1. Task 1
Understand the
structure and
ownership of the
media sector. P1,
M1, D1
EXPLAINING THE
STRUCTURE AND
OWNERSHIP OF THE
MEDIA SECTOR

2. Private ownership’s aim is to deliver communication to make a profit. There are two
different types of private ownership, first that it can be held by an individual or a small
group of people or there is ownership by a company which has shareholders. Another
type is the primary focus of the private media outlet is to make sure they survive and
succeed by making profit.
An example of this is MTV. They launched in 1997, it was for people to listen to the music
like a music video but now they are no longer just music section, it also can be
entertainment section.
An advantage of this is that they have more freedom to adapt their delivery in order to
suit their market/audience.
Another of advantage is that they are able to concentrate on more popular programs
therefore allowing satellite T.V. viewers to be their audience and getting money from off
them.
An disadvantage of private is that if when managing a problem or financial problems then
private owner/owners will personal suffer the financial losses.
TYPES OF OWNERSHIP: PRIVATE OWNERSHIP

3. Public Services are in the control of the government and or local councils. Certain
services are available to all such as police, fire service, teaching staff, refuse collection,
etc. These roles are seen to be essential to modern life which should be the right for
everyone to receive.
The advantages of public services are:
- Providing the public with a sense of well being, for example the assurance of knowing
free healthcare is available to everyone on the NHS.
- As public services are run by the government, a good standard of service is maintained.
The disadvantages of public services are:
- As public services are tax funded, salaries for highly skilled, difficult jobs may be lower
than in the private sector. For example NHS doctors earning less than doctors in private
practices in countries like America.
- Some people resent having to pay taxes to pay towards services they might not use.
TYPES OF OWNERSHIP: PUBLIC SERVICE

4. Multinational is an enterprise operating in lots of different countries but it is looked after by one
country. Any company that gets a quarter of its revenue from operating outside its own home
country is seen as being a multinational corporation.
An example of multinational is Apple Inc. which is based in California, this is a company that
designs, develops, and sells computer software and personal computers
The advantages for the home country are that its create opportunities to market the products
produced in the home country across the world. Also its create an employment for the people of
the home country at home and abroad.
The advantages for the host country are that they get latest technology from foreign countries.
There were also gets management expertise from multinational.
The disadvantages for the home country are that sometimes because the capital from the home
country gets transferred to the host country causing a negative balance. Another disadvantage
is that the home countries industrial and economic development could be neglected as
investments are more profitable in foreign countries.
The disadvantage for the host country is that they may get the technology that has become
outdated in the home country.
TYPES OF OWNERSHIP: MULTINATIONAL

5. Independent ownership are privately held organisations, they are operated in an self-
governing way. Most of the time, they take the form of sole proprietorship companies.
They are owned and run by one individual and there is no legal difference between the
owner and the business
An example of an independent ownership is the local restaurant Smith’s in Eccles.
(http://www.smithsrestaurant.net/)
Advantages of having independent ownership is that they can be very flexible and easier
to organise. Also only a small amount of capital is needed in order to set the business up.
Disadvantages could be that it can be more difficult to raise the funds required to set the
business up. There can be a reduced number of resources for an independent ownership
with banks being reluctant to invest due to the small assets and high rates of failure for
these type of businesses.
TYPES OF OWNERSHIP: INDEPENDENT

6. A conglomerate is a corporation made up of different companies that operate in many different
fields. For example a conglomerate may have businesses within it which may produce, sell
unrelated goods and services.
An example of a conglomerate is Virgin. Virgin is British multinational conglomerate which
diversifies into entertainment, areas of travel such as planes and trains, and lifestyle. There are
more than 400 companies worldwide. The net worth of Virgin Groups is more than £5.01
billion.
The advantage of this is that conglomerates tend to be large multinational companies with
operations in multiple regions of the world and so there is much greater flexibility and choice.
Another advantage is that there is less investment risk. A down turn in one of the companies
can be counterbalanced by stability and expansion of another division.
The disadvantage of a conglomerate is that there will be many managers and therefore this will
cost a great deal of money.
Another disadvantage is that poor performances of one company may dampen the
performances of the more successful parts. The overall profits may not highlight specific
problems that may exist in one or more of the companies.
TYPES OF OWNERSHIP: CONGLOMERATE

