Globalization of Media Industries

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GLOBALIZATION OF MEDIA INDUSTRIES

In the 1960s, Canadian professor Marshall McLuhan predicted that television media would create a "global village" where "time ceases, space vanishes." McLuhan's prophecies have come true, but even he could not have predicted the degree of globalization and convergence of technology that now exists throughout media communications. Since the 1960s, the rise of global media and multinational media companies has greatly influenced—if not transformed—the ways in which people think and interact, as well as how they gain access to and communicate information. With globalization, constraints of geography are reduced, but social and cultural interconnectivity across time and space is increased. Media are obviously important to globalization; they provide an extensive transnational transmission of cultural products, and they contribute to the formation of communication networks and social structures.

The manner in which media have expanded globally, yet converged technologically since the mid-1970s, is quite remarkable in its scope and integration. Millions of people now listen to "local" radio from a computer anywhere in the world. Modern television has changed the way that world affairs are conducted. Online users can access video graphics on any one of millions of websites. U.S. films are "greenlighted" (i.e., given the go-ahead for production) based on their potential to attract a global audience. Advances from satellite technology to digitally based, increasingly interactive media have made such a global media environment possible.

The Rise of Global Media

When the first communications satellite, Telstar I, was launched in 1962, few people predicted the major effect that satellite technology would have on global media. Although satellites helped to deliver such transforming events as the first moon walk and coverage of the Olympics in the 1960s, modern global media industries can be traced to 1975—the year when Home Box Office (HBO), a service owned by Time, Inc., decided to use satellite technology to show a championship boxing match to subscribers in two U.S. cable television systems. The experiment proved so successful—even enlightening—that HBO soon began to use satellites to distribute more programming, not only to its own systems but to cable system operations throughout the United States. HBO's entry marked the beginning of the explosive growth of cable television in the United States—from only 12 percent of U.S. homes in 1975 to nearly 70 percent in 2000—and opened the floodgates for other media companies that quickly saw the value of using satellites to expand their business.

The greater significance of HBO's "experiment" was that television industries no longer viewed themselves as "earthbound"—tied strictly to telephone lines or broadcast station signals—and bounded by their geographic borders. Worldwide transmission and distribution of media communication—information, entertainment, persuasion—was viewed as an attractive opportunity for media companies and individuals and entrepreneurs with the vision to take their media products to the global market.

The most globally minded media visionary was Ted Turner, who first used satellite technology to turn his "local" independent television station into "Superstation" WTBS. This led to the formation of the Cable News Network (CNN) in 1980. Many people thought that Turner was "crazy" for establishing a cable news network that would always be on the air, but CNN soon grew to have enormous influence on viewers around the globe.

CNN is considered by many people to be the "flagship" for media globalization. Turner transformed his Atlanta-based company into a credible international news service. The company's aggressive strategy of covering news whenever and wherever it happens, of breaking the news first, and of going live from the scene is important to the globalization of media industries. Former U.S. President George H. W. Bush once even quipped, "I learn more from CNN than I do from the CIA."

By the mid-1980s, various countries began to subscribe to CNN's satellite feeds. In less than twenty years from its creation, CNN (or CNN International) had viewers in more than 150 nations around the world. One of CNN's most intriguing concepts is "CNN World Report," a truly international newscast that presents stories from almost every point of the globe.

The emergence of CNN also sparked the development or expansion of other international news services, including BBC World, a television service started in 1995 that has grown to reach some 167 million weekly viewers in nearly 200 countries.

A second significant satellite channel began within a year of CNN's debut. On August 1, 1981, Warner Amex Satellite Entertainment Company launched Music Television (MTV), the first full-time music video channel. Rock-'n'-roll, radio, television, and youth culture around the globe would never be the same. MTV asked viewers to "think globally, act locally." The music and entertainment channel affected nearly every aspect of world popular culture—music, fashion, art, advertising, and movies. MTV has grown to the point where it is delivered to nearly 70 million households in the United States and to more than 100 million households in Europe, Asia, South America, and Russia. Together, CNN and MTV illustrate the emerging importance of communication—not only to reduce time and space but to convey both news and entertainment values to a global audience.

Globalization and the Internet

As satellite-delivered cable television continued to expand throughout the 1980s, the development and growing use of personal computers and the Internet added new dimensions and opportunities in worldwide media. In the early 1990s, the large increase of desktop computers and connections over the public telephone networks allowed for the exchange of messages (e-mail), computer bulletin-board postings, information files, and computer programs with tens of thousands of other computers in the same network.

