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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7 comments

  • The merger of NBC and Universal was defined in the media in three general ways – as a case of numbers in the business press, as a set of shows and entertainment properties in the entertainment press, and as a source for hilarity every time Conan O’Brien pulled his Walker Texas Ranger lever. Eileen Meehan is spot on in reminding us of the larger question – just what can a conglomerate behemoth like GE do with its own vertically integrated media fiefdom?

    This is not just about GE kitchens in new reality shows or incidents of GE PR disguised as NBC News. It is about the limits of corporate-owned, mass media discourse, as well as the limits placed upon discourse *about* that discourse. Let’s definitely speculate on the creative ways in which this new entity could serve GE, have fun with it. But let us not forget the need to return to the question, “Who/What is serving the public?”

  • Shame on you, Integration!!

    Although, yes, Van Helsing was quite scary… (awful, just awful) I totally support Eileen R. Meehan’s statement that GE conglomerations are “lots scarier.” The deregulation of how many media outlets one company could own was originally meant to diversify content, but in reality, all it’s really done is make a VERY small number of people VERY rich. With one company owning as much as GE does (which I admit I had NO idea about), its growing weight and power in the economic world is incalculable. This reminds me SO much of Clear Channel and its ridiculous amount of ownership- something which has taken anything even half-way against the hegemonic norm and driven it into the ground. Now THAT’s scary. Tsk, tsk, what WILL we do with these integrators?

  • Media power

    That is interesting how NBC was labeled as the one who achieved such the status of acquiring Vivendi Universal. It goes to show how the large media corporations like to be secretive about the ways that they conduct their business of growing larger and more powerful. It seems as though they do not want the public to be aware of the fact that they are so large in scale and so few in number(thanks to the Telecom Act of 1996). Meehan is right about the question of how NBC’s media could serve GE. It raises the question of ethics in the News. GE could influence NBC not to air any negative news related items about GE for the sake of saving face, even though questions of fair journalism arise. It is scary to think of what such great media power can do to influence the information that we receive.

  • While I agree that it is ridculously absurd withthe mount of vertical integration that is going on, I do not really see the type of influence that everynn is talking about, that GE will have. GE–> General Electric. This is a corporation, no some governmental asset looking to use NBC and Universal Studios as a propaganda tool. Shame on integration? Let’s all just scream out shame on business. This is no new story. All the major networks are part of a conglomerate corporation. ABC is owned by Disney. What else is owned by Disney? Oh no, does anyone really think that Mickey Mouse is controlling our news? Media has always influenced information output. Fox– hugely Republican. But what media is not partisan? In an ideal world there would be bipartisan or a non-partisan network. I want t know what exactly would happen if there was not vertical integration with the major networks we have? Quality programming wouldn’t exist? Funding would be cut? People whine about corporations gobbling up networks and becoming vertical integrated. Seriously stop and take a look at what would NOT exist and what would be replaced. Yes Meehan has a point as to what can GE do with NBC’s media? Influence everyone to buy new dishwashers and refrigerators!! Stop the overspeculation, the overanalyzation, and the striving to work against the companies that basicaly end up funding the movies, tv shows, etc. that we have. If not then lets hve independent networks all over. Down with series of all kinds! Down with the blockbuter! Indie films… period. Right… then we’ll be hearing complaints again how HOllywood has no money anymore to make movies. Make up your minds.

  • How do we really see these maneuvers?

    Are large acquisitions such as this ultimately good or bad? Let’s be honest with ourselves: the television and radio airwaves are no longer easy to obtain pirate access to, so the whole “crushing the little guy!” argument is all but obsolete. When we as a society created a media industry, most knew that the day would come when everything would become increasingly more homogenous and inhospitable. I may not be comfortable with it any more than the next person, but I believe we’ll just have to face the fact that mass media, as the years go by, will be in the hands of ever fewer names.

    Unless, say, one of us rises to become the CEO of GE or some such giant, then, hey! Change from within!

  • Jessie Mikolaichik

    I think it’s kind of absurd that these media giants continue to merge with other corporations, such as film production companies, and yet they continue to churn out such box office disasters like Van Helsing. I work at a movie theater and it’s true that the opening weekend defines the success of the film. Very few movies will continue to draw viewers after that. And sure, these corporations know the real money from the movie comes from “licensing, tie ins, merchandising, and corporate synergy,” but don’t you think everyone would be better off if they spent the time and energy to produce better quality films that would continue to attract large audiencs for mor than a few days?

  • Power and Control

    Many articles and arguments against integration tend to take the form of lists, and tend to take the term “corporation” as a uniform concentration of power, an inherent evil. It’s entirely possible that integration is as bad for society as some say, but lists and a priori arguments won’t convince many people. Somehow, we need to reframe this debate, examine things we take for granted.

    Regarding power: Sure, these consolidations are making a few people (top execs) extremely wealthy, but they also make a large number of people (stock holders) slightly wealthier. Corporations gain power by yoking many people’s fates together. Taking aim at greedy CEOs seems to be wrong tack. It’s the millions of middle managers whose 401ks are affected by merger deals that you’ll have to convince. Their salaries and the their families’ health care are tied to the well-being of the company they work for, which is tied to the fate of other companies through joint ventures. I’d argue that the reason why anti-consolidation arguments have yet to become a popular movement isn’t out of people’s ignorance of the degree of consolidation. It’s the degree to which everyone’s fate is tied together now. If the power and wealth of a few really were the only byproducts of mergers, you’d have no trouble building a mass movement opposed to them. It’s the diffusion of power that keeps people from objecting. Of course, the diffusion of power is extremely uneven, but it’s just diffuse enough to keep people “happy”.

    Regarding the control the media has over what people like, think, value: Van Helsing is one of many examples of the public rejecting a heavily advertised product that a giant corporation tried to shove down it’s collective throat. If a greedy corporation had complete control over what we watch, wouldn’t it be in their best interest to make less expensive fare, and wouldn’t they have a far better rate of success than they do? Overstating a corporation’s ability to manipulate preference, manufacture need, or limit discourse when there is so much evidence against it only weakens the anti-consolidation argument. Media’s power is canalization of public opinion rather than control. Even with an evil like ‘conspicuous consumption’, I’m not convinced that a lot of people wouldn’t buy things they didn’t need even if media wasn’t so consolidated. Easy to blame corporations for the #$&% that’s on TV/in the megaplexes. Tough to prove they invented the desire for it.

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