Film industry

Private Ownership its when a company is privately owned by one person

or a small group of people. Private ownership is funded by advertising.
With private ownership you can see that certain channels may be aimed at
certain audiences. The biggest advantage of private ownership us that as
it runs purely on advertising funds there are many companies desperate to
advertise their movies on TV this is because it is the most influential
source of media today. The disadvantage to private ownership is the
movie may flop as its funded by advertising and not publicly so there is no
research if they public will like it. An example of a private industry would
be FOX owned by Rupert Murdoch. I know that it is a private ownership as
its owned by one person and they use 21 st century before movies start as
an advertisement of who the film is made by.

Multinationals is an organisation that owns or operates production of

goods or service in more than one country. These companies are usually
very large and can be wealthier than small countries. An advantage of
multinational corporations would be that they create jobs and wealth as
well as large profits consumed for developments and research. However
the disadvantages of multinational corporations would be that they would
be closing down smaller businesses as the business is so big and
environment threats. An example of a multinational corporation would be
Sony Pictures, it is a large multinational film company that now owns
different media companies such as Columbia Pictures and Tristar Pictures,
while also owning Coca-Cola. Sony owns studios in the US, Hong Kong,
Madrid, Mexico, UK and Japan where there business is originally from.

Independent independent media companies are often a lot smaller and

operate outside of corporations. These business are normally only located
in one country. Advantages of an independent company is that you can be
your own boss and have a lot of freedom, independent companies gives a
lot of learning opportunities while disadvantages is that this independent
company may not be recognised or be used due to bigger companies
round the world. An independent film is a film production resulting in a
feature film that is produced mostly or completely outside of the major
film studio system. In addition to being produced and distributed by
independent entertainment companies, independent films are also
produced and/or distributed by subsidiaries of major film studios.
Independent films are sometimes distinguishable by their content and
style and the way in which the filmmakers' personal artistic vision is
realized. Usually, but not always, independent films are made with
considerably lower film budgets than major studio films. An example of
this would be Scenario Films, I know this company is independent as they
specialize in production, development and consultancy.

Conglomerates A conglomerate is a corporation that is made up of a lot

of different businesses. Media conglomerates often own many different TV
channels, newspapers, radio channels and movies this can be known as
mass media as there is a variety of different medias in one corporation.
Disadvantage of conglomerate is that there taking over many companies

meaning it decreases the chance of people starting new businesses this

will lessen the competition and the quality of film or program may not be
as good as it was before. While on the other hand the advantages are less
risk and higher profit from the different sources of media in the
corporation. An example of this would be Disney as they own their own
music, as well as TV channel and creating movies.

Cross Media Ownership This is when one company or individual owns

and operates many different types of media such as Radio, TV, and
Newspapers. All media products are owned by a particular producer eg
New Line Cinema produced Lord of the Rings. Each producer has legal
ownership of the particular media text they produce, this eans that they
profit from it. However they are also legally resposible for its contents such
as complaints, regulations and legal action. Cross Media Ownership
started when companies started merging and taking over business eg New
Line Cinema is owned by Disney. Companies and corporations do this to
make a bigger business to get more profit. The advantages of cross media
ownership is that it reduces cost as they have more purchasing power,
another advantage they have is synergy which can also help lower the
cost, also a wider distribution while on the other hand the disadvantages
are branding businesses lose their individual status, privacy and the
flow of information. An example of this would be News Corporation taking
over FOX (21st century) to make them one media corporation.

Vertical and horizontal integrations Vertical integration is when the

production company has the ownership of production, distribution and
exhibition of the fil by the same company, because of this they make
profit. If a media company started producing the DVDs that a film will be
stored on then this would be a vertical integrations. There is also forwards
vertical integration and backwards vertical integration this is where the
company gains control over its previous customers or suppliers.
Advantages of vertical integration is that its greater market share and
improves coordination in production chain, while the disadvantages are
lower quality products and reduced efficiency because lack of competition.
Horizontal integration is when there is a production company expands into
other areas of one industry. This means that the company can develop in a
particular area of production or they can take over or merge with another
company, if they take over the other company they increase their market
share. The advantages are increased market power, reduction in cost and
more synergies, while the disadvantages are increased work load and
responsibilities and anti-trust issues. An example of vertical would be 20st
century as they worked together with FOX to make the film X-men while an
example of horizontal would be blue sky studio they made a movie called
Robots, however FOX owns blue sky studio.

