Month: January 2003

Media companies have become collections of random assets — worth less than the sums of their parts, says financial columnist James Flanigan in the Los Angeles Times. He argues that media companies must slim down and focus on a single medium and decide whether they’re in the business of production or distribution.

The average return on invested capital over the last five years of the four major media firms — AOL Time Warner Inc., Walt Disney Co., News Corp. and Viacom Inc. — is less than 4% annually. (Vivendi Universal is excluded because it has no profit.)
That is laughably far below the 13% average return on capital for all large U.S. companies in the same period, as measured by Forbes magazine.

William Safire goes further, saying that even if they decide to focus, media giants should not be permitted to dominate their industries. Safire’s libertarian brand of Republicanism is at odds with the current regime’s pro-corporate, anti-civil liberties Republicanism:

Does this make me (gasp!) pro-regulation? Michael Powell, appointed by Bush to be F.C.C. chairman, likes to say “the market is my religion.” My conservative economic religion is founded on the rock of competition, which — since Teddy Roosevelt’s day — has protected small business and consumers against predatory pricing leading to market monopolization.

Flanigan and Safire help make the case that in addition to being bad for democracy and for consumers (reason enough to break up the media giants), the current trend toward gigantism is bad for stockholders.
Now that Steve Case is an a mere (albeit big) stockholder and no longer a manager at AOL Time Warner, he should insist on breaking up the company.

While I was in Belize, I found time to read Fast Food Nation and Culture Jam, both of which got me thinking (or kept me thinking) about how out of control corporations have become and how complicit we all are in this situation.
The issue that Culture Jam raises–which is still pretty much limited to the left–is that it’s a big problem that corporations are regarded in US law as having the same rights as human beings. That leads to the perverse idea that they should be allowed to participate (spend money) in the political process, for example.
I’ve always believed that the US corporations should not be allowed to violate our constitutional rights any more than the government can–especially the first and fourth amendments. In any event, it occurred to me that corporations were humanlike, but not quite human, and that something like Asimov’s Three Laws of Robotics ought to apply to them.
Today I found this article on Nike’s claim that it has the right to lie, and the author’s suggestion that Asimov might have already thought this problem through. Some ideas are just in the air. (Thanks, WebWord!)
The chapters of Fast Food Nation on worker safety in the meatpacking industry broke my heart. I don’t know why, but I’m still stunned by the cruelty and indifference with which some people are able to treat others. But I am ashamed that as a nation we’re incapable of electing a Congress willing to do something about this.

I’m back from Belize.
Spending a couple of weeks off the grid made me realize how little access I need, but how much I hate having someone deny it to me.
My only Internet access was an Internet cafe that was a 15 minute boat ride from my resort on Ambergris Caye. Phone calls home were a couple of dollars a minute at the front desk of the resort or a dollar a minute at the Internet cafe in town.
In the ten days that I was in Belize, I didn’t miss the Net or NPR or TV at all, and I think the general lack of electronic and automotive background noise contributed to a sense of peace and well-being. The biggest disturbance was a couple of boneheads that kept cruising up and down the beach on motor scooters until one of the neighbors chewed them out.
I doubt I would have appreciated this isolation on September 11, but it probably would have been better for me than watching CNN.
I thoroughly enjoyed dropping off the grid. What I hated was that others were in control of my access. The resorts on the north coast of Ambergris Caye had apparently decided together not to bring in newspapers. Our hotel was using their control of their phone to jack up the price of a call to the US and keep me from using AT&T’s low-price service. And it seemed pretty clear that the price floor was kept pretty high by Belize Telecom Limited, which controls telephone and Net access in Belize.
What worries me is that if ILEC’s had their druthers, and the Republicans are inclined to let them, phone calls in the US would be be a dollar a minute and we’d all be sharing dial-up lines in Internet Cafes.