No Logo

by Naomi Klein

  Because synergy’s efficiency is not measured by the success of any one “product,” whether a film or a book, but rather on how well any one of those products travels through the conglomerate’s multimedia channels, synergy projects tend to grow out of freewheeling meetings in which agents, clients, brand managers and producers riff on how next to leverage their flagship brands. And so the market is flooded with the mutant progeny of these brainstorming sessions: Planet Hollywood restaurants, Disney-published books written by ABC sitcom stars, Starbucks coffee-flavored beer, Lost in Space breath mints, a chain of airport bars modeled after the deceased set of the sitcom Cheers, Taco Bell—flavored Doritos …

  It seems fitting, then, that Sumner Redstone calls his Viacom entertainment products “software” since there is so little that is firm at the center of these synergy schemes. By software, Redstone means branded entertainment products that he pats and molds to fit his various media holdings. “We have created a software-driven media global powerhouse,” he says. “Our mission is to drive that software in every application here in the U.S. and to every region on the earth. We’re going to do it.” Redstone prides himself on the “absolute open communication” between his holdings. “We are coordinating various aspects of the business so each takes advantage of the opportunities provided by the other.”22

  The New Trusts: The Assault on Choice

  In less enthusiastic eras than our own, other words besides “synergy” were commonly used to describe attempts to radically distort consumer offerings to benefit colluding owners; in the U.S., illegal trusts were combinations of companies that secretly agreed to fix prices while pretending to be competitive. And what else is a monopoly, after all, but synergy taken to the extreme? Markets that respond to the tyranny of size have always had a tendency toward monopoly. Which is why much of what has taken place in the entertainment industry during the last decade of merger mania would have been outlawed as recently as 1982, before President Ronald Reagan’s all-out assault on U.S. anti-trust laws.

  Although many media empires have long had the capacity to coordinate their holdings to promote their various offerings, most were held in check from aggressively doing so by laws designed to put up barriers between media production and media distribution. For example, U.S. regulations passed between 1948 and 1952 limited the ability of film studios to own first-run movie theaters because lawmakers feared a vertical monopoly in the industry. Though the regulations were loosened in 1974, the U.S. government was at that point in the midst of implementing a similar series of anti-trust actions designed to keep the three major U.S. television networks (CBS, ABC and NBC) from producing entertainment shows and movies for their own stations. The Justice Department charged that the three networks had an illegal monopoly that was blocking the work of outside producers. According to the Justice Department, the networks should act as programming “conduits,” not programmers themselves. During this government anti-trust campaign, CBS was forced to sell off its programming arm —which, ironically, is now the synergy-obsessed Viacom. Another irony is that the interest that pushed most aggressively for the Federal Trade Commission investigation was Westinghouse Broad casting, the same company that merged with CBS in 1995 and now enjoys all the attendant synergies between production and distribution. Full circle arrived in September 1999 when Viacom and CBS announced their merger, worth an estimated $80 billion. The companies, reunited after all these years apart, converged into an entity far more powerful than before the divorce took place.

  In the seventies and early eighties, however, the majors were under so much scrutiny that according to Jack Myers, then a sales executive at CBS-TV, his network was reluctant to coordinate the sales departments of its television, radio, music and publishing divisions for cross-promotional purposes. “The idea,” writes Myers, “is one that several major media companies are today attempting to follow, but in 1981 concerns about anti-trust regulations prevented direct divisional interaction.”23

