Media Company Case Study

Task 1 Understand the structure

and ownership of the media sector

Sarah Murray

Private Ownership is when communication is provided for purpose and generating a profit. They could just be owned by their selves or by stockholders rather than the government. Its like being self employed. You're not tied to anyone you can do whatever you please. No one is there to tell you that you cant do something.

AdvantagesThey don’t have to meet strict securitiesAnd they don’t have to exchange commission filing requirements of public companies

DisadvantagesYou obviously have to please your viewers and try your hardest to keep them happyThey need to be consistently making profits to keep going and to stay around

Types of ownership: private ownership

http://www.qfinance.com/dictionary/private-ownership http://www.investopedia.com/terms/p/privatecompany.asp http://uk.ask.com/question/a-disadvantage-of-privately-owned-media-is-its

Public ownership is owned and funded by the government. It’s the same concept as private, the main key is to please the audience. A good example in the UK is the BBC they’re owned by the government and are one of the biggest TV and Radio broadcasters in the UK.

AdvantagesIn some countries they are the only stations availableAs its owned by the government there isn't a huge danger of loosing the funding's for it

Disadvantages it is really restricted as to what you can report. For example journalistsEditorial output is closely monitored by political leaders

Types of ownership: public service

Types of ownership: independent

Independent ownership is similar to private ownerships, it is obviously privately owned. So they’re their own thing don’t really belong to nobody or any specific company/broadcaster.

AdvantagesAn advantage of independent ownership is that you have complete control of what happens, you call the shots. You don’t have to be told of others how to do things.You’re your own boss, therefore you don’t answer to no one, you make all of the decisions. The clues in the name really, independent. This means you’re completely independent you chose your own work hours. Also, depending on the type of business you can choose where you work from. You could really work from home.DisadvantagesBeing part of a private owner ship can expose you to financial risk, starting up can be hard. You may have to get into debt or use your own money to get yourself going. And then there is always that risk that your company may not be successful. Therefore you’ll loose everything!There can also be downfalls, you may have periods where you loose money. Like I mentioned previously there is always that risk that you could easily loose money.

http://finance.mapsofworld.com/ownership/independent.html http://smallbusiness.chron.com/advantages-disadvantages-business-ownership-20258.html

Conglomerate ownership is a company within the media industry that owns not just one platform of the media. But numerous ones. For example one that owns Radio, television, movies, internet and publishing. Sony is a good example for this.

Advantages An advantage of this is that you’ll obviously have a bigger income. There will be a lot of

money flowing through the company with all the different platforms. Therefore they will have a huge amount of power throughout the industry.

Like I mentioned in the point above the company should be pretty wealthy. Therefore they can be more ambitious when making such things as movies and employ bigger stars. They will not have to collaborate to secure funding as they should have enough money.

Disadvantages One of the major disadvantages of conglomerate ownership is that even though the

companies make shed loads of money, nobody like paying out an awful lot of money at once. More often than not, if the company was making a new m0vie or sh0w they may have to fork out a lot of money to cover costs. Even though in the long run it is for the best. But it can be a LOT of money

Culture clashes can destroy the value of the company; the extra layers of management can increase costs. Therefore more loss in the financial sector.

Types of ownership: conglomerate

http://www.slideshare.net/sandraoddy2/media-ownership-skyfall-ill-manors

http://intromassmediasp11.blogspot.co.uk/2011/02/conglomeration-advantages-and.html

http://en.wikipedia.org/wiki/Media_conglomerate

Horizontal integration is where a production company expands into other aspect areas of the industry. This means that certain companies can then buy out other original companies that specialize in that area, if they’re successful at it.

Advantages Horizontal Integration is good for getting better possibilities in the foreign market, brings

more opportunities. It can also increase possibilities for bigger product diversity, so more different avenues in

which something could stem off to. So more directions and varieties.

Disadvantages Horizontal integration can have downfalls like possible collapse in organization due to

sector downturn. For example if there was a sudden loss in funds it could effect the whole of the company.

Also being a company maybe creating a new product or service. Need to be aware of competitors and how times change. For example it is really hard to keep a track of maintaining innovations. In the past it has been very poor of companies keeping a track of this. A good example is new mobile phones, companies seriously need to keep a track of new ones being released.

Types of Companies:Horizontal Integration

https://uk.answers.yahoo.com/question/index?qid=20060831003323AAx7f6j http://en.wikipedia.org/wiki/Horizontal_integration

http://www.slideshare.net/LiamDonnelly/vertical-horizontal-integration

A good example of this is the company Apple.

