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Structure and Ownership in The Media Sector: Oliver Kaplan

This document discusses different types of media company structures and ownership models. It describes privately owned companies, public service companies, multinational companies, independent companies, conglomerates, horizontal integration, vertical integration, cross media divergence, and synergy. For each type, it provides one advantage and disadvantage as examples. Privately owned companies have the advantage of receiving all profits but the disadvantage of less funding. Public service companies have the advantage of public funding but the disadvantage of less control.

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55 views10 pages

Structure and Ownership in The Media Sector: Oliver Kaplan

This document discusses different types of media company structures and ownership models. It describes privately owned companies, public service companies, multinational companies, independent companies, conglomerates, horizontal integration, vertical integration, cross media divergence, and synergy. For each type, it provides one advantage and disadvantage as examples. Privately owned companies have the advantage of receiving all profits but the disadvantage of less funding. Public service companies have the advantage of public funding but the disadvantage of less control.

Uploaded by

svr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Structure and Ownership in the

Media Sector

Oliver Kaplan
Private Ownership
A privately owned company is a business company owned either by non-governmental
organisations or by a small number of shareholders or company members which does
not offer or trade its company stock to the general public on the stock market. Instead
the company's stock is owned and traded privately.

Advantages and Disadvantages


An advantage to private ownership is that because the company is owned by you
entirely, you receive all the money that is earned.
A disadvantage of private ownership for a company is that it won’t be funded as well as
a public service company. (As there is no money from the public backing it)

A good example of a privately owned media company is Sky.


Public Service
In the United Kingdom, the term "public service broadcasting" refers to broadcasting
intended for public benefit rather than to serve purely commercial interests.

Advantages and Disadvantages

An advantage to public service is that the public are funding the company meaning that
there will be money for the company to fall back on.

A disadvantage of public service is that there is a responsibility to please the public by


having what they want, meaning the company won’t have all of the say.

An example of a Public Service media organisation is


the BBC.
Multinational
A multinational corporation (MNC) has facilities and other assets in at least one country other than i

Advantages and Disadvantages


Access to consumers is one of the primary advantages of a multinational company.
Increasing accessibility to wider geographical regions allows them to have a larger
amount of potential customers and help them in expanding, growing at a faster pace
as compared to others.

One of the major disadvantages to multinational companies are the strict laws that
vary in different countries. Multinationals are subject to more laws and regulations
than other companies.

Apple is a very good example of a Multinational.


Independent
An independent business is a business that is free from outside control. It usually means
a privately owned establishment, as opposed to a public limited company.

Advantages and Disadvantages

An advantage to an Independent company is that there are no restrictions on who,


how or where an entrepreneur should run there business.
However independent companies need a lot of money to set up in the first place
and to continue their business.

An example of an Independent media company would be Film Four.


Conglomerate
A media conglomerate is a large company that owns several companies that provide
products/services in the media industry. Media includes tv networks, movie studios,
theme parks, online digital companies, news papers, record labels, publishing
companies, magazines and radio stations.

Media conglomerates are basically massive vertically integrated companies that


control the entertainment industry. The five major media conglomerates are News
Corporation, Walt Disney Company, Comcast, Viacom and Time Warner.

Advantages and Disadvantages


One disadvantage of a conglomerate is that the company is taking over
another company without having any experience about the industry
and so therefore chances of mismanagement increases.

The main advantage of conglomerate is that it helps the company in


diversification therefore a company is less vulnerable to losses.
Horizontal Integration
Horizontal Integration is a Media Company’s Ownership of several businesses of the
same value. A Media Company can own a Magazine, Radio, Newspaper, Television and
Books. Almost all Media companies have horizontal integration. It helps to create more
money and makes the company more popular.
Advantages and Disadvantages

Horizontal Integration helps companies to reach a much wider audience.

One disadvantage is that the company could have a reduction in flexibility due to
the fact that it is now a larger organisation.

Disney's acquisition of Pixar is a great example of horizontal integration - two companies


of similar size and operation, operating in the same industry, combined to form a stronger
company.
Vertical Integration
Vertical Integration is when a Media Company owns different businesses in the same
chain of production and distribution. A good example of vertical integrated company is
Apple.

Advantages and Disadvantages

Vertical integration gives a company one hundred percent control of all aspects of their
business. They have the ability to dictate exactly the quality and types of materials that
they want to be used, how they want them to be produced, and how much they are
sold for. This gives the company one hundred percent of the profits the company
makes.
In order to integrate vertically, a company must have a very large amount of money to
invest in the first place. They have to purchase factories, hire mass amounts of staff,
and control all of their new facilities. This makes vertical integration nearly impossible
for smaller companies.
Cross Media Divergence
Cross Media Divergence is when a company produces two or more types of media.

A good example of cross media divergence is when music artists work with film
companies to produce soundtracks for a film.

Advantages and Disadvantages

Sometimes when a conglomerate becomes so big and powerful they are forced to split up by
the government. An example of this is Microsoft. This is a huge disadvantage to cross media
divergence.

The advantages of cross media divergence are that they receive much wider distribution of the
Synergy
Synergy is the simultaneous release of different products to boost both. Synergy can be
used most often by bigger companies as the different elements work together to
promote linked products across different media.
A good example of synergy is Disney. As well as releasing a film, Disney also
release games, clothing, DVDs, CDs etc to boost sales.

Advantages and Disadvantages

One advantage of synergy is that both products will be able to gain from profit increases as the

However many more risks are involved with synergy, as companies start making busine

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