Last column, I laid out a whack of data to illustrate how the size of the media economy in Canada has more than tripled from $19.7-billion in 1984 to $68.7-billion in 2010. Now I want to look at another question: have the media and Internet become more or less concentrated over time?
Some think the question is just plain stupid. With the billion-channel universe that is the Internet, 700 TV channels potentially on tap and 94 newspapers supposedly publishing daily in Canada, how could this be anything other than a golden age of media diversity?
There is another school of thought, however, that argues digital media and the Internet are no less prone to consolidation than any other media. The fact that there are dominant players in search (Google), access (ISPs), online music (Apple), social media (Facebook) and digital devices (Apple, Google, Nokia, RIM, Sony Ericsson) merits closer examination, rather than cavalier dismissal.
To address this question, I assembled data for the last 26 years for the following sectors: wired and wireless telecoms; broadcast TV; pay and subscription TV; cable, satellite and IPTV distributors; newspapers; magazines; radio; Internet access; search engines; social media sites; and smartphone operating systems. I add up the market share for each player in each sector, plot the trends, group them into three categories (network, content and online media) and combine them to give a portrait of trends for the network media as whole.
Of course, with 13 segments spanning 26 years, with dozens and sometimes hundreds of players in each segment, I can only cover the highlights:
The Network Infrastructure Industries
All network infrastructure sectors are concentrated and pretty much always have been, as data for the share of the top four companies (CR4) in the chart show.
CR4 for the Network Infrastructure Industries, 1984 – 2010
Telecoms became more competitive during the late-1990s, reaching a high point in 2000. Many new rivals were wiped out when the dot.com bubble crashed, with concentration growing again until 2006 as a result, before declining slightly.
Wireless services also tend to be highly concentrated, despite the advent of three newcomers in the last year: Mobilicity, Wind Mobile and Public Mobile.
At the high point of competition in 2000, two competitors – Clearnet and Microcell – obtained 12 per cent of the market, but were taken over by Telus and Rogers in 2000 and 2004, respectively. Whether the newcomers of last year will fare any better it is too early to tell, but with just 0.6 per cent of the market they are far behind the standard set a decade ago.
As the dot.com boom gathered steam in the late-1990s new Internet Service Providers (ISPs) emerged, with AOL, Istar, Hook-Up and Internet Direct taking more than a third of the market in 1996. The competitive ISP era was short-lived, however, with four of the incumbents – Bell, Shaw, Rogers, Telus – taking a bigger slice of the pie (54 per cent) by 2000 – where things have stayed remarkably stable since. It is more sobering yet to note that 94 per cent of high-speed Internet subscribers use one or another of the incumbent cable or telecom companies' ISPs, leaving the rest for some 500 indy ISPs to squabble over.
Cable and satellite concentration has risen steadily from low levels in the 1980s to the top of the scales by 1996, where they have remained ever since. Shaw, Rogers, Bell and QMI (Quebecor) accounted for 84 per cent of the market in 2010.
The Content Industries
During the 1980s and early 1990s, many local and regional TV owners amalgamated, slowly morphing into the large national companies that single-handedly owned CTV, Global, TVA, CHUM, TQS by the end of the 1990s. Despite this, concentration declined slightly between 1984 and 1996 as new players entered the field, although things stayed at the moderately high-end of the scale. Trends reversed course afterwards, first slowly and fitfully, then immensely and to all-time highs after 2006.
CR Scores for the Content Industries, 1984 – 2010
Shaw's takeover of Canwest's television assets and Bell's buy-back of CTV in the last year pushed the levels to new extremes. The largest four television providers now control 78 per cent of all television revenues (i.e. Bell, Shaw, CBC, Rogers, in that order), up from 71 per cent two years ago and the high 50s, low 60s-range for the rest of the years since 1984.
Add Astral and QMI, and the number rises to over 90 per cent. And remember those 700 TV channels referred to above? Fewer than 200 are actually up and running and more than half of them belong to Bell (28), Shaw (52), Rogers (17) and QMI (13) (see here).
And those 94 daily newspapers? Only a third are publishing original content on a daily basis. Competition has never flourished in the newspaper sector since 1984, with the share of the top four rising from two-thirds then to three-quarters in 1996 – a level that has stayed steady since, with periodic shuffling among players in the ranks.
Magazines are the least concentrated, with levels falling by one-half to about 20 per cent since 1984. Radio is still concentrated by standard measures, but only slightly so.
Combining all of the segments of the network media (except wired and wireless because their size overshadows everything else), the big four's share of the mediascape has risen steadily: Bell (CTV), Shaw (Global), Rogers (CityTV), QMI (TVA). In 1984, the big four accounted for 40 per cent of all revenues; in 2010, their share was 54 per cent – a far bigger slice of a much bigger pie.
Add these four massive media conglomerates with six other large but more specialized firms and you have the big ten companies at the core of the network media economy: Bell (CTV), Shaw (Global), Rogers (CityTV), QMI (TVA), CBC, Post Media, Cogeco, Astral, Telus and Torstar (see here). Their share of the total network media economy (excluding telecoms services) between 2000 and 2010 hovered steadily around 70-75 per cent – a substantial rise from 63 per cent in 1996, and further still from 53 per cent in 1984.
The overall trajectory is one of falling concentration in the 1980s and early 1990s, before levels climbed sharply and settled in at all time high plateaus around 1996-2000, where things stayed relatively steady since until rising significantly in the last two years (C4). The following chart shows the trends for the top one, four and ten players across all media.
Top 1, 4 and 10 Players' Share of the Market, 1984 – 2010
And for all those who continue to fantasize that the Internet is an oasis of free spirits and competitive markets, consider the following:
Google's dominance of the search engine marking is growing, accounting for 81 per cent of searches in 2010 versus Microsoft (6.8 per cent), Yahoo! (5 per cent), and Ask.com (4 per cent). With a CR4 of 97, this is extremely concentrated.
Facebook accounted for 63.2 per cent of time spent on social media sites last year, trailed by Google's YouTube (20.4 per cent), Microsoft (1.2 per cent), Twitter (0.7 per cent), and MySpace (0.6 per cent) Again, with a CR4 of 86 per cent, concentration is very high.
Time spent on the top ten websites nearly doubled from 20 to 38 per cent between 2003 and 2008, and most top 15 online news sites are arms of established media.
Top four web browsers – Microsoft's Explorer (52.8 per cent), Google's Chrome (17.7 per cent), Firefox (17.1 per cent) and Apple's Safari (3 per cent) – had a market share of over 90 per cent.
Top four smartphone operating system makers had a 93 per cent share of the U.S. market last year: Google's Android OS (29 per cent), Apple's iOS (27 per cent), RIM (27 per cent) and Microsoft's Windows 7 (10 per cent) (equivalent Canadian data not available).
So, does this mean that a massive trust-busting effort on the digital media frontier is in order? Maybe, but things will not turn on brute data by any means, since discussions about media concentration are in many ways a proxy for our views about politics and democracy. Ultimately, besides needing better data and a good airing of the issues, we need to get over the idea that we live in a digital nirvana where the laws of capitalism no longer apply.
Dwayne Winseck is a communications professor at the School of Journalism and Communication, Carleton University in Ottawa. Prof. Winseck been researching and writing about media, telecoms and the Internet in one way or another for nearly 20 years. He most recently edited The Political Economies of Media. You can read more comment on his blog, Mediamorphis. His column will appear every second Tuesday.