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BTEC Extended Diploma in Creative Media Production

Unit 7: Understanding the CreativeMedia Sector

Learning outcome 1:

Understand the structure and ownership of the media sector

Name: Rebecca Coughlin


Understand the structure and ownership of the creative media sector

Use this workbook to help you with this learning outcome. There is some guidance and further notes which you should read and then remove, replacing it with your own answers.

Provide a definition of the following different types of ownership and provide an example of a company which is owned in such a way.

Private ownership is where the people with the most money and shareholders own that company, where as public ownership is what the government owns. Having a private company can mean their products are of higher quality but this could asp lead to competition. By doing this, they could place for profit on a product than there is demand as well as increasing the likelihood of cultural decay as the media can become homogenized.

Public service broadcasting is a company who’s content isn’t for commercial gain. Such as the News, Art programs and religious content. It’s owned by the government and only makes their money from advertisement and product placement. The Public Service Media (PSM) is media fulfilled for public purposes as it uses digital media and platforms like the Internet to attract youthful people. The BBC owns a lot of these platforms. Channel 4 is a commercial example of a public service broadcaster who is self-funded through advertising and renit.

Multinationals are large companies who operate in different countries that can consist of many corporations or have many small businesses. RockStar Games is an example. A large presence across many countries means better tax arrangements but also means it can be hard to focus as regulations and laws can change.

Independents are large companies, which operates in many different countries. Large corporations can own them.

Conglomerates are a group of companies that work independently but are owned by a much larger company. An example of this is Time Warner merging with Warner Communications Incorporated and Time Incorporated. It can have influence across media, tv and publishing.

Voluntary or not for profit organisations work to affect social chance, what is meant by this is that they may work to make money, but all that money is ploughed back into their work to help whatever cause they would like to help. Some people are paid to work for the organisation where as others are volunteered to help them. An example of this is Accessible Arts and Media who help people with disabilities produce their own media to help the disabled community.

What are some of the challenges faced by independent media companies?


Keeping up to date with everything including the changing market. There is also the cost of evolving technology and products which could be difficult to keep up with being such an independent company.

What are some of the challenges faced by multinational media companies?

Owning.

What is cross media ownership?Cross media ownership is when an organisation owns more than one type of media company such as a newspaper or a TV station.Kerrang! Is an example of a British based media music magazine published by Bauer Media Group in Germany.An advantage of cross media is that is one platform falls, then it will still make a profit around another platform.

What is diversification? It’s a major media company who spread their business into other related and unrelated products. An example of this is the Virgin brand who started as a music distributor which expanded into a record label, radio empire, mobile phone provider and to an airline plus much more.

What is horizontal integration?Organisations that own more than one company at the same level of production.

What is vertical integration?They own companies at different stages of production.

What are some of the advantages of these different ways of structuring a company?An advantage of a horizontal structure is that it increases its profits and that company dominates market share depending on how much of the market. It also gives that company greater public influence which also helps with synergy. Although, a disadvantage of this type of structure would be that there is a reduced chance for their audience as well as not much competition in the market.The advantages of vertical structure would be that they have complete control over production, distribution and exhibition. There are also increased profits. However, there can be too much economic or political influence into that company.

Use the following table to show how the Disney Company is structured.


Production Marvel Pixar Walt Disney Company

Distribution

Disney Media Home entertainment

Marvel TV

Screening Marvel Entertainment

Walt Disney Motion Pictures

Hollywood Pictures

What different ways can ownership be shared out?Shareholders can put money into a company; they are one of the key ways to own a piece of the media.This could be from an individual person or ac company. Such as EA who own 20% of Microsoft.

What is a merger? Why would companies merge together?A merger is combining two previously separate organisations together, but both company’s have to make the decision to merge, they may do this to help cut costs and increase their profits. An example is Walt Disney and marvel who merged together in2009

What is a takeover? Why do companies take each other over?A takeover is similar to a merger as they both combine two previously separate organisations. A takeover is typified by the purchase of a smaller company by a much large one. This can produce the same benefits as a merger, but it is not always a mutual decision as they can be bought out or buys all their shares. The more shares there are, the more control that company has over the smaller one.

