7.1 Structure and Ownership of the Media Sector - Rebecca

The media sector is a very large industry therefore containing a range of areas within it, these include:

• Broadcast television
• Radio
• Film
• Animation
• Commercials
• Corporate production (DVD and CD-ROM etc.)
• Interactive media (Internet and electronic games etc.) 

For this assignment I will be focusing on the film sector as it the most interesting for me personally, and a sector that I would want to work in, in the future. The film industry (or the motion picture industry) is one of the biggest sectors within the media industry; it involves the technological and commercial institutions of film making. Examples include, film production companies, film studios, film festivals, distribution and many more. Additionally, there are different types of companies that make up the film industry; these include private ownership, public service media, multinationals, independents, and conglomerates.

Private ownership is when an individual(s) owns a company, and example of a privately owned film company is Newmarket Films. Public Service media is when companies are made/run/paid by and operate for the public (the taxpayer), and example would be the BBC. A multinational company is a company that operates in more than one country globally, thereby making them very large and wealthy. Most film companies are multinational, along with being something else, such as being privately owned, or a conglomerate. Independents are smaller companies, they will operate outside of big cooperation’s, and they are the companies that make 'indie' films. Lastly, a conglomerate is a cooperation made up of many different businesses, which bigger companies tend to be as they grow, for example News Corporation. The best way to understand the film sector is by looking at the history of different company types, and what they do/have done in order to grow within the market and become more successful and established.

Private Ownership: Newmarket Films/Exclusive Media Group

Newmarket Films was an American film production and distribution company founded in 1994 by Chris Ball and Will Tyre. It was a subsidiary (another term similar to being privately owned) of Newmarket Capital Group. However, in 2009 Newmarket Films was then taken over by Exclusive Media Group.

Exclusive Media Group is a vertically integrated film company, this means that they take over more aspects of producing and distributing of films in order to increase their companies dominance in the marketplace.  Nigel Sinclair and Guy East founded it in 2008, along with acquiring a minority stake in a U.S distribution company called Millennium in 2012, which in turn allows them to gain more income. Additionally, another way of increasing their source of income they acquired the home entertainment rights to Icon Entertainment International’s library, therefore adding to their library consisting of almost over 900 titles.

Public Service Media: The BBC

The BBC (British Broadcasting Corporation) is the public service broadcaster within the United Kingdom. They are the oldest national broadcasting organisation, along with being the biggest broadcaster in the world in terms of the number of employees (20,950). The BBC are a public service company as they are established under the Royal Charter, which means that it's work is funded by the principally by the annual television licence fee that is paid by the public. This licensing scheme, allows the public to receive live television broadcasts, as well as helping fund the BBC's radio, TV, and online services.

As the BBC operates for the public (the taxpayer), it means that they have the duty to inform, entertain, and educate, along with being commercial free. This means that they are an unbiased platform, allowing there to be different views and help support/boost democracy. The television shows, films, radio shows, that are presented under the BBC are all politically unbiased, as they have the reach the needs to a wide demographic, additionally they have to try and give all points of view a fair airtime so that everything is equal. 

The BBC (like over public service media companies) are non-profitable, they don't aim to make more money through methods such as advertising and budgeting. The earn money from the taxpayer, however all money is used to fund the companies assets - radio, film (etc.). This is what makes them a public service company, they job is to provide the public with a specific service, in this case television, film, radio, and online media. 

Multinationals: 20th Century Fox

Twentieth Century Fox (stylised as 20^th Century Fox) is a well-established American film studio and distributor, it is owned by 21^st Century Fox (formerly known as News Corporation). Founded by Joseph M. Schenck and Darryl F. Zanuck, 20^th Century Fox was a product of a merger in 1935. Horizontal integration was presented when new president of Fox Film (Sidney Kent) merged his company with 20^th Century Pictures, due to Fox Film financially struggling.

20^th Century Fox has eleven divisions, which involve not only film but also television, animation, music, and radio. A division is when a company splits off, therefore allowing there to be more diversification (more/different services) which allows there to be more sources of income while also assisting the company in legal situations (if one division does something, they get the consequence, rather than the company taking it as a whole).

As they are one of the six major American film studios, they have distributed some of the most successful films – they are also credited for the distribution of Avatar by James Cameron, which is the highest grossing film at box-office (see picture). 

