After digitalization, the concepts of “economic of scale” and “economic of scope” become more and more important to media and telecommunication. Media and telecommunication operators enjoy the benefits from these two economic concepts and try to maximize their advantage by merging other competitors or crossing over with related businesses. However, it is very dangerous to let any one company to become colossal, especially in the media and telecommunication business.
There were more than 10,000 newspapermen that protested the loss of freedom of press on September 1, 2012 which is Taiwan’s Journalist’s Day. One of the key appeals of this demonstration was to ask government not to permit the petition of Want-Want China Holdings Ltd., which owns a publishing company, newspaper, cable TV station, and wireless TV station. Want-Want also hope to merge with China Network Systems Co., Ltd., the main cable channel operator in Taiwan.
Want-Want’s dispute is still an ongoing problem in Taiwan. Passing Want-Want China Holdings Ltd’s application seems legal. However, there are so many predictable problems with a monster corporation in a society. Based on the hi-technology and the capital-intensive development, regulators should use the “economic of scale” and “economic of scope” very carefully.
I have the very same concern about the monopolized structure of media market as yours. It seems that many countries have been initiating policies on deregulation of media ownership. As I mentioned before, about two years ago, South Korean conservative government granted four big conservative newspapers the licenses to operate new cable TV channels after having lifted the traditional cross-ownership ban that prevented a corporation from owning newspapers and TV stations at the same time. Lots of journalists and scholars appear to have no faith in the government’s argument that the deregulation is for producing better media content that will help the Korean companies strengthen international competitiveness and become global media companies. The economies of scale are also true of media companies and the element of monopoly may be essential for innovation. I believe, however, that it is necessary to take note of the harmful result of monopolized media market; for instance, Berlusconi’s Italy. I think that in the short run, media conglomerates may helpful in terms of economies of scale, in the long run, however, it can have deleterious effects not only on media territory itself but also on the society at large including economy.
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