The Internet came of age as a communications medium with the creation of the World Wide Web (i.e., the Internet's graphical interface) by British engineer Tim Berners-Lee in 1991 and the invention of the first graphical browser (i.e., Mosaic) in 1993 by Marc Andressen at the National Center for Supercomputing Applications (NCSA) at the University of Illinois.

In 1989, America Online (AOL) launched a text-only service for Macintosh and Apple II computers; they added a Windows version in 1993. AOL, led by cofounder Steve Case, soon focused on building a "global community" of subscribers and entered into international partnerships with media companies in Latin American and in specific key countries such as Germany and Japan. In 1993, AOL acquired Global Network Navigator as a platform for direct Internet service. A joint venture with German conglomerate Bertelsmann AB created European online services in 1993. By the end of 1993, AOL had more than half a million members. After launches in the United Kingdom, Canada, and France in 1996 and in Japan in 1997, AOL passed the point where they had one million members outside of the United States.

In the late 1990s, when other online services focused on games, shopping, and business, AOL aggressively sought to "brand" its name throughout the world. Through these attempts to have its name considered to be synonymous with the Internet, AOL secured and interconnected subscribers in fourteen countries—including Australia, Brazil, Canada, France, Germany, Hong Kong, Japan, Latin America, and the United Kingdom—and seven languages. By 2000, AOL had 21 million customers in the world—3.2 million of which live outside the United States. AOL-owned CompuServe has 2.5 million subscribers.

AOL is the largest of thousands of companies that use the "information superhighway" to transmit media content, sell or advertise products, or send information. The Internet carries enormous amounts of information—combining voice, video, graphics, data, and computer services—around the globe. The Internet and other media technologies are empowering members of virtual communities throughout the world. New digital-age printing costs little to operate and reaches audiences of millions in an almost instantaneous fashion. In sum, the Internet speeds the delivery of information and communication throughout the world, but it also eases the individual user's access to that information and communication.

Globalization of Media Ownership

The growth of any media industry is predicated on the economic potential for growth and expansion. Part of the reason for globalization is not only the development of technology, but also the growth of multinational companies that seek to expand economic opportunities throughout the world. Through consolidation, global media companies are becoming increasingly larger in size but fewer in number. New technologies of digitization and multimedia and network integration have allowed for rapid structural globalization of communication. Rupert Murdoch owns media properties in the United States, Europe, Asia, and his native Australia. Japanese companies, such as Matsushita and Sony, own U.S. movie studios. These "conglomerates" seek to "vertically integrate" to control all aspects of production, distribution, and exhibition of content.

Successful channels such as Murdoch's Star TV are conglomerates of national and regional channels designed to meet the different political and cultural needs of their respective audiences in China, India, and other countries. Other multinational consortiums also own satellites and cable/DBS (direct broadcast satellite) systems in Europe, and Japan has several DBS systems. Companies such as Sony and Matsushita equip many of their new television sets and videocassette recorders with built-in DBS receivers.

AOL purchased CompuServe in 1998 and Netscape in 1999 and works with "strategic world-class partners" such as Bertelsmann AB (Europe, Australia), Cisneros Group of Companies (Latin America), Royal Bank (Canada), Mitsui & Co., Ltd., and Nihon Keizai Shimbun (Nikkei) in Japan. Mitsui owns 40 percent of AOL Japan, while Nikkei owns 10 percent. AOL also developed a partnership with China. com, a Chinese-and English-language service that began in Hong Kong in 1999. The $181 billion merger between AOL and Time Warner in 2001 further expanded the boundaries of global media conglomerations. AOL is the world's largest Internet service provider (ISP) and instant messaging (IM) service, while Time Warner is an entertainment empire that owns and operates popular video programming networks, multiple sports franchises, magazines, music recording labels, a broadcast television network, and the second largest cable system operator in the United States, as well as companies that produce and distribute films and television programming. AOL Time Warner's combined resources and infrastructure suggest almost unlimited possibilities for the production, distribution, and exhibition of media content on a global scale. This trend for companies to consolidate and to develop multinational partnerships is expected to continue.

Continuing Convergence and the Transition to a Digital World

As the companies that own the media industries become larger, the lines that once separated the various media also will become smaller. Convergence refers to the melding of the computer, the television, the telephone, and satellites into a unified system of information acquisition, delivery, and control. These are held together by a global network of satellite dishes, copper, coaxial, fiber-optic wires, and the accelerating flow of digital bits and bytes.

