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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: Amy Addison


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…being owned by a private individual rather than by the public or government.

Public service broadcasting is…TV programmes that are broadcast for the public benefit rather than for commercial purposes. These can include local news, arts and religious programmes.

Multinationals are…companies that work/operate in several countries, they could be owned by larger corporations or they could own many smaller businesses.

Independents are… a corporation that is of/influenced by government or corporate interests which refers to newspapers, the Internet or television.

Conglomerates are…A conglomerate is something grouped together therefore having smaller businesses being run by a bigger/well known business.

Voluntary or not for profit organisations are…These are a charity business that does not gain profit, does it for the community and shows, exports media that is serious e.g. disabilities. If they do gain money it will be to go straight back in to that business to help it, the charity it shows and to make the business better.

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


Some of the challenges faced by independent media companies could consist of having a smaller profit than what a bigger company could be getting, being taken over by a conglomerate company or not doing well enough (not gaining any profit) therefore going under or being bought by someone else in to their company.

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

Some of the challenges faced by multinational media companies could consist of being found by a big company and being bought in to their name. An example of this would be Lucas film that was acquired by Disney in 2012.

What is cross media ownership?This is a business/organisation that owns more than one type of media company for example a television show and a magazine. An example of this would be marvel They have comics which are basically magazines and also have television shows as well as films.

What is diversification? This is when a business starts out small with just one type of media e.g. a radio station that then expands and takes on more medias such as a television show, magazines, newspapers etc..

What is horizontal integration?Organisations that own more than one company at the same level of production E.g. many different companies that could be working on a project that is at the same level of production which could be Post-production in a filming corporation which is when the images, sound, and visual effects of the recorded film are edited.

What is vertical integration?Organisations that own companies at different levels of production e.g. Post-production and distribution.


1. the combination in one firm of two or more stages of production normally operated by separate firms.

What are some of the advantages of these different ways of structuring a company?If a company e.g. Warner bros and marvel are working at the same level of production on the same project they could exchange ideas to create a better final product. Although this is good, there is a disadvantage. As the team and project leaders have high levels of responsibility for achieving results but little real authority over their team members this could result in lack of control and therefore delay or mess up production.

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

Production Walt Disney pictures

Walt Disney animation studios

Distribution

Walt Disney studios motion pictures

Disney home video

Screening Walt Disney studio

Disney channel

What different ways can ownership are shared out?Ownership of media organisation can be shared out in a variety of ways. Share holders can choose to invest money in a company.

Limited ownership rules apply in the UK to control how much of the media people can control.

20/20 rule – A company is allowed to own 20% of another but no more.

What is a merger? Why would companies merge together?Mergers combine two previously separate organisations. Both organisations that the merger takes on decide together that they should merge for advantages to the businesses these are mostly to cut costs and increase profits.


What is a takeover? Why do companies take each other over?A takeover is the purchase of a smaller company by a much larger one. This can produce the same benefits as a merger, but is not always a mutual decision. A company can be bought by a takeover but not really have a say in the situation but this has the same advantages as what a merger does.

What is cross media regulation? Cross media regulations are about all the different types of media and who can own what and how much of it. For an example, there are restrictions on national and local newspaper groups and their ability to own a radio stations and TV licenses. They are only allowed a certain percentage of a certain media type.

Should we have restrictions on the amount of media outlets people can own?

Yes, if we didn’t there would be few people/businesses that acquire a lot of media which would lead to problems from others due to them not having any of the media licences and outlet or vies versa. A lot of people (being the public) could have many small or large pieces of the media which would then lead to control of public opinion and puts too much power in the hands of a few media owners.

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?(Discuss the different ways in which your company makes income. Depending on the type of organisation you have chosen, there may be one stream or there may be many.)I have been looking in to a music magazine named ‘NME’ this is an alternative rock magazine that has information on bands, tours, interviews, posters, many images etc.. It was founded in 1952 by a man named Theodore Ingham. It is a weekly magazine meaning there is a new edition published in shops, online every week. This magazine makes its money by selling in shops and having subscribers, these are people who pay monthly to get the new edition delivered to their door and follow everything that is going on with the company magazine.


