Task 1 Getting to Grips with

the Industry
Ownership and Funding
Rhys Painter
Through this I will be analysing various Case Studies to investigate Ownership
and Funding in the media. A few of the companies which I have chosen to
research on are BBC, ITV and Walt Disney. TV and Film industry is a list which
shows a vast amount of companies which are operated differently and are
also funded in a different way. When it comes to the most important aspects
in the media industry Ownership and Funding are them. Ownership is really
important as it shows who is in control and owns companies and or groups in
the media industries. Ownership is made up of; public serve, commercial;
private; corporate; independent companies; global companies; or companies
which are vertical and horizontal integrated and finally, monopoly.
Media Conglomerates:
- This is a media group or media institution that owns a mass
number of companies in various mass media, for instance,
television, radio, publishing, movies, and the internet. This
could be for example, Disney, News Corporation and Time
Warner.

Synergy:
- Is when the interaction of two or more forces working
together creates a greater effect than their original
individual effects.

Media Synergy:
- In which elements of a media conglomerate work together
to promote linked products across different media.
- An Example of Media synergy would be: That Disneys Hit
High School Musical promotes the DVD which promotes
the soundtrack therefore promoting the advent calendar
which then promotes the doll which also promoted the
sequel which promotes the Disney store then last promotes
the film.
BBFC, Ofcom (TV and Film regulations):

Changes over the last two decades:

- Developments in technology
- Changes in governing legislation and working practises
- Increase in the range of services and service providers
- Greater range and diversity of content
- Still have dominant terrestrial channels but audiences have more choice
- Content is more inclusive as a result

The film industry has gone through a range of technological, financial, commercial and aesthetic changes which have
seen the British film industry go through a relatively strong period of growth and development in the first few years
of the 21st Century.
Public Service Broadcasting:
- In the UK the term (Public Service Broadcasting) refers to
broadcasting which is intended for the public benefit rather than
purely commercial concerns.
A few media companies are bought by national, regional or local
government their overall objective is public service. Public broadcasters
receive funding from different areas including license charges,
individual contributions, public financing.
Their primary job is to inform, educate and entertain which plays an
advantage to the audience. Bringing arts to Teaching the Informing and
the working class population in diverting unpaid
Early principles: school female labour in
the home
Covering nation- Addressing
building events religious
such as sport and differences
news
Victorian corporations often had monopolies
over their particular sector. Based on this
model, the BBC initially had a monopoly over
broadcasting in the UK.

Lord Reith - first Director General of the BBC

(1927 - 38) said:
TV should not give people what they want
but what they ought to have.

The DUOPOLY:
- The era of two (a duopoly) competing
broadcasters, ITV and the BBC, is referred to
by a manly as a Golden Age of
broadcasting in the UK. The two institutions
had full control over the programmes as they
produced them in-house.
General Director in BBC: Lord Reith
John Reith (1889-1971) was the founder of
the BBC in his time. When the company was
set up as the British Broadcasting Company in
1922 he was its first general manager. He was
also its first director general when it became
a public corporation in 1927.
- He created both templates for when the
public service broadcasting in Britain and the
arms-length public corporations that were to
follow, especially after World War Two.
The British Broadcasting Company (The BBC)
- BBC was part-share owned by a group of
members who were from the wireless
industries. Plus British Thomson-Houston,
General Electric, Marconi and Metropolitan-
Vickers. At it may show, Reith had been in
fortune and favoured by the company being
taken into public ownership, as he felt that
even though the boards under which he had
served, permitting him a high level of latitude
on all matters, every single future members
may do as such. Albeit opposed by a few,
including individuals from the Government,
the BBC turned into a corporation in 1927.
Reith was knighted that year.
Due to Reiths autocratic attitude turned into things
of BBC legend. Through the duration of his life,
Reith stayed persuaded that the approach was the
most ideal to run an organisation. Director-General
Greg Dyke was later profiling Reith in 2007, noticed
a term which was recently added to the dictionary
to signify the style of management, especially with
the connection to broadcasting.
Reith summarised the BBCs motivation in three
simple words;
- Inform
- Educate
- Entertain
This hasnt changed.
It has additionally been used by broadcasters
throughout the world. One which I noticed in the
USA (PBA) Public Broadcasting Service.
The 2003 communication act required public
service broadcasters to obtain at least 25% of its
content from independent production companies
(currently 39% o the BBCs texts are produced
outside of the institution by indies.

The act also allowed foreign ownership of UK

networks and conglomeration (large networks
integrating or joining forces e.g. one large ITV
region instead of individual franchises).

The number of channels has increased drastically.

Many institutions now have a family of channels.

