Hey, check it out.
I just got this new phone. Well, kind of – I’m renting it for a couple
bucks a month. But really that’s part of a bundle – you
know, I’ve got my cell phone, my internet,
my cable. All one bill, which is pretty convenient. The phone is made by another company of course,
but they have this exclusive deal with the bundle people. And the bundle people have thought a deal
with the streaming service people, so now I
can stream movies all the time. And the streaming service I use has a deal
with my favorite TV channel, so I can watch
all my shows. And the TV people just bought my favorite
comic book franchise, so soon I’ll be swimming
in new superhero movies. And the comic book people will be raking in
the cash. Kind of, uh, complicated, no? So many deals and bundles and acquisitions
to watch for. It makes you wonder, who runs all this stuff? Who owns the media? Sure, maybe you’ve been keeping track of
who owns your favorite media franchises like Star Wars (that’s Disney) or Marvel (uh,
also Disney) or Harry Potter (Warner Brothers,
but also NBC). That way you can judge who’s going to do a great
job with your favorite storylines or totally ruin them
with the worst casting ever oh my god why. The media at large, everything from newspapers
you read to the apps on your phone, are part of a
big web of deals and partnerships and mergers. A very tangled, kind of incestuous, web. Sometimes these complex relationships work
out well for the consumer. But sometimes this tangled web traps the
consumer like a juicy little fly just waiting to be eaten by
the big bad spider. That’s why today we’re talking all about
media ownership – we’re going to figure out how ownership impacts your
everyday lives AND we’re gonna talk about the history
of media ownership AND...no, that’s it for today. But that’s plenty. [Theme Music] Ready for your head to spin a bit? So.
Who really owns “the media”? If you look at things from the end of 2017,
the media ownership landscape looks like this: Walt Disney Company owns ABC and the Disney
Channel of course. Plus EPSN, Miramax and Pixar, Marvel
Entertainment and Publishing, Buena Vista Records,
and over 270 radio stations. Plus their theme parks and tons of other related
companies. Comcast Corporation owns NBCUniversal – that
means CNBC, MSNBC, too – plus channels like
Telemundo, USA Network, Bravo and more. Plus Hulu and and the Universal Studios theme
parks. They even own the Philadelphia 76ers and the
Philadelphia Flyers. News Corp. owns FOX – including Fox News
and FX. They also own the Wall Street Journal, the
Daily News and the New York Post, HarperCollins,
and 20th Century Fox. Hearst Corporation owns 20 U.S. magazines
like Cosmopolitan and Esquire, plus 31 television
stations. Viacom owns MTV, VH1, Nickelodeon, Comedy
Central, and BET among its 160 cable channels,
plus Paramount Pictures. CBS Corporation owns all the CBS-named
things, 29 TV channels and 130 radio stations,
plus three book publishers. And this is all just the tip of the iceberg. I guarantee that this ownership web is already
obsolete as new deals have gone through. In fact, as we were shooting this episode,
Comcast, Disney, and Fox had all been
discussing a possible merger. But don’t worry, we prepared for that: There was a big merger! There wasn’t a big merger! There was something like a merger, but it
was more complicated than we predicted! But all this talk of mergers and ownership
begs the question: who cares? You do. Or, rather, you will.
After you hear the story of AT&T. The year is 1877 and Alexander Graham Bell
and his father in law start the Bell Telephone
Company. Over time, Bell becomes the dominant telephone
provider and is the first to build a nationwide
long-distance telephone network. That’s when they’re renamed: the American
Telephone and Telegraph Company. For almost 100 years, AT&T owns every part
of the telephone system – from the wires
and lines to the actual phones. Yes, literally. Until the mid-1980s, if you had an AT&T phone,
you had to rent it from the company. Kind of like you rent a modem for your internet
now. In the early 1900’s AT&T established themselves
as a walled garden. That meant it was a closed system that was
not interoperable with other systems or companies. In fact, they refused to let rival companies work
with them – they’d just buy them out instead. In 1915, for instance, they bought Western
Electric, one of the providers of their phone
equipment. Once they owned them, they made it so that
only official Western Electric equipment could
connect to the AT&T network.. Jump ahead to 1934. President Franklin D. Roosevelt establishes
the Federal Communications Commission. The FCC is meant to implement a national radio
and wire service in the U.S. But the FCC also has the authority to examine
AT&T’s business. The question was whether AT&T’s control
over every part of the phone system, or vertical
integration, was in violation of the law. But the FCC approves of AT&T’s business – and
the company is free to dominate the market for
decades, becoming bigger, and bigger. Eventually, though, AT&T becomes too big.