  Those concerns were alleviated when, in 1983, Reagan began the not-so-gradual dismantling of U.S. anti-trust laws, first opening the door to joint research between competitors, then removing the roadblocks to giant mergers. He yanked the teeth out of the Federal Trade Commission, dramatically limiting its ability to impose fines for anticompetitive actions, cutting the staff from 345 to 134 and appointing an FTC chairman who prided himself on reducing the agency’s “excessively adversarial role.”24 A former FTC regional director, Carlton Eastlake, commented in 1983 that “if the policies of the current chairman are permitted to govern for a sufficient period of time, some of our most basic liberties will be jeopardized.”25 Not only were the policies continued, but in 1986 even more dismantling legislation was passed with the explanation that American companies needed greater flexibility to compete with the Japanese. Reagan’s term saw the ten biggest mergers in American history up until that point —and not one was challenged by the FTC. The number of FTC anti-trust cases against corporations dropped by half during the eighties, and the cases that were prosecuted tended to target such ultra-powerful forces as the Oklahoma Optometric Association, at the same time as Reagan stepped in personally to protect the world’s ten largest airlines from a pending anti-trust investigation by his own government.26 For the culture industries, the final piece of the new-world jigsaw fell into place in 1993 when Federal Judge Manuel Real lifted the anti-trust restrictions that had been imposed on the three major television networks in the seventies. The decision opened the door for the majors to once again produce their own prime-time entertainment shows and movies and neatly paved the way for the Disney-ABC merger.27

  However, even in today’s climate of weak anti-trust laws, some of the more audacious synergy dreams have begun to wake up the long-dormant FTC. In addition to the high-profile case against Microsoft, Barnes & Noble’s bid to buy the book distributor Ingram created such rage in the book industry that the FTC was forced to set up a dedicated phone line to deal with the complaints and Barnes & Noble abandoned the bid. That these controversies are fiercest in the book and software industries is no coincidence: what is at stake is not the availability of cheap staplers, toys or non-branded towels but the free publication of, and access to, a healthy diversity of ideas. It doesn’t help that the concentration of ownership among Internet, publishing and book retail companies has come hot on the heels of what must now seem an incautious level of hype about the openness and personal empowerment of the so-called Information Revolution.

  In an open E-mail to Bill Gates, Andrew Shapiro, a Fellow at Harvard Law School’s Center for Internet and Society, voices an opinion that has surely occurred to most thoughtful observers of modern mergers and synergy schemes. “If the whole idea of this revolution is to empower people, Bill, why are you locking up the market and restricting choices? Synergizing your way from one biz to another every month?”28

  This contradiction represents a much larger betrayal than the usual doublespeak of advertising that we are all accustomed to. What is being betrayed is no less than the central promises of the information age: the promises of choice, interactivity and increased freedom.

  CHAPTER EIGHT

  CORPORATE CENSORSHIP

  Barricading the Branded Village

  Every other week I pull something off the shelf that I don’t think is of Wal-Mart quality.

  —Teresa Stanton, manager of Wal-Mart’s store in Cheraw, South Carolina,

  on the chain’s practice of censoring magazines with provocative covers, in

  The Wall Street Journal, October 22, 1997

  In some instances, the assault on choice has moved beyond predatory retail and monopolistic synergy schemes and become what can only be described as straightforward censorship: the active elimination and suppression of material. Most of us would define censorship as a restriction of content imposed by governments or other state institutions, or instigated —particularly in North American societies — by pressure groups for political or religious reasons. It is ra
pidly becoming evident, however, that this definition is drastically outdated. Although there will always be a Jesse Helms and a Church Lady to ban a Marilyn Manson concert, these little dramas are fast becoming sideshows in the context of larger threats to free expression.

  Corporate censorship has everything to do with the themes of the last two chapters: media and retail companies have inflated to such bloated proportions that simple decisions about what items to stock in a store or what kind of cultural product to commission —decisions quite properly left to the discretion of business owners and culture makers —now have enormous consequences: those who make these choices have the power to reengineer the cultural landscape. When magazines are pulled from Wal-Mart’s shelves by store managers, when cover art is changed on CDs to make them Kmart-friendly, or when movies are refused by Blockbuster Video because they don’t conform to the chain’s “family entertainment” image, these private decisions send waves through the culture industries, affecting not just what is readily available at the local big box but what gets produced in the first place.

