1. Daniel Hopkins
MEDIA COMPANY CASE
STUDY
TASK 1 UNDERSTAND THE
STRUCTURE AND OWNERSHIP OF
THE MEDIA SECTOR

2. In general terms, private ownership refers to a business not owned by the state. This may mean it is owned by a non-governmental
organization or by a small amount of stockholders. Private companies shares are not sold on the stock market, but are rather sold
or exchanged privately between individuals or groups. Some companies may be private because they are family owned and have
been commonly passed down the generations for years, with all stock-holders coming from the same family and their close friends.
This type of ownership also allows for less stricter regulations in terms of trading and security among other things, as they do not
have to conform to the requirements of public companies.
Rolex is a privately owned company and maker of luxury watches. They make huge profits each year and as they are private and no
numerous stockholders to give money to, they share the money out between employees and give large amounts to charity, as well
as sponsoring certain events. Boots is also owned by a private company: Alliance Boots. They were criticized for moving their
company’s HQ to Switzerland, where they could save millions in UK tax. This is somewhat of an advantage for privately held
companies, as they can move to countries where tax laws are much less stricter. These companies are usually known as ‘tax
exiles’.
Advantages of private ownership include the fact that it easy to control, with only one person needed to start and dissolve a company.
The few people who do run the company can also make strategic decisions without having to answer to shareholders. They can
also decide what to do with profits, using them for either financial gain or to assist in company growth. Disadvantages include not
being able to earn large amounts of capital through issuing shares, as they cannot issue share to the public. They may also lose all
of their funding, as it is usually from individuals rather than groups.
TYPES OF OWNERSHIP: PRIVATE OWNERSHIP

3. A public service is a type of service that is usually provided by the government to people within its jurisdiction and is usually
financed through a diverse range of funding. They are sometimes simple provisions, which many agree should be readily
available to all, regardless of income. Examples of public services are healthcare, education and public broadcasting. Other
services that fall under public services also include the police, fire brigade and military, which are financed by taxes, which
includes wages, equipment and training.
The BBC is a public service, providing a variety of television channels and radio stations. This is because it is funded through
license fees- an annual £145.50 fee that provides people with the above services- meaning it has to cater for a variety of
people. Other public services may be financed through direct government funds or individual contributions.
Describe it and give an example
Advantages for public service include essential services being provided, everyone having some form of benefit or gain from it
and wasteful duplication of sources is limited. However as with all types of ownership there are many disadvantages. There
is a risk of heavy political interference, which can greatly change how it runs and what its output is. Losses must also be
met by a taxpayer as it is a public service and so must be covered by the people. Employees may also lack incentive to
work, if they are not getting shares in the company they are running or being awarded bonuses.
TYPES OF OWNERSHIP: PUBLIC SERVICE

4. Independent ownership is a form of private ownership but, it could be an independently owned franchise of
a larger group. Independent companies will not have multiple locations throughout a country which is
common with privately owned businesses. Independent businesses are all private but, not all private
businesses are independent.
Typically, an independent business will be small in the majority of circumstances and could be anything
ranging from a corner shop to a market stall selling handmade goods. However, there are larger
independent companies, especially in the world of film. Independent film companies will usually only
produce small budget films due to limited investment and ones that appeal to a specific audience. Samuel
Goldwyn is an independent film company, which produces a variety of films and documentaries, it is based
in New York City.
Advantages of independent ownership include deciding what to do and making your own decisions by
yourself or with other owners. It is also relatively easy to set up a business and means you can choose what
area of work you want to do and when. Disadvantages include the fact that it is easy to set up, as
thousands of likeminded people will be doing the same. This may restrict finances and starting off, it will be
hard to maintain a profitable company.
TYPES OF OWNERSHIP: INDEPENDENT

