- Activision is a major video game publisher that owns several development studios like Treyarch, Infinity Ward, and Sledgehammer Games. These studios work on their biggest franchises like Call of Duty on a rotation basis. - Activision's main source of income is from publishing highly profitable AAA games like Call of Duty and World of Warcraft. The success of these franchises has led to Activision having a net worth of around $5.8 billion. - While Activision focuses primarily on blockbuster shooters and online games, they do have some diversity through owning developers that work on different genres. However, their business largely depends on continuing strong sales of their biggest existing properties.

1. BTEC ExtendedDiplomainCreative MediaProduction
LewisHill
Unit 7: Understanding the Creative
Media Sector
Learning outcome 1:
Understand the structure and ownership
of the media sector
Name: Lewis William Hill

2. 2 TYPE THE DOCUMENT TITLE
Understand the structure and ownership of the creative media sector
Use this workbook to help you with this learning outcome. There is some guidance
and further notes which you should read and then remove, replacing it with your own
answers.
Provide a definition of the following different types of ownership and
provide an example of a company which is owned in such a way.
Private ownership is…
 Private Ownership, people or shareholders who are private citizens rather than
being owned by the government own A single company.
 This is different from a public ownership, which is funded at least from the
general publics profit. Although the BBC is a private company it is still funded by
the public, and it also relies on politicians to allow it to still collect from the
license fee.
 If a company is privately owned it can result in better quality products due to
competition. The threat of losing shares to a competitor forces firms to put their
best products on the line.
 It can become ‘homogenized’ meaning that it can become uniform to other
companies.
Public service broadcasting is…
 Public Service Broadcasting/Media, these are companies who’s content is not
for commercial gain. They do this through content, like the news, arts
programming and religious content. These can be either state owned or
commercially owned.
 State owned, means they are owned by the British Government, whereas
commercially owned, means they make money through selling advertising space
and product placement.
 Public Service Media (PMS), is media channels, which fulfil the same public
purposes as PMS, but instead uses digital media and platforms.
 Public Service Broadcasting/Media – Channel 4 is bae. It is also a commercial
example of a public service broadcaster. It is self-funded through advertisements
but it has a public service remit that must meet in order to continue to
broadcast.

3. BTEC ExtendedDiplomainCreative MediaProduction
LewisHill
Multinationals are…
Multinationals,these are largercompanieswhooperate inall differentcompanies.Theycanbe,
ownedbylargercompaniesorcouldownthemselvesandhave manysmallerbusinesses.For
example,RockstarGames,operate incountiesall overthe world,Leeds, London,Torontoand
Vancouver.Havingdivisionsindifferentcountriescanbenefitthe company,becausethenthey
can understandthe individual marketplace andoften,bettertax arrangements.
Independents are…
Independents,anyformof media,radio, telly,Internet,newspaper,thatisfree of influence by
governmentorcorporate interests.The HuffingtonPoststartedasanindependentnewsblog
before AOLboughtthemin2011. BlitzGamesStudioswasformedin1990; it createda range of
gameswitha strong focuson usingotherpeople products,like SpongeBob,toproduce games.It
closedin2013 afterhavingtrouble raisingfundsfornew games. Anotherexample,Fledgling
Pressisan independentpublisherthatwere basedinEdinburghwhopublishedsmall runsof
booksand eBooks,Formedin200 theycreateda range of adultfictionincomicbooksand
regularbooks.
Conglomerates are…
Conglomerates:isagroup of companiesthatwork like theyare independentbutbigger
company,like Time WarnerInc,owns them. Time WarnerInc. -> WarnerBros. Pictures+ DC
Comics-> Dark KnightRises/Begins
Voluntary or not for profit organisations are…
VoluntaryorNotfor Profit:Theyworkto affectsocial chance. Sometimestheiraimcanbe to
make profit,butthen it isfeedbackintotheirownworkto helpthe companiescause. There are
manyorganisationsthatworkinthese conditions.Some peopleare paidtoworkfor themwhilst
othervolunteertohelpthe organisationout.Accessible ArtsandMedia,whichisbasedinYork,
theyhelppeople withdisabilitiestoproduce theirownmediawhichsupportsthe disabled
community.Wikipediaisanexample of avoluntaryorganisation;itisagatheringof many
resourcestoproduce the online encyclopaedia.
What are some of the challenges faced by independent media companies?
Not well known so they might not get many customers to buy their products, so
this will mean little profits for the company.
They might not have enough money to rent or buy offices to house their staff or
be able to rent/buy a location to make their products.
For example, Kelly’s Storage may not be able to produce enough profit to keep
its storage containers or to expand the business.