In management, vertical integration is where the supply chain of a company is owned by that company. More often than not each member of the supply chain produces a different product or market-specific service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. One of the first, largest and most famous examples of vertical integration was the Carnegie Steel company.

Advantagesone advantage is that companies get higher and earn more control in the value chain. They get more responsibility and higher in the pecking order so therefore earn more control over things.Vertical integration also offers more ability to control the costs throughout the whole distribution process. Meaning that they can make profit of selling their product or service.

DisadvantagesVertical integration reduces manufacturing flexibility, lengthening design time and ability to introduce new products.It may also require radically different skills and or capabilities

Types of Companies: Vertical Integration

http://en.wikipedia.org/wiki/Vertical_integrationhttp://smallbusiness.chron.com/advantages-vertical-integration-strategy-20987.html

Richard Branson an his World wide company Virgin is a good example of Vertical Integration. He started of in a little record shop. Now he’s one of the richest men in the world!

Media convergence is when two or more different mediums in the media industry come together, combine with one another. The different mediums are Film, Radio, TV, Computer, Website and Graphics. A good example is when a music industry comes together with the Film industry. For example When Linkin Park created numerous songs for the transformers films, they released “What I've Done” for the first film (2007) and it featured a few times in the movie. Then “New Divide” for ‘Revenge of The Fallen’ the second film (2009). Then “Iridescent” for the third film “Dark Of The Moon” . And there is rumour for them creating a song for the new film coming out in 2014.

Advantages It helps promote the film or programme more. And it promotes the artist. Its a win -win for both industries everyone gets noticed for their hard and good work.

DisadvantagesBy having 2 different industries combining, you’ve got to remember you have got to try please a larger audience. Really, it is 2 separate and different audience’. It may put someone off an artist if a song is for a complete different style movie to the genre of music. Or vice versa.

Cross Media convergence

http://www.slideshare.net/sandraoddy2/synergy-and-cross-media-convergence-15537127

Synergy's are what producers in the media industry use to promote a certain programme or

service. For example Lady Gaga released a perfume called ‘The Fame’ in 2012. This obviously

promoted her a lot in the way she would of made a lot of money off of it. It is similar to the cross

media convergence in the way it is purely to promote . Promoters use numerous techniques. For example, games, songs, merchandise like T-shirts, scarves, hats, wrist bands, artwork. Also maybe collectable items and or toys.

Advantages An obvious advantage for synergies is that it is more money for the promoters,

artist or if its for a film industry then for them.

Disadvantages And again an obvious disadvantage would be if the extra wasn't successful and

you ended up loosing out on money if the product or extra didn't sell.

Synergy

Horizontal- BBC and ITV.Vertical- Channel 4 and E4.BBC is the biggest TV and Radio broadcaster in the United Kingdom with 8 channels, 2 for children

and the rest are of different genres. And the radio has 11 national stations, 6 nations and 42 local. They have a station for lets say every genre. The BBC are an individual station

Then there is the ITV which is similar to the BBC however ITV do not own any part of the radio industry. It is just television. The ITV are the BBC’s biggest competitors. Also the ITV is commercial. The BBC is completely independent. The ITV have a number of different channels as well these are ITV, ITV2, ITV3, ITV4, ITVHD, CITV, The Store, ITVBE, ITV Encore, ITV PLAY, ITV SPORT, ITV NEWS and more. So both companies are highly successful and own some of the most popular programmes and shows world wide.

Channel 4 is similar to ITV just a lot of a smaller scale. The channel Four Television Corporation is a publicly owned and operate the station. Channel 4 have had some successful shows to come from them.

E4 is very similar to channel 4, it just has a different target audience therefore broadcasts different shows to apply to different people. E4 is part of the Channel Four Television Corporation along with channel 4, More 4, 4 Music, Film 4, 4seven and 4oD. So again, a really successful channel.

BBC Structure-The BBC has 4 different categories of people involved in their structure. These are

Royal Charter which deal with setting out the public purposes and editorial independence, BBC Trust this is setting the strategic direction of the BBC, Executive these are responsible for the operational management. Then last of all its the Media Regulators, these are pretty much the governors. These are responsible for the broadcasting.

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

The media company I have decided to do is Sony, this is from the music and television sector. Sony also make electrical goods such as TV’s and Laptops. Sony pictures have produced many films some examples are ‘Made In Dagenham’ (2010) ‘Bad Education’ (2004) and ‘Lone Star’ (1996). Sony is a Conglomerate company, it owns Sony corporation which owns Sony computer entertainment, Sony pictures entertainment, Sony music entertainment, Sony Ericson and Sony financial. Sony have also got some of the biggest names in music to this day on their own music label. For example AC/DC, Alicia Keys, Beyonce, Jimi Hendrix, Michael Jackson, Taylor Swift and so many more. Sony is a huge company to be signed to, It would be a privilege to be part of them.

