Competition in the media market is identified with media pluralism, meaning the existence of many media entities offering diverse content, which fosters pluralism of views, free exchange of ideas, and comprehensive information [1].

Competition under free market conditions should lead to increased diversity of messages. Unfortunately, in relation to the media market, this mechanism does not work, and rampant competition destroys rivals and leads to ownership concentration, escalation of costs, and the piling up of economic barriers that make it difficult for new broadcasters to enter the market [2].

As a result, in highly competitive markets such as television or local press, there is a noticeable decrease in the quality of media offerings, for example, product homogenization instead of differentiation, trivialization of content, increased sensationalism of information, and a decrease in their accuracy and reliability. According to market functioning theory, fragmentation and increasing competition do not foster product differentiation and quality improvement – a phenomenon known as the Hotelling effect [1].

Concentration is defined by the European Media Institute as an increase in the presence of one or several companies as a result of various possible processes: mergers, acquisitions, and transactions with other companies [3].

We distinguish three types of concentration:

1.
Vertical – involves merging as many different types of media operating in the same or different markets as possible. In Poland, Agora SA is an example: a media company that publishes books, magazines, a daily newspaper (Gazeta Wyborcza), as well as internet portals (e.g., Plotek.pl), blogging platforms, and radio stations (e.g., Tok FM).
2.
Horizontal – refers to merging as many media of one type operating in different markets as possible, e.g., the Eurozet radio group, which includes Radio ZET, Chilli ZET, Radio PLUS, Antyradio, and Planeta FM [2].
3.
Cross-media – when there is capital concentration in several different media markets (press, radio, television, Internet) [3].

Media ownership concentration

Capital concentration in the media market significantly affects media pluralism, and therefore monitoring and analyzing its level is essential for the proper functioning of audiovisual media. This results from the specificity of media enterprises. On one hand, they are economic entities, and on the other, they fulfill important socio-political functions, which means they cannot be treated identically to commercial enterprises [4]. In contemporary EU countries and the USA, the media market is characterized by a high degree of concentration, but its level varies depending on the type of mass medium concerned. The press market is subject to the fewest state restrictions. For this reason, concentration processes within it are the most dynamic. While limited regulation favors press concentration, in the case of radio and television, legal regulations contribute to it [2].

Ownership concentration in the press market results from the desire to occupy a privileged position in the publishers’ market. This can be achieved through mergers with other publishing houses or as a result of their absorption or support from external investors. This constitutes the starting point for further strengthening and striving for a dominant position after destroying or weakening the competition as a result of the principle of the circulation spiral. According to this principle, a strong broadcaster offers an attractive product, which sells in high circulation because it attracts a large number of recipients. This allows the broadcaster to create even more attractive issues, which attract even more readers and, as a result, generate increasing revenues from sales and advertising. Consequently, its market position strengthens, and when it exceeds \(65\%\) market share, other titles cease to be its competition and occupy secondary positions or disappear from the market [5]. Thus, in the case of the press, the free market paradoxically favors the creation of monopolies and oligopolies, as competition leads to the emergence of a few, or in extreme cases, a single publisher in the market [2].

Ownership concentration in relation to radio and television has a slightly different character and results from the fact that until the 1970s in Western Europe and the 1990s in Poland, the state guaranteed public television monopolies. Its abolition did not cause far-reaching changes in the television market. Public broadcasters retained privileges, e.g., revenue from mandatory license fees and advertising, while private broadcasters, apart from advertising, can only benefit from voluntary subscriptions. Additionally, in most countries, a licensing policy is in place, allowing for control over the number of broadcasters. In the radio market, deregulation, on the other hand, brought significant revival. As a result of the abolition of the public radio monopoly, many small stations were established, but they could not withstand intense competition, which forced concentration [2].

Degree of concentration and media pluralism

The degree of media concentration – defined on a scale from full monopoly to perfect competition – can be measured by the extent of control that the largest companies in the media market have over production, employment, distribution, and audience [6]. There is no clearly defined level of concentration above which it can be said to be too high. However, it is generally accepted that an acceptable level of concentration is a situation where \(50\%\) of the market is controlled by 4 media companies or eight companies have control over \(70\%\) of the media market in a given country [6].

To prevent the harmful effects of excessive concentration in the media market and to exclude the possibility of domination by large media conglomerates, which have significant economic resources and can thus gain a dominant position under competition, states take action to counteract negative trends in the media market and strive to ensure an appropriate level of pluralism by introducing:

Regulation of the audiovisual market includes general legal measures, e.g., antitrust law, and specific measures – licenses for non-public broadcasters. In the press market, regulation is based on direct economic instruments, e.g., subsidizing production or distribution, or indirect ones, e.g., tax reliefs [2].

Annotation 1: Degree of concentration and pluralism in the media market


The Media Pluralism Monitor 2020 report, published in July, is intended to serve as an early warning of threats to media pluralism in all member and candidate countries. In assessing the media market in terms of pluralism, it took into account indicators such as media ownership transparency, media concentration, profitability, and ownership and commercial influence on editorial line. In this area, Poland, along with 16 other EU countries, belongs to the group of medium-risk countries. The high-risk group includes 13 countries (Albania, Bulgaria, Croatia, Cyprus, Czech Republic, Finland, Latvia, Malta, Romania, Slovakia, Slovenia, Hungary, and Turkey). No country was classified as low risk in this area, which means that the problem of maintaining media pluralism in EU countries concerns all member states [8].

