Industries: Ownership and control

 Industries: Ownership and control

Media conglomerate research

1) Type up your research notes from the lesson - what did you find out about your allocated media conglomerate? Selection of companies: Alphabet, The Walt Disney Company, National Amusements, Meta, News Corp, Time Warner, Comcast. If you were absent or didn't have time in the lesson to make these notes, research any one of the companies above and find examples of all the terminology outlined in the notes at the start of this blog post.

• A conglomerate is a large company composed of a number of smaller companies (subsidiaries).
• A media conglomerate, or media group, is a company that owns numerous companies involved in creating mass media products such as print, television, radio, movies or online. Examples include Comcast, Fox or Disney.

• Vertical integration is when a media company owns a range of businesses in the same chain of production and distribution. 
• For example, a company might own the film studio that makes a film, the distributors that sell it to cinemas and then the movie channel that premieres it on TV.
• Vertical integration allows companies to reduce costs and increase profits – but it is not always successful if the parent company lacks expertise in certain areas.

• Horizontal integration is when a media company owns a range of different media companies that are largely unrelated e.g. magazines, radio stations and television.
• Horizontal integration helps media institutions reach a wider audience.

• Convergence (sometimes called technological convergence) refers to the way we can now consume a range of media on one device.
• Similarly, synergy is the process through which a series of media products derived from the same text or institution is promoted in and through each other. 
• Look for links or consistent branding across different media platforms and products. E.g. Warner Brothers and Harry Potter – films, merchandise, stage plays, theme parks, video games etc.

• Diversification is when a media company branches out into a different area of the industry. For example, many media companies have had to diversify to internet-driven distribution (e.g. streaming) as a result of new and digital media.
• In the music industry, major labels such as Warner Music have had to embrace streaming in order to reverse years of declining revenue.

• Cross-media regulation is when two companies wish to merge or diversify (e.g. vertical or horizontal integration) it needs to be cleared by a regulatory body to prevent any one company becoming too powerful in a given market.

Media Magazine reading and questions

Media Magazine 52 has a good feature on the changing relationship between audiences and institutions in the digital age. Go to our Media Magazine archive, click on MM52 and scroll to page 9 to read the article 'Two Key Concepts: The Relationship Between Audience and Institution'.

1) Briefly describe the production, promotion and distribution process for media companies.

• The production process provides audiences with the media products they want. It needs to consider the audience’s desires and should provide the gratifications the audience expects.
• The promotion process researches and identifies the target audience for the product, and uses advertising and marketing strategies to inform and persuade them of the value of the media product. 
• The distribution process uses the most appropriate methods for getting the product to the audience and making it as easy as possible for them to access it.

2) What are the different funding models for media institutions?

• BBC: it's funded by a licence fee and it has a public service remit, it is more likely to screen programmes with a regional interest than other broadcasters.
• ITV: relies on income generated by advertisers. This means that appeal to a large audience are seen as more valuable than ones with smaller niche audiences
• Sky One: it needs an income from subscribers and may well invest in programming that attracts a loyal audience, who are more likely to invest in a long term subscription to guarantee early access to the shows they enjoy.
• Mail Online: receives more income the longer a reader stays on the site, so stories will feature lots of images and videos, and sensationalised or controversial headlines will be constructed to ‘tempt’ readers to ‘click through’.

3) The article gives a lot of examples of major media brands and companies. Choose three examples from the article and summarise what the writer is saying about each of them. 

• Disney: is known as a family-friendly brand that focuses on children’s entertainment.
• Marvel: is inextricably associated with the superhero genre as the film production studio developed from its hugely popular original comic book publications.
• Spotify: allowed for the streaming of free music with ads or through a monthly subscription to access the music without the ads in order to make money.

4) What examples are provided of the new business models media companies have had to adopt due to changes in technology and distribution?

• In the music industry they can not rely on selling the music directly anymore and have to rely on subscriptions, sponsorship and merchandise in order to get monetary gain, while contracts are signed to have a percentage go back to the studio from the profits generated.
• Cinemas invested in 3D cinema to encourage more people to leave their homes and come to the cinemas.
• BBC reconsidering its funding structure as on demand streaming becomes more popular.
• Some online newspapers now require you to pay subscriptions to view their contents.
• Advertisers find it more difficult to advertise through traditional media and so have to use targeted marketing based on social media or by sponsoring youtubers to promote their products.

5) Re-read the section on 'The Future'. What examples are discussed of technology companies becoming major media institutions?

Technology companies such as Amazon, Facebook, Google and Yahoo.