Sony

Ownership

Like I mentioned in the previous slide, Sony are a huge company and have lots of different branches in which it stems off to. So they have a huge income through all of the products and services they offer. They’re a Conglomerate company like I mentioned previous but they're in fact owned by their shareholders. Sony have numerous different shareholders, these are;  Japan Trustee Services Bank, Moxley and Company, The Master Trust Bank of Japan, SSBT OD05 Omnibus China Treaty 808150, Japan Trustee Services Bank, State Street Bank and Trust Company, Japan Trustee Services Bank, Ltd. Japan Trustee Services Bank, Ltd and Mellon Bank.

Sony is a vertical company. Sony themselves allowed it to become a vertically integrated company.

Vertical

Sony has different competitors depending on the aspect of the media industry its from. For example in the electrical side their main competition is LG, Samsung, Toshiba, Canon, Nikon, HP Invent and Phillips. In film and television it is Columbia, Tri-Star, Warner Brothers, Universal, Paramount and 20thCentry Fox. In music their competition is Universal, Columbia, Epic and RCA. And in gaming the main competition will be Xbox and Nintendo as Sony are the creators of the Play station probably the biggest console in the world. Obviously the competition is high with Sony, so they have to try their hardest to keep their standards up and to not disappoint when bringing out a new film or signing a new artist. Even when new music videos drop, if they’re good and please the audience it

should keep the competition under control. And obviously one of the biggest problem with any company in the creative media industry is illegal downloading. Sony have high copy right on their music and products but you're never going to fully stop people illegally downloading. This would effect any company. This has rocketed in the past decade as computer technology is HUGE and completely not what it used to be so it does bring a lot of loss to big companies like this and even music artists and others involved.

Competitors

With a company like Sony which produces and manufactures a number of devices, services and products they don’t have specific ages on their products. Obviously you wouldn’t see a child going into a store to by a 42” plasma screen TV. Its highly unlikely. But maybe a child might have a plasma TV at home. One thing I thought about an age would be films or music they produce which has a certificate for a specific age range. In the UK the movie certificates are U, PG, 12, 12A, 15, and 18. it’s the same with games. And CD’s would say “Parental Advisory, explicit content”. And again demographics don’t matter, they do a number of varied products they can suit anyone. However some of their products are expensive so maybe you might have to have a steady income to be able to afford lets say a TV, Camera, Laptop, a DVD collection and CD Collection. Life now in the 21st century consists of technology, everyone has a phone, everyone has an email address. Everything is on computers now!

Audience

Multidivisional organizations such as Sony have divisions that become flexible as in the sense that they are able to merge, add or close divisions. This is apparent in the fact that Sony's mobile division merged with Ericsson to create the Sony Ericsson walkman phones, they were like one of the first phones which were specifically for listening to music on and was easily accessible should you want to change over a song and control it.

New strategies were made When howard stringer joined as the CEO of Sony Global Japan. he made new strategies to restructure the organization to be in-line with these strategies. The core competencies of the company was what he looked at first. He focused mainly on the games, electronics and entertainment sector. He established a growth strategy saying “our target is for the Sony Group to achieve consolidate sales of over 8 trillion yen an operating profit margin of 5% electronics4% by the end of fiscal year 2007.

In 2006 there was a huge burst of controversy across the world where there was a fault with some of the Sony Notebook laptops. There was a certain material in the battery that was overheating and exploding. Causing fires. Obviously these were a huge risk as 1000’s of them had been sold. So Sony did a recall on all of them and tried to fix the problem. This was the biggest recall in history. Other companies were also advised to maybe do recalls if they had used this same material in their batteries. Still it cost Sony a lot of money but they soon redeemed themselves!

http://en.wikipedia.org/wiki/Sony

http://www.qfinance.com/dictionary/private-ownership http://www.slideshare.net/sandraoddy2/synergy-and-

cross-media-convergence-15537127 http://www.investopedia.com/terms/p/

privatecompany.asp http://smallbusiness.chron.com/advantages-vertical-

integration-strategy-20987.html http://finance.mapsofworld.com/ownership/

independent.html http://www.slideshare.net/LiamDonnelly/vertical-

horizontal-integration

Bibliography