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Mass Media Giants and the Big Six

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Mass Media Giants and the Big Six

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  1. Mass Media Giants and the Big Six Power Point by Reeves Medaglia-Miller, Ph.D. for GHUM 1180, Pop Culture, GBC

  2. Mass Media Giants • I began to compile this Power Point for in-class usage back in 2001, when I first taught Pop Culture. The ‘Big Six’ was a relatively fresh concept back then. I have been updating the PPT ever since. • It seems that every year, membership in the titans of media changes and some new entity emerges. • One year, it is the ‘Big Six.’ Next year, it is the ‘Big Eight.’ The following year, it will be the ‘Big Five.’ It depends on who’s selling off what, from year to year. • With the exception of GE and the addition of Comcast, the basic pantheon of the giants is almost the same today as it was a decade ago: Disney, Viacom, NBCUniversal/Comcast, Time Warner, News Corporation, Sony, Vivendi, and Bertelsmann. • Yet, even this has been modified since 2004 and 2006, with the emergence of web giants like Facebook, Google, and Youtube. In 2010, as you will see, Comcast comes on the scene and in 2013, GE makes its final bow. • The two rules are: don’t expect things to remain the same from one year to the next. There are always newcomers. • And: once as high as fifty, with increased consolidation, the number will never again rise above ten.

  3. The Giants Peat Giant Image by Faugar at

  4. The Giants • Depending on whom you ask, the term “the Big Six” has been used, on and off over the last decade, to nickname both the roster of American media giants and that of all international media leaders. • At the beginning of the 21st century, the international Big Seven were Disney, Viacom, General Electric, Time Warner, News Corporation, Sony and Bertelsmann (remembered with the mnemonic DVG TNSB). • For about half the decade, Bertelsmann and Sony attempted to merge their music media, which would have made them the international 800 pound gorilla (DVG TN S/B), and solidified a ‘big six.’ • The S/B venture lasted about four years. In 2008, the merger was overturned by the EU court since its vast size was considered to be unfair competition. • Notably, by 2011, the owners of 90% of all American media still closely resembled that same group (Disney, Viacom, General Electric, Time Warner, Newscorp, CBS, and Comcast = DVG TNCC). • In 2013, GE, for the most part, got out of the entertainment business when it sold the remainder of its NBC Universal holdings to Comcast. • Internationally, then, there’s a Big Eight today: DV TNCC SB.

  5. The Big Six in 2013 • Today, the term ‘Big Six’ (if you have to choose just six) is usually used to refer to the largest media conglomerates dominating the American realm, those who engage in extensive media cross-ownership: Disney, Viacom, NBCUniversal/Comcast, Time Warner, News Corporation, and CBS. • See Wikipedia, Media cross-ownership in the United States • See Wikipedia, Concentration of media ownership

  6. Relative sizes and assets of the giants • Many of the following dozen slides are a decade old, so that we may see the relative sizes of the international media giants at that time, and how their assets were allocated. • For the first three shown, Disney, Viacom, and Time Warner, you will find a complete comparison between 2000 and 2012. • Also provided are links to each company’s 2012 annual report, so you can see recent bottom line results for the rest of the giants, and draw comparisons for yourself. • It is interesting to note that each of the multinationals owns apparatus for the distribution of an entertainment product at each level of its consumption (movie-making, movie exhibition, pay tv, video sales, television, internet, etc.). • In other words, each of the giants is vertically integrated. • (see slides 35-49 for more on vertical integration)

  7. DISNEY 2000 Studio Entertainment accounts for 23.6 percent of the revenue that Disney's top business segments generate, and only 2.7 percent of their operating income. Business Segment Revenue(millions) Operating Income(millions) Media Networks 9615 2298 Studio Entertainment* 5944 (23.6%) 110 (2.7%) Parks and Resorts 6803 1620 Consumer Products 2622 455 Internet Group 368 (402) Combined 25402 4081 *Includes Walt Disney Pictures, Touchstone Pictures, Walt Disney Feature Animation, Walt Disney Television Animation, Buena VistaTheatrical Group, Miramax Source: The Walt Disney Company Annual Report 2000

