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  1. 1. Task 1Understand thestructure andownership of themedia sector. P1,M1, D1EXPLAINING THESTRUCTURE ANDOWNERSHIP OF THEMEDIA SECTOR
  2. 2. A privately held company or close corporation is a business company ownedeither by non-governmental organizations or by a relatively small number ofshareholders or company members which does not offer or trade itscompany stock.An example of a private company will be a company called IKEA. IKEA sellhousehold furnitures and other house necessities . Not only do they sellhousehold necessities they also sell food and they have their ownrestaurants in the shops. IKEA has 332 stores in 38 countries. In fiscal year2010, it sold $23.1 billion worth of goods. All of the goods that was sold byIKEA was kept to the owners. This is an advantage of a private ownership,all of the money you earn you get to keep. The disadvantage of this is that ifIKEA start losing sales the people that would lose money are the ownersonly no one else.TYPES OF OWNERSHIP: PRIVATE OWNERSHIP
  3. 3. An example of a public service ownership will be BBC. The BBC their mainjob is to educate, entertain and inform the whole public of the UnitedKingdom. The public all have a say what goes in the BBC because each andevery single household in the UK pay a TV license fee that goes towards theBBC licensing fee. As a public we all have a say what the BBC shows. As apublic we all have a vote of what shows we want and what shows we don’twant. The advantage of public service is that if the BBC produce a show thatdoesn’t do well the BBC don’t lose any money because they get their moneythrough the public through the licensing fee.TYPES OF OWNERSHIP: PUBLIC SERVICE
  4. 4. Multinational is where a company is owned by more than one country. Itsusually a large company which sells goods in many country’s. It can also bereferred to as a international corporation. An example of this will be Canon.Canon is a Japanese multinational corporation specialized in themanufacture of imaging and optical products, including cameras,camcorders, photocopiers, steppers, computer printers and medicalequipment. The advantage of a multinational ownership is that with yourcompany being multinational is that you will gain a lot more profit due to thefact that your company is multinational. The disadvantage of this is that ifyour business across the countries don’t do well financially then the ownerslose money.TYPES OF OWNERSHIP: MULTINATIONAL
  5. 5. An independent company is sometimes referred to as ‘indie’. This is where acompany is independently owned which is very common among new and upcoming bands. An example of this will be an independent record label calledblast. It caters of alternative music style bands who have a specificaudience. A major disadvantage with being a independent label is that notmany people know who you are and it will be hard make money which youneed to order to promote your band to the public.TYPES OF OWNERSHIP: INDEPENDENT
  6. 6. Conglomerate is a combination of corporations that fall into one bigcompany. An example of this will be Wal-Mart. Wal-Mart own a lot ofcompanies world wide. Like Asda, Sam’s Club, Seiyu Group and Walmex.The advantage of a conglomerate ownership is that you will gain a lot moremoney. Wal-Mart for example will make money off theirsubsidiarycompanies such as Asda, Sam’s Club and so on. Thedisadvantage of a conglomerate ownership is that if for example Asda startlosing sales then Wal-Mart would lose profit because they are responsiblefor the subsidiary companies.TYPES OF OWNERSHIP: CONGLOMERATE
  7. 7. Horizontal integration is a lot of companies in one. They share profit. An exampleof this will be Windows (Microsoft). Windows make the software and thehardware is made up of different products such as NVidia, AMD, SATA, RealTekand RAM. Windows will buy certain hardware from different companies givingindividual companies profit. So windows don’t get the full profit for theirproducts.-An advantage is that you will not struggle in producing certain hardware orsoftware-An advantage is that it makes the product more diverse because more peopleare involved-A disadvantage there will be trust issues within companies-A disadvantage is that if one company fails then the rest are more likely to failTYPES OF COMPANIES:HORIZONTAL INTEGRATION
  8. 8. Vertical integration is where everything is done under one roof, an independent companyif you will. An example of this will be apple. Apple make their own hardware and softwareand they do not share it with other companies. The reason for this is so that they makemore profit with all the products that they sell. Even if you have a Windows computer ifyou have an iPhone, iPod’s Mac’s etc. If you want to download music in to your appleproducts you will need iTunes on your Windows computer.-Advantage of Apple is that they gain all the profit that they make-Another advantage is that they gain more control with everything and no communicationis lost-A disadvantage of vertical integration is that if one of apple’s product break apple haveto fix it and pay for the damage-Another disadvantage is that if you’re a small company you will need someone to fundyou due to the fact that you’ll need a warehouse to get started. You will also lose skillbecause you need people to specialize in a certain area.TYPES OF COMPANIES:VERTICAL INTEGRATION
  9. 9. Synergy means when two different things such as two different companiescome together to make something. An example of Synergy will be Disney.Disney is a type of synergy due to the fact that Disney have areas of work inall kinds of media related subjects. When Disney produce films for thechildren they go and watch that film in the cinemas. After that they are morelikely to watch the Disney channel due to the fact that they might seecharacters that they love on the Disney Channel. The companies that willgain profit here will be the cinema companies and the media companiessuch as Virgin, Sky and BT and so on.SYNERGY
  10. 10. Our technology nowadays are very advanced when it comes to cross media.Years ago if you wanted to read the newspaper you will have to buy andnewspaper and but nowadays you can access the news on yoursmartphones. Not only can you access news you can access photos, videos,music, maps and so on. All of these things you’ll be able to do on yoursmartphone. Through the years our technology in terms of cross media havereally developed and progressed over the years. Even now they carry onprogressing as our technology becomes more advanced.CROSS MEDIA DIVERGENCE