LO1 Understanding the Creative Media Sector

Understanding the ownership and structure of the media

sector
Discuss ownership within the film industry.
Major multinational media companies own film studios, TV stations, record laels,
maga!ines etc" and the five major distriutors of the film industr# in the U$ are%
&arner 'ros
United (nternational )ictures
'uena Vista
*+
th
Centur# ,o-
Son#
There are different t#pes of institutions in the U$ film industr#, these are% independent
companies, government odies, television companies and co.productions with /oll#wood
studios0 The film industr# in 'ritain is dominated # 1merican products, 234 of their films
dominate the total U$ o- office0
What is vertical integration?
Vertical integration is where the suppl# chain of a compan# is owned # that compan#0
Verticall# integrated companies are those who own most of the chain of the product or
service that the# are selling0 1n advantage of vertical integration is that it can reduce the
cost as the# are not having to find other companies and ma5e the process of the
production shorter and less time consuming due to not having other companies involved0
1nother wa# to define vertical integration is a situation when two firms in the same
industry at different stages of production come together. This could be through the two
businesses merging together or one firm taking over another. 1 good e-ample of how
&arner 'ros has used vertical integration is /arr# )otter and the 6eathl# /allows7 )art *,
this was created # &arner 'ros in association with /e#da# films and it was distriuted #
&arner 'ros0
8
What is horizontal integration?
/ori!ontall# integrated companies are companies which are set up and owned # different
companies, a production compan# e-pands into another area of one industr#0 This can e
time consuming as the final product has to go through a different compan# for each step of
process which means it isn9t all done # one compan#0 1n e-ample of a film which is
hori!ontall# integrated as it e-panded into other companies while the ma5ing of the film is
Casino :o#ale0 This film is mainl# made # Son# owned companies for e-ample,
Columia )ictures, ut there are other companies involved in the production process such
as an 1merican compan# called M;M0
LO1 Understanding the Creative Media Sector
What is a conglomerate?
1 conglomerate is a compan# which owns a mi-ture of different companies in various
t#pes of media such as% television, pulishing, radio, film and the internet0 1nother term
#ou could descrie a conglomerate in is a multi.industr# compan#, an e-ample of one is
&al5 6isne# which is the world9s largest conglomerate0
What is a multinational company?
1 multinational compan# is a compan# which is 5nown worldwide0 Their aims are to
e-pand usinesses worldwide, minimise cost of production and provide more emplo#ment
opportunities0