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.
