LO1 Understanding the Creative Media Sector

Understanding the ownership and structure of the media

sector
Discuss ownership within the film industry. (Warner Bros.; Paramount Pictures; Walt Disney;
Columbia Pictures; Universal Studios; 20
th
Century Fo!
The big six are known as the biggest companies in the filming industr! The are "arner
#ros$ %aramount %ictures$ Columbia %ictures$ &'
th
Centur (ox$ "alt )isne and
Universal Studios! The are known as the big six because the are the ones who make the
biggest movie productions! The have lots of distributional places that sort out things like
making their movies into )*) or make it into cinema!
Company Film Example
"arner #ros +ravit
%aramount %ictures (orrest +ump
"alt )isne ,laddin
Columbia %ictures +hostbusters
Universal %ictures -!T
&'
th
Centur (ox ,vatar
There are hundreds of big film companies out there and .uite a lot of them seem to be
owned b /big six0$ an example would be )ream"orks ,nimation$ it is owned b &'
th

Centur fox! ,nother example would be 1ew Line Cinema2 it is owned Time "arner$ which
is a label of "arner #ros!
The #ig Six dominate the film industr2 the own 3'4 of all the media companies! This
helps them with making their films bigger! The own a lot of the smaller companies in the
production chain to help to make it cheaper and .uicker to release films into )*)0s or what
goes into what cinema! ,ll six of the big companies own hundreds of smaller companies
and some rather large companies too$ the reason that the are so big is because the gain
so much mone from all the small companies it helps them bu all the others! The big six
have their main companies in San (ernando *alle and 5ollwood! The current ma6or in
the film business is "arner #ros$ the own 13!14 of all shares in the ,merican and
Canadian market!
What is vertical integration?
*ertical 7ntegration is when companies own the entire chain of production! The companies
that make the final product what it is! ,nother wa to explain it would be looking at
something like a newspaper2 the big compan owns all the things like the paper and 7nk
Compan and the tree that made the paper!
%ros 8 Companies can benefit b developing a specialit product and selling it through
their own retail outlets!
7t is a lot .uicker and cheaper to do it from their own branches!
7t profits all their own companies!
Cons 8 %roduct development and retail and distinct businesses and doing both is going to
take a lot more work!
,ll the smaller companies are going to have a reall hard time if the big six own all the
LO1 Understanding the Creative Media Sector
companies!
,n example of *ertical integration would be /5arr %otter and the )eathl 5allows9 %art &0
"arner #ros did the production in association with 5eda films!
Then distributed b "arner bros
Marketing was then done using several of time warner0s companies$ like 5#O and C11!
What is horizontal integration?
5ori:ontal 7ntegration is where a compan develops b buing its competitors in the same
section of the market$ so it is basicall a compan buing all the smaller companies in the
same area the are looking at to give it a higher chance!
%ros 8 Media can transfer easil$ newspaper could be transferred onto an online website!
Consolidates the industr and creates monopol$ thus helping the compan gain power in
the market!
7ncreased market power!
;eduction in the cost of international trades due to foreign markets!
Cons 8 The Compan will expand too .uickl and will then have problems with doubling up
6obs and have problems with resources!
Companies fail to materiali:e the amount the gain from the other snergies!
What is a conglomerate?
, Conglomerate is when a compan owns a large amount of other companies in loads of
different areas such as T*$ radio$ movies and 7nternet! "alt )isne is currentl the largest
conglomerate compan in ,merica!
,n example of a conglomerate compan would be ##C$ the own several radio and T*
stations in the U< such as ;adio One$ ##C Two$ ##C Three!
What is a multinational company?
, Multinational Compan is a big compan owns more than one business in more than
one countr! ,nd control productional services! The have a ver important role in
globali:ation! There are loads of multinational companies$ some examples would be2
Cadbur0s$ )unkin )onuts$ Mercedes=#en:$ Microsoft$ Starbucks$ "arner #ros and
*odafone! The one 7 will be mentioning is *odafone$ it is a #ritish phone contractor$ the
work worldwide in over 1>1 countries!