What is product diversity? How diverse is your company’s product range?This product has a lot of range to it. ‘It is largely associated with rock, alternative and indie music. It started as a music newspaper, and gradually moved toward a magazine format during the 1980s and 90s’ http://en.wikipedia.org/wiki/NME The magazine includes a lot of information personal and non about the artists within the music range. This could include interviews which could become personal, tour dates, including posters, many images, freebies (free give aways).

What advantages does this give your company in the market place?There are a few other music magazines who look in to the same genre e.g. Q and Kerrang! But i think the fact that NME was once the biggest music newspaper that followed on to become a music magazine helps keeps this popular and gives a great chance on the market. I also think because a new edition is published weekly that it is more up to date than the magazines that are published monthly therefore more people are willing to buy this because they are getting 3 times more information out of this magazine than they would with any others.

Why is the profitability of a product range so important to a company?NME runs a music magazine and this is enough for them as it does so well and makes more than enough profit and has done ever since it started up in 1952. The magazine has had peaks and drops in it’s time where the competitors have been more popular for a couple of months but NME seem to find a way to keep the numbers of subscribers and profit high.

What advances or disadvantages are there in making big budget, mainstream products?

The advantage of making a big budget, mainstream product is the profit. The magazine is so well known and has a high number of buyers and subscribers that they don’t need to worry how big of a budget they have as they will get a lot of profit back from it.

What are some of the objectives of your chosen company?

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


Objectives of NME consist of keeping a high number of buyers and subscribers, making profit for the business from the music magazine.

What are the advantages/disadvantages of taking part in a media franchise?

(Use examples from your chosen company as well as others. Use specific examples to help support your writing. Facts, figures and detail with help you comprehensively explain the answers to these questions.)

What, if any, products does your company license?NME doesn’t really have any merchandise but the artists they interview, give information about in their magazines do e.g. t-shirts of bands and their names, hoodies, wrist bands, jewellery etc. This still links to NME as they have a website that sells these products. NME don’t have their logo on any of these items unless they are to come specifically from the magazine but i think this is because NME have a share in the business that make the merchandising for the bands and NME is sort of an advertisement for the artists. Therefore when one of the merchandise is sold NME get a share of that money to do advertising.

Who is in competition with your company? How successful is your company in comparison?

There are a few competitors within this category of the media. Some of these are Q and Kerrang!. NME is a very successful magazine as it has been around for a lot longer than most therefore being more well known than others, Kerrang! Is also a well known media due to the fact they have a music television station but this doesn’t drastically decrease how well NME do as a business making music magazines. They have an advantage as they being a new magazine edition out weekly so essentially having more buyers and subscribers than any other music magazines.

Who are your customers?(Customers can be categorised in a range of ways. They could be members of the public or other businesses. They could be buying a product or a service. Explain who they are and what they get from you. You could go further and consider the age, gender and class of your audience, particularly if you are


selling directly to the end user.)The customers for this product are members of the public. Stereotypically this magazine is aimed more a th male gender due to the type of music but it is slowly becoming realised that females like the alternative rock genre just as much as males who listen to it. Also stereotypically it is aimed at teenagers due to how reckless and disobedient that age group are and this is what this music and the artist in this genre are like. They are in a sence role models for the younger generation in a sense of trouble. This is not true though as some people e.g. young adults listen to this music genre still and buy music magazines as they have followed this magazine and music genre because they enjoy the artists and music as NME have such a wide ranged of genre and history to talk about.

Which global media trends are affecting your company right now?(Look at the list of trends and see how they could affect your company. It mobile technology changing the services you have to provide? Is online news cutting sales of your newspaper? Are downloads (illegal or legal), changing the way you need to provide video games to your customers. Think about each trend, its impact and what you company is doing about it.)

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