Assessing Media Concentration in the New Network Media Economy

The final AANZCA 2024 conference session for today is one I’m also presenting in, but we start with a paper Terry Flew and Cameron McTernan. Terry starts by noting that Australia has long had one of the most concentrated media systems in the world. The Global Media and Internet Concentration Project (GMICP) is a new initiative to further explore such concentration patterns here and abroad, and trace their dynamics over time. This ultimately examines the network media economy, including telecommunication and Internet infrastructure, online and traditional media services, and core Internet applications and sectors.

This integrated approach better reflects the integrated nature of this economy, and better addresses the considerable power of large companies in this economy – some of which have been closely scrutinised, while others have been able to fly considerably more under the radar. In Australia, Alphabet is now the second largest operator in this market, eclipsed only by Telstra. It’s revenue stems predominantly from digital advertising, a sector which reached some $15 billion in 2022 and surpassed the combined volume of traditional media revenues.

Here the platform companies compete directly with traditional media, and Alphabet significantly outcompetes every other player (with $8b in revenue, and Meta capturing another $2.3b of the total market). This has disrupted the media supply chain as platforms now act as digital intermediaries; and this shift in how content is distributed and monetised has impacted on the business models of traditional media companies, which also affects media diversity. In fact, our understanding of the conventional media diversity supply chain may need to be reconfigured.

Netflix and Xitter both provide exceptions to these models, however. Netflix is a major leader in the market, with $1b and more in revenue; its size is not as indicative of market dominance from the effects of Alphabet’s size in its market, however. Many other players also exist in the streaming-video-on-demand market, and content still plays a considerable role in determining market dominance.

Conversely, Twitter (now X) is nowhere near dominant in the Australian market, even in spite of the outsized attention paid to this platform, the substantial contribution that X owner Elon Musk has made to Donald Trump’s presidential campaign, and the financial payoff that Trump’s election win has in turn produced for Musk.

Such engagement by media moguls in electoral politics is nothing new, of course, even though there had been a move away from personal ownership of media outlets in some media sectors in recent decades. Major tech companies are now giant IT conglomerates with significant media subsidiaries rather than quasi-media companies; that said, however, tech company owners are now themselves more actively involved in political processes, and most of them were aligned with Trump or at least avoided overt alignment with Harris. Market power leads to political power and can lead to cultural and ideological power here, certainly in the case of Musk and perhaps also in the case of Zuckerberg and others.

In this changed environment, then, what agencies and what laws do still matter? What is the impact of concentration across media markets in the network market economy? Are platforms now a more direct conduit to influencing political behaviour than traditional mass media?