Media Ownership in the Digital Era

Indonesia & the Philippines in the face of digitalisation

When discussing the power and influence of media owners, most of us in the Western world think immediately of Rupert Murdoch. In my country in Australia, a homecoming visit by Rupert Murdoch can lead to a change of Prime Minister. But the Murdoch model of media ownership is unique. Murdoch’s media empire stretches over a wide range of countries and continents, and unlike media moguls elsewhere (including as we shall see, in Southeast Asia) the Murdoch family do not seek direct political positions, either via elections or by appointment. His media explicitly campaigns for candidates (usually conservative political parties) but always in the context of a two-party preferred system.

In contrast, most democratic countries around the world maintain a multi-party system. Numerous parties can bring their leader to power as President and win a majority of seats in Parliament. Owners of media companies have direct affiliations with political parties, and have been appointed in positions of the government. This is not to say that questions which arise from scholarship pertaining to Rupert Murdoch or political economy studies of the West are irrelevant, but it is important to render precise and contextualised accounts of how media owners exert their power and influence. Media barons are often directly involved in political parties where a free press co-exists with a multi-party system. Media personalities and moguls possess the crucial ‘social and media capitals’ to put them in power [1] and this was the case in the 2004 Philippine elections [2]. For example, in the Philippines, often described as having the freest media system in Asia, the 2004 elections saw one Presidential candidate, two vice-presidential candidates and no less than ten Senate candidates having media or entertainment industry backgrounds. [3] In India, newspapers are largely owned by business barons, with an increasing trend of these businessmen entering into politics. [4] In Honduras, President Carlos Roberto Flores is a media owner whose success stemmed in part from the support of his newspaper and other media owners with similar values. [5] In Nigeria, current and former political leaders of political parties own national media outlets, which vigorously represent their interests by building political agendas. [6] In Kenya, Uhuru Kenyatta is the country’s richest man and Prime Minister, who owns television, radio and newspapers. [7] Where a multi-party democracy exists, media owners form political parties, and politicians start media companies, in order to enhance their political capital.

Understanding Media Ownership Trends

Why should we look to Southeast Asia to understand media ownership trends? In many ways, media companies in Southeast Asia have been far more nimble and strategic in adapting to the digital era than media companies in the West as far as business models are concerned. In one rare case of scholarly research on the media industry in Southeast Asia, Duncan McCargo explains that “prominent media ‘businesses’ are not profitable in a conventional sense”, as they have long been cross-subsidised by other arms of a larger business conglomerate. [8] As McCargo writes “it might equally be the case that Western patterns of media-politics relations could soon begin to unravel along ‘Asian’ or non-Western lines—if, indeed, this is not already happening”. [9] In short, the West does not always lead the way in new media innovation, nor are the ways in which media companies and users utilise new technologies formulaic around the world.

Digitalisation of media is creating a highly oligarchic media system. Digitalisation enables wealthy, powerful media companies to expand their reach. The convergence of digital media platforms allows for increased concentration and conglomeration of the industry, leading to an increasingly oligopolistic media landscape. Put simply: digitalisation enables big media to become bigger. My research in Indonesia shows that digitalisation has been a tool of media oligarchs to consolidate the industry and reduce the diversity of viewpoints in mainstream news. [10] As such, media owners in Indonesia wield significant influence. They are in some cases chiefs of political parties and presidential candidates. Indonesia’s presidents have bowed to powerful media owners in various ways in order to shape partisan coverage of their election campaigns. But they also have sought to include these owners in their inner circle, inviting them to be ministers, advisers, even potential vice-presidential candidates, or including their parties in their coalition as they know coverage will be favourable.

Similar models around the world exist where a media owner—turned rich businessman or turned influential politician—dominates the political scene. Digitalisation has been used as a tool of media oligarchs to centralise their media companies into larger businesses. Media companies were previously distinctively different according to platforms. Now, a media company owns a television station, newspaper, online site, radio station and increasingly, companies that own satellites, cable TV providers, telecommunications, and social media and messenger applications. In short, big media is getting bigger in the digital era. Thus, despite the hope that the internet would democratise the flow of information and bring down the hierarchical structures of media ownership power, industrial media remains a dominant paradigm in which elites exert their power.

Shifting Power of Media Owners: the Philippines

On the other side of the South China Sea [11] is the Philippines, which presents us with a completely different case of understanding the power of media moguls in tandem with the rising power of digital media. While in other countries, media moguls are highly influential in the political arena, the Philippines presents a distinctive case. In this country, media outlets are owned by big business families who also control tele-communication companies, water concessionaires, and power distributors — all of which are regulated by the government. This engenders Philippine media’s vulnerability to government and business interests. [12] Once lauded as the freest media in Asia, recent crackdowns by ‘the Trump of the East’ President Rodrigo Duterte, has the Philippines media owners ducking for cover. During his campaign and throughout his presidency, Duterte is able to utilise social media to work on his favour. He was able to ‘weaponise’ Facebook through paid social media trolls that boosted his popularity. [13] Duterte was convincingly elected president in 2016, on a platform of eradicating drugs and crime. Upon assuming the role as the nation’s leader, he immediately took aim at the mainstream media. Much like Trump’s obsession with lambasting The New York Times, Duterte has singled out Rappler as his bete noire. Rappler, an online news platform launched in January 2012, was founded by Maria Ressa along with a couple of other veteran journalists. Strengthening democracy and changing the face of journalism in the emerging digital era were its driving forces. [14] In July 2017, he falsely claimed Rappler was “fully owned by Americans”. Earlier this year, he banned Rappler’s regular correspondent Pia Ranada from entering the palace, a ban which extended to any Rappler correspondent when Duterte travels around the country. Now, Rappler and its CEO Maria Ressa has been indicted for tax evasion. The attacks on mainstream media who criticise him are multiplying. Last month Duterte threatened to block the franchise of the leading news conglomerate ABS-CBN. Inside the news organisation, managers are now having to prepare for the worst-case scenario—a potential closure of its operations. In August, owners of the leading Manila-based newspaper The Inquirer were accused of tax evasion, resulting in them looking to sell to keep Duterte off their back. One would presume, then, that media owners in the Philippines would urge their journalists and editors to take up the fight to Duterte. Indeed, Duterte has accused these “elite” owners of using their media to protect their illegal business activities. But in the Philippines media owners are apparently toothless tigers. Media owners talk of ‘lying low’, ‘riding out the storm’ as Duterte completes the remaining four years of his six-year term. Rappler seems to be the only one ‘holding the line’ as Ressa has described her actions in response to Duterte’s crackdowns.