  8. DISNEY 2012 Compare the year’s results on the previous slide with these results from 2012. Business Segment Revenue(millions) Operating Income(millions) Media Networks 19,436 6,619 Studio Entertainment* 5,825 722 Parks and Resorts 12,920 1,902 Consumer Products 3,252 937 Interactive 845 (216) Combined 42,278 9,964 Source: The Walt Disney Company Annual Report 2012 • See Disney's 2012 Annual Report • See Disney 2012 Yearly Earnings

  9. VIACOM2000 Entertainment accounts for 13.5 percent of the revenue that Viacom's top business segments generate, and 8.9 percent of their operating income. Business Segment Revenue(millions) Operating Income(millions) Cable Networks 3895 1250 Television 5382 431 Infinity 2765 589 Entertainment* 2758 (13.5%) 210 (8.9%) Video 4960 76 Publishing 596 50 Online 101 (257) Combined 20457 2349 *Includes Paramount Pictures, Paramount Parks, movie theater and music publishing operations Source: Viacom Annual Report 2000

  10. VIACOM2012 Viacom 2012 results report considerably less revenue than at the beginning of the decade. This is, in large part due to Sumner Redstone’s division of the huge company into two separate entities, Viacom and CBS, in order to avoid antitrust penalties. Business Segment Revenue(millions) Operating Income(millions) Media Networks 9,194 3,889 Filmed Entertainment* 4,820 325 Eliminations (127) 1 Expenses (314) Combined 13,887 3,901 Source: Viacom Annual Report 2012 • See Viacom's 2012 Annual Report

  11. TIME WARNER2000 (called AOL Time Warner in 2000) • Filmed Entertainment accounts for 21.7 percent of the revenue that AOL Time Warner's top business segments generate, and only 9.1 percent of their operating income*. • Business Segment Revenue(millions) Operating Income(millions) • AOL 7703 2350 • Cable 6054 2831 • Filmed Entertainment** 8119 (21.7%) 796 (9.1%) • Networks 6802 1502 • Music 4148 518 • Publishing 4645 747 • Combined 37471 8744 • Figures are projected; estimations for operating income are before depreciation and amortization. • ** Includes Warner BrothersPictures, New Line Productions, Fine Line Features, Warner Home Video, Warner Bros. Television • Source: AOL Time Warner Annual Report 2000

  12. The Rise and Fall of AOL Diagram from Yarrow, 2009

  13. TIME WARNER2012 Note that TW Cable is now a separate entity from Time Warner, (as with Viacom) also for the purposes of avoiding antitrust penalties. Note the current size of TW Cable. Business Segment Revenue(millions) Operating Income(millions) Filmed Entertainment** 12,018 1,228 Networks 14,204 4,719 Publishing 3,436 420 Eliminations (929) (97) Corporate (352) Combined 28,729 5,918 Source: AOL Time Warner Annual Report 2012 TW Cable 21,386 4,445 • See Time Warner's 2012 Annual Report • See TW Cable 2012 Revenues

  14. GENERAL ELECTRIC and its brief adventure in entertainment • In 1986 GE reacquired RCA, primarily for the NBC television network (also parent of Telemundo Communications Group). The remainder was sold to various companies, including Bertelsmann (Bertelsmann acquired RCA Records) and Thomson SA which traces its roots to Thomson-Houston, one of the original components of GE. • In 2004, GE bought 80% of Universal Pictures from Vivendi. Vivendi bought 20% of NBC forming the company NBCUniversal. GE then owned 80% of NBC Universal and Vivendi owned 20%. • On December 3, 2009, it was announced that NBCUniversal will become a joint venture between GE and cable television operator Comcast. The cable giant will hold a controlling interest (51%) in the company, while GE retains a 49% stake and will buy out shares currently owned by Vivendi. • By January 28, 2011, GE owned 49% and Comcast 51%. On March 19, 2013, Comcast bought GE's shares in NBCU for $16.7 billion. Source: Wikipedia, General Electric • See GE's 2012 Annual Report

  15. VIVENDI(called Vivendi Universal in 2000) TV/Film accounts for 31.2 percent of the revenue that Vivendi's top business segments generate, and only 23.6 percent of their operating income*. Business Segment Revenue (millions) Operating Income (millions) Music 495 94 Publishing 3540 493 TV/Film** 4248 (31.2%) 526 (23.6%) Telecoms 5270 1303 Internet 48 (184) Combined 13601 2232 *Figures for operating income are before depreciation and amortization.**Includes Universal Pictures, StudioCanal, Universal Studios Recreation Group, Canal+, Universal Television & Networks Group Source: Vivendi Annual Report 2000 • See Vivendi's 2012 Annual Report

