Media Company Case Study

Task 1 Understand the structure

and ownership of the media sector

Emily Aldred

Roc-A-Fella Records Roc-A-Fella Records is a privately owned record label founded by Shawn ‘Jay-z’ Carter, Damon ‘Dame’ Dash and Kareem ‘Biggs’ Burke in 1995. Its parent company is Universal Music Group. Private ownership provides communication for the purpose of generating profit for their own company. Private ownership can be held by a small group, a large group, a single person or even a company. With private companies, it gives the company freedom to change their goals or purpose without any great changes.AdvantagesAn advantage of Roc-A-Fella records being privately owned is that they can provide music to only one audience genre if they wish to. They can also sign an act that they wish to without having to appeal of a wider audience than they wish to. Acts such as Rita Ora, Rhianna and Kanye West are all of the hip hop and R&B genre which appeal to their targeted audience.DisadvantagesA disadvantage of privately owned media is the fact that they must please their investors and keep them happy. Since they are privately owned, they must make a profit to stay around. This could result in them being biased by those who invest. Privately owned business’ are also less visible than a publicly owned business. They can also loose business easier.

Types of ownership: private ownership

BBCThe British Broadcasting Corporation is a publicly owned broadcasting corporation. Its main service is to provide broadcasting for the UK, applying to all ages. The shows broadcasted can vary from news to sports to fictional TV shows to documentary's. It is funded by the Government to provide the public with a service. From April 2012 to March 2013, the cost of the license fee for the BBC was £145.50, the equivalent of £12.13 per day or just under 40p per day. With the BBC being publicly owned, they do not need to provide advertising to keep their funding going. AdvantagesAn advantage of the BBC being a publicly owned corporation is that the public are basically in charge of what is shown on TV. For example, if something was aired on the BBC that had something offensive or unsuitable for the audience, the public would therefore complain, giving the BBC the power to reply to the complaints by changing the programme or the time it is aired.

DisadvantageA disadvantage of the BBC is that other people will pay subscriptions to other companies such as Virgin Media and or Sky because they provide more options than the BBC which offers only a couple of channels.

Types of ownership: public service

Types of ownership: independent

Harpo Productions Harpo is an independent company who was built from the ground up by Oprah Winfrey herself. From the business planning stage to opening day, Oprah has does it all. She has hired consultants, staff and others to assist in the business endeavour. She founded it in 1986 in Chicago, Illinois. It has a sister network called OWN (Oprah Winfrey Network) which is 50% owned by Harpo and 50% by Discovery Communications. On this network, Oprah airs some of her own shows such as the famous ‘The Oprah Winfrey Show’ and other shows such as ‘The Rosie Show’.

AdvantageAn advantage of having an independently owned company is that there are no restrictions to how Oprah wants or wanted to set up her business. She also has the freedom to promote other celebrities such as talking and working closely with Lindsay Lohan during her after phase from rehab. With these advantages its also gives her freedom to become the biggest production in the world from a little business.

DisadvantageA disadvantage to owning your own production can be the competition for the specific area that you may be interested in. Every business decision also depends on the owner(s) and there is no branding or guidelines on how to run your business.

DisneyThe Walt Disney Company is a conglomerate ownership type of company, created by Walt Disney and is Americas largest conglomerate ownership company in terms of revenue. Walt Disney created the Disney business on October 16th, 1923 alongside his brother, Roy O Disney. Disney has become one of the largest family running business across the world and has different outlets such as theme parks, shops, TV shows and channels and its own production studio. By being conglomerate, it means combining separate parts of the media industry and combing them into one corporate group, usually involving a parent company, which in this case would be the different outlets of the studios to the shops all under the parent, The Walt Disney Company.

AdvantagesAn advantage of Disney being a conglomerate business is that if one area of the business is failing, there are other ways to improve the loss from the other areas of the business. Also, with Disney having a high profile, it allows it to reach out into different genres, attracting more different audiences age ranges, such as Disney princess’ and princes, for little children and Pirates of the Caribbean for an older generation.

Disadvantages A disadvantage of Disney being a conglomerate business is that money profitcould be lost as something that Disney invested in, might not be well accepted by their audience. Also, there may be a lack of focus in one specific area thatmay need a lot of attention, again, causing profit loss.

Types of ownership: conglomerate

Dr Dre Beats & Apple Inc.Horizontal integration is the formation of two separate company's coming together, to form one company. An example of one of these type integration, is Dr Dre Beats and Apple Incorporated. This collision happened around May 2014, and Apple bought Beats Electronics for an estimated $3billion. This horizontal integration works well as Apple products are quite mainstream, with Ipods, Iphones and Ipads etc. and all coming with music apps to listen to music and the Itunes store, to buy music and or films etc. Most people who own an Apple device, will also own Apple earphones that come alongside their products, but other owners may own Beat headphones as they provide a clear sound and block excess sound out from the surroundings, that they will use with their Apple device, so the two go hand in hand.

