Why are large media companies constantly merging and breaking up with each other?

In 2006, The Nation ran a fold-out graphic that visualized the frightening state of major media concentration in America. Just 10 years after the Telecommunication Act of 1996 unleashed mergers under the specious assumption that size and concentration could improve services and spur innovation, large media companies had gobbled up book publishers, television and cable networks, radio stations, and internet ventures.

The chart resembled a pack of six octopi, each with about eight arms, holding dozens of brands each. At the center of the tendrils were News Corporation, General Electric, Disney, Time Warner, Viacom, and CBS. The graphic and accompanying articles portended a threat to democracy: A handful of rich companies would dictate what we saw, heard, read, and perhaps thought.

Now, just 15 years later, that particular threat to democracy seems quaint. It turns out that American media do threaten American democracy—just not because of that model of concentration and not because of too much control. Instead, American media threaten democracy because they produce too much noise.

Such a chart in 2021 would be much more disorderly. Of those six companies, only Disney would still rank a central, dominant position. General Electric is out of the media business, having sold NBCUniversal to Comcast in 2009. Viacom and CBS are one company now, controlling a collection of prime cable channels as well as the mothership television network of old.

And on Monday, Discovery, a company so small in 2006 it did not merit inclusion among the giant octopi, and perhaps best known as the home of Shark Week, devoured Warner Media, a rump of the once-powerful Time Warner empire. The world’s largest telecommunication company, AT&T, the latest iteration of the company Alexander Graham Bell founded in 1885, unloaded Warner Media after a failed three-year daliance—a shorter period than Jennifer Lopez and Alex Rodriguez dated.

When it merged with Time Warner a few years ago, AT&T hoped that such prime attention magnets as CNN and HBO would attract new mobile data customers and lock in those who already paid the company several hundred dollars a month to keep their smartphones smart. But to acquire Warner’s brands AT&T had incurred significant debt.

Media concentration is not what it used to be. It’s less of an obvious threat to democracy than the Nation warned in 2006. Yet it’s much more of a problem than libertarian-leaning techo-optimists like former FCC Chair (and current cable industry lobbyist) Michael Powell asserted when he resisted calls to limit mergers on the basis that the internet provided infinite channels for diverse voices.

A chart of media conglomeration and power today would need three dimensions and at least three levels, like the chess Spock and Kirk played on the original Star Trek.

The base level would be the cable and telecommunication companies like Comcast, AT&T, T-Mobile, and Verizon. These companies control the wireless networks and fiber-optic pipelines that flood our lives with data. Until recently these companies had been trying to integrate vertically, gobbling up media production and content companies to lock in viewers and users. Since Verizon sold off AOL (once the internet carnivore that ate the old Time Warner in 2000) and Yahoo (once the chief gateway to the World Wide Web) earlier this month and AT&T excised Warner Media last week, only Comcast, owner of NBCUniversal since 2009, remains as a classic media behemoth, swollen with vertical integration.

The second level would be the Google-Facebook duopoly, two of the 10 most valuable companies in the world and the masters of our attention. Google and Facebook manage what we (and they) consider important, interesting, and “relevant” to us. They do so through pervasive surveillance of billions of people around the world and massive computational power that guides both companies in their advertisement-targeting efforts.

The result of this concentrated power over attention and advertising has been the starvation of industries that have long depended on advertisements to thrive, such as newspapers, magazines, and radio stations—the very instruments we depend on to inform ourselves and deliberate publicly about crucial issues.

Every company in the base level must respect Google and Facebook because of users’ dependence on them. We can’t seem to find our way around the world, or the world of ideas, without using them. So no phone hosted by Verizon could block access to either company if the telecom suddenly saw such a measure as otherwise being in its business interest. Such a phone would be useless to most people.

It’s this second level, the great gatekeepers of our attention, that threatens democracy through its massive, unchecked global power and its effect on our collective ability to think clearly about the problems we face.

Almost every company in the third and final level, the content level, must pay heed to the algorithmic power of both Google and Facebook. Google and Facebook drive viewers, readers, and clickers to one site over another. Editorial decisions at news publications often reflect assumptions about what will generate clicks on Google and shares on Facebook. That makes everything shallower and more abrasive. Thoughtful, measured content sinks in the digital stream.

The elements of the content level have been the subject of most of the merger-and-acquisition scrambles of the past 20 years. Content-company CEOs bought other content companies in an effort to forge “synergy” and cross-promotion. Then later they discarded brands they considered to be losers or laggards, or just to make some cash. So, for example, News Corporation split itself into two publicly traded content companies in 2012. In 2013 Rupert Murdoch sold the one that focused on entertainment, 21st Century Fox, to Disney, while holding onto his smaller, but politically influential, journalistic unit, the parent of Fox News, the New York Post, and the Wall Street Journal. Similarly, Discovery has now merged with Warner Media, which AT&T no longer wants.

Of the three levels, only the content level has real competition. Every brand in it, from Netflix to Hearst to Penguin-Random House to Pornhub to TikTok to FanDuel to Howard Stern to Match.com—and yes, even the biggest of them all, Disney—competes for a slimmer sliver of our attention. The number of attractions grows, yet the number of minutes in the day remains constant.

If you could follow all of that easily you just might be a media lawyer. Through more than two decades of frenetic buying, selling, merging, and divorcing the lawyers and investment bankers who facilitate these deals have made a killing through transaction costs, draining capital for unproductive and uncreative activities.

That’s just one way this three-dimensional model of media ownership and power costs Americans dearly. The more significant harm is in the cacophony it has generated. This system has filled our lives with alerts, seductions, addictions, and obsessions. It has not helped us find enlightenment, education, or edification.

We were supposed to be smarter, more tolerant, and more fun because of the digital revolution. Instead, we are angry, tired, confused, and divided. This is not a good condition for a democratic republic that depends on media to inform and organize citizens to govern themselves.

The current American media system is a lot more complicated than critics warned or champions promised in the early years of this century. “Breaking up” big companies through antitrust might help the situation a bit. But many of these companies do a fine job breaking themselves up as they stumble and fail.

The panic over media concentration was overblown, yet failed to predict how Facebook and Google would soon rule and ruin almost everything. The technophilic libertarian crew also missed the paradox within the emerging media ecosystem: that the two most internet-centric companies ended up dominating rather than distributing power. We now suffer from both concentration and cacophony. The lesson of all of this echoes what screenwriter William Goldman wrote of his industry in 1982: “Nobody knows anything.”

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