  16. NEWS CORPORATION • Filmed Entertainment accounts for 27 percent of the sales revenue that News Corp.'s top business segments generate, and 15.5 percent of their operating income. • Business Segment Revenue (millions) Operating Income (millions) • Filmed Entertainment* 6625 (27.0%) 503 (15.5%) • Television 7008 991 • Cable/Network 2696 197 • Magazines and Inserts 1675 437 • Newspapers 4600 904 • Book Publishing 1907 205 • Combined 24511 3237 • Includes Twentieth Century FoxFilm Corp., Fox 2000 • Pictures, Fox SearchlightPictures, Twentieth Century • Fox Home Entertainment • Source: News Corp. Annual Report 2001 • See News Corporation's 2012 Annual Report

  17. Here’s an excellent visual of News Corp’s holdings today… News Corp vertical integration diagram: Media.edusites

  18. SONY Pictures account for 7.7 percent of the sales and operating revenue that Sony's top business segments generate, and only 1.8 percent of their operating income. Business Segment Revenue (millions) Operating Income (millions) Electronics 39989 1989 Game 5169 (409) Music 4568 164 Pictures* 4442 (7.7%) 35 (1.8%) Insurance 3415 143 Combined 57583 1922 *Includes Sony Pictures Entertainment, Sony Pictures Classics, Columbia Pictures, Columbia TriStarTelevision Source: Sony Annual Report 2001 • See Sony's 2012 Annual Report

  19. BERTELSMANN • Broadcasting - RTL Group • Radio, RTL Radio France, RTL2, FUN RADIO, RTL Radio Deutschland, 104.6 RTL (Berlin), ANTENNE BAYERN (Germany), Radio Hamburg, radio NRW (Germany), RADIO 21 (Germany), bigFM (Germany), Radio Regenbogen (Germany), Radio Dresden, HITRADIO RTL SACHSEN (Germany), Hit-Radio Antenne (Germany), ANTENNE MECKLENBURG-VORPOMMERN (Germany), Radio Brocken (Germany), 89.0 RTL (Germany), ANTENNE THÜRINGEN (Germany), BB RADIO (Germany), 105'5 Spreeradio (Germany), radio TOP 40 (Germany), Oldie 95 (Germany), ROCK ANTENNE's (Germany), RTL Radio Lëtzebuerg, Bel RTL, Radio Contact (Belgium), Mint (Belgium), Onda Cero (Spain), Europa FM (Spain), Television, RTL Television, M6 (France), Five (UK), ANTENA 3 (Spain), RTL 4 (The Netherlands), RTL 5 (The Netherlands), RTL 7 (The Netherlands), RTL TVI (Belgium), RTL Klub (Hungary), RTL Televizija (Croatia), Télé Lëtzebuerg, VOX (Germany), RTL II (Germany), Super RTL (Germany), n-tv (Germany), Den 2. RTL (Luxembourg), RTL Shop (Germany), Traumpartner TV (Germany), RTL TVI (Belgium), Plug TV (Belgium), RTL 9 (France), REN TV (Russia), Fun TV (France), Téva (France), Paris Première, Série Club (France), TF6 (France), W9 (France), M6 Music Rock (France), M6 Music Black (France), M6 Music Hits (France), Antena 3 (Spain), Antena.Nova (Spain), Five US (UK), Five Life (UK) Programming • FremantleMedia, UFA Film & TV Produktion, UFA Fernsehproduktion, UFA Filmproduktion, UFA Entertainment, Grundy UFA, GRUNDY Light Entertainment, Karlheinz Brunnemann. teamWorx, Universum Film, talkbackTHAMES, Crackerjack, Blue Circle, Blu, Home Shopping Service, SND, CLT-UFA, ENEX • Publishing • Books: Random House, Inc., Ballantine, Ballantine Books, Ballantine Reader's Circle, Del Rey, Del Rey/LucasBooks, Fawcett, Ivy, One World, Wellspring, Bantam Dell Publishing Group, Bantam Hardcover, Bantam Mass Market, Bantam Trade Paperbacks, Crimeline, Delacorte Press, Dell, Delta, Domain, DTP, Fanfare, Island, Spectra, The Dial Press, Crown Publishing Group, Bell Tower, Clarkson Potter, Crown Business, Crown Publishers Inc., Harmony Books, Prime, Shaye Areheart Books, Three Rivers Press, Doubleday Broadway Publishing Group, Broadway Books, Currency, Doubleday, Doubleday Image, Doubleday Religious Publishing, Main Street Books, Nan A. Talese, Harlem Moon, Knopf Publishing Group, Alfred A. Knopf, Anchor, Everyman's Library, Pantheon Books, Schocken Books, Vintage, Random House Audio Publishing Group, Villard Books, The Modern Library, RH Trade Paperbacks, Striver's Row Books, Random House Children's Books, Dell/Delacorte/Dell Young Reader's Group, Alfred A. Knopf, Bantam, Crown, David Fickling Books, Delacorte Press, Dell Dragonfly, Dell Laurel-Leaf, Dell Yearling Books, Doubleday, Wendy Lamb Books, Random House Diversified Publishing Group, RH Value Publishing, Random House Information Group, Fodor's Travel Publications, Living Language, Prima Games, Princeton Review, RH Espanol, RH Puzzles and Games, RH Reference Publishing , Waterbrook Press , Shaw Books, Fisherman Bible Study Guides • See Bertelsmann's 2012 Annual Report