The ‘chilling effect’ inside the rest of the media is clear. Media owners are hoping to lay low and avoid the administration’s wrath. For my recent research with the University of Philippines with Clarissa David, many media CEOs and owners respondents were wary of speaking on the record, while one media executive played music on her mobile phone while talking to us, fearing it was being recorded by the government. In the United States, prominent media outlets continue to defy Trump, because, at least so far, his petulant and aggrandising statements do not come with legal crackdowns or the apparatus of the State. Clearly, the threat of crackdowns are much more real under Duterte, not least because a feature of his presidency is murder in the name or eradicating drugs and crime.

Despite opening up its media after the authoritarian regime of Ferdinand Marcos (1965-1986) imploded, the Philippines is still well-known for violence against journalists, most famously in 2009 when 32 journalists were massacred in Mindanao province. Their mainstream media has faced contemptuous presidents in the post-Marcos era before, most notably by Joseph Estrada (1998-2001), who pursued a libel case against the Manila Times, forcing them to sell, and called for advertisers to boycott The Inquirer. But Estrada’s popularity spiralled, both with the populace and the elites; he lasted only three years before he was brought down by a corruption scandal. Duterte remains generally popular, and few amongst the business and media elite are willing to challenge him at this point in time.

Explaining Duterte’s Strength

What makes Duterte’s regime more successful? How is it that the media, an institution that kept leaders with ‘authoritarian fantasies’ (as scholar Nicole Curato has described Duterte) at bay previously, can’t seem to do so effectively anymore? The answers tell us much about how the Fourth Estate is being comprehensively eroded in the digital era, and ultimately explains the rise of modern-day wanna-be autocrats against the decline of democracy globally.

First, is the widely-reported digital-age phenomenon of hiring social media ‘trolls’, who are hired to campaign for president Duterte and attack his opponents online and on social media platforms, particularly Facebook. Attacks on those who criticise Duterte include media owners. [15]Because of the personalised attacks they can make on social media, media CEOs and owners like Ressa and others talk of being targeted in ways they have never been before. It heightens the fear, as trolls talk of retribution through jail, and even rape and murder. Rappler has published reports exposing the trolls, linking them to Russian involvement and Cambridge Analytica. ABS-CBN too, has also attempted to ‘unmask’ the trolls. The pro-Duterte digital influencers, backed by teams of social media creatives, hecklers and haranguers, are systematically eroding trust in institutions which criticise the president, in particular professional journalists. They regularly attack credible news stories, professional journalists, and media organisations, while at the same time promote the opinions of pro-Duterte bloggers and social media influencers.

Second, mainstream professional media is as financially weak as it has ever been. The Inquirer, like most print publications, is making losses, while Rappler (which only has 25 full-time journalists currently anyway) is still figuring out a financially sound business model. It wouldn’t take too many court cases and legal fees to plunge their businesses further into the red. Owners clearly feel less inclined to risk further critical coverage of Duterte’s administration because their business models are teetering on collapse.

Third, Duterte has cunningly attacked the non-media business interests of the owners. In the Inquirer’s case it is tax evasion through their business Dunkin’ Donuts. For leading radio broadcaster MBC it’s the threat to their hotel businesses in Boracay Island, which Duterte has closed down. Media owners have shown their colours—when asked to risk their most profitable businesses, they generally prefer silence and profit to critical reports and financial uncertainty. In March this year, the Washington Post wrote that Duterte was “Taking aim at the press” and “testing the foundations of Philippine democracy”. Now, those foundations are looking even more shaky, as Duterte’s rule has shown us a new type of wildly successful autocrat winning the battle against a critical media, just as the mid-term election campaign gets underway. Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) was practically never heard of before it served as Duterte’s vehicle to the presidency in 2016. Its most popular recruit before Duterte was boxing champion Manny Pacquiao in 2012. But before Duterte became president, the party could barely claim posts in government. [16] PDP-Laban, and presidential daughter Sara Duterte’s newly established party Hugpong ng Pagbabago (HNP) [17] are expected to gain even more support after these elections, while Duterte-backer Bongbong Marcos, son of the former dictator, grows in power. The same trolls who have backed Duterte are backing Marcos in the mid-terms. In the lead-up to the mid-term elections, Facebook took down 200 pages, groups and accounts organised by Nic Gabunada, who was integral in helping Duterte’s social media strategy in 2016. The pages included about 1.8 million followers who joined at least one of these groups and around 5,300 accounts followed one or more of the 25 Instagram accounts that Gabunada has established.