5. A media conglomerate is a company that owns large numbers of companies in
various mass media such as television, radio, publishing, movies, and the Internet.
This can give them huge control in certain markets as they may own many
successful divisions of one media sector. Conglomerates are effectively a large
company composed of many smaller companies, which would seem to be engaged
in unrelated business.
TYPES OF OWNERSHIP:
CONGLOMERATE
The biggest six conglomerates (known as the big 6) are The Walt Disney company, NewsCorp, Time Warner, CBS
Corporation, Viacom and 21st
Century Fox. These six dominate the film, television and film industry, with many major
companies being owned by one of them. For example, The Walt Disney company is the largest media conglomerate and as
can be seen above owns many different TV channels such as ESPN, ABC and The Disney Channel. They are all unrelated
channel types and is good example of how far conglomerates reach into the media world, as well as how much they can
control. The Walt Disney company also owns Marvel Comics, the Disney music group and the Walt Disney theme parks.
A benefit of a media conglomerate is that it owns so many things and can intertwine its own media. For example, a TV show
successful on the channel Fox may be then turned into a movie, which would then be distributed by 21st
Century Fox. As
conglomerates have a wide range in the media spectrum, they will make enormous amounts of money and will often have
large profits which they may use to fund new creative output or to purchase a new company to join its conglomerate.
Disadvantages include the fact they do control a wide range of companies and may be more loyal to sponsors rather than
public interest. They may also manipulate prices as much as they want.

6. Horizontal integration is a business strategy where
a company acquires or creates a production
unit to assist with their output. For example, a
company may produce something but, use a
third-party to distribute and market it for them.
It involves the addition of other business
activities at the same level of the value chain.
TYPES OF COMPANIES:
HORIZONTAL INTEGRATION
By combining operations with other companies, perhaps even competitors, it saves money and increases income. If a
company develops into other areas of one industry they will be able to benefit from other markets. This can be done
by developing a company in that area of production (like producing films) by buying out/taking over another company
in the same stage of production. This means that they will not have competition whilst making money from both
markets. Other examples of horizontal integration include where an oil company may purchase a group of new oil
refineries or a jeweller buys more jewellery shops.
Advantages include cost advantage and having a stronger presence on the market. It also means that a company
can expand without having to build something new from scratch. Disadvantages include the business getting too big
which may lead to resources being managed improperly. They may also have doubles of staff, which would lead to
redundancies and a lack of communication between each sector.

7. This is when a company has the ownership of the means of production, distribution and
exhibition of a media product. Due to owning all branches of the supply chain, the company will
subsequently receive all of the profit.
An example I found was Time Warner and their distribution of the film ‘Harry Potter and The
Deathly Hallows Part 2’. Time Warner, as mentioned are a conglomerate and many of the
smaller companies they own will be able to perform the certain tasks in the supply chain of the
film. The film was created, funded and oversaw by Warner Bros. Pictures, distributed by Warner
Bros. distribution and marketed on several of Time Warner’s TV channels. HBO and CNN ran a
series of adverts and behind the scenes shows in the run up to the film, which will assist it’s
owning company. The film was released in Warner Bros. cinemas and the TV premiere was on
HBO.
An advantage of vertical integration is that a company doesn’t have to seek the help of other
companies, as the supply chain is all catered for within the company. This will save the company
the money of hiring someone else to do the work. Disadvantages include the fact the company
will have to cover the finances themselves if any mistakes occur along the supply chain. Also,
though not affecting themselves vertical integration affects independent films who cannot afford
to complete the stages of production within their own company and so will not be able to
compete with larger companies.
TYPES OF COMPANIES:
VERTICAL INTEGRATION

8. Cross media convergence is the combination of two mediums in the media industry, these could include music, TV, film, video games
and magazines. The use of cross-media convergence helps to bring more money in as buyers of one media product may then but the
media convergent. An example of a prolific person in cross media convergence is the rapper and sometime actor, Eminem.
Eminem has starred in a film called “8 Mile” with him writing several of the songs featured in the soundtrack. He also won The
Academy Award for best original song for “Lose Yourself”. This increases awareness of him in the world of film, with casual movie-
goers watching the film and possibly becoming a fan. He will have made money from his acting role as well as money from the
soundtrack and promotional appearances for the film. The cross media convergence here is between the movie and the CD
soundtrack.
Eminem has also worked twice with the ‘Call of Duty’ series, which are first-person action video games. In 2010 on ‘Call of Duty:
Black Ops” one of his songs, ‘Wont Back Down’, was featured in the game as an accessible song to accompany the players gaming.
In 2013 he again worked with Call of Duty, this time on their new game ‘Call of Duty: Ghosts’. The song ‘Survival’ from his new album
was featured in the game’s trailer and in the game. During Survival’s music video, gameplay from Call of Duty can be seen in the
background along with its logo, which is prominently shown. The idea is to attract rap fans to gaming and vice-versa, with Eminem
earning himself lots of money due to the songs appearance in the game. The convergence here is between music and video games.
An advantage of cross media convergence is that a company can make more money and bring in new fans/buyers/supporters from
different media preferences. A disadvantage is that it may not be successful and fans of certain types of media may be disappointed
at the convergence with others.
CROSS MEDIA CONVERGENCE

