PRINT CONCENTRATES UPON THE NET.
By Johann Roppen, research fellow at the University of Bergen/Volda College. Paper
delivered after the course: Mediaeconomics, Gothenburg 21.-24. April 1996. (This
net-version is a proofread version of the paper printed in the report from the course,
and should thus be preferred as source of citation.)
As a technological device, the newspaper clearly represents the past, while the Internet
(the Net) business is hype, being the medium for the future. In this paper, I will
demonstrate that the technological and cultural properties of the two media are less important than the regulatory environment, economic conditions and considerations
by large corporations as factors that might eventually shape the new medium. In Norway,
these large corporations have their economic base in print. These companies have
also been financing the establishment of new, privately owned broadcasting stations,
which themselves do not yet have the financial strength to enter a new market like
the Net.
The activities of these companies have made concentration of ownership in the national
media industry a hot issue in Norwegian politics. It clearly seems like the big players
in the media market are determined to achieve even greater control in the field,
thus further strengthening the oligopolic structure of the sender side of the mediamarket.
While this is happening, the politicians are deep in thought as to whether to regulate
or not, and the effectiveness of regulations is clearly disputed.
Proprieties of ink and Net
The newspaper was the first mass media, while the Internet is hitherto the latest.
At first glance, the Internet appears to be some kind of television, but a closer
look at the properties of the new medium shows that it raises new theoretical problems
for the study of mass media.
Schwebs/Østbye (1995:25) classifies different kinds of communication under the labels
personal and mass communication. The Internet's most striking difference from other
devices for mass communication is the flexibility of the roles of the sender-receiver. The roles may alter several times in a second; the sender becomes receiver, and the
receiver becomes sender. Responding to the new challenges raised by computer communication,
some scholars argue the need for a completely new theory of communication (Rogers 1986).
In one sense, the Net and the newspaper have some similar properties, differing from
those of broadcasting. Broadcasting might be branded linear media: You have to follow,
or get off, their cart. You can choose from different channels, but you can not change the speed of transmission or jump from one part to another. This is possible both
in the newspaper and on the Net. Some would call this property "interactivity," thus
making the newspaper a more interactive medium than television.
But the Net can also be a more traditional mass media, e.g. when newspapers publish
a Net edition of their news. The content is standardised, it is the same content
for every reader, and the content is published routinely, often once a day. Clearly,
the differences between sender and receiver are less blurred in such a context than they
are, for example, in newsgroups and irc (Internet relay chat). What is common, both
for newspapers and on the Internet, is the need for some kind of complicated and
costly technological equipment in order to produce content.
But on the Net, such equipment is also needed to read the content. This is a very
important matter, making Net-communication something very different from ordinary
personal communication. Thus, the Net has the potential of being both a medium for
personal communication, and mass mediated communication. The technological limitations of the
Net seem to be non-existent. How the Net will be used is not settled, but major
patterns of use will probably emerge. If experiences from other media are relevant
in this case, these patterns will rely heavily upon the economic environment. There are
no technological reasons why the tv is a very important carrier of American soaps,
but there are heavy economic reasons for this. Thus it is necessary to study the
evolution of the Net from a media economics perspective. And my point of attack is to analyze
the role of the big corporations, often branded media conglomerates. These are the
important players, and their actions will have a major influence upon the future
of the Net.
Major players in the Norwegian market
The largest player in the Norwegian media market is Schibsted, which has a solid financial
basis from controlling the two largest--and most profitable--newspapers in Norway:
Verdens Gang and Aftenposten. These two papers account for 31 percent of the total circulation in the Norwegian press. In 1995 the Schibsteds group revenue was 3,4
billion NOK (app. $450 million), and 90 percent of the revenue stemmed from print.
In 1993, Schibsted was ranked the 54th largest media corporation in Europe, and in
1994 was the 60th largest company in Norway. Schibsted is also one of the two largest
owners in the national commercial public service (sic!) television station TV2 and
the low-taste, commercial TV Norge (TV Norway). TV Norge is planned to be the network
provider for the new local television stations of Norway, and the conservative Schibsted
is here cooperating with the labour press corporation, A-pressen. Schibsted made
arrangements for the labour press to invest both in TV2 and TV Norge. Schibsted has also
bought 50 percent of the Swedish social democratic paper Aftonbladet, thus strengthening
the alliance between the conservatives and the social democrats in the media market also in a Nordic context.