4. 4 TYPE THE DOCUMENT TITLE
What are some of the challenges faced by multinational media companies?
To sell the small companies product to their customers.
To leverage the small company’s technology to make one of their products better.
For example, Google paid 25 million dollars for DocVerse due to the fact that DV
built a better way to share documents.
What is cross media ownership?
When a company own more then one media company, like video games and
television.
‘Kerrang!’ is a British magazine company owned by Bauer Media Group. In the
year 2000 they produced a digital radio station and then a year later they created
‘Kerrang! TV’
Magazine Titles, Radio Stations and also shares ownership of a number of music
TV channels.
What is diversification?
Diversification is when a major company spread their ownership of other, different
products that may be related or unrelated, similar to Conglomerates. An example of this
would be Virgin, media, radio, records, and cola.
What is horizontal integration?
 Structures:
 Horizontal Integration,
 Warner Bros. Pictures – WB Records – Dc Comics – WB Games
 Organisations that own more then one company at the same level of production,
 Advantages – Increased profit
 Increase in market shares
 Greater public influence
 Companies work with one another
 Disadvantages – Reduced choice of audience
 Reduced competition in the market
 The creation of monopolies and oligopolies
 Reduced Media plurality
What is vertical integration?

5. BTEC ExtendedDiplomainCreative MediaProduction
LewisHill
Vertical Integrationiswhen the bigcompanyhasdivisionswithinthe companythatdodifferent
thingsinthe productionline. (/Pretendthatthisisgoingdownnotsideways)
 WB. Pictures – WB Video – WB Cinemas
 Production - Distribution – Exhibition
What are some of the advantages of these different ways of structuring a
company?
Advantages
- Complete Control over all the production of their products.
- Great synergies between owned companies.
- Massive profits.
Disadvantages
- Can have too much economic and political influence.
- Reduced choice of audiences.
- Reduced competition for the market.
- Reduces the diversity.
Use the following table to show how the Disney Company is structured.
Production Walt Disney Pixar Marvel
Distribution Walt Disney Home
Entertainment Buena Vista Marvel Television
Screening Walt Disney Motion
Pictures
Hollywood Pictures Marvel Entertainment
What different ways can ownership be shared out?
Shareholders can choose to whether or not to invest into a company.
Companies can own parts of other companies.
Limited ownership rules apply in the UK to control how much of the media people
can control.
For example EA own 20% of Ubisoft.
What is a merger? Why would companies merge together?

6. 6 TYPE THE DOCUMENT TITLE
A merger can happen when two companies want to combine their companies to
either increase profits or to cut costs.
For example Walt Disney merged with Marvel studios, this happened in 2009 for
$4.3 million.
What is a takeover? Why do companies take each other over?
When a bigger company takes over a smaller company.
They can produce the same benefits as a merger but it is not always a mutual
decision.
Taking on their employees and maybe even some unpaid bills.
What is cross media regulation?
This is created to control who can own what across a variety of different media.
There are many restrictions on newspapers groups and their ability to own a
radio stations and TV licenses.
If a national newspaper owns more then %20 of market shares then they are not
allowed to run a radio station.
This is known as the 20/20 rule.
While these restrictions have been changed over the years with a trend towards
deregulation, there are still restrictions in place.
Channel 4 may not hold any channel 3 regional licenses.
Control of the media means control of public opinion.
Should we have restrictions on the amount of media outlets people can
own?
The rule about market shares is that a company can only own 20% of all media
coverage in the UK, they are not allowed to own more then this amount.
This can have its advantages and disadvantages.
The main advantage of this law is that one company can not rule over all market
shares, with this power the company would be able to influence the opinions of
the public either politically or socially.
A main disadvantage is that the company would not generate the most profit out
of this 20% share, if they owned more then that would mean more revenue.