What is cross media regulation?Control over a range of different medias. This means there are restrictions. For examples, if a national newspaper group has more than a 20% market share, they are not allowed to run a national or regional radio station.

Should we have restrictions on the amount of media outlets people can own?No company should own 20% of newspapers and radios, but if they own less, they are allowed to own another station or newspaper.I think that there should be restrictions to allow more competition across the entire market. Although it limits that amount of profit that company makes as they can’t grow their market.

You should select an organisation to work with to help you answer the following questions. It can be in any media sector. Researching your company in detail will help you produce stronger answers.


What income streams does your chosen company have?Apple makes their money by selling its hardware and software to consumers in a package as they are all connected, such as the iPad, Mac, iPhone etc. Because Apple controls everything about its product, they have one stream of income from their loyal Apple fans.

What is product diversity? How diverse is your company’s product range?Apple has a big diversity in their company through entering different markets. Their products range from phones, computers, iTunes and other software’s such as iXO, Apple production, KeyNote and the Apple store.

What advantages does this give your company in the market place?It can increase the revenue of that business as well as its profitability. This may help the business as the consumers will perhaps buy products from that business more because of the range they give to them.

Why is the profitability of a product range so important to a company?It is important to have a popular product as it will be sold for a longer period of time, this will be profitable as the company would be making money from that product for longer and may even be able to up the price because of its popularity. Apple did this with the iPhone 6, because it had fans of the previous phones, Apple new that there would be a lot of hype around it, they increased the price and had it on sale for a long time.

What advantages or disadvantages are there in making big budget, mainstream products?With a big budgeted product, you can either lose money or gain money depending on how well it sells and if it disappoints fans. To stop this from happening and not taking big risks on new products, Apple like to carry on a successful product while changing other things about it, such as the iPhone which is just like an upgraded version of the last one. This means the product already has fans and there will be a less chance of disappointing them.

What are some of the objectives of your chosen company?


“Our goal and what makes us excited is to make great products. If we are successful people will like them and if we are operationally competent, we will make money." - Sir Jonathan I’ve, who is Senior Vice President of Industrial Design at Apple.I think they are trying to achieve products that are a high standard that is challenging to create and to make it great.

What are the advantages/disadvantages of taking part in a media franchise?Apple do something very similar to franchising, but they have that franchised shop have a different name such as storm-front, this way the Apple name is not associated with that shop if anything bad happens to it, but that shop can still sell Apple products with the Apple name on the door.

What, if any, products do your company license?Apple licence shops like a franchise to sell their products. A franchise pays to have the rights to have an Apple shop and to sell Apple products.

Who is in competition with your company? How successful is your company in comparison?When it comes to mobile computers, Apple is by far the most profitable and biggest selling company in this industry. Competitors include Google (GOOG), Samsung, Nokia and Asus. Samsung is their biggest rival in the phone sector of the market as they both are heading down the same line of production, such as having finger print touch to unlock your phone easier.

Who are your customers?Teenagers are considered one of Apple Inc.'s target markets. Teenagers use iPods for many reasons. Some of these reasons are to socialize with friends, listen to music and go on Facebook, MSN, twitter etc. There are also many gaming apps that appeal to them. IPods have become quite a trend with teenagers. Business people are very intrigued by Apple products. All Apple devices (iPhone's, iPad's, MacBook's etc.) have a business quality that is very useful. These devices are used to finish work efficiently and to communicate with clients easily. In addition, sending documents is easy and organized.

Which global media trends are affecting your company right now?Businesses haven't failed to noticed the runaway expansion of social.Haven’t noticed the exponential increase in ads on your social media feeds? That probably means Apple are focussing on the new media trends and marketing through social apps like Facebook and Instagram.

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