  21. Here’s an excellent visual of Bertelsmann’s holdings today… Organigram of Bertelsmann: cached at Zusas

  22. COMCAST • In 2010, cable and internet giant Comcast becomes the new kid on the media block with the purchase (from GE) of half of NBC Universal. • “In December 2009, Comcast announced its intent to acquire a majority stake in the media conglomerateNBC Universal from GE. The planned acquisition was subject to scrutiny from activists and government officials; their concerns primarily surrounded the potential effects of the vertical integration that the merger could create, as Comcast is also heavily involved in cable television and internet services in many media markets. The deal went through, resulting in Comcast owning 51% of the company until March 2013, when GE divested its stake; Comcast now owns 100% of NBC Universal.” • Text from Wiki, Comcast NBC merger. 

  23. Television NBC Universal(January 2010) • Cable • Comcast Cable • Programming • E! Entertainment, Style, Comcast SportsNet Philadelphia, Comcast SportsNet Mid-Atlantic, Comcast SportsNet Chicago, Comcast SportsNet West, SportsNet New York (partial), The Golf Channel, Versus Network, AZN Television, PBS KIDS Sprout, TV One, G4 • Sport Franchises • Philadelphia 76ers, Philadelphia Flyers, Philadelphia Phantoms, Philadelphia Charge, Frederick Keys, Delmarva Shorebirds, Bowie Baysox • Other • Through Comcast Spectator, Wachovia Center, Wachovia Spectrum, Ovations Food Services, New Era Tickets, Front Row Marketing Services • See Comcast's 2012 Annual Report

  24. Comcast has become a major player since buying up NBC Universal’s television and movie holdings. Comcast vertical integration diagram:

  25. Consolidation and Mergers

  26. What is a merger? What is an acquisition? • “From a legal point of view, a merger is a legal consolidation of two companies into one entity, whereas an acquisition occurs when one company takes over another and completely establishes itself as the new owner (in which case the target company still exists as an independent legal entity controlled by the acquirer). Either structure can result in the economic and financial consolidation of the two entities.” Wiki. • Today, large corporations and multinationals (like Sony) function as hunters, taking down or acquiring the most vulnerable elk who are struggling at the rear of the herd.

  27. Case study: the takeover of EMI • For example, in 2012, Sony completed its acquisition of EMI Music Publishing, giving it a global market share of about 31% of all music publishing worldwide. • Meanwhile, Vivendi's Universal Music Group won European and U.S. approval for its $1.9 billion purchase of EMI's recorded music business. • Effectively, EMI, once one of the world’s largest, most prestigious music publishing companies (eg. the Beatles, the Rolling Stones, Queen, David Bowie, Pink Floyd) was no longer an autonomous entity. • Practically divided in half, it is now a subsidiary of (a) Sony and of (b) Vivendi.