9. Synergy’s are the interconnecting marketing and distribution of media across a wide range of platforms. It
involves the promotion and sale of a product through various subsidiaries. It gives a person or company a
chance to expand their market and monetary income, through appealing to different people with different
tastes in media.
The difference between synergy’s and cross media convergence is that cross media convergence involves
just media products and platforms, whereas synergy’s can expand to many other fields. In the world of
music, synergy's are very prominent as many different types of merchandise can be created, to be sold to
fans of the artist/band.
One band who have a successful synergy are One Direction. They are an extremely popular boy-band
appealing to young children up until teenagers. Due to this they have a wide range of 1D related products on
the market. These include music videos, documentary movies, CD’s, toys, clothing, jewellery, posters and
even things such as stationary sets and sporting equipment. They are so popular it was most likely deemed
to be a wise move to produce many goods associated with them, as it would increase their income. Each
product will help promote the others, with some more so than others.
This is a major advantage for a synergy. By expanding to different types of markets and selling many things
to die hard fans, the extension of income through extension of outlets will be extremely large. A disadvantage
is that people may think that a company is ‘milking it’ and selling pointless products for financial gain. This
may lead to people buying less products in the future.
SYNERGY

10. The music industry is a complex system of many different organizations, firms and individuals who contribute to
different processes. There are many elements to the music industry from creating the song to distributing it .
Firstly, someone will come up with and then write a song. This is usually either the singer themselves or a lyricist
who provides songs for many different people. The song will then have to be recorded in a studio, which will
require audio technicians and directors among others. Next, the song will then have to be released, so it will be
advertised through many different means including TV, newspapers and magazines. It then may need to be
created in CD form so it will have to be manufactured in a factory. It will then need to be distributed, which will be
done through many different stores and online. These are only a few key components of the process, as the
industry employs many more people in a huge amount of roles. Many bigger music companies will be horizontally
integrated, as they can acquire other businesses in the industry. However, smaller, independent companies wont
be able to do this, instead being vertically integrated. This means that they control all aspects of the production
phases including creation, marketing and distribution. Some music companies are independent yet still very
successful such as the Domino Recording Company. Larger successful ones such as Aftermath records are owned
by Universal Music Group, who are a subsidiary of universal.
MUSIC INDUSTRY
OWNERSHIP
STRUCTURE

11. My case study is on the huge international and well-known media company, The Walt
Disney Company. It doesn’t belong to any one media sector as it owns many smaller
businesses and companies, as well as having many subsidiaries. It has huge influence in
film, creating and producing its own films, as well as owning Marvel Comics(meaning it
also owns marvel films) and LucasFilms (StarWars).
The company is a conglomerate, as it owns large numbers of companies in many different
forms of media. These include ABC, ESPN, The Walt Disney Theme Parks, Hulu and
Marvel Comics among many others. It is generally seen as a children’s company, though
that is what it merely started out as. It has retained its highly recognizable name and
logo for many years.
Disney is now a global competitor considered one of the big 6 in the media industry,
alongside NewsCorp, Time Warner, CBS Corporation, Viacom and 21st Century Fox.
THE WALT DISNEY COMPANY

12. The company was founded in 1923 by Walt Disney and Roy O. Disney. It currently has
stock on the stock exchange, which are available for purchase by the public. Currently,
there are millions of stock holders. The current CEO and COO of The Disney Company is
Bob Iger. He will make the big decisions along with the help if a board of people.
Though the company is owned by millions of people, this does not mean that they have
a role within the company’s running or output. This may only apply to holders of large
amount of stock such as below.
Here is a list of the top 5 owners of stocks in The Walt Disney Company:
OWNERSHIP

13. The company is both vertically and horizontally integrated. The Walt Disney Company
owns many studio entertainment, consumer product companies, and media networks.
However, it also plans, produces, advertises, and distributes some of its products on its
own.
The Walt Disney company owns many film making businesses such as Marvel
Entertainment, LucasFilm, Hollywood Pictures, Miramax films and Pixar. These
companies will do things on behalf of The Walt Disney Company, such as making films
that appeal to different audiences and ones that cannot feature the Walt Disney Logo at
the start. For example a horror film wouldn’t look so scary if the Disney castle opening
was at the start of it.
However, it also creates and produces its own films, such as Walt Disney Animations.
These are the hallmark of the Disney Company and so they will often want to take part
in the full process of the film themselves.