Like way too big. And the anti-trust lawsuits start. Anti-trust laws are what exist to try and
prevent monopolies – when a single company
dominates an entire market or industry. Monopolies are bad in a lot of ways. A company with a monopoly can overcharge
customers or under deliver services because
there’s simply no competition. Preventing monopolies, or if you have to,
breaking them up, protects consumers and
encourages competition. And by the 1980s, more than a century after the
founding of the Bell company, those anti-monopoly
efforts finally start to make a difference. In 1982 AT&T starts letting people buy their
own phones, a good first step. But in 1984, the monopoly really breaks up,
and the company separates into 7 different,
smaller companies. At the time, some people thought the break up of the
AT&T monopoly was bad – it seemed so convenient
to get all your phone maintenance in one place. When it did break up, though, we got cool new inventions
like answering machines, three-way calling, and caller ID
– all thanks to an outbreak of competition. Trust me, those things were really cool back then. Today, companies try to dominate markets through
new versions of vertical integration. Think: do you have one of those bundles? You might get your TV service, internet, and
cell phone service from the same company. These companies own the world’s fiber optic
cables, where the internet flows. In fact, where the last 100 years of anti-trust
media has largely been about phones, these days
it has way more to do with the internet. But that’s where it gets a bit dicey. Let’s head into the Thought Bubble: In a world with net neutrality, a corporate
stronghold on the internet isn’t too bad. You pay for internet access and you use it
pretty much however you want. The net is neutrally accessible from different
internet service providers, or ISPs. If your ISP stinks or is too slow, you can
often pay for a different service if there
are options in your area. But the ISPs believe that, since they’re
delivering you a service, they should determine
how it’s delivered. They’d like to create tiered services, where
if you pay more you get faster internet. Basically, they want to use their vertical
integration to create more monopolies. Imagine the internet is a road and the content
you want is a car. ISPs would like to create a slow lane and
a fast lane. Or maybe a slow, medium, and fast lane. Depending on what you want or can afford,
you’d pay for that speed. If ISPs could decide to create a slow lane
and a fast lane, you can see how they could
abuse that power pretty quickly. We wouldn’t get a fast lane and a faster
lane. We’d get a “so slow you want to smash your
computer on the ground” lane and a “probably the
speeds you have now but twice as expensive” lane. As we know, internet access is crucial to
thriving in the digital age, and hiking up prices
would box some people out entirely. Or, to put it more graphically, some people would be
in the lifeboats and some people would be Jack and
Rose, floating on a door in the middle of the ocean. Until Jack freezes to death even though he
TOTALLY could have fit on the door. Thanks, Thought Bubble.
I guess. There are more consequences to net neutrality
than consumer pricing. Without net neutrality, ISPs have the power to cut
off or speed up certain content – like, say, their
business partners or their sister companies. Certain cars wouldn’t even be allowed in
the slow lane – you’d have to pay extra. So if you have Comcast as your ISP, your Comcast,
NBC and Universal content might be fast but
other content might be slow. Comcast owns Hulu, and Netflix is a competitor
of Hulu, so who knows, maybe they’d slow down
your service to Netflix – the horror! In some countries without net neutrality, ISPs
have already created walled gardens like this. You pay a base fee for internet service and then pay
additional fees for a “Social media” package to access
your apps or a “news package” to get your news. It’s not pretty. You can see why it’s so important to understand
how media companies are all connected. When they come together to form monopolies,
they can have a huge impact on how a society
communicates. We know that media companies like to band
together through mergers and acquisitions. Sometimes this forms healthy competition and
sometimes, like we said, it creates a monopoly. But telecommunications and media have been
regulated and studied for some time. You know what also like to band together through
mergers and acquisitions, sometimes for competition
and sometimes to form monopolies? Tech companies like Google, Facebook and Amazon. These monster corporations have their hands
on a ton of different projects. Alphabet is Google’s parent company. Google isn’t just a search engine; it’s
also an advertising platform. Alphabet owns YouTube and over 200 other companies. Plus they make products like Android phones
and Gmail and self-driving cars. And through search and Google News they’ve
become a major distributor of media. Amazon, in addition to being a dominant e-commerce
platform, provides the internet infrastructure for tons
of top companies. It also creates its own TV and movie programming
through Prime and owns The Washington Post. Similarly, Facebook owns over 50 companies
like Instagram and Whatsapp. It recently partnered with news outlets to help
with media distribution through its Journalism
Project and its Instant Articles product. They’re even dipping their toes in creating
original video programming. Plus, 45% of US adults get their news from
Facebook. Forty. Five. Percent. And yet they don’t call themselves a media company. What’s the big deal? Well: currently, Tech companies aren’t regulated
the same way that media companies are. Remember the FCC? They regulate media companies not only to break
up monopolies – they also set rules for what kind of
content is allowed on TV, radio, and phones. Different rules for different technologies. This is why some songs have “radio edits” and
why you have to bleep out the live TV when the
Thanksgiving Parade hosts get too tipsy. But the FCC doesn't currently have the same
authority over companies like Facebook or
Google – which means there is tons and tons
of debate over whether they should. Media ownership can be problematic enough. When one company dominates the means of
production and creation on one product, consumers
often get a lesser product. Without competition, innovation stagnates. And when companies have too much control,
they can wreak havoc on our communication
and culture. When tech companies that are also media
companies don’t act like it, they shirk the accountability
that other media organizations have. The accountability that we, as consumers rely
on. Anti-trust regulations have their drawbacks. People who prefer less government intervention
don’t like them. The Monopoly man certainly doesn’t like
them. But they’re often in the public’s best interest
to prevent exploitation and encourage creativity. To be a media literate citizen, it’s crucial to
keep an eye on how these businesses combine,
split up, and interact. Their relationships with each other affect
our relationships with media. Today we covered how huge corporations and
their regulations impact our media environment
– the macro stuff. Next time on Crash Course: Media Literacy,
we’re going micro. We’ll take a look at how government policies impact
how you, the consumer, absorb and create media. Until then, I’m Jay Smooth.
See you next time! Crash Course Media Literacy is filmed in the
Dr. Cheryl C. Kinney Studio in Missoula, MT. It’s made with the help of all of these nice
people, and our animation team is Thought Cafe. Crash Course is a Complexly production. If you wanna keep imagining the world complexly
with us check out some of our other channels, like The Financial Diet, SciShow Space, and
Mental Floss. If you'd like to keep Crash Course free for
everyone, forever, you can support the series
at Patreon, a crowdfunding platform that allows
you to support the content you love. Thank you to all of our patrons for making
Crash Course possible with their continued
support.
