Task 1 – Understand the Structure and Ownership of the Media Sector

Sector

The creative media sector includes a wide range of industries, each employing large numbers of people in a variety of creative and technical roles, such as:

• Film
• Television
• Publishing
• Interactive Media
• Games Development
• Radio
• Photo-Imaging
• Advertising
• Animation

The UK Games industry forms a major part of a global industry that is gaining in importance and prominence. Overall the Games industry comprises of around 485 businesses that are split into 3 sub-sectors:

• Games Development Companies
• Games Publishing Compaines
• Games Support Companies

The UK Games industry currently employs just under 7,000 people. The global market for video games is projected to grow at an annual rate of 10.6% and is estimated to reach $86.7 billion in 2014.

Structure and Ownership

Private Ownership

Private ownership is when a company is owned privately by an individual or individuals.

Public Service Media

Public service media is media companies that made by, run by, payed for by and operate for the public (taxpayer). The BBC is an example of a public service broadcaster, it is payed for by the TV license and isn’t run for profit.

Multinationals

Multinational corporations are companies that operate in more than one country. They are large companies that can in some instances be more wealthy than some small countries.

Independents

Independent media companies are often smaller companies that operate outside of corporations.

Conglomerates

A conglomerate is a corporation that is made up of a lot of different businesses. It holds the majority stake in all of it’s business that operate separately.

Voluntary

Voluntary companies are known as not-for-profit companies. They rely on volunteers to run them and make enough money to keep operating.

Cross-Media Ownership

Cross-Media ownership is when a company or individual owns and operates many different media formats such as TV, Newspapers and Radio.

Diversification

Diversification is when a company branches out into new ventures in order to offer more service & bring in a great deal of revenue.

Vertical and Horizontal Integration

Vertical integration is when a company starts to take over more and more aspects of the producing and distributing of the end product that it sells in order to increase that company’s dominance in the marketplace. Horizontal integration is when a company takes over another company in order to increase it’s own market share.

Share of Ownership

Share of ownership is when the ownership of a company is divided into shares that are owned by different people, these are called shareholders, they have to pay for their share and in return get a slice of profits that the company make.

Sources of Income

There are many sources of income that can bring money into a company, such as selling a product or service, voluntary donations and getting private investment.

Profitability of Product Range

Profitability of product range is how much profit a company will make from the products that the company sells,if a certain product doesn’t sell well and is unprofitable then the company wouldn’t continue to see that product. In order to decrease the risk of making a loss companies will tend to sell products that are popular.

Licenses and Franchises

Licenses are a contractual agreement to use a brand name, patent or property that is owned by another business entity. A franchise is a business that operates under an existing brand name.

Competitors

Competitors are any individuals or entity which are rivals against one another. Companies which are in the same industry that offer a similar product or service are competitors.

Customers

Customers are individuals that receive or consume products, they also have the ability to choose between different products and suppliers.