In the Internet market, according to press reports, Schibsted bought an access provider
for the sum of 15 mill. NOK (Computer World Norge, June 28 1996). It branded the
company Schibsted nett and is currently investing heavily (reported a 16 mill. NOK
loss in the annual report for the year 1995) to make Schibsted nett the largest Internet
company in Norway. A-pressen controls approximately 20 percent of the Norwegian newspapers
by circulation. A-pressen initially formed an alliance with the magazine company Aller and the industry (and media) conglomerate Orkla by way of the company Norsk
Lokal TV (Norwegian local TV), intending to become a network provider. But this alliance
was betrayed by A-pressen when they joined Schibsted's TV-Norge.
Orkla is the third major player in the newspaper market. Initially an industrial company
occupied with forestry and mining activities, Orkla has emerged into new sectors
like food, drinks and brands, and also media. Orkla was in 1994 the 4th largest company in Norway with revenue of 21 billion NOK (app. $2.7 billion), and the media-sector
contributed with 8 percent of this sum. While A-pressen and Schibsted have been in
the business all through the century, Orkla bought its first newspaper in 1984. With
several friendly takeovers of local dailies, Orkla today is controlling 10 percent of
the total circulation. Orkla is also investing heavily in Poland, and the circulation
of Orkla's Polish papers exceeds the circulation of their Norwegian newspapers. Orkla
is also a very important player in the magazine sector of Norway, together with the
Danish company Aller, and Orkla is also the largest Norwegian company in the direct
mail sector.
Orkla and Schibsted are in conflict in several areas. The network supply for the new
local television was already mentioned. Currently, Orkla has filed a lawsuit against
Schibsted, claiming that Orkla had the right of pre-emption to buy shares in TV2,
the shares Schibsted helped A-pressen to acquire. Orkla and Schibsted both seem interested
in shares in the remaining four largest regional dailies, still not under control
of any of the major owners. Of the two, Schibsted seems to have the advantage, being
a major shareholder in all four papers,while Orkla owns shares in two of these papers.
Additionally, Schibsted prints editions of VG in two of the four papers, thus being
a major business partner for the companies.
Newspapers, markets and theories
The newspaper is one product, but competes in two markets: the market of the audience
and the market of the advertisers. The audience mainly pays for the editorial content.
The size and typology of the audience is what makes the advertisers pay for space in the paper. There are a cluster of theories explaining the process of concentration
in a local market. The theories were first developed in Sweden and have been used
to explain the need for and design of the press subsidies.
The first of these theories is the theory of the circulation spiral. First put into
print by Lars Furhoff (1967), the theory prescribes that in a single market, one
newspaper sooner or later will become the winner, and all the others will become
losers. This process is almost inevitable. At the heart of this theory is the cycle of circulation,
advertisement, profit and editorial content. High circulation is attractive to advertisers,
which returns profit, which is spent improving the editorial content, which leads to higher circulation. This process has always been important in the newspaper
market, but in periods of time when political affiliation was of great importance,
the process was of less importance for the performance in the market. Gustafsson's
(1988) theory of household coverage is a more sophisticated theory, differing from the
quite mechanic circulation spiral theory by the role of the audience. The audience
at the location where the newspaper is published is of greater importance for the
advertisers than other people. Thus, the paper with the majority of the city readers would
eventually become the winner in the local market.
Distribution is a very important limiting factor of the print medium. The further
the distance the newspaper needs to be transported, the less profit there will be,
and the more tempting and economically profitable it will be to establish another
paper (e.g. Øye 1993).
Players in the Internet market
In Norway there are four major players in the Internet market. Two of these are also
very important media conglomerates with a financial basis in the newspaper business.
They make money in the newspaper business, but invest in broadcasting and in the
Net. These two are Schibsted and A-pressen. Schibsted is running the company Schibsted
nett, regarding it as a long-term investment, and is prepared to spend sums in the
size of around 10-15 mill. NOK for the next three years in order to become an important
player in the game. Schibsted has not limited its expansion efforts to Schibsted nett,
but has also bought a provider of business -information, Hugin.
The main activity for these four groups, is to deliver Internet access, and some content,
thus mixing media, computers and telecommunications as Nicholas Negroponte has described
in his vision of the future (Negroponte 1995). Schibsted nett has recently formed an agreement with the IBM company, Norsk informasjonsteknologi (NIT) in a strategic
alliance, forming a media-computer giant in the Net market where Schibsted is the
content expert, and IBM is the delivery expert. Providing content will really make
the big bucks in the future. Schibsted is now in the process of building a base of
customers who later on might be able to use services delivered by Schibsted nett.