Undesirable effects of excessive concentration:

Trends toward increasing media concentration pose threats resulting from:

1.
a decrease in the diversity and quality of media offerings, which affects both recipients and content providers;
2.
price increases as a result of media owners’ ability to freely dictate prices in the case of a high degree of monopolization of the media market;
3.
limited access to media, resulting from the exclusion of competition from the market due to the possibility of financially destroying competitors and difficulties in attracting advertisers [6].

Media concentration does not always result in a reduction in the number of channels; often, strong broadcasters decide to increase their offerings with new periodicals, programs, or thematic channels. In this way, media conglomerates want to adapt to the expectations of increasingly smaller and more diverse audiences [2].

Level of media concentration in Poland

Radio market: In the first half of 2018, 72.7% of society listened to the radio daily – according to Radio Track Millward Brown research. The most popular stations were RMF FM (25.6%), Radio ZET (12.4%), and Radio ESKA (7.6%). The largest market share belongs to the RFM Group – owner of RMF FM, RMF MAXXX, and RMF Classic (30.6%), belonging to Bauer Media Group, followed by Polskie Radio – 19.2%. Czech MediaInvest, which took over the Eurozet Group from the French Lagardère Group, has about 16.5%; ZPR – approx. 14.5%; Agora Radio Group Sp. z o.o. – 6.2%. The concentration index for this market is over 80%.

Television market: According to a report prepared by wirtualnemedia.pl, in the first half of 2018, the largest viewership share – considering all channels – was held by Telewizja Polska. It amounted to 28.9%. The next positions were: Polsat Group – 24.51% and TVN Discovery Polska – 23.45%. The concentration index for this segment of the media market in Poland exceeded 80%.

Press market: According to data from the Press Distribution Control Association, all publishers sold a total of 631,699,252 copies of newspapers and magazines in 2017. The highest sales were: Bauer Publishing Ltd. – over 228 million (36.1% market share), Ringier Axel Springer Polska Ltd. – 96.8 million (15.3%), Polska Press Ltd. – 81 million (12.8%), ZPR Media SA (41 million and 6.5% market share), Agora SA (36.7 million and 5.8%), and Edipresse Polska S.A. (17.5 million and 2.7%). In total, the four largest publishers held over 70% of the market, and the eight largest – over 80%. However, none of the publishers achieved a dominant position in this market, as such is considered to be a market share of one publisher exceeding 40%. A comparison of shares in individual markets shows, among other things, that Bauer Media Group Poland is a very important player in three markets: press, radio, and internet; Ringier Axel Springer Polska – in the press and internet market; while Agora SA in the newspaper, radio, and internet markets. This data indicates a high concentration of the media market in Poland [9].

Exercise 1:


Exercise content:
Please explain what consequences excessive media concentration has?
Solution:
1. There is less competition in the market, which can lead to lower quality, higher prices, and lack of innovation. 2. The diversity of opinions in society is not reflected in the media, and public opinion is shaped by similar content. 3. The market is dominated by commercial content.

Bibliography

[1]

Dzierżyńska-Mielczarek J. “Poziom konkurencji na rynku prasy w Polsce”. In: Studia Medioznawcze 4.71 (2017). (accessed: 15.08.2020), pp. 121–134. url: http://cejsh.icm.edu.pl/cejsh/element/bwmeta1.element.desklight-3b87ea01-9283-4488-be75-fff2dae3e28c.

[2]

Mrozowski M. Media masowe. Władza rozrywka i biznes. Warszawa: Oficyna Wydawnicza ASPRA-JR, 2001.

[3]

Jas-Koziarkiewicz M., Stasiak-Jazukiewicz E. “Przeciwdziałanie koncentracji mediów w wybranych państwach członkowskich i Unii Europejskiej – analiza rozwiązań prawnych”. In: Przegląd Politologiczny 1 (2018), pp. 147–162.

[4]

Rostek H. “Regulacje dotyczące koncentracji własności na rynku mediów w wybranych krajach”. In: KRRiT (). (accessed: 10.08.2020). url: http://www.krrit.gov.pl/Data/Files/_public/Portals/0/komunikaty/koncentracja-mediow/antykoncentracjne-regulacje_analiza.pdf.

[5]

Kowalski T. “Media i pieniądze. Ekonomiczne aspekty działalności środków komunikowania masowego”. In: Biblioteka Cyfrowa Małopolska (). (accessed: 10.08.2020). url: http://mbc.malopolska.pl/dlibra/docmetadata?id=141&from=publication.

[6]

McQuail D. Teoria komunikowania masowego. Warszawa: Wydawnictwo Naukowe PWN, 2007.

[7]

Stępka P. “Koncentracja własności w mediach z perspektywy Rady Europy i Unii Europejskiej”. In: KRRiT (2004). (accessed: 10.08.2020). url: http://www.krrit.gov.pl/Data/Files/_public/pliki/publikacje/analiza2004_04.pdf.

[8]

Monitor pluralizmu mediów. “Monitor Pluralizmu Mediów 2020”. In: (2020). (accessed: 29.08.2020). url: https://sdp.pl/monitor-pluralizmu-mediow-2020/.

[9]

Palczewski M. “Dekoncentracja rynku mediów w Polsce – punkt wyjścia”. In: Instytut Staszica (2018). (accessed: 15.08.2020). url: http://instytutstaszica.org/wp-content/uploads/2017/03/Dekoncentracja-rynku-medi%C3%B3w-w-Polsce-punkt-wyj%C5%9Bcia.pdf.