  Both Wal-Mart and Blockbuster Video have their roots in the southern U.S. Christian heartland — Blockbuster in Texas, Wal-Mart in Arkansas. Both retailers believe that being “family” stores is at the core of their financial success, the very key to their mass appeal. The model (also adopted by Kmart), is to create a one-size-fits-all family-entertainment center, where Mom and Dad can rent the latest box-office hit and the new Garth Brooks release a few steps away from where Johnny can get Tomb Raider 2 and Melissa can co-angst with Alanis.

  To protect this formula, Blockbuster, Wal-Mart, Kmart and all the large supermarket chains have a policy of refusing to carry any material that could threaten their image as a retail destination for the whole family. The one-stop-shopping recipe is simply too lucrative to risk. So magazines are rejected by Wal-Marts and supermarket chains —which together account for 55 percent of U.S. newsstand sales — for offenses ranging from too much skin on the cover girls, to articles on “His & Her Orgasms” or “Coming Out: Why I Had to Leave My Husband for Another Woman.”1 Wal-Mart’s and Kmart’s policy is not to stock CDs with cover art or lyrics deemed overly sexual or touching too explicitly on topics that reliably scandalize the heartland: abortion, homosexuality and satanism. Meanwhile, Blockbuster Video, which controls 25 percent of the home-video market in the U.S., carries plenty of violent and sexually explicit movies but it draws the line at films that receive an NC-17 rating, a U.S. designation meaning that nobody under seventeen can see the film, even accompanied by an adult.

  To hear the chains tell it, censoring art is simply one of several services they provide to their family-oriented customers, like smiling faces and low prices. “Our customers understand our music and video merchandising decisions are a common-sense attempt to provide the type of material they might want to purchase,” says Dale Ingram, Wal-Mart director of corporate relations. Blockbuster’s line is: “We respect the needs of families as well as individuals.”2

  Wal-Mart can afford to be particularly zealous since entertainment products represent only a fraction of its business anyway. No one hit record or movie has the power to make a dent in Wal-Mart’s bottom line, a fact that makes the retailer unafraid to stand up to the entertainment industry’s best-selling artists and defend its vision of a shopping environment where power tools and hip-hop albums are sold in adjoining aisles. The most well known of these cases involved the chain’s refusal to carry Nirvana’s second hit album, In Utero, even though the band’s previous album had gone quadruple platinum, because it objected to the back-cover artwork portraying fetuses. “Country artists like Vince Gill and Garth Brooks are going to sell much better for Wal-Mart than Nirvana,” Wal-Mart spokesperson Trey Baker blithely said at the time.3 Facing a projected loss of 10 percent (Wal-Mart’s then share of U.S. music sales), Warner and Nirvana backed down and changed the artwork. They also changed the title of the song “Rape Me” to “Waif Me.” Kmart Canada took a similar attitude to the Prodigy’s 1997 release Fat of the Land, on the basis that the cover art and the lyrics in the songs “Smack My Bitch Up” and “Funky Shit” just wouldn’t fit in at the Mart. “Our typical customer is a married working mother and we felt it was inappropriate for a family store,” said manager Allen Letch.4 Like Nirvana, the British bad boys complied with their label’s subsequent request and issued a cleaned-up version.

  Such censorship, in fact, has become so embedded in the production process that it is often treated as simply another stage of editing. Because of Blockbuster’s policy, some major film studios have altogether stopped making films that will be rated NC-17. If a rare exception is made, the studios will cut two versions —one for the theaters, one sliced and diced for Blockbuster. What producer, after all, would be willing to forgo 25 percent of video earnings before their project is even out of the gate? As film director David Cronenberg told The New Yorker, “The assumption now seems to be that every movie should be watchable by a kid…. So the pressure on anyone who wants to make a grownup movie is enormous.”5

  Many magazines, including Cosmopolitan and Vibe, have taken to showing advance copies of new issues to big boxes and supermarkets before they ship them out. Why risk having to deal with the returns if the issue is deemed too risqué? “If you don’t let them know in advance, they will delist the title and never carry it again,” explains Dana Sacher, circulation director of Vibe. “This way, they don’t carry one issue, but they might carry the next one.”6