7. This is where a company tries to strengthen its positive in a particular industry. It may merge
with another company which is at the same production stage. The reason for doing this is to
grow the company in sizes, increase variety of products, reduce competitive or access new
markets. The horizontal integration can be done by merging two similar size companies,
acquiring another company or a hostile takeover, where the company does not want to be taken
over.
An example of this is T-Mobile, it is a joint French and German company. They own a mobile
network and mobile broadband operator in the UK. It is owned and operated by EE, the UK’s
largest mobile network.
The advantage is lower costs – as larger companies can provide more services and products.
There can be greater efficiency. Another advantage is that there is greater market power over its
suppliers and distributors. It also gives access to use new markets and reduces competition.
The disadvantages are that horizontal integration does not always add value to the companies
just because they have merged. There are legal repercussions - horizontal integration may lead
to a monopoly. The government don’t like this because it takes away the competition. The
government has to approve. There is less flexibility as the large organizations are harder to
manage and are less flexible in introducing new ideas to market.
TYPES OF COMPANIES:
HORIZONTAL INTEGRATION

8. This is when a company expands its business by taking on other areas of production. For
example a company may only manufacture goods but expands to own its supplier and or
distributor. This can help company to keep costs down and to improve efficiency by
decreasing costs for transportation and turn around time.
An example of vertical integration is the merger of live nation and Ticketmaster. This
created a vertically integrated entertainment company that manages and represents
artists, produces the shows and sells tickets for the events.
The advantages are lower costs as company providing more services instead of
outsourcing. There is better coordination of supply chain if only one company is involved.
There is greater market share and there is improved quality of supply.
The disadvantages are if the company cannot manage the new activities efficiently then it
will cost more. There are legal repercussion due to size as the government prefer
competition.
TYPES OF COMPANIES:
VERTICAL INTEGRATION

9. OWNERSHIP PART 2

10. Cross Media Divergence is the separation of different types of things in the media. It is
when a product can use different media in order to promote a product, for example,
television, radio, magazines etc. Within one media type, for example, newspapers it
means the different ways news can be read, traditional paper forms as opposed to online
forms.
An example of the use of cross media divergence is when a film wishes to be promoted,
this could be done through Facebook campaigns, advertising via Internet, television,
magazines etc.
Advantages of cross media divergence is that when more than one media come together
to promote a product this promotion will be viewed by a larger audience. This in turn
could lead to product being more successful. Using different media types can ensure that
all different genre of people will be targeted, young, old, female, male etc.
CROSS MEDIA DIVERGENCE

11. Synergy is working together in order to achieve an objective that cannot be
achieved independently. Synergy is the Synergy is the advertisement and sale of
products, these could be products from films, soundtracks or video games etc.
An example of synergy is Walt Disney, they used synergistic methods in the
1930’s. This came about originally when they let different firms use the Mickey
Mouse character in their businesses and advertisements. This in turn promoted
the name of Disney and the other products that they were involved in.
Advantages of using synnergy are that products can be marketed in such a way
to increase sales and to advertise the name. They not only promote the original
company but can support the shops, films etc that assocoiates with that name.
SYNERGY

12. The music industry is all about the creation and selling of music in order to make a profit for the
individuals involved. Obviously this industry is made up of many different groups of people.
These groups include the musicians, who compose and perform the music, music publishers,
producers, recording studios, engineers, record labels, retail and online music stores and
performance rights organisations. Also included within the music industry are the individuals
who present live music; the booking agents, promoters, music venues and road crews. There
are the professionals who help the musicians develop their careers, talent managers, business
managers, entertainment lawyers and those who broadcast the music and finally the
journalists, the educators, the musical instrument manufacturers; as well as many others.
The music industry that we recognise today first began in the middle of the 20th
century. This
was when records began to replace sheet music and then everybody started to talk of ‘the
recording industry’ in place of ‘the music industry.’ The majority of the market involved in the
music industry is controlled by three major corporate labels, the French owned Universal Music
Group, the Japanese-owned Sony Music Entertainment and the US owned Warner Music Group.
The biggest portion of the live music market is organised by Live Nation which is the largest
promoter and music venue owner. Live Nation was originally a subsidiary of Clear Channel
Communications, which is the largest owner of radio stations in the United States.
MUSIC INDUSTRY

13. Over recent years the music industry has been effected my many drastic changes since
the start of widespread digital distribution of music. One way of confirming this statement
is to look at the total of music sales since the year 2000.There has been a major drop in
the sales of recorded music while live music has seen a steady rise in its importance. To
add to this fact the largest sales of music across the world is now digital. The two largest
companies now in the industry are Universal Music Group and Sony/ATV Music
Publishing.
Due to the rise in illegal downloading of music a performer’s main source of income can
come from the live performances of gigs, festivals and concerts that they are involved in.
As mentioned previously a performer needs many people around him in order for him to
become successful. For example, a manager, who will support them in many different
aspects of their life and career, an entertainment lawyer who advises and supports them
in the many legal aspects of their career and a business manager who will sort out all
their finances and bookkeeping.
MUSIC INDUSTRY