Issue Date : 9 June 2014
Submission Date : 11 June 2014
Assessor : Hannah Mead
Internal Verifier : Julie Teckman
Unit 7: Understanding the Creative Media Industry
Learning Objective 7.1
Media Ownership
“The media industries are expanding on a national and global level. Recruitment to the sector
has accelerated offering new professional opportunities. There are more people working in the
media today than in any other employment sector. Developments over the last two decades
have also taken place across the sector
in response to technological changes, with a notable impact on media production, distribution
and patterns of employment. Other wider developments include deregulation and the debate
over the status and funding of public service broadcasting. The ongoing developments in
digital media technology are creating a highly mixed and competitive environment. All these
developments will affect those seeking employment in the media sector”.
BTEC Media specification
Task 1 – Research and summarise company structure and ownership
terms – this is a Pass task
Structure and ownership of Media companies – all research should focus on the media sector
Private ownership
Define: Is when the company, big or small, is owned by a small group of people, an
individual or by shareholders.
Example: roster teeth
Public service media
Define: This is when a company does not broadcast on the Radio or TV but it
provides media on other platforms for example on the internet and print.
Example: The BBC, they put news on their webpage and sometimes have posters
around English towns.
Multinationals
Define: This is when a company gives their services to more than one country that
does not include their own.
Example: The BBC shows some of their shows in different countries for example
America premiered the third season of Sherlock at the same time as it premiered in
the UK.
Independent
companies
Define: This is when a company does not own any other company, large or small
but it can have shareholders within it. These types of companies can be private or
public.
Example: Polytron corporation
Conglomerates
Define: This is a large company that owns many different private or public, large or
small companies and no one owns the conglomerate company.
Example: The Walt Disney Company owns ABC television network, Disney
channel, ESPN and ABC Family.
Subsidiary companies
Define: This is a company that has either been bought or set up by a bigger
company.
Example: Marvel entertainment is a subsidiary company of The Walt Disney
Company.
Diversification
Define: When a company gets larger it starts to add more products, services and
customers, it also grows to different locations to help the company make more
profit and publicity.
Example: Google only used to be a search engine now it bought YouTube then
added Google maps, Google chrome and the chrome book.
Vertical and horizontal
integration
Define vertical integration: This is when a company owns smaller companies to be
able to overview the whole process and are able to change that process if they
wanted to.
Example: Warner Bros Entertainment they own the studios and the distribution
company.
Share of ownership
Mergers and
takeovers
Define horizontal integration: This is when a company buys it’s competitors and
other companies that produce a similar product so they can get more profit as they
would sell all the products they bought.
Describe what this term means: Is when people on different parts of a company to
make up a whole company.
Define merger: This is when two or more companies come together by offering
stockholders from one company. This decision is normally mutual.
Define takeover: This is when a buying company makes a bid on another. This
means the buying company buys all of the other company and is now responsible
for the companies operations.
Cross-media
regulation/deregulation
Sources of income
Company regulation and deregulation: For each area of media there will be
different regulatory bodies where the media will have to conform to those rules
other wise, for example television adverts will be taken off air if they do not conform
to the rules. Deregulation is when there are not many rules but there will be a
complaint service for example, the press can write whatever they like in their
newspaper, magazines ect but they will only have to take something out if it is
complained about by the public. Some of the regulatory bodies are the ASA, Ofcom
and the BBFC.
Research a company and give an example: Marvel has a lot of products and
subsidiary companies. Their income would come from their movies, comics, action
figures, children’s toys, clothing, lunchboxes, TV shows and food. Most of their
income comes from licensing.
Product diversity
Give an example of company or product diversity: This is when they introduce
more products to gain more profit by selling a similar product. For example, Haribo
have many different flavours and packets of their sweets to gain more profit and
appeal to more costumers.
Profitability of product
range
Give an example, quoting figures:
Performance against
financial concerns
Licenses and
franchises
Competitors
NBC Universals revenue at the end of 2009 was 4.5 billion dollars then at the end
of year 2010 it was 4.9 billion dollars so from 2009-2010 it had only gone up by a
few million dollars. Then at the end of 2011 it rocketed up to 8.2 billion dollars
which is double the amount they had before.
Explain why success and profitability is important to media companies?
If a company was not getting any profit or it was not getting into the public eye they
would not be making any money so then they would have to go defunct and the
company would no longer be a company however if the company was a big
success with lots of profit it could buy other, smaller companies to be able to get
more money and bring out new products to keep the costumers interested.
Define a media franchise and give an example: A media franchise is many
different types of media products under the same name for example The Walking
Dead is now a franchise as it was originally a comic, which is still running, The
Television show that came out in 2010 that is now on it’s fourth season that came
out earlier this year. They now also have a video game, which came out in 2011,
this has just released the second game this year.
Why are competitors important to media producers?
Competitors are important; as a company will have to improve their products to
keep their customers from buying the product the competitors are selling. They
may also have to change the prices of their products, as the competitors are
cheaper. If there were no competitors companies would not come up with ideas
and will lose their customers.
