MEDIA COMPANY CASE STUDYTASK 1 UNDERSTAND THE STRUCTURE AND

OWNERSHIP OF THE MEDIA SECTOR

Emma Upton

Types of ownership: private ownership

• A private company is a company whose ownership is completely private, a result of this is that it doesn’t need to meet strict Securities and Exchange Commission filing requirements that public companies require.

• An example of a private company is ITV.• A big advantage of Private ownership is that it is run purely on advertising funds,

so this means there are many companies that are desperate to advertise their product on TV, as TV is now one of the most influential sources of current media. So this means that the more popular that channel is, the more money companies are willing to pay more to advertise, so private ownership generates a lot of funding and money.

• However a disadvantage of private ownership is that as BBC is a public owner before they create a new show they spend a lot of money on research to find out how popular hat show will be, this is before even funding the show. However if a private channel, for example ITV liked a show, they could fund the show immediately without the input of the public, which could mean the show could fail miserably. So there is some chance of the show failing.

Types of ownership: public service

• Public service ownership is completely funded by the government with the TV license which TV owners have to pay. An example of this is the BBC, because they are run by the government they have to cater to the publics wants and interested. So this enables the audience the public to complain and give feedback and make changes to what is shown.

• Advantages to public service ownership is that because the BBC is ran completely on the basis of what the public want, the shows are designed purposely around the wants of the public so you get wide variety of different shows to suit many different people.

• Disadvantages would be that the majority of people are very willing to subscribe to companies like Sky and Virgin Media and pay for them rather tan pay for a TV license that only funds the BBC.

Types of ownership: independent• An independent company is a record label which

operates without the funding of the organizations of the major record labels. Lots of bands or musical acts begin as independent labels.

• An example of an independent record label is Domino Recording Company.

• Advantages of independent record labels is that they have more control over what they create.

• However the disadvantages of an independent record label is that they don’t produce as much money as others.

Types of ownership: conglomerate

• A media conglomerate is basically a company which owns a large amount of other companies in many different mass media forms, for example television, radio or movies. Media conglomerate companies aim for policies that make it easier to control different markets around the world.

• An advantage to media conglomerates would be that also show the growth of earnings, this is by acquiring companies who have shares that are more discounted then their own.

• A disadvantage of media conglomerates are that Culture clashes can destroy the value of the company; the extra layers of management can increase costs.

Types of Companies:Horizontal Integration

• Horizontal integration is when a production company expands their business into other areas of an industry. This means the company can then develop in a specific area of production or they can buy out another company that deals with these areas.

Types of Companies: Vertical Integration• Vertical integration is when a media company has the

ownership of different businesses in the same chain of production ad distribution. For example, Sony owns a variety of different entertainment companies such as Columbia Pictures and Tri-Star.

• In 1984 Columbia brought out the film Karate Kid, Sony then bought the Columbia and remade the film Karate Kid in 2010. By doing this, they receive the profit from the distribution and exhibition of the film.

Cross Media convergence• Cross Media Convergence is when two or more companies

work together to produce, distribute or exhibit a film. It can also be used to help market the film too, with the combination of the music industry and film industry for a soundtrack. For example, when a music artist is used on the soundtrack for a film, it will benefit both the film production company and the music artist. A well known example of this would be the music artist Adele being used on the soundtrack for the James Bond film, Skyfall.

Synergy• Synergy is the relationship between a company and other industries,

for example a film production company that then expands into other industries for example, clothing, DVD or Blu-ray companies.

• For example, when a film is brought out and proves to be popular, the film production company will decide to create merchandise that surrounds that film, this could be T Shirts, Mugs or Posters that could include the main actor or the logo for that film. They could even make video games based on the film, and therefore they will make more profit from consumers buying that merchandise.

