1. Media Company Case
Study
Task 1 Understand the structure
and ownership of the media sector
Ryan Sharman

2. ∗ Private ownership is where a certain person with a company owns the
business, this means that it does not need to meet the strict Securities and
Exchange Commission filing requirements of public companies.
∗ Advantages – Strict deadlines don’t have to be met, and commission fling
requirements of public companies are not exchanged.
∗ Disadvantages – Viewers opinion is vital when it comes to them
liking/disliking the company. Profits must be constantly being made at all
time to keep the company going.
∗ http://www.investopedia.com/terms/p/privatecompany.asp
∗ http://www.globalization101.org/ownership/
Types of ownership: private ownership

3. ∗ From gathered information the popular types of public
service in the UK are the BBC and channel 4. These types of
services are owned and funded by the government.
∗ Advantages – Funding can’t potentially be lost because it is
owned by the government.
∗ Disadvantages – Political leaders closely monitor editorial
output.
http://en.wikipedia.org/wiki/Public_broadcasting
Types of ownership: public service

4. Types of ownership: independent
∗ Independent ownership and private ownership are very similar, the only
difference it that independent was privately owned.
∗ Advantages – You are completely in control on what happens towards the
business. No one can tell you what to do, you’re the business.
∗ Disadvantages – Financial things can be at risk because of being a part of a
private ownership. To start it off you maybe have to borrow money which
basically meaning you can be in debt unless paid off. Another disadvantage
is that you can loose money quite easily if business isn’t that good for a
week for example.
∗ http://www.theguardian.com/media/independent-production-companies

5. ∗ A media conglomerate, media group or media institution is a company that
owns large numbers of companies in various mass media such
as television, radio, publishing, movies, and the Internet. Media
conglomerates strive for policies that facilitate their control of the markets
around the world. An example would be Walt Disney Studios.
∗ Advantages – A big advantage would be the income, this is obvious because
of how many places and businesses you owe the more companies the more
money.
∗ Disadvantages – A major disadvantage would be selling the company,
because its a conglomerate ownership to buy it would cost a lot of money.
∗ http://en.wikipedia.org/wiki/Media_conglomerate
Types of ownership: conglomerate

6. ∗ Horizontal integration simply means a strategy to increase your
market share by taking over a similar company. This take over /
merger / buyout can be done in the same geography or probably
in other countries to increase your reach. Examples of Horizontal
Integration are many and available in plenty. An example of
Horizontal Integration will be You Tube, which was taken over
my Google primarily because it had a strong and loyal user base.
∗ Advantages - Allows for greater control of both prices and costs.
(Better economy of scale). Allows for increased presence in
foreign markets.
∗ Disadvantages - Increases possibilities of anti-trust
prosecution. Poor track record for maintaining innovation.
Types of Companies:
Horizontal Integration

7. ∗ Commercial institutions try to combat the power of the BBC by becoming larger and
creating vertical integration. This is where an institution has shares or owns each part
of the production and distribution process. For example: Warner Bros Entertainment
calls itself a fully integrated broad based entertainment company which owns film
studios and the means to distribute the films as well as some of the cinemas in which
they are shown. Warner Bros in itself is part of an even bigger conglomerate called
Time Warner which is a huge media conglomerate institution which uses horizontal
Integration to consolidate its power and profits.
∗ Advantages – Allows companies to get higher and earn more control in the value
chain, they get more responsibility and higher in the pecking order so therefore they
earn more control over things.
∗ Disadvantages – Vertical integration reduces manufacturing flexibility, lengthening
design time and ability to introduce new products.
Types of Companies:
Vertical Integration

8. ∗ Cross-media convergence is the way that different products are produced and distributed on
different platforms. E.g. the Guardian used to be a purely paper-based media product. Now
it's produced and distributed on iPhone and iPad apps, the website, etc. I'd say cross-media
convergence also applies to marketing strategies whereby products are marketed using
print, web, film, TV-based platforms. An example would be the recently new film, The Great
Gatsby. This film has a soundtrack with popular artists from around the world, also these
songs are also covers from artists as well. This meaning if you hear the song this can relate to
the film. Most important of all the The Great Gatsby is also a book which was made into a
film that now has a popular soundtrack.
∗ Advantages – It helps promote the film/book more giving this the option to get a great
audience. It’s a win win scenario for both industries selling both more books and more box
office tickets.
∗ Disadvantages – Because this is two completely different industries, both companies will
have to do their best to impress and meet the standards of the opposite audience.
Cross Media convergence

9. ∗ Synergy is the term used to describe a situation where different entities
cooperate advantageously for a final outcome. Simply defined. It means that the
whole is greater than the sum of its parts. It’s the strategy of synchronising and
actively forging connections between directly related areas of entertainment.
∗ Disney is an obvious example of a synergistic company from the top down from
Film Studio to Kids' TV Channel (where it further plays and promotes its films) to
the Disney Store (in the street and online) where your kids can pester you to buy
all the merchandise and DVDs/CDs they've seen on the TV/Web or in the cinema.
∗ Advantages – A clearly obvious advantages for using synergy is that there is more
money for the companies using this method.
∗ Disadvantages – If a product or franchise wasn’t as popular as expected to be
you will end up losing money because of this.
Synergy