Communication theorists, computer specialists, media moguls, telecommunications leaders, and Wall Street investors have found common ground in the belief that the Internet is evolving into the premier medium of the twenty-first century. Already, by the year 2000, nearly one billion people were using the Internet on a regular basis. Because of its ability to convey both sequential and nonsequential writing, e-mail, audio and visual images, animation, audio conferencing, and multimedia presentations, the Internet has become the embodiment of the global information superhighway. Philips Electronics, a U.S. company, has already introduced "WebTV." In 1999, AOL signed pacts with DirecTV, Hughes Network System, Philips, and Network Computer to help bring interactivity to the television experience.

Convergence of technology increases the power of large multinational companies, but it also empowers individuals with the ability to choose their channels and to dispatch their own descriptions of what is happening to a rapidly expanding online audience. For example, firsthand information and eyewitness accounts of the Serbian conflict of the 1990s came from the professional corps of print and broadcast reporters, but it also came from amateurs who had computers, modems, cellular telephones, digital cameras, and access to e-mail. The riveting and insightful e-mail dialogue between two high school students, one in Kosovo and the other in Berkeley, California, was recycled in newspapers and read throughout the world. Using websites and chat groups on the Internet, monks, farmers, housewives, paramilitary leaders, and propagandists in Serbia, Kosovo, Albania, Macedonia, and Montenegro told, with varying degrees of accuracy and trustworthiness, about their beleaguered cities, towns, and refugee camps.

Emerging technologies are rapidly transforming the global media landscape. The Internet and the World Wide Web, wireless communications, and digital video technology are creating a new global communication environment in which the roles of media consumer and content creator often blur. Increasingly, media consumers from throughout the world have unprecedented choice and control over the media experience, selecting not just what they watch, read, or hear, but when and where they do so.

By the late 1990s, much voice, sound, and image communication was being converted to digital coding, a system that grew out of computer and data applications. Advances in transmission systems have also greatly facilitated the capabilities of modern telecommunications, making it possible to send messages, whether voice, data, or image, across different communication routes and computer systems. Digitalization will bring crystal clear, "high-definition" pictures and hundreds of additional channels, but it will also make television sets interactive, similar to personal computers.

Ramifications of Media Globalization

The digital age has the potential to provide an unprecedented richness of new sources of information, diversity of views, and a variety of perspectives that will not be bound by geographic or even political barriers. However, the free flow of information across any boundary is not without detractors. For "information rich" countries such as the United States and many Western European countries, the global flow of information across national boundaries is a positive consequence of globalization. However, the flow of media content is not equal between developed and developing countries. The globalization of media content means cultural values are far more likely to be transmitted from the United States to other countries than to the United States from other countries. Some would go so far as to say that "globalization" of the media industries is Westernization.

Certainly, all forms of information and entertainment contribute to social learning, the process by which people come to know their society and its rules and absorb its values, beliefs, and attitudes. U.S. movies, television, music, and magazines compete with and sometimes replace native versions in many countries. Advocates of the "global village" can aim at spreading Western culture and lifestyle through the mass media or strive for a real global culture of democratically integrated markets, ideas, and potentials. This new media, which will not divide along the traditional lines of delivery that were established by print, broadcast, and cable, will provide shared media experiences that will be created at least in part by those same people who receive it.

See also:Cable Television, History of; Community Networks; Digital Communication; Digital Media Systems; Globalization of Culture through the Media; Internet and the World Wide Web; McLuhan, Herbert Marshall; Satellites, History of; Telecommunications, Wireless.

Bibliography

Flournoy, Don M.; Carter, Jimmy; and Stewart, Robert K. (1999). CNN: Making News in the Global Market. Luton, Eng.: University of Luton Press.

Gershon, Richard. (1996). The Transnational Media Corporation: Global Messages and Free Market Competition. Mahwah, NJ: Lawrence Erlbaum.

Greco, Albert N., ed. (2000). The Media and Entertainment Industries. Boston: Allyn & Bacon.

Gross, Lynne Schafer, ed. (1995). The International World of Electronic Media. New York: McGraw-Hill.

Kai, Hafez. (1999). "International News Coverage and the Problems of Media Globalization: In Search of a 'New Global-Local Nexus.'" Innovation 12(1):47-62.

McGrath, Tom. (1996). MTV: The Making of a Revolution. Philadelphia, PA: Running Press.

McLuhan, Marshall. (1967). The Medium Is the Message. New York: Penguin Books.

Winston, Brian. (1998). Media Technology and Society: A History from the Telegraph to the Internet. London: Routledge.

Roger Cooper

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Globalization of Media Industries