Describe the Structure of the Music Industry

• The media industry contains two major record label types, there are Major Labels that consist of Sony, Warner and Universal (The Big 3) and Independent Labels. Major labels tend to be very mainstream and usually consist of Pop and Chart music, for example One Direction or Beyoncé. Where as, independent labels cater for more niche music for example, indie music, artistic music, punk music and metal music. There are also subsidiary labels that are smaller companies that are owned by a major label.

Walt Disney

• The company I have chosen to do my case study surround is going to be Disney they are a conglomerate global company who now run a series of TV subsidiaries, TV stations that produce and show kids, news and documentary channels. They also provide a music section where many child actors have diverged into such as, Miley Cyrus, Demi Lovato and Selena Gomez.

Ownership• The Walt Disney Company or more formally known as ‘Disney’ own

many different media platforms. They operate through five primary business units which includes The Walt Disney Studios that includes the company’s film, recording label and theatrical elements. Their Parks and Resorts which features the companies theme parks, cruise lines and any travel-related assets. Disney Consumer Products which provides and produces the toys, clothing and other merchandise based on the company’s television shows. The Media Networks which includes the Disney TV stations (Disney Channel, Disney XD) and finally, Disney Interactive, which dals with the companies Internet, mobile, social media and computer game operations.

• This means any product that their company makes they own the full rights and copyrights for. Which means they will collect all the money and profit that comes through these areas, from the Theme Parks to the Merchandise sold there.

• Disney not only owns the rights to their own made products but the Disney Media Networks also own various television networks and cable channels.

• For example The Walt Disney Company owns the ABC Television Network, ABC Family Worldwide, ABC Family, ABC Owned Television Stations Group they even own 50% of A+E Networks.

• The Walt Disney Company also owns their own Radio ‘Radio Disney’ 32% of the online service Hulu and a massive 80% of ESPN Inc.

• This means that all the subsidiary companies they own, The Walt Disney Company will make a profit from each of these channels. Including profit from their own made companies. They will also own either all of the copy right and rights to these subsidiaries or only a few copyrights where they only own a certain percentage of the company (ESPN, A+E Networks).

• They also recently bought the rights and now own Marvel Entertainment and Lucas films, which there was a huge reaction from original fans.

Competitors• The Walt Disney Company has three main

competitors which are, 21st Century FOX, Universal and Time Warner. Each of these companies are global conglomerates. Combined, these companies control over 65% of the whole media and TV’s Market value.

• These companies compete over ownership of certain things, for example 21st Century Fox own the rights to X-Men which are apart of Marvel, so when Disney bought the rights to Marvel, they also wanted to buy the rights from 21st Century Fox for X-Men, however 21st Century Fox would not sell the franchise. This is just one example of what they compete for.

Audience• Because The Walt Disney Company broadcast to

over 300 million homes in 35 different languages and in 168 companies, they pretty much broadcast to all different kinds of audiences. For example, children or pre-teens will watch The Disney Channel, where as adults may watch the channel ABC Family or ESPN.

• Their films also reach out to a vide variety of audiences, children may want to watch the newest Disney princess film, where as young adults, children and adults may watch the Marvel films.

• So in a way, Disney reaches to every one and every possible audience. Even with their parks and attractions, there are rides to cater for everyone from children's rides with live actors as their favourite princess’ to rides for thrill seekers.

Disney Controversy• Disney has received a lot of

controversy over the years however the most recent occasions would be when Disney bought the rights to Marvel and Lucas Films.

• They received a lot of controversy especially online, long time fans of the Marvel films or Star Wars felt like Disney could possibly ruin the franchise, by taking it away from its original roots and directors.

• However when Iron Man was released, they received a lot of positive feedback as many fans enjoyed their/marvel’s rendition of the comic books.

Bibliography• www.imdb.com/name/nm000370/• www.disney.com• www.thewaltdisneycompany.com/investos/annual_reports

/2010/kb_cable_story.html• www.toxicmessiah.hubpages.com/hub/Walt-Disney-

Secrets-Mistakes-And-Controversies• www.justdisney.com/walt_disney/