14. As Disney is one of the ‘big 6’ the five others members of this group are its main competitors,
with each of the conglomerates owning various types of media that compete against one
another. This can affect income as each own respective international organizations in
different types of media, such as film, TV, music, theme parks and video websites. Due to
this Disney- as will all the other companies- will strive to make their respective markets as
popular and as good as possible.
Disney will often change its output depending on what is currently popular and also try and
replicate the successful products of other companies. For example, if Universal released a
highly successful animated film, Disney might respond with a bigger and better film two
years later. This is to try and show that they have dominance over that area of the media.
Disney then make a ride out of a film at their theme parks, depending on its success.
Disney will also have to compete against illegal things that also harm the industry as whole,
such as illegal downloading and film copies. They will have large range of copyright and
trademark laws that prevent people rom using it, which will result in possible prison
sentences for those involved. They may also have a group of people who go online
themselves and filter through all of the illegal copies of their work, reporting the sites to
the service provider.
COMPETITORS

15. Though there are no exact figures for how many people have purchased Disney products
over the past 80 years, it will run into the millions and even hundreds of millions. This
involves the dozens of films they have released, the television shows, the theme parks
and all of the accompanying merchandise. This will generate billions in revenue for
them, with a statistic I found stating that they make approximately $35 billion a year.
This means that it has most likely made over $1 trillion dollars in its history.
The audience for Disney is generally aimed at children as they have theme parks based
on children’s animated movies and The Disney Channel, which features many different
comedy shows. However, they are not the sole demographics, as many people will enjoy
Disney films and the theme parks. The majority of their output however, will be aimed at
children. As a conglomerate and not just looking at things Disney-related, the company
owns ESPN, ABC and numerous film companies. This means that their audience can
stretch to sports fans, casual TV viewers and many different film audiences. These
include superhero (Marvel) and Science Fiction (LucasFilm).
AUDIENCE

16. In 2011, Walt Disney Parks and Resorts Chairman Al Weiss stood down and was
succeeded by tom Staggs, who decided to change the leadership at the parks. Staggs’
decisions included changing the structure of how they all ran and to make the
hierarchy more simple. This was a step in the company’s One Disney approach. This
involved merging all of the divisions finances such as revenue and marketing into one.
Currently, Disney has a president for each of its sectors, who will regularly meet to
discuss business plans and investments. Presidents include the chairman of Disney,
president of Disney interactive and president of Disney consumer products.
STRUCTURAL CHANGES

17. Disney has had many controversies over the years, with varying levels of offensiveness
and problems for the company. A historic controversy was from when Walt Disney was
alive and accused of holding National-Socialist beliefs and was believed to have attended
anti-Semitic meetings. He was also accused of racism, as some of his motion pictures
from the 30’s, 40’s and 50’s featured racially insensitive material.
Some recent films have also been accused of having sexual references in them. For
example, in the film ‘The Lion King’ it is widely believed that stars in the sky form to make
the word ‘sex’. However, it supposedly says ‘SFX’, which is a nod to the special effects
team on the movie. Despite claims of this, it still remains a controversy. In recent years
some of their stars have been accused of being sexually provocative and not fit for the
viewing of a child. Former Disney stars such as Miley Cyrus have made headlines for a
wide range of things such as drugs, delinquency and in Miley’s case being sexually
provocative- by ‘twerking’.
Some of their films have intense, frightening scenes in them which many parents deem
inappropriate.
CONTROVERSIES

18.  http://
www.diszine.com/content/disney-leadership-undergoes-major-structural-chan
 http://uk.ask.com/question/how-much-money-does-disney-make
 http://thewaltdisneycompany.com/
 http://www.slideshare.net/hollycrossleyturner/media-ownership
 http://www.revisionworld.com/a2-level-level-revision/sociology/mass-
media-0/ownership-and-control-media
 http://bizdharma.com/blog/what-is-vertical-and-horizontal-integration/
BIBLIOGRAPHY