  28. Why Media Mergers matter “Having a few huge corporations control our outlets of expression could lead to less aggressive news coverage and a more muted marketplace of ideas.” Rifka Rosenwein, Why Media Mergers Matter, Brill’s Content,Dec. 1999 Gagged man photo: 28

  29. Charles Lewis “If media moguls control media content and media distribution, then they have a lock on the extent and range of diverse views and information,” says Charles Lewis, [executive director of the Centre for Public Integrity]. “That kind of grip on commercial and political power is potentially dangerous for any democracy.” Miren Gutierrez. (2004). Fewer Players, Less Freedom. 29

  30. Consolidation and Consumerism • Rosenwein’s and Lewis’ predictions came to pass some years ago. Viewpoints represented in the American media are so similar in both content and philosophy that it is essentially irrelevant where consumers go to get their news and to gain access to differing worldviews. • Despite their pretense of ideological war, the philosophical differences between the worldviews of even Newscorp’s Fox News and CBS or NBC are so slight, it is clear that the North American way of life has become a monoculture, steeped in the language and practices of consumerism.

  31. What is Consumerism? • “Consumerism is a social and economic order that encourages the purchase of goods and services in ever-greater amounts.” • Wiki, Consumerism

  32. How do large corporations encourage consumerism? • The few corporations that control 90% of our media foster consumerism by gaining control of all aspects of the distribution of a media product. • By embedding overt consumerist messages and product placement in the media product’s distribution, at each level of consumption, the consumer is literally immersed in a pervasive philosophy of consumerism. • Remember Marshall McLuhan’s fish? Corporations use the propaganda of advertisement to prompt our desires for virtually everything we long for: movies, cars, houses, boats, vacations, food.

  33. How does a corporation gain access to every level of our consumption? • Using vertical integration. • Through vertical integration, a media conglomerate owns each corporation in the chain of media dissemination, from the actual devices we use to consume our media to the media we consume. • From the movies we watch to the popcorn and chocolate we eat while watching those movies. • Ask yourself, how much media and entertainment do I consume in a single day? • How much do I watch movies, television, and so on, even if it is online? • How many of these choices were made by me and how many were prompted by corporate advertising? The last one is a trick question: because of McLuhan’s fish, none of us has the knowledge to answer that question.

  34. How much time do you spend each day consuming media? • "The average young American now spends practically every waking minute — except for the time in school — using a smart phone, computer, television or other electronic device, according to a new study from the Kaiser Family Foundation." • "Those ages 8 to 18 spend more than seven and a half hours a day with such devices, compared with less than six and a half hours five years ago, when the study was last conducted. And that does not count the hour and a half that youths spend texting, or the half-hour they talk on their cellphones." • “And because so many of them are multitasking — say, surfing the Internet while listening to music — they pack on average nearly 11 hours of media content into that seven and a half hours.” • “I feel like my days would be boring without it,” said Francisco Sepulveda, a 14-year-old Bronx eighth grader who uses his smart phone to surf the Web, watch videos, listen to music — and send or receive about 500 texts a day” • Levin, Tamar. (January 20, 2010). If Your Kids are Awake, They're Probably Online. New York Times. • Schulten, Katherine. (January 22, 2010). How Much Time Do You Spend Consuming Media Every Day? New York Times.

  35. Vertical Integration NBC/CBS vertical integration diagram: LearningDesign

  36. What is Vertical Integration? • Free Dictionary defines Vertical Integration as follows: “The merging of companies that are within the chain of companies that handle a single item from raw material production to retail sale.” • Investopedia writes: “When a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor.” • Diagram: Cambridge

  37. Business Dictionary defines  ‘vertical integration’ as follows: • “Merger of companies at different stages of production and/ or distribution in the same industry. When a company acquires its input supplier, it is called backward integration. When it acquires companies in its distribution chain, it is called forward integration.” • “For example, a vertically integrated oil company may end up owning oilfields, refineries, tankers, trucks, and gas (petrol) filling stations. Also called vertical merger.”

  38. Vertical Integration in Media • “Media concentration is… promoted through vertical integration, which denotes owning both the content and the conduits to distribute that content. It has manifested itself in U.S. media over the past fifteen years, and the recent merger of General Electric's NEC and Vivendi means that all commercial TV networks are owned by a media corporation that also owns a major Hollywood film studio. Each firm also owns TV show production studios as well as cable TV channels.” (McChesney, 2004) • Read Robert McChesney's The Problem of the Media.