More content is now produced using fewer

resources e.g. a journalist may photograph, shoot,
write, edit and distribute his own material thanks
to advances in technology.
 Private Companies
Private companies are generally companies in which are
either owned by a non-governmental organisation or by a
relatively small number of shareholders or even company
members in which do not offer or trade within its company
stock (shares) to the general public on the stock market
exchanges, but rather with the companys stock is offered,
owned and traded or exchanged privately. (Google)
Although there is no relevance
Private companies are seen to be quite similar as to TV and Film McDonalds is
independent companies. The only obvious different is that known to be one of the top 10
with the private companies they are able to choose their well known private companies
shareholders. However with a private company they dont and they are doing well for
need to be able to meet the strict exchange with commission themselves.
requirements that the public companies would have to
adhere to, like having to offer a certain percentage of their
given income to the government.
Independent Companies
With independent companies, they work on their own which
means that they are able to make their own decisions on their
own and are generally free of the influence of the government
or corporate interests. Independent companies are seen and
are generally different to subsidiaries as Independent
companies are not owned by any conglomerate. A potential
advantage of running an independent company would generally
be that all of the money in which the company is making would
be its own profit rather than being shared with other
companies. However, a potential disadvantage with a media
company would be that they are often seen as being difficult to
survive against its competition with larger companies in which
are owned by conglomerates as they are known more to the
market, which would reduce their source of income resulting in
bankruptcy.

Although if an independent media company were to be

successful they could potentially be bought by larger
conglomerates meaning the independent company and the
people behind it could receive a mass amount of profit. An
example for this could be SO Television which was actually
bought by ITV.
 Public Service Broadcasting
With some media companies they are owned by national,
regional or local government and their overall primary goal
is public service. Public broadcasters tend to receive the
majority of their funding from diverse sources which would
includes things like; license fees, individual contributions
and public financing. A key example of public service
broadcasting would be the conglomerate, the BBC (British
Broadcasting Corporation). The reason behind it being
called public service would primarily be be due to it being
funded by the public through license fee and also it is there
to then serve the publics interest. Their main job is to
generally be able to inform, educate as well as entertain
which would overall be the benefit for the audience, and
among other companies I feel they would share the same
saying but perhaps in a different way or even have their
own saying.
Commercial Institutions:
Commercial companies are generally funded just from commercials
and they are following normal accepted business practices and
operate in the effort to be able to make a profit.
- They are not financial institutions.
- Their requirements are; capital, labour and material resources
- (Google)
 License Fee Funding
The license fee is generally paid by all households within the
UK that are receiving television, the annual cost for a license
fee with colour would be around 145.50 as of the 1st of April
it has stayed at that price until the current time of 2017. With
a black and white TV license it is currently sitting at 49. The
majority of the BBCs funding is generally from the license fee
which again is paid by all UK households.

Another type of funding is advertising which actually applies

to television and it is basically when products which are
branded are paid by the television commercials. For example
with a Virgin advert which was paid to be put up during the X-
factor programmes interventions. Media conglomerate such as
the channel 4 as well as commercial companies are funded by
their advertising as well as their sponsorships. With most
advertising companies they would pay media conglomerates
to then have their branded product put onto different
channels to then be able to receive the publicity in the effort
of gaining more consumers for their products. In terms of
advert costs this would overally depend on the channel you
would be using for example channel 4, channel 5 or even ITV
etc. However, within my next slide I will talking about
Sponsorship, this tends to be used as another form of funding
by larger conglomerates.
Subscription

With subscription, this refers to the subscription-

based television services or even agreeing to be
able to make an advance payment in the effort to
be able to receive or participate within a TV
program is called subscription funding.
Subscription payments are usually paid annually,
weekly and or even monthly basis which would be
done through satellite or cable viewers which
would be for example Sky (BSKYB) or even Virgin
Media. Subscription television consists of Pay
television, premium television, or premium
channels. With these subscriptions you are able to
gather extra money from the audiences, however
different subscriptions tend to come with different
benefits.
Sponsorship
Sponsorship, this is where companies
are paying for their logos/ brands to
then be put on before and after a
commercial for example with X-
Factor they would sponsor Talk Talk
the telephone company. Another
example of sponsorship funding is
that vigin media had signed a 20
million deal which was to promote
their services using the Olympic as a
theme which they intended to use
the sponsorship package to then
promote the range of services in
which it offered.
Pay per view Pay Per View, this provides a service by which a TV audience
would be able to purchase events to be able to view via private
telecast. The broadcaster would then show the event at the same
time to everyone ordering it, opposed to video-on-demand
systems, which actually allow their viewers to be able to see
recorded broadcasts at any time. With examples, Sky sports use
this for important sporting events, which offers a huge service
where a television audience would be able to purchase certain
events to then be able to view via a private telecast which
wouldnt be shown for free.