Give an example of media competition:
Customers
Competition and
trends
Doritos and pringles.
How do media producers keep their customers?
By advertising their products in many different ways, making advertising posters,
which stand out from the competitors as well as bringing out new products regularly
so the customers do not get bored.
How does this affect business for media producers?
The company can lose costumers and profit if the competitions product is cheaper
or better than their own also trends change quickly so the company has to change
with them to keep their profit and costumers coming in. So this means the company
has to keep updating and improving what they are producing and the products they
are selling to keep going.
Explain a current media trend: Social media is a current media trend, many people
over the last few years have signed up to be apart of Facebook, Twitter, Instagram,
Tumblr, Vine and Youtube. There are many more and more are being created. It
started off with Facebook then other companies saw it was very popular and was
bringing in money so more started to be created and more people started to
become an account for every social networking site. Social networking also creates
trends within it for example the hashtag and selfie trend, which many people take
apart in daily.
For Pass grade:
Using the table provided, explain each term using examples to illustrate your point.
For Merit:
Produce a case study on the structure of the global media giant - News Corporation.
Your case study will show that you have researched News Corporation and can explain:
 History and overview
 The company ownership
 Company structure and subsidiary companies
 Mergers and takeovers and the effect of this on company success
 Product diversity
 Production and distribution of products, linking these to market trends
This case study will take the form of a written report.
(Minimum 500 words)
News Corporation was an Australian American mass media corporation that was trading all
over the world. They spit in June 28th 2013 and became News Corp because of the phone
hacking scandal that started in 2011 by News of the world, which was a subsidiary company of
News Corporation. In 2011 News Corporation was the world’s second largest media company
in the world’s third largest entertainment media group from 2009. The headquarters were in
New York. The former type of the company was public, the industry was a multinational mass
media corporation. News Corporation was also a publically traded company. Rupert Murdoch
founded it in 1976 in Australia, and then it was founded in America many years later (2004) by
buying a company that sold it’s products in America, then they expanded to the UK by buying
another company that sold their products in the UK.
When it was created in 1979 it was only a holding company for News Limited. Rupert Murdoch
inherited The Adelaide News when his father died and that is how it started. News Limited
bought San Antonio Express-News, which was based in America. They owned News
International, which includes The Times, The Sun, and the News of the World, which is now
defunct. Dow Jones & Company, which includes The Wall Street Journal, the book publisher
HarperCollins, and the Fox Entertainment Group, which owns 20th Century Fox film studios
and the Fox Broadcasting Company. These two are both massive American broadcasting and
television companies. The products they have are newspapers from The Times and The Sun,
these are sold in the UK, television channels, television broadcast networks and cable network
programming these are provided by the Fox Entertainment Group, films which 20th Century
Fox and the Fox Entertainment Group provides and direct broadcast satellite television. News
Corporation’s biggest successors were 21st Century Fox and themselves, News Corp. Now that
they split because of the scandal it is known as News Corp and 21 st Century Fox.
News Corp is also a public corporation, which was made after the spit as a spin off of the old
News Corporation and they are still a mass media corporation that was trades all over the
world. They focus on newspapers and publishing as they always had. They are a network of
leading companies so they also provide most media, news, education and information services
as well as TV, all over the world.
News Corp own The Wall Street Journal, The Times and The Sunday Times, The Australian,
New York Post, REA Group, The Sun, News +, Herald sun, Fox Sports, Fox Tel, Barron’s,
Market Watch, DJX, The Daily Telegraph, The Sunday Telegraph, The Courier Mail, Herald Sun
Sunday, The Sunday Mail, The advertiser, NT News, Sunday Territorian, Mercury, Sunday
Tasmanian, TSL, Smart Source, Donna Hay, GQ, Vogue and Vogue living and finally Inside Out.
So these companies are subsidiary’s within News Corp.
News Corp uses vertical integration as they buy companies but then o not fold it into their own
company they just review the profit it brings in and how the process works for that company.
They do not change the products they make or how the process of the subsidiary company
works they only do so if it would be better for the company.
Bibliography
http://newscorp.com/
http://en.wikipedia.org/wiki/News_Corporation
http://en.wikipedia.org/wiki/News_Corp
For Distinction:
Produce a case study on the structure of the global media giant - News Corporation. Your case
study will show that you have researched News Corporation and can explain:
 The company ownership with share of ownership over the years
 History and overview
 Company structure and subsidiary companies
 Mergers and takeovers and the effect of this on company success
 Product diversity
 Vertical / horizontal integration of the company
 Profitability of the company last year
 The company’s competitors
 Future media trends and how this affects News Corporation
This case study can take the form of a written report.
(1000 words)
To achieve a pass
grade the evidence
must show that the
learner is able to
P1 describe the
structure and
ownership of the media
sector
To achieve a merit grade the
evidence must show that the
learner is able to
To achieve a distinction grade the
evidence must show that the learner is
able to
M1 explain the structure and
ownership of the media sector
with reference to detailed
illustrative examples
D1 comprehensively explain the
structure and ownership of the media
sector with reference to elucidated
examples