  39. Vertical Integration in Media • Many of the large media company owners are entertainment companies and have vertical integration (i.e. own operations and businesses) across various industries and verticals, such as distribution networks, toys and clothing manufacture and/or retailing etc. That means that while this is good for their business, the diversity of opinions and issues we can see being discussed by them will be less well covered.

  40. Vertical Integration in Media • One cannot expect Disney, for example, to talk too much about sweatshop labor when it is accused of being involved in such things itself. The wider ramifications are highlighted well in this following quote: “Vertical Integration was once looked upon with alarm by government. It was understood that corporations which have control of a total process, from raw material to fabrication to sales, also have few motives for genuine innovation and the power to seize out anyone else who tries to compete. This situation distorts the economy with monopolistic control over prices. Today, government has become sympathetic to dominant vertical corporations that have merged into ever larger total systems. These corporations, including those in the media, have remained largely unrestrained.” Ben H. Bagdikian, The Media Monopoly, Sixth Edition, (Beacon Press, 2000), p. xvii Image: Mickey Mouse picture from

  41. Here’s a diagram of a 10-stage vertical integration process in the distribution of a movie product (continued on the next slide) Vertical Integration diagram template:

  42. Vertical Integration diagram template:

  43. Windows of Exhibition Windows of Exhibition • Another model for understanding how media corporations are vertically integrated has been called the “windows of exhibition.” • When a corporation owns all of the companies required to distribute an entertainment product (from its initial showing in theatres through each and every other method by which the entertainment product is shown to the public), each opportunity to exhibit the product is referred to as a “window of exhibition.” • Another model for understanding how media corporations are vertically integrated has been called the “windows of exhibition.” • When a corporation owns all of the companies required to distribute an entertainment product (from its initial showing in theatres through each and every other method by which the entertainment product is shown to the public), each opportunity to exhibit the product is referred to as a “windows of exhibition.”

  44. Windows of Exhibition • Hollywood movies are shown not only on the big screen--they're exhibited on video and DVD, on network and cable TV, on pay-per-view, and on airplanes. Hollywood films continue to make money for the studios across all of these platforms, known as "windows of exhibition," years after their theatrical release. • In a very real way, this diagram is a horizontal illustration of vertical integration. 2001, pbs online and wgbh/frontline Diagram and concept from (2001). The Monster that ate Hollywood.

  45. Thus, even if a movie is initially unsuccessful in its theatrical release, the corporation will still make huge profits when it distributes the product through the subsequent windows of exhibition.

  46. Where Hollywood Films make Money * Includes domestic and international revenue sources; "TV" includes all related revenue streams, including pay-per-view, network TV, and premium cable Source: Filmspace: Behind the Scenes, ABN Amro, Sept. 12, 2000 Diagram and concept from (2001). The Monster that ate Hollywood.

  47. Windows of Exhibition • Read more about ‘windows’ at The Monster that ate Hollywood (PBS, 2001).  • Windows

  48. Vertical Integration and the Indies • What effect does vertical integration of the  major studios and distributors have on the independent producers, distributors, and exhibitors? • In a word, devastation and ultimate buyout. • In the mainstream, with notable exceptions like Spielberg’s Dreamworks, there is virtually no longer such a thing as an independent film company, producer, or distributor. • 1990s independent film companies like Miramax and Castle Rock were ultimately acquired by the giants. • In 2012, even billionaire George Lucas sold his renowned indie, Lucasfilm, to Disney. George Lucas photo: Wikipedia

  49. If you are an independent, well-known film- maker, like Spike Lee, for example, it may be a manageable task to raise enough money to make a picture. • The difficulty will be when it comes time to get the movie shown. If you cannot access a distributor and, hence, an exhibitor, your movie is doomed to obscurity. • Because of vertical integration, the giants own their own movie companies, distributors, and theatre chains. • Whose movie will Viacom show in its movie house? Your small movie or one made by Paramount, a major movie company that is owned by Viacom? • It’s a rhetorical question. Spike Lee photo:

  50. Landmarks in the History of Vertical Integration of the Majors