A-pressen (the labour press) is also trying to become an important Internet player,
creating a network (RiksNett) composed of local providers and local newspapers in
the A-pressen. The company is still not national in coverage.
The (still) state monopoly Telenor
(Norwegian Telecom), which is facing a deregulation on January 1, 1998, is entering
new markets to get ahead. Telenor is also a very big corporation, with a revenue
of 18,300 billion NOK ($2,4 billion) in 1994, and was the 7th largest Norwegian company
that year.
By January 1, 1998, the whole Norwegian telecommunications sector will be opened for
free competition, and Telenor will no longer be in the position of having a monopoly.
Telenor has, in the last few years, been adapting to face this new market environment. In the media sector, Telenor is running the ground-based radio and television, but
is not allowed to exploit its monopoly status. The long time cooperation with NRK,
the national public service broadcaster seems to be continued into new areas, like
commercial tele-text, which NRK is planning to deliver in its new national channel NRK
2 (Aftenposten June 21). Telenor has become a major player in the Internet market,
delivering Internet access, and has thus also become a content provider.
The fourth provider is EU-Net, solely a Net company. EU-Net could be Orkla's Net branch,
press reports speculated, but Orkla denied this. EU-Net is financed by capital from
a group of investors and is independent from the major companies.
So far, Orkla has, together with the magazine and radio company Aller, bought 1/3
of the shares of the prosperous multimedia company Mogul Media, presenting this as
Orkla's multi-media strategy. Orkla further owns the local-based access providers
DrammensNett (Drammen) and Mimer (Ålesund), and has registered Internet addresses for all its
newspapers.
Theories for the Net?
Are the economically-based theories developed for the newspaper business obsolete
when it comes to the Internet market? In order to answer this question, we must first
ask what the differences are in these two markets.
There are three very important differences between newspapers and the Internet business
when it comes to economy: First, in the Internet market, the audience is not paying
for the content, as is done in the newspaper business. Secondly, the geographical
limitations of the newspaper are of less importance in the lno sense of placen realm
of cyberspace. And thirdly, the Internet byte is not a commodity limited by scarcity
as, for example, paper or ink are. We will now discuss these arguments in more detail.
Content is free; access is expensive
As we have pointed out earlier, the content providers are dependent upon commercials
in order to receive returns for their investments. Only a few publications are attractive
enough for parts of the audience to be paid for directly, but new systems may occur and alter this.
It is not easy to determine whether this will be an important difference from newspapers
or not, but the possibilities for marketing are immense. The medium is more flexible
than tv, not limited to certain minutes of the hour and bundled together with other commercials, not excluded from news or childrens pages, and most important: The
users are intensely watching and reading the screen in a more concentrated fashion
than the average tv-viewer watches tv or the casual reader reads the local paper.
In Norway the news from the commercial radio P4 and the two tabloids VG and Dagbladet
are among the top ten Internet sites visited. So in order to make money from the
content, one has to sell the screen to advertisers, and this is being done. No Norwegian
content provider demands payment for access (yet), not even the soft-porn company
providers, but the players expect this to happen within the not-too-distant future.
Internet access may be bundled to ordinary subscription, as an extended service to
the paying subscribers. However, the moment pay-per-view is established also on the
Net, the content providers expect the Internet business to make money. The dilemma
for existing content providers, like the newspaper companies, is to assess or avoid cannibalism.
This may occur when the traditional media starts bleeding from the competition with
the new, maybe free, Net media.
No sense of place in cyberspace
The geographic factor is essential in the theories for the newspaper business. Depending
on the geographical location in relation to the market and the ability to serve this
market, a newspaper enterprise will succeed or fail. With the rapid development of the Internet providers' services, one can now reach a node (a connection) to the
Net at the lowest telephone tariffs in most parts of the country. Naturally, one
has to assume here that no access monopoly at any level is allowed to emerge. Access
by way of a certain provider does not mean that one is locked into that provider's network,
as with former commercial networks before the Internet revolution. The simplicity
of the Internet is the idea that all content is available for everyone.
