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Unit 7 LO1 Assignment: Understand the structure and ownership of the media sector.

In the film industry there are a lot of well-known companies, for example Walt Disney Pictures, 20th
Century Fox, DreamWorks Animation, Universal Studios, Paramount Pictures, Warner Bros, Marvel
Studios, etc.
Disney is an example of a privately owned company. It was founded by Walt Disney and Roy O.
Disney in 1923. Since then it has been successful in making around 460 films (including Frozen,
Finding NEMO and The Lion King), TV channels, two holiday parks, shops, merchandise, games etc.
Disney owns other companies such as ESPN, ABC Television Network and ABC Family.
Cross-media is a marketing form of cross-promotional companies commit to surpassing traditional
advertisement techniques and decide to include extra appeals to the products they offer, this
material can be communicated by any mass media such as emails, letters, web pages or other
recruiting sources. Cross-media regulation is the ownership of multiple media businesses by a
person or corporation. For example, Disney would have to adapt their products to meet different
countrys regulations and different audience expectations. Working across multiple sectors help
product diversity as it provides a larger income to the company and helps spread publicity for the
films a company makes. For example, if a new film was out and had interviews, etc. featured on a TV
programme, the film would gain publicity from the viewers of the programme.
Having a diverse range of products can also help with the income of a film company, for example,
having things such as Disneys Disney Store, or Warner Bros. Harry Potter World, means people can
enjoy merchandise and days out whilst the film company is making money from it. As well as this,
many film companies now have theme parks such as Universal Studios and Disneyland/ Disneyworld.
Places like these are very expensive but also very popular as many people spend a lot of money
every day at these theme parks. For example, Disneyland Paris has generated more than $700
million in profits since opening in 1992 making around $85.7 million in a year. This can broaden the
customer base for the company as more people are likely to want to go to a theme park/ a day out,
than watch the films made by the company.
Often, British productions are made by smaller outlets like Wrap Films, which will require working
with Film 4 or he BBC to secure extra funding and help with distribution. Another example of an
independent film company is the company Independent. This company has made films such as
Level Up, The Falling and The Sea. I think this company is successful as some of the films are
quite well known and include well-known actors like Josh Bowman and Simon Farnaby.
An independent film maker in the US called Orin Peli, made the film Paranormal Activity for only
$15,000. However he needed the help of Paramount (a major studio) to distribute his film. This
meant he made over $190 million.
Vertical integration is the process by which a media conglomerate owns several companies at
different stages of the production/supply chain. Horizontal integration is where a production
company expands into other areas of the industry. This means that the company develops in a
particular area of production or they can buy out another company that deals with these areas.
Warner Bros. is owned by Time Warner which is a huge multinational media conglomerate. Warner
Bros have used vertical integration with their film, Harry Potter and the Deathly Hallows: Part 2.
Harry Potter is a massive movie franchise which uses vertical integration to maximise the potential
earnings from productions. It was created by Warner Bros and Heyday Film, it was the distributed by
Warner Bros. Distribution. It was marketed using several of Time Warners companies. For instance,
HBO ran a behind the scenes before its cinematic release. CNN was able to use is position as a news

station with worldwide to promote the film. Time magazine ran special features to ensure people
were interested in both going to see it at the cinema and buying the DVD. In the US, HBO broadcast
the Harry Potter TV premiere, this allowed HBO to profit by having exclusive rights to showing a
worldwide box office hit, but also meant that Warner Bros. profited from the integration of Time
Warner companies.
Casino Royale is mostly made by Sony owned companies such as Columbia pictures however other
companies were involved in the production such as MGM. This means Casino Royale uses horizontal
integration because it expands into other companies during the making of the film.
Integration is good for this sector as it means companies can get more publication and money in
ways other than just making and showing the film. It also means companies can work together to
cover different aspects of the process and ensure each part can be done properly and can benefit
from the outcome.
Multinationals are organizations that own or control productions of goods and services in one of
more countries other than just their home country. For example, Disneys headquarters are in
California, USA, but they sell products all over the world.
Licenses and Franchises are companies where different people can set up a different business under
a common name. To do this however, they have to pay an initial or ongoing fee to the owner of the
franchise. The advantage of this is you. Your business can instantly be well known and popular,
however, you have to conform to the codes, regulations and rules of the franchise.
Source -
Conglomerates are combinations of two or more corporations engaged in entirely different
businesses that fall under one corporate group. An example of this is Disney. Disney owns a movie
production studio, theme park resorts, broadcast television network, cable channels, news, political
and business channels, national sports networks, a record label and a publishing company.
Share of ownership is when the ownership of a company/ corporation is divided into shares that are
owned by different people, called the shareholders. Shareholders pay for their share and in return
get a certain amount of the profits the company makes depending on how much of a share they
hold. PLCs are companies that sell shares to the public in order to generate revenue through public
Competitors are rival companies which make similar products and compete for the bigger share of
the market. Competition can lead to better products and more innovation to top their rivals. This
can be on a local scale, national scale or international scale.
This is an example of Walt Disney Studios top competitors. Source

Customers are people who pay to use the product/ service that a business sells. A high number of
customers is better for a business as it generates a lot more money than a business that doesnt get
any customers. Businesses can use different techniques to attract more customers for example,
creating new products, advertising campaigns, taking over other companies or diversifying.
Customers must be treated as important to companies and their complaints must be taken seriously.
Source -
Profitability of product range is how much profit a company will make from a product that it sells. In
the film industry, film companies tend to mainly produce films which are most popular in order to
make the most amount of profit possible. This is also why generally it is only smaller film companies
that make indie films.
Merges and takeovers are where two previously separate firms combine into a single legal entity. A
takeover consists of one business acquiring a controlling interest in another business leading to a
change of ownership. A merger is when a combination of two businesses join to make a new one. An
example of this is when a major Bollywood player worked with members of the Broccoli film-making
dynasty on a possible $2 billion takeover of debt laden Hollywood studio Metro-Goldwyn-Meyer.