Want to Hear a Scary Story?
by: Eileen R Meehan / Lousiana State University
May is always hectic for folks in higher education. Last May brought the usual round of exams, term papers, graduations, and conferences as well as the last episode of Friends and an intense promotional campaign saturating television with ads for Van Helsing. Promising that “adventure has a new name,” the ads featured moody landscapes, a scary and scantily clad CGI vampire, and a moody Hugh Jackman shown variously with his gun, cross-bow, and a set of whirling blades reminiscent of power tools. The ad’s quick cutting made the film look like a romp through Dracula-land — exactly the kind of movie to wrap up a tough semester.
Despite good box office on its opening weekend, Van Helsing tanked. Even in Baton Rouge, where I live, the film was in trouble. A few weeks into the run, only two theaters listed Van Helsing in their newspaper ads: one screening at midnight, the other at 11:30 a.m. When I went to buy tickets for the morning show, I was told that Van Helsing was no longer on the schedule. Costing $200 million to produce and promote, Van Helsing was nowhere to be seen.
Such failures are not news and Van Helsing’s failure provided no fodder for the news. A $200 million flop is no big deal when everybody knows that the real money isn’t earned at the box office but through the licensing, tie ins, merchandising, and corporate synergy that attend every expensive title. But behind Van Helsing lurked a scary tale waiting to be told: General Electric’s purchase of Vivendi’s Universal Vivendi Entertainment unit, which made and released Van Helsing. On 11 May 2004, after 11 months of negotiation, GE finalized that $134 billion deal.
Much of the deal’s print coverage focused on NBC, not on its owner GE. Stories emphasized that NBC’s acquisition of Universal Studios would give it some parity with its rivals — Disney, News Corporation, Time Warner, and Viacom — which owned studios and networks. The attitude can be paraphrased thus: “Nice to see that little NBC is joining the Big Boys at long last!” But NBC was already part of one of the biggest of the big corporations that operates out of the United States. And that story deserved telling.
Since 1892, General Electric has essentially manufactured patents that have industrial, military, and consumer applications. Recruited by the Navy Department as a member of the Radio Patent Pool during World War I, GE became a major player in wireless technology. In 1919, it founded RCA and its subsidiary NBC with the hope of monopolizing wireless. Although it maintained connections to the military throughout the 20th century, GE lost control of RCA in 1931 and regained it in 1986. Then GE sold off most of RCA, but kept and started expanding NBC. By 2002, as number five in the Fortune 500, GE was a sprawling conglomerate with vertically and horizontally integrated operations in the manufacturing, finance, services, and entertainment-information sectors of the global economy. In that year, GE had total sales of $15.1 billion according to its annual report. According to Hoover’s Online, nearly half of GE’s sales came from insurance, power systems, and commercial finance with NBC contributing only 5.4%.
Consider the context of NBC’s slight contribution. In finance, GE offers property insurance, specialized financial services, commercial finance, casualty insurance, and consumer finance. For manufacturers, GE makes materials like plastics, silicones, resins, laminates, and abrasives. All of these figure in its own manufacturing operations and products: aircraft engines, centrifugal compressors, gas turbines, industrial automation products, equipment to control and distribute electricity, locomotives, nuclear reactors, steam turbine generators, transportation system products, and household appliances bearing the GE, Hotpoint, Monogram, Profile, or Profile Performance brands. Finally, GE provides service for commercial aircraft, medical and network-based information services, technical services, and equipment management.
As a highly diversified conglomerate that vertically and horizontally integrates basic industries, GE’s presence in the global economy is far greater than that of Disney, News Corporation, Viacom, and Time Warner. But make no mistake, GE’s media empire is considerable indeed.
Unlike its four rivals in television, GE has infrastructural interests in satellites. Until 2002, GE owned satellites and tracking stations. In that year, GE traded them for a 31% stake in the world’s largest provider of satellite services, SES Global. Primary customers include governments and owners of television networks, cable channels, and radio networks. Today, GE owns 54 television stations and has access to 250 stations through network affiliation contracts. GE split those holdings between NBC (29 stations, 220 affiliates) and Telemundo (25 stations, 30 affiliates).
In cable channels, GE owns Bravo, Telemundo Internacional, and MUN2. Through joint ventures, GE intertwined its interests with various firms including Dow Jones, Microsoft, Disney, News Corporation, and Viacom. Specifically, GE held interests in A&E and A&E International (with Disney); American, European and Japanese versions of CNBC (Dow Jones); History and History International (Disney and Viacom); MSNBC (Microsoft); National Geographic and National Geographic International (News Corporation and the National Geographic Society); and ShopNBC (Value Vision Media).
Programming built further alliances. Since 2001, GE has leased three hours of NBC’s Saturday morning schedule to the Discovery Channel, owned by Liberty Media, Cox Cable, and Advance/Newhouse Communications — all owners of cable systems. GE and Time Warner share the rights to NASCAR races from 2001-2006. GE has consistently licensed programming from other network owners and co-produced shows with them. In 2002, GE licensed ER, Friends, Good Morning Miami, Third Watch, and West Wing from Time Warner and Frasier from Viacom. Viacom and GE produced Ed and In-Laws. These alliance-building practices persist.
Placing NBC in the context of GE’s other properties, corporate alliances, and vested interests changes our understanding of the NBC/Universal merger. Backed by GE, NBC is far from a weakling. Given GE’s military and governmental connections, its building of NBC into a multi-media giant raises questions about how NBC’s media serves GE. I’m betting that the answers are lots scarier than Van Helsing!
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