10. ∗ Time Warner - Vertical integration is the process by which a media institution - a
media conglomerate - owns several companies at different stages of production
or the supply chain. Warner Bros. is owned by Time Warner, which is a huge
multi-national media conglomerate. The current assets of time warner are all of
the HBO production including HBO films, HBO Sports, HBO Documentary and
much more. Time warner owns The Turner Broadcasting System and from this
company they have many branches of networks which vary. For example Cartoon
Network along with Boomerang as network of this, these are very popular kids
programme networks. Now moving on onto the bigger companies owned by
Time Warner, Warner Bros. Entertainment Inc is a part of Time Warner along with
Warner Bros. Picture Group, Warner Bros. Television Group and Warner Bros.
Home Entertainment Group. All these side companies underneath also have
companies owned by the side companies like New line cinema being owned by
Warner Bros. Picture Group.
Describe the Structure and of
Ownership of Either The Film, TV,
Gaming or Music Industry

11. ∗ Apple Inc. is an American multinational corporation headquartered
in Cupertino, California, that designs, develops, and sells consumer electronics,
computer software, online services, and personal computers. Its best-known
hardware products are the Mac line of computers, the iPod media player,
the iPhone smartphone, and the iPad tablet computer. Its online services
include iCloud, iTunes Store, and App Store. Its consumer software includes the OS
X and iOS operating systems, the iTunes media browser, the Safari web browser, and
the iLife and iWork creativity and productivity suites.
∗ When it comes to what media sector it belongs to Apple doesn’t make the content it
in my opinion creates the platform for other people to finish off the rest. Apple on
its own manufactures, distributes and markets their products and nothing more.
∗ Apple Inc. is a public company.
Apple

12. ∗ As a corporation, the company is owned by its
shareholders, or people who invested money in it. Bill
Gates owns 51% of the company, Apple. Apple doesn’t own
any companies, however they have a partnership with
Intel.
∗ In 2007 Apple Computers Inc. changed their name to just
Apple Inc. The name change reflects the company’s
newfound emphasis on consumer electronics.
Ownership

13. ∗ Apple is the most vertically integrated company in IT and
communications today.
∗ They make/control/own almost every level of production
from the research and development to manufacturing to
end-user experience.
Vertically Integrated

14. ∗ Apple has many competitors in the business world. When it
comes to smart phones, one of their biggest competitors is
Samsung who produce the popular Samsung Galaxy line of
smart phones. In the world of laptops and PC's/Macbooks,
Apple is in direct competition with Microsoft, Acer, HP and
many others. In the portable music device market, one of
iPods biggest competitors is Microsoft's Zune.
Competitors

15. ∗ Apple is marketing to people who have a few characteristics. 1) Middle/Upper income people
who are willing to pay a bit more for a better user experience. Paying more money for
computer if you have a decent income isn’t a big deal.
∗ As of Q3 2010, Apple had sold about 120 million iOS devices (about 60 million iPhones, 45
million iPhones and 5 million iPads. Here's additional iOS sales since then:
∗ 2010 - 14 million iPhones, 4 million iPads, 9 million iPods
∗ 2011 - 16 million iPhones, 7 million iPads, 19 million iPods
∗ 2011 - 19 million iPhones, 5 million iPads, 9 million iPods
∗ 2011 - 20 million iPhones, 9 million iPads, 7 million iPods
Audience

16. ∗ This is a company that grew extremely fast in little time, that their
management found themselves not being able to keep their operations
and finances under control. Apple Inc. has been forced to reeva luate
and redesign it’s organizational culture and organizational structure to
a void bankruptcy.
∗ The organizational structure of the company has also transformed to be
more competitive in a critical juncture in the company’s history. Apple is
going through major restructuring to regain control of its operations
and finances in order to stay competitive on the global market.
Change in structure

17. ∗ Here is one case study to do with iTunes:
∗ Apple was caught up in controversy regarding the online sales of music in
the European Union where, as a single market, customers are free to purchase
goods and services from any member state. iTunes Stores there forced
consumers and other music buyers to iTunes-only sites by restricting content
purchases to the country from which the customers' payment details originated,
which in turn forced users in some countries to pay higher prices. On December
3, 2004, the British Office of Fair Trading referred the iTunes Music Store to
the European Commission for violation of EU free-trade legislation. Apple
commented that they did not believe they violated EU law, but were restricted by
legal limits to the rights granted to them by the music labels and publishers.
Criticism and Apple

18. ∗ http://www.slideshare.net/belair1981/synergy-and-cross-media-convergence
∗ http://www.globalpost.com/dispatch/news/business-tech/technology-news/120307/apple-
top-5-controversies
∗ http://wiki.answers.com/Q/Who_are_apple's_target_market?#slide=1
∗ http://www.quora.com/How-many-customers-does-Apple-have
∗ http://www.planetoftunes.com/music-industry/music-industry-structure.htm#.U5gOiPldV8E
∗ http://blogs.wsj.com/digits/2012/06/26/why-the-apple-demographic-is-so-
important-to-orbitz-and-retailers/
Bibliography