Remember the eighties, the decade when pop killed off punk, and when Jerry Bruckheimer got rich making loud and lame movies? OK, so some things never change.
Another loud and lame idea from the eighties has come back to haunt us. The Federal Communications Commission has loosened the rules preventing companies from owning television stations and newspapers in the same market.
What problem is the FCC trying to solve?
Allowing companies to get merge in order to increase the level of competition in a market always ends in oligopoly.
Here in the San Francisco Bay Area, one company (Comcast) owns all the cable systems and another (Media News) owns all the newspapers, with the exception of the increasingly Finlandized San Francisco Chronicle.
You don’t need to be Marshall McLuhan to know that television, radio, and newspapers are such different media that there are no meaningful synergies among them. I’ve said it here before: The pursuit of false synergies has destroyed more shareholder value in the media business than any other boardroom fad of the last twenty years.
And you don’t need to be Dean Singleton to know that there is only one way to make more money by merging two companies in a mature business.
You can either decrease costs, which means laying off staff, including in the newsroom.
Or you can increase revenue, by raising your advertising rates.
The FCC is serving the demands of its licensees here, and not the needs of the communities where they operate.
Originally published on my blog at JupiterResearch.