LO1 Understanding the Creative Media Sector

Understanding the ownership and structure of the media

sector
Discuss ownership within the film industry. (Warner Bros.; Paramount Pictures; Walt Disney;
Columbia Pictures; Universal Studios; 20
th
Century Fo!
Film ownership in the UK falls into three main categories, firstly there are the five main
dominant American companies thats are m!ltinational conglomerate and they are United
"nternational #ict!res, $arner %rothers, %!ena &ista, '(
th
Cent!ry Fo) and Sony* +hen
there are smaller independent companies s!ch as Film , and -edlam prod!ctions* +hen
there are television companies s!ch as "+& and Channel .* Finally there is an ownership
where there is a p!-lic service where -y a percentage is owned -y the government/p!-lic*
An e)ample of this wo!ld -e the %%C*
+here are advantages and disadvantages with the different types of ownership with in the
film ind!stry* "n the case of large conglomerate prod!ctions they have finances availa-le
for -etter actors and actresses, great special effects and the -est locations as they have
plenty of f!nding* +hey also have their own organisations to promote and distri-!te their
prod!ctions* +he down side with large conglomerate prod!ctions is that they need to
satisfy mass mar0ets and therefore are !na-le to ta0e creative ris0s as the reven!e
generated is of paramo!nt importance* For the smaller and independent companies face
many diffic!lties as they generally have m!ch smaller -!dgets and do not have access to
cross company interaction* On the other hand they do have a greater creative freedom*
+hey are also more a-le to !se !n0nown stars which can f!rther enhance creativity as
they are not restricted to !sing world famo!s stars* +he smaller companies can often have
pro-lems sec!ring s!fficient f!nding* "ndependent companies also tend to -e more
targeted to a specific a!dience as they have fewer f!nds availa-le to reach a -roader
a!dience*
What is vertical integration?
&ertical integration is where the s!pply chain of the company is owned -y that company*
&ertical integration can help companies red!ce costs and improve efficiency* For e)ample
$arner %rothers is a f!lly integrated entertainment company as it owns film st!dios and
the means to distri-!te the films as well as some of the cinemas in which they are shown*
What is horizontal integration?
1ori2ontal integration is where an organisation grows -y -!ying other competitive
companies in the same section of the mar0et* For e)ample a large film st!dio -!ys another
smaller film st!dio, the res!lt -eing an ownership of a larger percentage of the mar0et
share*
LO1 Understanding the Creative Media Sector
What is a conglomerate?
A conglomerate is where two or more separate legal companies wor0ing in different
-!siness areas come together as one corporate gro!p* "t !s!ally consists of a parent
company and a n!m-er of s!-sidiaries 3a company that is completely or partly owned -y
another4* Conglomerates are often m!ltinational* An e)ample of this wo!ld -e +ime
$arner some of the companies owned -y them are $arner %rothers, 1%O, C55 and
more* 6enerally spea0ing a conglomerate will 0eep wherever possi-le their -!siness
within that gro!p* As an e)ample if they were to -e ma0ing a film they wo!ld !se their
s!-sidiary companies to prod!ce, advertise and -roadcast this prod!ction th!s 0eeping all
the profit within the gro!p*
What is a multinational company?
A m!ltinational company are organisations that own or control prod!ction or services in
one or more co!ntries other than their home co!ntry* A good e)ample of a m!ltinational
company wo!ld -e $alt 7isney* $alt 7isney has its 18 in California USA, as well as
having $alt 7isney st!dios and prod!ctions in America they also have among other
-!siness incl!ding 1, theme par0s worldwide, 7isney stores, Cr!ise lines and +&
channels*