Share of ownership this is when the ownership of the company and

corporation is divided into shares that are owned by different people called
shareholders, however these people vary depending on whether the
company is private or public. If the company is a public limited company
(PLC) they sell shares to the public to get revenue through public

investment, while if the company is a private limited company (LTD) these

shares are split either between the owners and their family, they cannot
sell their shares publicly. Shareholders pay for their share of a company
and in return get some of the profit depending on how big their share is.
Advantages of PLC it helps raises the public profile of the business, which
can help to the business and encourage new customers, shareholders and
owners have limited liability which means they wont lose personal assets
and there is no limit to shares. The disadvantages is that it is costly and
time consuming, original owners may lose control by being brought out by
shares, many PLC are big companies and can face management problems.
The advantages of LTD is that they also have limited liability, more capital
can be raised. The disadvantages of LTD is that only allowed 50
shareholders and the shares are private and cant be sold like you can for
PLC. Walt Disney is an example of a company that sells shares to the
public, I know this because the company itself is public and because it is a
popular and well known company.

Mergers and takeovers Merger is when two businesses join together and
make one business between them. The decision between both businesses
joining together is mutual and agreed. The advantages of mergers is that
the business is now bigger and is more likely going to survive better, it can
lower costs however the disadvantages mean there will be job losses and
can lead to less choice for consumer. While a takeover (acquisition) is
when one company buys out another company so that they own that
company. The advantages of takeover is that risks and costs of new
product development decreased, as well as market power as market share
increases and competition decreases. The disadvantages of a takeover is
that there can be integration problems, may be costly to take over
business leading to financial consequences. An example of this would be
Disney when they brought out by Marvel.

Cross media regulation Is the regulation and control of how much control
companies have over the different sectors of the media in a country so
that they dont have the monopoly over the media and so that the press
remains free which is important in a democracy. Ofcom has a duty to make
sure that the media industry follow these regulations. Parliament has put
in place media ownership rules for TV, radio and newspapers. An example
of this would be when News Corporation merged with FOX there must be
certain laws they must stick to.

Sources of income there is many different sources to bring income into

the media industry theses are:
Selling a product or service
Selling shares if PLC
Getting private investment
Getting government investment (taxpayer)
Loans
Voluntary donations

Product Diversity/ Diversification it is a form of business development.

Small businesses that use this strategy can diversify their product range

by modifying existing products or even adding new products. The strategy

provides opportunities to grow the business by increasing sales to existing
customers or entering new markets. The planning process for this strategy
involves market research, product adaptation analysis and legal review.
Advantages are new customers, more profit from new product, this can
also mean less risk however the down side you can over expand with new
products which may not sell as well as older products, or even lose
products if newer products sell well.

Profitability of product range is how much profit a company will make

from the products that they sell. If a product does not make profit the
company will no longer continue to sell it as they want to make a profit.
This is why companies sell products that are popular to decrease loss of
profit. Music companies listen to the top 40s to see what type of music is
hot at the moment so they can continue making the CD or broadcasting
the song on the radio, while film and TV companies produce the most
popular kinds of films and shows this is also the same with video games. It
is all to make profit. This is why we see more of certain types of genres to
films, TV programs and video games.
Organisational objectives these are the objects that a company makes to
follow for how they want their company to be in the future. Also known as
goals. These goals are set by the owner and are used to measure success.
However these goals must be realistic as they must be reached or
otherwise you cant measure the success of the business. Organizational
objects have 3 functions to control a company plan, motive staff, to be
direct by having a clear focus. The advantages of making objectives is the
fact that it can keep employees focused, sense of direction and purpose,
encourages planning for long term. On the other hand the disadvantages
are if goals arent reached the company plan may not go as planned and
company may fail and start to lose a lot of profit. An example of an
objective a film company would make can be either how many views they
can get on their new film in a week or how much profit it can make in a
week?

Licenses and franchises these are companies where different people can
set up the same business for example McDonalds, WHSmith and Tesco ect
in different locations. To do this you must buy the name and logo and the
ongoing fee to the owner of the franchise, which is normally called a
franchisor. A franchisor is someone who owns the rights to sell the
company as a franchise, the franchisor sells the name and logo and legal
documents to the franchisee for them to run the franchise.

Competitors many different companies have competitors, these

competitors normally sell the similar type of product, and compete for
customers and biggest share in the market. They get there customers by
having low prices and bringing out better products. However these
competitions can be useful as it leads to them becoming well known for
their good products and low prices. Great competitors make great stories
and become popular. An example of two main competitors in the film
industry would be Sony Pictures and Warner Brothers.

Customers customers are the way companies make their profit, by

paying for a product or service. Companies are always trying to get more
customers and get their attention this can be from advertising, lowering
prices, having special deals on, bringing new products out and taking over
or even merging with other companies to take their customers. Companies
must satisfy the customer so that they come back to the company again,
many companies have customer service if any of their customers are
unhappy with the service they have received putting the customer first.

National and Globally competition and trends local stores in the UK tend
to mainly look at national trends and stay competitive with national
companies this is due to other countries having different trends that
people in the UK wont wear. However it is likely to see a little bit of
inspiration from global countries such as America. But UK and other
countries tend not to compete against each other due to different
currencies as they all add up to be different prices. An example of this
would be when many different film companies were making horror movies
about ghosts and hauntings.