Chapter
one- Understanding structure and ownership in the creative media sector
The creative media industry consists of film, TV, radio, publishing,
advertising and marketing, animation, interactive media, games, and photo
imaging. Within these sectors, there are several subsidiaries that exist, thus
making the creative media industry even bigger. In this assignment I will be
explaining structure and ownership in the creative media sector.
Film
The film industry is
structured around the various steps of production which include Development,
pre-production, production, post production, and more- as shown by the below
poster which was in the December 2015 empire magazine.
Different companies can have different roles in the film development process
depending on their relationship with the company that has total control over the project.
For example, the film
Elf was a co-production between New Line cinema who are credited as the
distributors and Guy Walks Into A Bar Productions.
The film industry has several ways of earning a profit that includes retail sales, downloads,
advertisers, sponsorship, cinema box office, CD and DVD sales, as well as
merchandise.
An example of a huge film company is Walt Disney Pictures. Disney currently
has its own production and distribution sectors for the different types of
films it produces.
(Wikipedia)
The whole Walt Disney
Company employs 58000 people and has sales figures of of $49.78 billion according to Forbes
Most Valuable Brands.
One of the reasons why Disney is such a big company is because it is a
Conglomerate and owns companies such as LucasFilm and Pixar, as well as being
involved in all of the creative media sectors such as TV (Disney Channel) and
Radio (Radio Disney).
Television
Television is one of the
biggest creative media sectors. In 2013 there were 121,910 employees in
the TV broadcasting which was more than both the radio employees, and the cable employees. The
structure of television is focused on five parts: Creation, Production,
Aggregation, Service, and Delivery. Creation and Production are both carried out by the
production company.
Aggregation is carried out by a channel or network and is the packaging of several TV shows onto one
channel. Service and Delivery are both carried out by cable or satellite
companies. The whole TV sector employs over 55,900 people.
The BBC is quite possibly the biggest UK Television company because they have 10
live TV channels- two for children- as well as BBC iPlayer on which people can catch up on
their shows through. There are 20,951 employees within the whole of the
BBC.
The BBC is publicly funded through the obligatory license fee that everyone has to
pay to watch television, whether coloured or black and white, although the
latter is cheaper. Between 2013 and 2014 66% of all license fees paid went
towards TV, which equates to £2276 million or £8.00 per month, per
household.
The sources of income vary between whether the TV company is private (like
Disney Channel) or public (like BBC) as the BBC's income comes from the licence
fee as well as merchandise sold and DVD's sold. The Disney Channel would have
CD sales as another source of income as almost everything they produce for the
channel has a soundtrack.
Radio
There are two types of
radio which exist- publicly funded, or commercially funded
(advertisements).
Different radio stations
can focus on different genres, whereas some just focus on what is popular
like Capital.
Radio employs over
22,800 people.
Publicly funded examples
of radios are all of the BBC radios, whereas an example of a commercially
funded radio station is Capital FM. Capital have different radio
stations around the country, as shown by their website.
Capital FM is funded by
adverts played, hence why it is known as commercial radio.
In the BBC there are
1300 employees working on their radio.
Publishing
The sector known as publishing includes books, magazines, newspapers and
information services.
The biggest book
publisher in the world, according to The Passive Voice is Pearson, which is a
subsidiary to Pearson PLC. Another subsidiary it owns is Edexcel, the exam
board. The company primarily produces resources for schools and colleges, and
had 40,000 employees as of 2009.
This is the structure of the Publishing sector that shows the outlets of income that exist for
each part of the book. This therefore shows who is involved in the process.
Advertising and Marketing
Advertising and marketing refers to the promotional material created for the
other sectors, and can include logos, posters, and more. This sector employs
21,455 people. Media advertising and marketing has increased in popularity in
the past few years as a job, and presently many universities do a course solely
focused on media advertising. The main source of income for Advertising would
be client jobs such as logos or posters.
Animation
The animation sector has
over 4600 people working for it in the UK, which doesn't seem like much.
Animation can be used in films, TV shows, music videos, and advertisements.
Animated films are
for the most part dominating the cinema box offices.
The biggest animation
film companies are:
- Pixar
(A subsidiary of Disney) which had over 1200 employees in 2011 and
released big films such as Inside Out (2015) and Toy Story (1995)
- Dreamworks
that had
2200 employees in 2013 and has released big franchises such as Shrek and
Madagascar.
- Studio
Ghibli (A subsidiary of Toho Co) that had around 300 employees in 2012. The
studio has released films like Howl's Moving Castle and Spirited Away.
The sources of income
for the animation sector are similar to films as it is DVD sales, cinema ticket
sales, merchandise sales, and soundtrack sales.
Interactive
Media
Interactive media refers
to websites and media that can be shown on interactive televisions which
include moving pictures that interact with the viewer.
Examples of interactive
media websites can be social networks such as Facebook and Tumblr. Video games also come under the
interactive media sector although they have their own sector.
This is the structure of
the interactive media sector according to ATSF. This sector employs about
40,000 people.