This function is generally used for the fact that the audiences
would be able to pay for private broadcastings which would be
viewed so that it wouldnt be shown on normal TV. This is
accomplished by using on screen guides for example, using the
red buttons on SKY or even calling up the service provider. This
tends to be used for programmes such as sporting events like
huge boxing matches. Another example for where pay per view
would be used is on blink box which is an online TV where you
are able to purchase movies or even your favourite TV series.
 Product Placement
Product Placement is used as a form of advertisement, when branding goods and or services and placed into context
which usually devoid ads, such as movies, music videos, the story line of the television show or even news
programmes. Product placement generally wouldnt be disclosed at any time in which the good or service would be
featured. It is generally a key aspect which is in funding within the TV and film industry as it is a form of self-
advertising. With product placement this is used to get brands more popular in the sense of the audience, by putting
particular brands into movies/ TV programmes it dramatically increases the chances of the target audience awareness
for the particular product. An example for this perhaps could be a fashion company which may pay for famour
celebrities to wear their clothes during a certain programme, this would generally be used for commercial interests.
This would inevitably lead to the product getting a higher rate in terms of publicity and potentially draw in different
commericla interests within other sectors. It would also benefit the media company as it would receive extra funding
to then allow the product to be shown within something even bigger for something like a Programme or even a Movie.
With big companies with brands such as Apple and Pepsi they would and could promote their brand through TV and
Film.
Product Placement
Within the film industries, filming is expensive with a UK
film costing around 3 million to be able to produce a
film it is considered as being a low budget. Funding
generally comes from distributors who tend to buy the
rights for the film before they begin producing.
Alternatively private investors would hope to have a
share within any of the profits in which would be
gathered from the finished products selling's. Another
form of funding would potentially be through the
Development funds for example with the UK film council
which is a non-departmental public body which was set
up in 2000 by the Labour Government in the effort to be
able to develop and promote the film industry itself
within the UK. If a film were to be made by a major
studio, as with the 20th Century Fox for example a film
like Avatar which was introduced to the public in 2009,
then the studio would resort to them funding it
themselves.
Horizontal integration:
This occurs when one company buys a similar company. For example a TV station
buys another TV station. This happens commonly through mergers and buyouts. An
example of Horizontal integration would be Zodiak Media (UK) they own several
smaller production companies across different genres. Potential advantages of
horizontal integration could potentially be that costs can be shares production,
expertise and management. Another advantage could be that the production could
potentially done in bulk and that the profits could be larger.

However, when looking at the disadvantages of horizontal integration this could

potentially be that one company could potentially swallow another one, with loss of
jobs and features. Companies which operate the same way, according to the same
rules, so scope for individuality is lost which would be very important for local news.
Market share might leave no room for competitors and then result in a monopoly or
antitrust situation.
Vertical Integration:
- This involves a company taking over a company which
provides different stages of the production process.
Therefore a record company might buy a chain of CD
retail stores or a movie studio might buy cinemas.

Advantages of this would be:

- Improved co-ordination of all activities
- Profit margins are cut, so cheaper supplies
- Sources can be specialised and exclusive
- Better access to direct distribution, with no fear of
competition

Disadvantages of this would be:

- Decreased flexibility - stuck with one supplier and one
distributor
- Lower efficiency as competition stimulus is removed.
 Ownership

Now focusing more towards Ownership I feel there are many different media
conglomerates around the world who own smaller companies and or
corporations which are also called subsidiaries. Conglomerates are large
corporations which have multiple media interests. Media conglomerates
work towards policies regarding their control of the mass markets across the
globe. They merge with other companies, this allows them to gain a form of
synergy between them. For example Disney owns Entertainment and Sports
Programming Network (ESPN) and American Broadcasting Company (ABC).
Media conglomerates arent just interested in one aspect of Film and TV,
there are also other conglomerates such as ITV and BBC.
Synergy and Cross Media Convergence:

- Vivendi Universal make a film in Universal Studios.

- It releases the films soundtrack on polygram, one of its record labels.
- The tracks can be bought only at MP3.com, one of its internet companies.
- The film can be downloaded on Vivendi Telecom phones.
- The film is then shown in its Odeon cinema chain.
Owning all of these assets makes it cheaper for the producer to make, distribute,
market and exhibit the film, this maximising profit, enabling the studio to keep
making big budget films. This is an overall, win-win scenario for Hollywood Studios.

Cross media convergence:

- The combining of two or more mediums.
- Different mediums are TV/ film/ computer graphics/ radio and website etc.
- Media convergence in the film industry can happen in production, distribution
or exhibition.
- This happens when the music industry comes together with the film industry.
For example when Adele releases the new single for the move Skyfall.

Technology convergence:
- Technological convergence is the process by which existing technologies merge
into new forms that bring together different types of media and applications.
Film and New Technology
- Home Cinemas
- Films on the move
- IMAX 30
- The list goes on.
Advances in new media technology have made it possible for
anyone to make films and showcase them on the internet on
sites like YouTube. We can now also watch films on phones,
games consoles, digital Demand on TV. We can also see state
of the act SFX on giant screens 3D.

- It is 90% cheaper to distribute digitally, than a reel of film.

- Such as apps like Instagram and Snapchat can make people
take photos and videos.