20^th Century Fox are a multinational company as they distributed films globally, along with working within different countries. For example, in 2015 Sirena Liu was hired to be the managing director in China.

21st Century Fox

Twenty-First Century Fox is an American multinational mass media corporation that owns 20^th Century Fox. It was the product of a spin-out of News Corporation (founded by Rupert Murdoch in 1979), therefore being split into 21^st Century Fox and ‘new’ News Corporation. 21^st Century Fox is a family owned business, primarily owned by Rupert Murdoch (Murdoch Family Trust). In 2014, Murdoch tried to bid $75 billion to buy and merge with biggest competitor, Time Warner; Murdoch did not win due to the two companies being very different when it comes to organisational objectives – Time Warner is traditionally a liberal organisation with liberal values, whilst 21^st Century Fox is the complete opposite. Furthermore, the merger did not succeed due to money and ownership issues, as Murdoch wanted to buy Time Warner, it would mean that there would not be equal shared ownership.

Independents: Blumhouse Productions

Blumhouse Productions is an American independent film production company. They focus on producing horror films outside bigger, well known studios, and instead produce and release films themselves. Blumhouse Productions was founded by Jason Blum, and have produced successful micro and low budget films including, Insidious, The Purge, and Sinister franchises. One of the most recognisable and successful films produced by Blumhouse Productions would be the Paranormal Activity franchise; released in 2007, Paranormal Activity was a home-made supernatural horror film made by Oren Peli. Originally the film was developed as an independent feature through Blumhouse productions, given screenings at film festivals, however it was then later acquired by Paramount Pictures. The film was made on a small $15,000 budget, but made a huge $193.4 million at box office, which created a massive amount of profit for not only Oren Peli, but Blumhouse Productions - it is the most profitable film ever made, based on return on investment. Due to the success of the initially independent film, it then became a high rising franchise when sequels were produced, but this time were not independent films. 


Although independent companies often have the reputation of being less successful compared to bigger corporations, Paranormal Activity is a clear example on how success doesn't depend on budget, and in this circumstance it can be far more beneficial. Furthermore, although sequels were created with bigger budgets, they still can be created under independent production companies, like Blumhouse, as this helps with keeping with the original style of the film being intact, which is beneficial for the company and customers. 

Conglomerates: The Walt Disney Company

The Walt Disney Company (more commonly known as Disney), is an American multinational mass media and entertainment conglomerate. It is a conglomerate company, as like most major American entertainment companies, it is made up of numerous smaller subsidiary companies. Disney is the second largest media conglomerate in terms of revenue, and Walt Disney and Roy O. Disney founded it in 1923. It was originally established as a leader in the animation industry, and then later on diversifying into film production, television, and theme parks. Additionally, it even started divisions later on, that focused on theatre, radio, music, publishing, and online media. In order to market more mature content, compared to it's usual family-orientated brands, the company has created more corporate divisions. 

The company operates through four primary units (called business segments), they include: 

• The Walt Disney Studios, which involved the company's film, music recording label, and theatrical divisions.
• Parks and Resorts, which included the company's theme parks, cruise line, and other travel related assets.
• Media Networks, which include  the company's television properties.
• Disney Consumer Products and Interactive Media, which produces toys, clothing, and other Disney merchandising. Additionally, it includes Disney's Internet, mobile, social media, virtual worlds, and computer game operations.

These wide range of segments present the company with a large product diversity, this in turn allows there to be more revenue for the company as they can meet the needs of more customers. Furthermore, The Walt Disney Company, being one of the biggest conglomerate companies, have faced many financial and competitive difficulties. From 1991, the company's total revenue was $6,111 million, however it have now grown to a massive $48,813 million - overall Disney's revenue has been at a constant growth, but when it first started it struggled with an era called the 'silent era' as films were not being successful, and ultimately lead to bankruptcy in 1923. Along with this, The Walt Disney Company is so largely recognised, which was something that had to be earned - within Hollywood there are numerous big conglomerate companies that still today stand as a competitor to them. To overcome this though the company perform procedures such as creating more divisions to meet more demands, and therefore keeping their status against local, and global competitors such as Paramount, or Dreamworks.