Media Ownership

1. Task 1
Understand the
structure and
ownership of the
media sector. P1,
M1, D1
EXPLAINING THE
STRUCTURE AND
OWNERSHIP OF THE
MEDIA SECTOR

2. Sky
Sky was founded in November 1990and was founded by Rupert Murdoch. Sky is a British satellite
broadcasting, broadband and telephone services headquartered in London. Sky is the largest pay-tv
broadcaster in the UK and Ireland with over 10 million subscribers. It had a market capitalisation of
approximately £13.69 billion as of 14 August 2014.
Advantages and Disadvantages of Private Ownership
An advantage of Private Ownership is that because the company is owned by you entirely, you receive all
the money that is earned.
A disadvantage of Private Ownership is that it isn’t better funded as a company funded by Public Service,
as Private Ownership doesn’t receive money from the public.
TYPES OF OWNERSHIP: PRIVATE OWNERSHIP

3. BBC
The BBC is a UK based international public service broadcaster. It is the world’s oldest national broadcasting
organisation and the largest broadcaster in the world by number of employees, with about 23,000 staff. Its
work is funded principally by an annual television license fee which is charged to all British households,
companies and organisations using any type of equipment to receive live television broadcasts. The level of
fee is set by the British Government and agreed by Parliament.
Advantages and Disadvantages of Public Service
An advantage of Public Service is that the public are funding the company meaning there is money to fall
back on.
A disadvantage of Public Service is that there is a responsibility to please the public by having what they
want, meaning the company doesn’t have much of a say.
TYPES OF OWNERSHIP: PUBLIC SERVICE

4. Disney
The Walt Disney Company is an American diversified multinational mass media corporation headquartered
at the Walt Disney Studios in Burbank, California. It is the world’s second largest broadcasting and cable
company in terms of revenue, after Comcast. Disney was founded on October 16, 1923.
Advantages and Disadvantages of Multinational
Ownership
An advantage is that they increase the investment level and also the income and employment in the host
country.
A disadvantage is that taxes or tariffs imposed on imports from other countries.
TYPES OF OWNERSHIP: MULTINATIONAL

5. ITV
ITV is a commercial TV network in the United Kingdom. Launched in 1955 as Independent Television under
the auspices of the Independent Television Authority. ITV is a network of television channels that operate
regional television services as well as sharing programmes between each other to be displayed on the entire
network. In recent years, several of these companies have merged so currently the fifteen franchises are in
the hands of three companies.
Advantages and Disadvantages of Independent Ownership
An advantage is that there are no restrictions on who, how or where an entrepreneur should set up his/her
business. The freedom to do what one wants to do is the biggest advantage in this form of business. It can
be extremely fulfilling.
Because of the ease and flexibility of getting started, there can be a lot of competition in a particular area
for a certain type of customer. Every business decision rests on the owner(s). There is no branding, no
present guidelines and a great deal of risk in this business model.
TYPES OF OWNERSHIP: INDEPENDENT

6. BBC
A media conglomerate, media group or media institution is a company that owns large numbers of
companies in various mass media such as television, radio, publishing, movies, and the Internet. An example
of a Conglomerate is the BBC.
Advantages and Disadvantages of Conglomerate
Ownership
An advantage is that a conglomerate creates an internal capital market if the external one is not developed
enough. Through the internal market, different parts of conglomerate allocate capital more effectively.
A disadvantage is that there can be a lack of focus, and inability to manage unrelated businesses equally
well.
TYPES OF OWNERSHIP: CONGLOMERATE

7. X Factor
The X Factor is a British television music competition to find new singing talent, contested by aspiring singers
drawn from public auditions. Created by Simon Cowell, the show began in 2004 and has since aired annually
from August/September until December. In business, horizontal integration is a strategy where a company
creates or acquires production units for outputs which are alike - either complementary or competitive.
Advantages and Disadvantages of Horizontal Integration
An advantages is that employees may attain greater satisfaction in a horizontal structure due to greater
freedom and autonomy.
A disadvantages is that the decentralized structure could lead to a "loose ship," as the team and project
leaders have high levels of responsibility for achieving results but little real authority over their team
members.
TYPES OF COMPANIES:
HORIZONTAL INTEGRATION

8. Apple
Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that designs,
develops, and sells consumer electronics, computer software, online services, and personal computers. Its
best-known hardware products are the Mac line of computers, the iPod, the iPhone, and the iPad tablet. A
vertical organization typically consists of a president or chief executive officer at the top and a series of vice
presidents who oversee specific functional areas such as marketing, finance and manufacturing. As you
move down the chain in each functional area, the level of authority and responsibility decreases accordingly.
Advantages and Disadvantages of Vertical Integration
An advantage is that vertical organizations provide clear lines of authority and a tight span of control, which
can lead to high operating efficiency.
A disadvantage is that employees at the bottom of a vertical structure may feel less valued than those
higher up in the chain. Some employees may not relish the accompanying culture of politics, which places
heavy emphasis on pleasing the boss.
TYPES OF COMPANIES:
VERTICAL INTEGRATION

9.  commonly defined as a drawing apart, as of lines extending from a common centre, the acquisition of
dissimilar characteristics by related organisms in unlike environments and a deviation from a course or a
standard.
 Similarly to the concept of convergence, divergence is frequently used within several academic fields
such as mathematics, optics, and biology.
CROSS MEDIA DIVERGENCE

10.  Is the term used to describe a situation where different entities cooperate advantageously for a final
outcome. Simply defined, it means that the whole is greater than the sum of its parts.
 In media economics, synergy is the promotion and sale of a product (and all its versions) throughout the
various subsidiaries of a media conglomerate e.g. films, soundtracks or video games.
SYNERGY

11. If looking at the film industry compare the American and UK industry.
Explain what types of companies they are (horizontal or vertical) Explain
the benefits / weaknesses of this
If looking at the music industry look at companies from the “big three” to
an independent as well as subsidiaries.
Look at who is involved and how it is structured
This site might help… http://
www.planetoftunes.com/industry/industry_structure.htm
Aim to do 500 words
DESCRIBE THE STRUCTURE AND OF
OWNERSHIP OF EITHER THE FILM INDUSTRY
OR MUSIC INDUSTRY