One might think that the audience is seeking local material, thus making a geographical
dimension important still, but this is not likely for two reasons. First, such material
is almost non-existent. Even though some 20 Norwegian newspapers have some kind of presence on the Net, their Net version is very limited compared to the amount of
news in the paper edition. Secondly, the Internet is still in the first phase of
a diffusion process, and one important characteristic of the "innovators" is that
they are not very closely linked to the local society, but are outward-looking. The fact that
most of the content on the Net is written in English further stresses this point.
The expected next wave of Internet users may alter this situation.
The plethora of bytes
The Net is floating on a sea of bytes, while the newspaper is delivered as a bundle
of atoms. Atoms are scarce; bytes are unlimited. To some extent this is true. One
could say that the bytes available in each user's computer system are limited, at
least by economy. But the important thing is that it is not more expensive transmitting your
message to one reader than one million readers. Of course one million "hits" on (visits
to) a web page may case severe problems, but the main point is that in comparison,
it is extremely more expensive to distribute one million copies of a newspaper than
to transmit your message to one million netizens.
Nicholas Negroponte (1995) is quoted for the bits-atoms analogy, and he foresees that
companies and businesses relying on atoms will soon be forgotten, because companies
making their bet in bytes will beat them. Some of the people inhabiting the Internet
society claim that information should be free, free from any regulating forces, and
with no cost for the user. First, I will claim that the Internet certainly is not
is free of charge. In order to connect to the Internet, you will need to buy a computer
and software. In Norway that will cost at least $1,500 today.
Furthermore, you need to buy a connection from an Internet provider, which might cost
$300. And the phone bill will also feel a burden from the Net. This kind of money
and the know how needed to get on the Net is clearly not available for everybody.
The money is available for e.g. Schibsted, and its Net company Schibsted nett is an interestingly
study of the growth of a Net company.
Schibsted nett as a case of growth
Schibsted nett is probably the fastest growing Net company in Norway, and is a very
interesting case study of how big money enters a new market with the intention of
sweeping away the competitors by the use of financial force, with expected future
profit as the motive. The philosophy of the Schibsted nett is nothing less than to create
"...electronic services, working as the spine, the nerve-system and the heart of
the Norwegian society, interconnecting local societies and groups closer together
in the 21. century, and to create substantial values (Schibsted nett 1995)".
Edith Penrose's (1959) model of growth may explain how and why Schibsted is investing
heavily in the Net and maybe contributes to the concentration of the Net market by
growing more rapidly than other companies. The basic concepts in her model are inducements and obstacles to growth, with there being both internal and external inducements
and obstacles. What external inducement exists for media conglomerates to enter the
Internet business? Clearly the demand (pumped up by the marketing of the Internet
companies) for Internet access is growing rapidly; certainly new technologies are out on
the market; there are numerous new entrants; and the media conglomerates have special
opportunities in the Internet market while they control large amounts of news material originally produced for print. Whether and how the Internet will substitute for other
media is not yet clear. The major patterns of use will probably emerge within the
next few years.
Internal inducements are not as easy to determine without closer knowledge of each
company. Market objectives were clearly put in front by Schibsted's first CEO in
the Net division, Schibsted nett. In an interview, Mr. Knut Falchenberg said that
by the year 2000, Schibsted would make more money from Net-vertising than from todays newspaper
advertising. Chairman of the board, Mr. Kaare Frydenberg is certain that by the year
2003, 60 percent of Norwegian homes will be attached to the Net. Utterances like
these signal that the managers put a great amount of personal prestige into the development
of the Net.
The Schibsted newspaper Aftenposten is the largest Norwegian newspaper when it comes
to the amount of advertising. Mr. Falchenberg seemed to have received a "go" for
the plans of making Schibsted a major player in the Internet market, thus spending
huge human and financial resources in the project. The owners of Schibsted may also have
been worried about the new law regulating media ownership, which could put an end
to the growth in the newspaper sector. Personal ambitions could clearly be a part
of the internal inducements, and whether Schibsted possessed special knowledge at the point
of time when the decision was made will be evident in the next few years. There
clearly are obstacles to growing on the Net. The competition in the market is quite
brutal, and the market is rather complex. Modems are offered for the price of 1 NOK if the
customer signs up for a subscription to Internet access, and prices have been cut
dramatically, while the number of nodes have been increasing rapidly. An overview
in the magazine Internet-guiden (No. 4/1996, page 44-45) shows that currently at least 30 companies
are offering Internet access.