  Since bands put out a record every couple of years —not one a month —they don’t have the luxury of warning Wal-Mart about a potentially contentious cover and hoping for better luck on the next release. Like film producers, record labels are instead acting preemptively, issuing two versions of the same album —one for the big boxes, bleeped, airbrushed, even missing entire songs. But while that has been the strategy for multi-platinum-selling artists like the Prodigy and Nirvana, bands with less clout often lose the opportunity to record their songs the way they intended, preempting the objections of family-values retailers by issuing only pre-sanitized versions of their work.

  In large part, the complacency surrounding the Wal-Mart and Blockbuster strain of censorship occurs because most people are apt to think of corporate decisions as non-ideological. Businesses make business decisions, we tell ourselves —even when the effects of those decisions are clearly political. And when retailers dominate the market to the extent that these chains do today, their actions can’t help raising questions about the effect on civil liberties and public life. As Bob Merlis, a spokesperson for Warner Brothers Records explains, these private decisions can indeed have very public effects. “If you can’t buy the record then we can’t sell it,” he says. “And there are some places where these mass merchandisers are the only game in town.”7 So in much the same way that Wal-Mart has used its size to get cheaper prices out of suppliers, the chain is also using its heft to change the kind of art that its “suppliers” (i.e., record companies, publishers, magazine editors) provide.

  Censorship in Synergy

  While the instances of corporate censorship discussed so far have been a direct by-product of retail concentration, they represent only the most ham-fisted form of corporate censorship. More subtly —and perhaps more interestingly —the culture industry’s wave of mergers is breeding its own blockages to free expression, a kind of censorship in synergy.

  One of the reasons that producers are not standing up to puritanical retailers is that those retailers, distributors and producers are often owned, in whole or in part, by the same companies. Nowhere is this conflict of interest more in play than in the relationship between Paramount Films and Blockbuster Video. Paramount is hardly positioned to lead the charge against Block buster’s conservative stocking policy, because if indeed such a policy is the most cost-effective way to draw the whole family into the video store, then who is Paramount to take money directly out of mutual owner Viacom’s pockets? Similar conflicts a
rise in the aftermath of Disney’s 1993 purchase of Miramax, the formerly independent film company. On the one hand, Miramax now has deep resources to throw behind commercially risky foreign films like Roberto Benigni’s Life Is Beautiful; on the other, when the company decides whether or not to carry a politically controversial and sexually explicit work like Larry Clarke’s Kids, it cannot avoid weighing how that decision will reflect on Disney and ABC’s reputations as family programmers, with all the bowing to pressure groups that that entails.

  Such potential conflicts become even more disturbing when the media holdings involved are not only producing entertainment but also news or current affairs. When newspapers, magazines, books and television stations are but one arm of a conglomerate bent on “absolute open communication” (as Sumner Redstone puts it), there is obvious potential for the conglomerate’s myriad financial interests to influence the kind of journalism that is produced. Of course, newspaper publishers meddling in editorial content to further their own financial interests is as old a story as the small-town paper owner who uses the local Herald or Gazette to get his buddy elected mayor. But when the publisher is a conglomerate, its fingers are in many more pots at once. As multinational conglomerates build up their self-enclosed, self-promoting worlds, they create new and varied possibilities for conflict of interest and censorship. Such pressures range from pushing the magazine arm of the conglomerate to give a favorable review to a movie or sitcom produced by another arm of the conglomerate, to pushing an editor not to run a critical story that could hurt a merger in the works, to newspapers being asked to tiptoe around judicial or regulatory bodies that award television licenses and review anti-trust complaints. And what is emerging is that even tough-minded editors and producers who unquestioningly stand up to external calls for censorship —whether from vocal political lobbies, Wal-Mart managers or their own advertisers —are finding these intracorporate pressures much more difficult to resist.