AdvantageAn advantage of this type of horizontal integration, is that it is expanding Apples income and audiences, gaining those who like Beats to join the Apple group. It also gives Apple a chance to dive deeper into foreign marketing as Apple’s main genre of technology are smart devices, now it gives them another field of sound and engineering.

Disadvantage A disadvantage of horizontal integration is that it is increasing its ability of anti-trust due to inviting another company into its own terrority. Also, if one area of the company fails, then it drags down the rest, loosing profit and researching how to improve it. Another disadvantage would be their competitors for a similar product as a new product may be released that is better than an existing product they already have. Its similar to putting all their eggs into one basket.

Types of Companies:Horizontal Integration

Warner BrosVertical Integration is where a supply chain of a certain type of company, is owned by one larger company, they also produce, distribute, exhi9bit and exchange their productions. An example is Warner Brothers, because they run a production of film, television and music. They own production studios that films will be produced in, then advertise that film by showing it in their own cinema. Warner Bros. is owned by a larger conglomerate business called Time Warner, which Warner Bros would be the vertical integration of this conglomerate company. AdvantageAn advantage of Warner Bros being a vertical integration business is that there profits and money efforts can be controlled, without the confrontation of other business involved. They also have control over their business.DisadvantageA disadvantage of Warner Bros being a vertical integration is that because it’s a larger business, it can be harder to control with all the different areas of the business in different genres, also because the whole company might not be flexible in marketing.

Types of Companies: Vertical Integration

The Guardian Cross-media convergence is the way that different products are produced and distributed on different platforms. An example of this can be The Guardian newspaper. It started out as just a normal paper, then developed into being available online, and by apps which are accessible by Iphones and other android type devices. An advantage of this type of cross media convergence is that it promotes their product, by advertising the apps and other portable ways of accessing their product. It also would gain them more of an audience as people with androids, would be interested in downloading this app. A disadvantage of this type of cross media convergence, is that it could be hard to manage all types of ways to access the paper, for example if the app failed to work, it would need more attention that say the paper version of the paper, which would cost time and money to fix.

Cross Media convergence

Harry Potter // LegoSynergy is the combined effort of two or more business working together, to get a result that would be greater than the sum of individual work or capabilities. They also come together to promote an item across all types of media. An example would be Harry Potter as it has outlets such as Harry Potter World in London, (which is of relation to Time Warner & where the film was filmed and produced), Harry Potter Studios in Orlando Theme Park in Florida, and it has massive merchandise outlet such as the cloaks, wands, books and maps etc. Harry Potter is also available in games such as the lego Harry Potter, which would be the combining of Harry Potter studios and the Lego industry, to create an outcome greater than an invidudal effort.

Synergy

Tv OwnershipHorizontalITV // Independent Television is one of the UK’s biggest public service TV networks. ITV does not own any radio stations as it focus’ more on television. ITV is more commercial than the BBC as they get their funding from the advertisement customers and the BBC is from the TV license. ITV has about 11 channels, with most of them being aimed at a 14+ age range due to those channels showing soaps and dramas. They do own a children's channel which is called CITV, and a few HD channels. BBC // The British Broadcasting Corporation is also one of the UK’s biggest broadcasting company’s with areas in Tv and radio for all kinds of genres and ages. It is similar to ITV but is a public service, where as ITV is independent. The BBC currently holds 8 channels, with 2 of them being HD, (BBC 1 HD and BBC 2 HD) ones and 2 children's channels, those being CBBC and Cbeebies. The BBC Radio stations have 42 local station s across the country including BBC Radio Merseyside and BBC Radio Manchester. They also have 11 national stations and 6 nations. They also have several individual genres types of stations including BBC Radio Asian Network and BBC Radio 5 live which is sports.

BBC Structure // The BBC had 4 different categories of people involved in their structure. These are Royal Charter which deal with setting out the public purposes and editorial independence. The BBC trust this is setting the strategic direction of the BBC, executives are responsible for the operational management. Then last of all its media regulators are the people in direct charge, also known as the governors. These are responsible for the broadcasting.

VerticalE4 // E4 is a channel mainly aimed at the older teen generation due to the genre of shows they air. E4 is apart of the Channel Four Television Corporation alongside Channel 4, More 4, 4 Music, Film 4, 4 Seven and 4 OD. The channel airs mostly dramas about teenagers life and situations such as Skinks, Misfits and Made in Chelsea. Channel 4 // Channel 4 is a similar channel to E4 but airs mostly different types of shows such as documentary's and is aimed at 25+ age range . The Channel 4 news is quite popular , and sets the tone for the channel which is a more serious theme than its other sister channels.

Describe the Structure and of Ownership of Either The Film, TV, Gaming or Music Industry

GoogleGoogle is an privately owned company that was founded September 4th, 1998 by Larry Page and Sergey Brin. It started out by licensing search engines and then in 1999, Google started using sponsored links that appeared at either side of the search engine bar. Over the last years, Google has grown immensely and still continues to. It has reached out into different areas of media besides search engines. Google have produced their own add on’s to the search bar such as Google Maps, Google Translate and Google images and many more. They have also branched out into email, blogging and even phones, the Google Android. Google are also commonly known for their creativity, such as changing the home page of Google to suit a certain day in history, incorporating the name Google into it. They have also previously changed their system to do practical jokes such as when someone googles, “the answer to life, the universe, everything” from The Hitchhikers Guide to the Galaxy, it provides the answer, 42 and nothing else. When you type “do a barrel roll” into google, the page rolls around as well as typing “google.com/webhp?hl=xx-pirate” into google, will translate Google into pirate.