Most companies are locally based, while the seven largest ones are offering Internet
access at local telephone tariffs in all the largest cities. Schibsted nett is so
far in the lead with 36 local access points all over the country. Other large providers
are Telenor (Telecom Norway), with 20 local access points, and the independent EU-Net,
with 23 local access points.
To some extent the Internet is disapproved of due to press reports of pornographic
and racist material, as well as recipes of bombs and drugs. The telecomunications
companies are also worried about the possibilities of the Internet becoming a competitor
and wish to ban Internet phone systems. But so far legal restrictions, like making the
Internet provider responsible for content, have only been discussed at a preparatory
level, and only the Christian people's party has clearly uttered a stand for censorship of the Net.
In the USA, the proposed Communication Decency Act (CDA) aims to put an end to sex,
violence and harassment on the Net, but the law is facing big difficulties, with
opponents arguing that it violates the first amendment.
Another, more dangerous, kind of disapproval might occur and prove to be fatal to
the future of the Net and the companies investing on the Net: Users may find the
Net useless. Once again we are facing the problems related to the fact that users
donmt pay for content.
Severe internal obstacles to the growth of the Net are hard to see today. In the spring
of 1996, the Norwegian Union of Journalists succeeded demanding extra pay for Internet
publishing of their material. With the disagreement with the journalists put to an end, there seem to be no important obstacles left. But over time, the owners will
expect their investment in the Net to pay back. New media enterprises are extremely
costly, and stable financial support from long-term investors is crucial.
The current trend in the US financial market is that Internet companies like Yahoo
loose value as they are not able to deliver the projected profit. (Computer World
Norge 28. June 1996).
One external obstacle not mentioned so far is the possibility of public regulations
not only of control, but of ownership. In order to foresee how the Net could be regulated,
we have to look at the existing media regulation, namely the regulation of broadcasting and newspapers.
Regulating the broadcasting media
Heavy regulation of the broadcasting media has a long tradition in Norway and in
most other European countries (confer. Syvertsen 1992, Siune & Truetzschler 1992).
Even today, the public regulates both access to the airwaves, and to some extent
the content of the output.
Relying on the public service broadcaster NRK for radio (since 1933) and television
(since 1960), Norway was one of the few West European countries with no privately-owned
national broadcaster by 1990. In 1992 the commercial tv channel TV2 was launched,
and in 1993 the privately-owned radio channel P4 went into business. Both channels
were to be run according to public service conditions regarding content, and there
were quite detailed rules for how and where to put the advertisements. A special
regulating body (Statens medieforvaltning) is responsible for making sure the channels are following
these principles. Both TV2 and P4 quickly managed to get hold of a substantial share
of the audience, thus making profit very early.
In 1996, the government handed out local monopolies in the field of local tv, sharing
Norway between 30 local monopolists. There was great interest in having concession,
both due to favourable economic trends, and because the geographical areas in which
the concessions were given were quite large compared to the former arrangement, where
concession was limited to lesser geographical areas (Norwegian Department of Culture,
Press release 63/95, august 25 1995).
Right now the government is considering which companies will receive the privilege
of having local radio monopolies, following the same pattern as the local tv with
local monopolists, serving larger geographical areas.
The big difference between broadcasting and the Internet is that broadcasting is dependent
on one station transmitting content to all receivers, whereas the Net consists of
not only one sender. With access to telephone lines, anyone might become a sender,
thus making such regulations seemingly impossible to carry out, even though, for example,
Chinese authorities demand registration of Internet users.
It has also been claimed that it is technologically impossible to regulate the content
of the Net. The amount of information is too vast. But major parts of the Internet
today are registered at search engines like AltaVista. These systems have indexed
most of the web pages (30 million by June 1996) and newsgroups (13 million messages by
June 1996) in the world, making the Internet universe shrink dramatically (Wired
4/96).
When the Net search engine AltaVista was accused of giving easy access to kiddie porn,
the owner Digital Corp. quickly responded by regulating the content of its service,
censoring the Net, some would say. This was done in days, while the CDA (Communication Decency Act) of the politicians will do the walk all through the American juridical
system. Who's in charge here?
It seems like it is impossible to censor the Net prior to publishing, but it doesn't
have to be too hard controlling the content.