Games
This is the structure of
the games sector. Either
the same company or different ones carry out the first four steps.
Retail is the place that sells the game.
In 2010 there were 32,000 employees in the games
industry.
The biggest game
companies according to revenue are as follows:
The sources of income
for the Games sector are the games consoles, the games, and the add-on packs for
games.
Photo
Imaging
The photo-imaging
sector includes image producers, photo retail, picture libraries and agencies,
manufacturers, and support services (for example equipment hire and repair).
The sector has around
44,000 people working in those five sections, in over 14,000 companies.
The main source of
income for the photo-imaging
sector would be jobs from
outside clients such as retouching or airbrushing.
Advertising funds private ownership television
and most of the time applies to a certain audience only, for example MTV aims its TV shows
at 16- 24 year olds. This is an advantage, as they know they are sticking to what they are
good at rather than trying to please everyone.
The licence fee that everyone has to pay funds
Public Ownership television, like the BBC. As it is public, the shows have to be A- suitable for
everyone viewing (or played after watershed) and B- able to please everyone. This is why they
have an array of channels, as they please more people by having audience
specific channels like Cbeebies.
This is an advantage as it increases their outlets.
A Multinational company is a company that controls production in more than one country
other than their home country. An example of this is Universal, as their films
are released in many countries, and an advantage of this is that the audience
is diverse.
Diversification is the ownership of unrelated products by a company
that did not
originally start out that way. An example of a diversified company is Virgin as
they started out distributing music, then created a record label, and developed
a mobile phone distributor company, as well as an airline and many more. An
advantage is that they have full say over what happens in those companies and
they all bring money into the overall company.
Share of ownership is common when two conglomerates take over a
company and both have ownership of it. CBS and Viacom have a large portion of
ownership of National amusements (Theatre Company).
Product Diversity (or product variety)
refers to the different products that the company has to offer. This could relate to
diversification- like Virgin- or could relate to a company creating different products
for one media sector. For example, the BBC has to have a variety of products
available as it is public service and has to please everyone, so they have
shows for almost every target audience.
Profitability of Product range is a phrase that refers to companies using what is
popular and sticking with it to make more money. An example would be Disney
using Frozen so much. Post success of the original film they have since
released a short film, tonnes of merchandise relating to the film, and there is
a sequel planned currently. Another example is film companies releasing Horror
films in autumn,
and family movies when school isn't in session.
Performance against financial concerns relates to how well
companies do against competitors or whilst there are troubles in the general
economy.
Organisational objectives are the ultimate goals and objectives of
a company. For example, Pixar's
objectives as written on their LinkedIn page are
'To combine proprietary
technology and world-class creative talent to develop computer animated
feature films with memorable characters and heart-warming stories that appeal to
audiences of all ages.'
Licences and Franchises seem similar but they have different
meanings. Licensing refers to a business offering another
business the chance to create their products for a fee. An example of this
is how Disney
sells their
characters to be reproduced.
A franchise is a collection of media that has come from
an original media product. Shrek is a franchise as it has four films, and
several short films for which the idea was carried on from the first film.
Competitors exist in media whether you are a small company, or a
big conglomerate company. An example of competition in terms of film is Disney
Pixar as a competitor of Illumination pictures. They both had family
blockbusters out this past summer, with Pixar releasing Inside Out
and Illumination releasing Minions. Competition can be a good thing for a company
as it can push you to be better.
Customers are important in all sectors of media as no one would make any money
if there were any customers. A company that especially needs to please its
customers is the BBC as it is funded through the obligatory License fee and
therefore has to appeal to everyone paying that.
Voluntary ownership is the section of creative media that is not produced
for a profit. Several radio stations, such as ones in some hospitals,
are voluntary and not created for a profit.
National and Global competition is the way in which companies
compete with each other despite long distances.
Trends are figures that allow media companies to see how well themselves
and competitors are doing presently, and how well they will be doing in the
future if they keep the same sales figures as they have now.
Conglomerates are big media companies (or parent companies) that own a lot of
smaller companies which are called subsidiaries. An example of a hugely
popular conglomerate is The Walt Disney Company; which has subsidiaries that it owns (Pixar, LucasFilm, Marvel)
as well as subsidiaries in almost all of the creative media sectors (radio,
print, film, animation, TV, Interactive Media, and Games). They also have
subsidiaries in the music industry.
Independent media companies include any company that isn't influenced by the government or
corporate interests. An advantage of being an independent company is that you
have a niche target audience and can create the films you want.
Cross media ownership is the diversifying of a company to begin to
create different products. An example of this is Disney creating a record label
for the soundtracks of their films.
Mergers are the combination of two media companies coming together
to create a bigger media company; an example of merging within the larger
creative media industry is the merging of Virgin records and Mercury
records to create the record label Virgin EMI. An advantage of a merger
like this is that both companies originally had artists signed, so
these artists became a shared product when the companies
were merged.
An example of a media takeover is when Virgin Media was sold to Liberty Global.
A takeover is
when one company gains control of another one.