expect that the region's various domestic media powerhouses would have objected to foreign competition. However, such "second-tier media firms [were] hardly oppositional to the global system" (McChesney). Fox observes that, "in need of capital to bankroll acquisitions, maintain expansion, and keep ahead of competitors, domestic groups reached out for capital from financial firms" (Fox & Waisbord 308). Consequently, several American investment firms, such as Goldman Sachs and Citibank, ended up with "substantial media interests" (308) in the region. While smaller operations benefited from virtually limitless capital and the opportunity to conduct business elsewhere in the region, media giants such as Rupert Murdoch's News Corporation enjoyed "local domination of the politicians and the impression of local control over their joint ventures" (McChesney). Mexico's Televisa, Brazil's Globo, Argentina's Clarin, and Venezuela's Cisneros Group each partnered with large global investment groups or media companies during this period.

By privatizing various media outlets, Latin America's governments did their part in providing these newly formed joint-ventures with somewhere to put their money. In Argentina, Chile, Colombia, Mexico, and Peru, state-owned television stations and broadcast licenses were auctioned off to private bidders (Fox & Waisbord 306). Moreover, the private sector benefited from the newly available electromagnetic spectrum. Fox notes that, the "vast majority of the new radio and television frequencies were awarded to private bidders" (306). Today, with the support and partnership of various global enterprises, "a handful of companies now control the majority of media interests in Latin American countries" (307). As in other highly concentrated markets, continuing trends towards deregulation, increasing foreign investment and the barriers to entry posed by high operating costs and exclusive advertising agreements, make the current conditions of Latin America's media landscape unlikely to change.

Proponents of Latin America's current media system point to the greatly increased availability of media in the region as a form of democratization and a victory for the people. However, Waisbord points out that more media does not necessarily mean better media. He acknowledges that there are "more films, wildlife documentaries, golf championships, community talk-shows, cooking shows, monster-truck extravaganzas, [and] roundtable chats" (Waisbord) on Latin American media than ever before. Yet, as many media critics argue, this is all formulaic content, designed to attract audiences and advertisers with safe, conventional ideas. According to Waisbord, Latin America's newly 'democratized' media has little room for the voices of minorities and the marginalized, nor does it care to explore cultural differences or offer social commentary (Waisbord). One cannot help but conclude that this media landscape amounts to little more than an augmented version of the media as it existed under passed authoritarian regimes.

Conclusion

Through dictatorships and democracies, Latin American media has been characterized by the worst aspects of concentrated media. An analyses of the region's media systems from both the pre and post-globalized era turns up only various iterations of heavy commercialization, severely limited scope of perspectives and monopolized control. One could argue that the current increase in south-south media flow marks an exception to this trend. However, the fact that very few Latin American media companies operate exclusively through domestic funding and ownership places the citizenship of domestic productions in question.

Although Latin American media has been a home to rapid growth, dynamic personalities, and great profits, its overall power structure has stayed remarkably unchanged for years. In the era of authoritarian rule and state-owned media, all-powerful governments exerted absolute control over their airwaves and newspapers. Today, governments maintain control by "negotiating the terms of business practices and defining the workings of media markets" (Fox & Waisbord 310). In the past, both foreign and domestic media owners rationalized their biased content with the profits that they reaped from government sponsored monopolies. Today, the same profit motive helps ownership align with parent companies and advertisers, while they deliver content that is at odds with "large segments of the population in their home countries" (McChesney).

In the mid-1990s, Fox observed that, while more people gained access to television and radio sets than ever before, the region experienced one of its worst economic and social crises in contemporary history (Fox & Waisbord 305). Fox's remark is in many ways representative of the ongoing relationship between Latin America's masses and its media; while the world goes on about them, the powers that be have worked to keep the people of the region both entertained and oppressed.

It is often said that media concentration, like globalization, exacerbates existing situations. In the case of Latin American media, this indeed seems to be the case. Although the faces have changed, the nature of the region's media has stayed the same. What makes it worse is that because the system is now a validated part of global economics, its traditions of exploitation and manipulation have become dangerously acceptable.

Works Cited

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