Media Company Case Study

Task 1 Understand the structure

and ownership of the media sector

Emma Upton

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: private ownership

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: public service

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.

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 ownership: conglomerate

Horizontal integration is an absorption into a single firm of several firms involved in the same level of production and sharing resources.

An advantage of horizontal integration is that you have expanded your company which gives the company increased market power and a larger percentage of the markets value, which means more profit.

A disadvantage would be, legal repercussions. Higher integration can lead to a ‘monopoly’, which is highly discouraged by many governments due to lack of competition. With a monopoly makes it’s harder for new ideas and products to come into he market and compete with larger companies.

Types of Companies:Horizontal Integration

Vertical integration is when a company profits from production, distribution and consumption. This only used to be large companies such as Time Warner that could actually afford to profit from production, distribution and consumption. However now, due to the internet, social media and websites such as sound cloud small companies can also vertically integrate, such as independent record labels or small bands. Especially now there are free programmes you can download that makes the production a lot cheaper because you can do it from home, or anywhere for free.

An advantage would be improved coordination throughout the supply chain. There is also a greater market share and secured distribution channels.

Disadvantages are the higher costs if the company is incapable to manage new activities efficiently. The ownership of supply and distribution channels can sometimes lead to lower quality products and reduced efficiency because of the lack of competition, and new competencies may clash with old ones and lead to competitive disadvantage.

Types of Companies: Vertical Integration

Cross media coverage is where companies from the media world but completely unrelated collaborate to produce a service or a product such as a new game will have a soundtrack so Sony music could sell a track from the arctic monkeys to be the trailer music for the new Call of Duty game or they could have a music show on TV such as the X-factor or voice these use music and television and turn it into a competition to compete for a music contract this is an example of two types of media converging and overlapping

Cross Media convergence

Synergy is selling products to promote an artist so at a concert you might be able to buy t-shirts, mugs and posters all related to the artist the money for merchandise is then split between the music company for the promotion of the tour/concert and the artist

Synergy

It works in a pyramid system you start from the top with the product or service and it filters it’s way down and then it the reverse for the people who pay for the product or service it starts off as an idea and then the artist who creates the music will write the piece and if not already signed up to a music company will then do then begins the process of selling and promoting it this can be do through social media e.g. twitter, Facebook and YouTube then once it hits it’s release date it will have been prepared to be sold in shops all across the world

Describe the Structure and of Ownership of Either The Film, TV, Gaming or Music Industry

The company I have chosen is going to be Disney they are a conglomerate global company who now run a series of TV subsidiaries they run TV stations that do sport, kids, news and documentary channels they also provide a music section where they have made artists such as Miley Cyrus, Selena Gomez and Ariana Grande

Walt Disney

The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media corporation headquartered at the Walt Disney Studios in Burbank, California. It is the largest media conglomerate in the world in terms of revenue. Disney was founded on October 16, 1923, by Walt Disney and Roy O. Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks.

The company also operated under the names Walt Disney Studio and Walt Disney Productions. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theatre, radio, music, publishing, and online media.

The company is best known for the products of its film studio, the Walt Disney Studios, which is today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN, A+E Networks, and ABC Family publishing, merchandising, and theatre divisions; and owns and licenses 14 theme parks around the world. It also has a successful music division.

Ownership

Disney Media Networks is the headquarters it’s horizontally integrated with a variety of different TV companies. The Walt Disney Company that contains the company's various television networks, cable channels, associated production and distribution companies and owned and operated television stations

Disney–ABC Television Group ABC Television Network ABC Family Worldwide ABC Family ABC Owned Television Stations Group A+E Networks (50%) Disney Channels Worldwide Radio Disney Disney Television Animation

Walt Disney's main three competitors are 21st Century FOX, Time Warner and NBC Universal Media. All of these are global conglomerate companies these 4 companies control over 65% of the media and TV’s market value

These companies don’t really have an issue with distribution and production as they all have there own production and distribution lines so they never are competing against each other.

Competitors

Disney Channels Worldwide reaches more than 300 million homes, with 95 entertainment channels and 35 different languages, showing for families in 168 countries.

The Company launched Disney Channel in Russia, Greece and Ukraine, and announced a joint venture to launch a local language Disney Channel in South Korea

In 2010 the USA marked Disney Channel’s most watched year on record in total day and total viewers, as well among the key audiences of kids (6-11) and tweens (9-14). Disney Channel also celebrated its eighth consecutive year as television’s No. 1 network in primetime.

Audience

A few rumours were told about Walt Disney, he was rumoured to be an Semitic during his lifetime, and these rumours persisted after his death. Animator Art Babbitt claimed to have seen Disney and his lawyer, (Gunther Lessing) attending meetings of the German American Bund, a pro-Nazi organization.

However, the most recent scandal is about Miley Cyrus and how she turned from Disney star to an outrageous troublesome teen. Many people claim this is to Disney trying to steal her youth, but others disagree.

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/

Bibliography