Google

The owners of Google were originally Larry Page and Sergey Brin that created Google, while they were Ph.D students at Stanford University in 1998.By creating the business together, it gave Google a privately owned status which meant they could personalize the company to how they wanted to see it in years to come. Together they own about 14 percent of its shares but control 56 of the stockholder voting power through supervoting stock. They incorporated Google as a privately held company on September 4, 1998. An initial public offering followed on August 19th, 2004. Its ideal statement was from the outset to “organize the worlds information and make it universally accessible and useful”. In 2006, Google moved to their new headquarters in Mountain View, California with the nickname, ‘Googleplex’.

Ownership

Google is organized by spreading over ten thousand computers around the globe, spreading the workload out evenly. Each time you Google search, it returns the results to the closest geographical data center. Google also has two test domains // www2.google.com // www3.google.com where new algorithms are tested. At Google, eleven “characteristics” are documented. These include having a passion to change the world through the internet, being smart and being non-political. One of the main characteristics, is doing good // “Don’t be evil” is their slogan. Many interviewees testified that they were attracted to work at the company because of the characteristics. With the business rapidly growing, they had to hire people to work for them and as of 2013, Google had 47,756 employees.

Organization

Google’s competitors are other search engines such as Yahoo! Ask Jeeves, Live search and Bing etc. Google does have an effect on these competitors as Google is mainly used to get to these other search engines and Bing stands for Because Its Not Google. With Google having its own internet, Google Chrome, it advertises it on TV and they have created some heartfelt adverts, such as the ‘Coffee’ advertisement about a man trying to get back the one that got away by asking her back out on a date by Google mapping places that they had been previously on dates and renaming the locations and providing Google clips of the two at a certain locations. This distribution effect of these type of adverts, are heartfelt, making the audience want to own a Google account for the hope of similar feeling.

Competitors

Google’s customers are over one million advertisers from small businesses targeting local customers to many of the worlds largest global enterprises, who use Google Ad Words to reach millions of users around the world.Google’s demographic audience is a variety of males and females due to the different aspects of Google to help them out such as blogs, financial advice etc. the age range of its audience is around 21 to 45 in both males and females due to this being the typical age range to start business’, with the help of Google. “During the month of September, Google boasted a multi-platform audience that numbered almost 228.2 million, or around 94.4% of the total digital audience of 241.8 million. That was about 5-and-a-half million more than Yahoo’s total of 222.6 million. Considering that the desktop-only figures for September had Yahoo ahead by about 6 million unique visitors, it’s clear that Google has a sizable lead over Yahoo in the mobile area”

Audience

Over the years, Google have made changes to the way their company runs and functions. Some of the changes are in the business itself and others are for the audiences benefit such as the creation of Google +, a constant sharing network in 2010. They announced in late 2013 some major changes to Google’S SEO (search engine optimization). Some changes may still be going within the business itself to improve working conditions. Google also announced in February 2014 that they would be making changes to Google in Europe which could end in Google receiving a $5 billion fine or 10% of its total annual revenue after being sent to 8 original plaintiffs for evaluation.“We will be making significant changes to the way Google operates in Europe. We have been working with the European Commission to address issues they raised and look forward to resolving this matter,” Kent Walker, Google’s general counsel.

Changes in Google

In the past, Google have received comments of manipulation and misuse of searches in other property’s that concerns people privacy and censorship. A well known Google app called, Google Maps Street View has caused controversy over the years about privacy of peoples homes. Many people complained because they did not know they were being photographed, while others felt you were able to zoom too far into peoples home, invading their privacy. The European Union have also had trouble with Google over the last few years as European Union Officials wrote to Google asking the company to justify its policy on saving the European individuals search engine history for up to 2 years. The letter questioned whether had “fulfilled the necessary requirements” on the EU’s laws concerning data protection.

Controversies

Apple buys Beats Electronics – The Guardian Website – Heidi Moore // New Yorkhttp://www.theguardian.com/technology/2014/may/28/apple-buys-beats-dr-dre-music-streaming

Google Customers // Enterprisehttp://www.google.com/enterprise/whygoogle.html

Google’s audience quote http://www.marketingcharts.com/wp/online/google-still-has-a-bigger-digital-audience-than-yahoo-37886/

Harry Potter // Time Warner Relationshttp://www.forbes.com/sites/markhughes/2013/09/28/why-warner-bros-needs-the-new-harry-potter-films/

How is Roc-A-Fella Recods privatly owned http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=13104283

Harpo Productions Informationhttp://www.oprah.com/pressroom/Harpo-Productions-in-the-News-Press-Releases

Bibliography