The unregulated newspaper market
Contrasting broadcastingms heavy regulation of ownership and content, the newspapers
face a whole different regulatory environment. There has never been a newspaper law,
though in Norway, freedom of print was granted by the constitution of 1814. In 1968,
press subsidies were introduced in order to keep underdog papers alive, fighting against
the iron laws of the circulation spiral and the household coverage. The press subsidies
have slowed down the pace of the concentration process, though they have not been able to stop it completely (NOU 1992:14).
Legitimating the need for, and assessing the positive effects of press subsidies was
almost identical to press policy from 1968 until 1995, with a new governmental committee
giving deep thought to the matter every 10 years (NOU 1973:22, NOU 1982:44, NOU 1992:14). During the last 15 years, concentration in the newspaper business has increased
substantially in Norway (Høst 1994, Østbye 1996) as in most other Western countries
(Nærø 1992), and in 1995 a governmental committee submitted the report: NOU 1995:3
Mangfold i Media (Variety in the media), proposing a media law and limiting the total
ownership in the press. The committee was split in half at this point. The majority
wanted a 30 percent limit, while the minority proposed a 50 percent limit (NOU 1995:3). The representatives of A-pressen and Schibsted both voted for a 50 percent limit,
while Orkla's representative voted for a 30 percent limit. If the limit is set to
30 percent it will, in theory, cut off Schibsted's possibilities for further expansion
in the newspaper business, since Schibsted today controls more than 30 percent of the
total circulation of newspapers.
By mid-June 1996, the minister of culture announced a new law regulating media ownership
by size of total ownership and forbidding cross-ownership between print and broadcasting
companies. There were no limitations of ownership in the Internet market in the initial draft of the law (NOU 1995:3). According to the press release, the new law
probably will appear by the end of 1996. The law will be very similar to the competition
laws and will include all media. It states that major players won't be allowed to own shares in each other's companies. Further, editorial independence will be established
by law. A special body will control the market, having authority to forbid buying
of companies (Norwegian Department of Culture, Press release 39/96, 19. June 1996).
For Norwegian politicians, it seems to be too early to regulate the Internet business.
The public committee of 1995 (NOU 1995:3) stated that it was necessary to closely
watch the development and that the most important threats were the large multinational
and multimedia companies, suggesting that the government should support the domestic
multimedia industry. In a report from the Norwegian department of church, school
and research (Gundersen), the issue of concentration was left almost untouched. A
later report touched the issue, stating that control over infrastructure should not lead to
control over content. However, too tight regulations could make the business less
attractive for investments, thus jeopardizing the establishment of new companies
(Statssekretærutvalget 1996, Tiltak 3.4.2c).
Why concentration?
Thus, we have established that the newspaper business and the Internet business are
of two different worlds, regarding both the properties of the media and important
economic and political factors.
Strange then, that the two media seem to be undergoing a similar kind of concentration,
where the giants seek to grow at the expense of the smaller, and almost certainly
will have success, because of their financial strength. In a growing market, there
is room for many players, big and small. When the market cools down one can expect consolidation,
and concentration. There is so far no sign of that in the Internet market, while
the Norwegian newspaper market in a 100-year perspective surely is cooling down, and has almost reached the maximum level of concentration. The next possible major
step in the process of concentration might be a fusion of A-pressen and Schibsted.
With the pattern of cooperation between the two companies clearly visible even today,
such a fusion might be not necessary at all. Furthermore, it is probably not particularly
desirable, since it would surely make politicians furious, unless the debts of A-pressen
makes financial aid necessary.
In the choice between jobs and concentration, politicians almost inevitably choose
jobs. The number of Net providers is high, but there are big and small fish. The
size of the fish is limited to the money available for feeding the company. For the
last few years, Norwegian companies have had high profits, so there has not been a lack of
money for financing the new medium, in spite of the fact that time and size of profit
is mostly uncertain.
As the Schibsted nett case has show, there are few obstacles to growth, and political
resistance to concentration in the market is absent, so the big players can work
freely in the market. And as long as other media companies are investing heavily,
it feels safe to join the ride, simultaneously one is afraid of being left behind at the
station. Many established Netizens were critical of Schibsted's entering the Net
market, claiming that this market should be a free one, free from the big players.
What they seem to forget is that the money for the expansion of the Net had to come from somewhere
and someone, and that most likely someone was the existing media companies, and in
Norway that means newspapers, just like commercial broadcasting is also financed
by newspaper companies.
Why regulation?
