In an unlikely coalition, consumer groups have allied with the American Association of Advertising Agencies to oppose plans by the Federal Communications Commission to emasculate current restrictions on media consolidation [WAMN: -02]
The FCC intends to relax existing curbs on any one media owner becoming dominant within a local area. It also plans to lift the barrier on cable or satellite operators assuming control of a rival serving the same locality.
Earlier this year, the Four As was up in arms over the issue, complaining that the current wave of consolidation places too much ad negotiating power in the hands of the sellers, thereby driving up costs, reducing program diversity and – in certain instances – preventing advertisers such as smaller retailers from buying coverage within geographically limited areas [WAMN: 03-Jul-02].
The media buyers also argue that ‘homogenization’ of local radio in tandem with cable consolidation, means that retailers with just a few outlets are finding it increasingly difficult to compete – as are marketers of regional products.
Now the AAAA has been joined by two major public-interest groups, the Consumers Union and the Consumers Federation of America, as well as a number of minority-owned media companies. The loose-knit alliance has commissioned an economic analysis of media consolidation from the Information Policy Institute.
“We share [the 4A's] concerns,” says CFA director of research Mark Cooper. “They have an interest in a competitive market. We have an interest in a competitive market.”
Ad agencies and consumer groups are united by “a confluence of interests” in opposing media consolidation, notes IPI president Michael A Turner, who makes no pretence at being anything other than partisan.
“Right now ad agencies can leverage against a rich number of media outlets, and get the best rates. If concentration is instead on the supply side, giving agencies reduced power, rates will go up, and marketers will have to pass it on to consumers.”
Turner also says that consumer groups are worried about local news. “In a number of markets the local newspaper is basically surviving. Yet radio concentration has gutted local programming and what has suffered is the dissemination of local news and local programming.”
He is not impressed by the FCC’s argument that greater concentration of ownership would incentivize media companies to diversify programming. “We will be addressing that,” he says.
“In reality, that is false. It makes advertising as a means of disseminating marketer information more expensive and it is erecting an economic barrier for small and medium businesses, dampening competition.”
Data sourced from: AdAge.com; additional content by WARC staff