Business Opinion: When truly global media players like Rupert Murdoch, Ted Turner and Barry Diller sit down for monthly board meetings in New York, London or Los Angeles it is unlikely the Irish media market is listed near the top of the agenda, writes Emmet Oliver
While €1.3 billion of advertising revenue is up for grabs in the Republic each year, the Irish market is a pygmy in international terms. The British market alone is eight times bigger. Or to put it another way the daily circulation of the Sun (3.3 million) is larger than the combined circulations of all the daily Irish newspapers.
In other words, most international media tycoons do not spend their days thinking up Machiavellian ways to buy up Irish media assets. There is also a second reason many of them are just not interested in this market - exiting dominant players.
Conrad Black, the former publishing tycoon, once told this reporter why he never invested in Ireland. Asked two years ago if he would be interested in any Irish newspapers in the future, he said: "No, not at the moment. But, I mean, it looks like it's pretty much stitched up. There is not a whole lot available, is there?". Most reporters interpreted this to mean the dominance of Independent News and Media in the Irish market.
But despite these comments and the smallness of the market, there is a subtle change going on. Small Irish-owned newspapers and radio stations are disappearing and larger companies are taking their place. The buyers may not be the giant US corporations like Viacom or Time Warner, but this country is now playing host to several large British media groups (for example Emap, Johnson Press, Daily Mail and General Trust), not to mention BSkyB and News International.
This change poses a challenge to plurality and diversity in the media. When these issues came up a decade ago most debate centered around the role of Independent Newspapers, but the debate has moved on and has spread to other parts of the media landscape.
For example, the radio sector is the next area where policy makers will have to decide how much limits should be placed on big players in an attempt to protect smaller operators.
The Broadcasting Commission of Ireland (BCI) has already imposed an ownership cap. It is a pretty blunt one. No one company can own 17.9 per cent of "the total number of services licenced" by the BCI. This has already put a stop to the commercial gallop of UTV. The company has snapped up Lite FM (now Q102), LM FM, Limerick's Live 95 and Corks 96 & 103 FM in the south already. But the BCI cap has brought the buying spree to an end. Consequently UTV recently made its latest acquisition in the UK, when it snapped up the Wireless Group.
However this BCI cap is not necessarily permanent. The BCI is reviewing its ownership and control policy and may move the cap up or down. This decision is likely to have an influence on the radio sector for many years to come. Does the country really want two or three big radio groups (and that includes RTÉ) controlling most of the news and information we hear every day?
The Competition Authority has itself raised this issue in a different context - is it good for advertisers to have three or four major radio blocs potentially controlling airtime rates? We have a similar problem in the television arena, with TV3 accusing RTÉ of having an undue influence over the setting of advertising rates, although so far Government reports on this have returned a not guilty verdict.
The issue is also one for the Competition Authority in the cable area. UGC (United Global Com) is hoping to buy NTL, even though UGC already owns another cable operator Chorus, which mainly operates in the Munster area. There are unlikely to be competition concerns there because NTL is mainly Dublin based, but there is another complication.
Wealthy US media mogul John Malone who controls UGC also has shares in News Corporation, the largest single shareholder in Sky, the main rival to NTL and Chorus in Ireland. The Competition Authority will have to make the crucial decision on whether this linkage means the deal will lessen the competition for "the sale of good and services".
These are not just issues for Ireland. The Council of Europe back in March in Kiev said media pluralism was going to be a key concern for European governments over the next five years. The Government here appears to at least recognise that preventing consolidation of media is important. For example, since the Competition Act 2002 came into law every single media merger must be referred to the Minister for Enterprise, Trade and Employment for approval.
Even Ted Turner, the founder of CNN, has raised the issue of diversity of choice in American media. He recently pointed out that in 1990, the major US broadcast networks - ABC, CBS, NBC and Fox - fully or partially owned just 12.5 per cent of the new programming they aired. By 2000, it was 56.3 per cent and just two years later, it had surged to 77.5 per cent. So why should anyone be worried about this? Well forget whether its bad for society or not, its arguably bad for business.
To quote Turner: "When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers . . . They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It's called capitalism".
Clearly the BCI will be considering such ideas in its deliberations in the next few weeks. But of course regulation and laws only go so far. American politicians thought they could protect American stations from takeover by hostile foreigners when they stipulated you had to be an American citizen to own a US station.
No big deal thought Rupert Murdoch in 1985 when he simply renounced his Australian citizenship and became an US citizen instead. For him it was worth it - it meant he could get his Fox network off the ground and in a strong position to challenge the three existing networks.