In the current debate, the antagonists of regulation often ask questions like: Why
regulate? Does the concentration really have an impact upon the content? If the owners
donmt interfere with the journalists and the editors businessm, then it is not important who owns the media. Research projects into the matter are quite numerous in the
USA and in Canada (e.g. Picard et.al. 1988, Busterna 1989a, 1990, 1991). Critical
theorists have also delivered numerous accusations of abuse of power by big corporations
(Bagdikian 1987, Herman & Chomsky 1988, Allern 1992, Underwood 1993, McManus 1994).
To sum up all these findings: It is hard to find valid evidence for the notion of
big owners as being less favourable owners for the freedom of speech, democracy or
the local market (confer. McQuail 1992,1994).
This point of view is only one argument against regulation of ownership of the newspaper
business. It has also been stated that such a regulation clearly might have negative
impacts, such as jobs being lost. Besides, it could be very hard to stop tycoons
consciously getting around the regulations.
Soap and the media
The owners right to do whatever he likes with his business is crucial in a liberal
democracy. But newspapers are not considered just like any other business. If you
produce soap, democracy will not shiver from one monopolist, but with newspapers
its quite another story. Newspapers are pivotal in the democracy, carrying the public debate
on their wings, so to speak.
This view is, in a way, a novelty in Norwegian press history. Only 20-30 years ago
the press was more of a player in the public debate, and almost every newspaper had
a clear-cut ideological profile. The owner, the editor and to a great extent the
journalists too, were very well aware of the newspaper'fs role as an agitator and a propagandist
(confer. NOU 1982:30).
With the growth of a more self-sustained journalistic ideology, and with very few
towns with papers of different political flavour, it was both in the journalists'
and the business people's interest to downplay the newspaper's role as an agitator
and exaggerate the role as a independent, objective player in local society (Raaum 1978). Whether
this was, or is, the case or not is not as important as the fact that the journalists
are confined to this ideology. In Siebert, Schramm and Peterson's (1956) terms, the Norwegian newspapers and newsmen currently consider the social responsibility theory
as being valid for their work.
With the disappearance of ideology in the newspaper business, new owners appear on
the stage. In a new political environment, to a great extent kept alive by the journalistic
ideology, interference from owners is not anticipated. The journalists demand to
be in control over content. The journalists and the journalistic ideology are a counterweight
both to the former partisan press way of defining the pressm role, as well as to
the big owners' sultry wishes of achieving control over individual newspapers and the press system.
The new owners claim that they are only here for the money, that they are not interested
in the content. This view is problematic in several ways:
First, the business people are responsible for delivering profit to the shareholders.
Running a newspaper business properly means that you need to have some kind of control,
also over content, which is the main product of the paper. It would then be irresponsible of the owners to have no opinion of the content of the paper.
Secondly, the profit demands themselves means that there will be less money left in
the paper for making a paper. A substantial part of the profit is returned to the
holding company (often as konsernbidrag, since paying dividends would mean being
cut off from press subsidies), and this surely must influence content. With less money left
in the newspaper, there is less money available for improving the content.
Thirdly, the owners appoint the managers, and in smaller enterprises the board also
directly employs every employer. The single most important person is the editor,
who is solely in charge of the content, and the recruitment of editors is thus a
very important process in which the corporation invests time, money and efforts.
The Net in the hands of the corporation
Access to, and content of the Net is soon to be controlled by the same large companies
and organisations which have been controlling the other parts of the media system,
once again proving the adaptability of the market and the impotence of politics.
Maybe. It all depends upon the success of the Net. In market terms, the Net is an enormous
success. Out of nothing, the whole (western) world suddenly realised that one had
to enter the Net, and the growth rate of the Net is still exponential.
Theoretically, every citizen on planet earth will be connected not so many years after
2000, according to some prognoses. But the rate is extremely fragile, dependent upon
the market's faith in Internet shaping the brave new future for mankind.
To summarise: The big players spend a lot of money on Net-related activities, but
have no clear view of how to get returns from the investment. The pattern of use
of the Net is still undergoing immense changes, making it hard to foresee the eventual
outcome of the process. Nevertheless, their ambitions and visions are overwhelmingly--wanting
to control the heart, nerve centre and brain of the modern nation. They might very
well soon be. Politics is way behind in the development, even though existing law
proposals may easily be adapted to fit the Internet as well as traditional mass media,
but the discussion has not started. Yet.
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Proofread by C. my warMest thanks.