7. BTEC ExtendedDiplomainCreative MediaProduction
LewisHill
You should select an organisation to work with to help you answer the following
questions. It can be in any media sector. Researching your company in detail will
help you produce stronger answers. Activision
What income streams does your chosen company have?
Activision is one of the world’s largest third party game publishers. In 2008
Activision merged with Vivendi Games to create Activision Blizzard. They have
published multi-million dollar games like Call of Duty and World of Warcraft; this
is their main income to produce profit for the company. To produce these games
they own lesser companies, like Treyarch, Infinity Ward and Sledgehammer
Games to create the Call of Duty games each year on a rotation basis. These
types of games produce lots of revenue for the smaller company and Activision
Blizzard. Activations Net worth is around $5.8 billion, which is £4 billion.
What is product diversity? How diverse is your company’s product range?
(Be specific here. Talk us through what they make.)
Activision Blizzard is a major conglomerate and produce massive games to a
range of different demographics. The studios that they own are;
 Beenox – Skylanders
 Blizzard Entertainment – Diablo
 Demonware – Crash Bandicoot
 Infinity Ward – Call of Duty Modern Warfare
 Sledgehammer Games - Call of Duty Black Ops
 Treyarch - Call of Duty Advanced Warfare
 Major League Gaming – Professional Gaming
These different studios create different games to appeal to a larger market to earn more
money.
What advantages does this give your company in the market place?
This gives Activision Blizzard the opportunity to appeal to a wide range of gamers
who like a verity of different genres. It also means that they have more
knowledge of that type of audience so they can learn and refine their games to
tend the needs of their audience.
Finally, it means more profit for the company as they have more products to
purchase, this also makes them better known in other markets and have more
rivals.
Why is the profitability of a product range so important to a company?

8. 8 TYPE THE DOCUMENT TITLE
This is when a company has not so much success on one product but another is
very profitable and is really successful. For example, Activision created a
massive franchise, Call of Duty, which brings in millions and millions of pounds
each year and they expect it to be a success. Whereas Tetris Worlds, is a game
that was produced on a much lower budget then Call of Duty and in reality made
a lot less then its successor. Activision knew this would happen as they intended
for Tetris Worlds not to make much profit.
What advantages or disadvantages are there in making big budget,
mainstream products?
Activision produce Call of Duty, which is probably one of the biggest game
franchisees ever made in the gaming world. This really benefits Activision due to
the fact that it brings in millions and millions of pounds so they can use that profit
to create other games and the next Call of Duty.
What are some of the objectives of your chosen company?
Activation Blizzard has eight main objects these include:
Gameplay First – which means that they focus on making the best game possible
to their best standard of work.
Commit To Quality – They call this ‘Blizzard Polish’, which refers to their
outstanding work that they put into each game that they produce.
Play Nice; Play Fair – Lasting impressions are everything, they strive to make
sure that each interaction with the audience is of a high level of respect, including
players, colleagues and business partners.
Embrace Your Inner Geek – Everyone at Activision is a geek, their unique
enthusiasm helps to shape the fun, creative culture.
Every Voice Matters
Think Globally
Lead Responsibility
Learn & Grow
What are the advantages/disadvantages of taking part in a media
franchise?
A franchise is a product that is authorised by the company so that other
companies can use that product on their products to make a profit, the bigger
company then gets 5% of that profit of that product that has their franchise on.
For example, Activision have released Call of Duty as a franchise so that other
companies can make products with the branding of Call of Duty, Activision then
make 5% of those products profits.
The disadvantages are that the companies will have to many people deciding on
different ideas so there will be a clash of ideas and personalities.
What, if any, products do your company license?

9. BTEC ExtendedDiplomainCreative MediaProduction
LewisHill
Activision Blizzard, have many franchises;
Call of Duty
World of Warcraft
Skylanders
Who is in competition with your company? How successful is your
company in comparison?
Activision’s biggest competitors are Nintendo, Ubisoft, Electronic Arts, Sony and
Microsoft. These are just some of the biggest game publishers in the world,
Nintendo being the biggest as it was one of the first and it was the reason that the
games console is so big today.
Nintendo make some great games and consoles, like the DS and Wii. Some of
the biggest games that Nintendo have created are Mario games, Pokémon and
The Legend of Zelda, these games have made Nintendo one of the richest game
companies in the world.
Even though Nintendo are a massive company, I would have to say that
Activision’s main competitor is Ubisoft as they create similar titles like, Far Cry
and the Assassin’s Creed franchise, which is also one of the biggest and well-
known franchises in the world.
Who are your customers?
Activision’s main customers are gamers (obviously) as these are the most likely
people to purchase their well-known titles and their not so known titles like the
Tony Hawk games.
Another one of their main customers is people with smartphones and tablets as
they can download apps made by Activision. They have recently purchased one
of the biggest app games out there, Candy Crush; this has brought in a lot of
customers and profit for the company.
Which global media trends are affecting your company right now?
Recently Activision bought Candy Crush in the mobile games industry, this is a
massively growing market because smartphones are getting more and more
common by the day. If they can dominate this market, then they will own the
gaming industry as most of their customers will be mobile gamers. Mobile gaming
is already catching up with console and even PC gaming specs and graphics, it
will be on an equal level with consoles by the year 2018, says some scientist.