Disney is a highly diversified media company with ownership across many sectors of film production, distribution and screening. It owns major film studios like Pixar, Walt Disney Studios, and Marvel Studios, and distributes films through Disney Media Distribution and Walt Disney Studios Home Entertainment. Films are screened in cinemas through Hollywood Pictures and Walt Disney Motion Pictures. Disney's product range is very diverse, including films, TV, games, toys, clothing and theme parks, giving it dominance in the marketplace. Its biggest source of profit is box office revenues from blockbuster films.

1. BTEC Extended DiplomainCreativeMediaProduction
Unit 7: Understanding the Creative
Media Sector
Learning outcome 1:
Understand the structure and ownership
of the media sector
Name: Sophie Baker

2. BTEC Extended DiplomainCreativeMediaProduction
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 a company owned by people (or shareholders) who are
private citizens rather than said company being owned by the government. The
difference between private to public ownership is that a private ownership is
funded partly from general public revenues. E.g. the BBC, which is publically
funded as well as relying on politicians allowing the company (media ownership)
to collect the license fee. However, private ownership can have films placing
profits above public interest. As well as leading to cultural decay. Meaning a
popular media can become homogenized.
Public service broadcasting/ media are things like the news, arts programming, etc.
where company who’s content isn’t purely for commercial gain. Could be state owned
(owned by the government) or commercially (privately) owned (makes money by selling
advertising space and product placement. PSM is media, which fulfils the same public
purpose as public service broadcasting. E.g. (State owned – BBC). They use a license
fee to create media across a huge range of platforms. Including TV, radio and the
Internet. Increasingly branching out in to digital services including online only
programmes. E.g. Channel 4 is commercial example of a public service broadcaster.
Gets the majority of it’s funding through commercial means such as advertising.
However, it has a public service remit (they pass their allowance to do something.
Contract. They have to abide their deal so they can continue) that it must meet in order
to continue to broadcast.
Multinational are large companieswhichinmanydifferentcountries.Largercorporations
typicallyownthemortheycouldownsmallerbusiness/intereststhemselves. E.g.inthe
videogamesindustriessuchas‘Rockstar’Gamesare justone of many that operate inseveral
countries.E.g.‘Amazon’.Youcan purchase somethingathome inthe UK but the website,
‘Amazon’,will tell youthattheyproduct(s) come fromdifferentcountriesandsometimeseven
continents.Operatinginmultiple differentcountriescanhave benefitssuchasa better
understandingof individual marketplaces.Andoften,bettertax arrangement. However,
regulationsandlawscanchange betweencountries.Itcanalso be difficulttomaintainandfocus
on everycompanyineverycontinent.Criticsargue thatmultinationalsleadtolesschoice forthe
consumeras well asputtingtoomuchpowerto a small group of people.

3. BTEC Extended DiplomainCreativeMediaProduction
Independentreferstoanyformof media.TV,radioor the Internet.Free of the influence (none-
biased) of eitherthe governmentorcorporate interests.E.g.The HuffingtonPoststartedoutas
an independentnewsaggregator/bloguntil AOLboughtitoutin2011. E.g. BlitzGamesStudios
was formedin1990 that originallystartedoutasInteractive Studios.Creatingarange of games
witha strong focuson usingotherintellectualpropertyonlicense toproduce games.Itclosedin
2013 afterhavingtrouble raisingfunds fornew games.E.g.Disneycharacteror‘SpongeBob’.E.g.
CillianPressisanindependentpublisherinManchesterwhopublishesarange of youngadult/
adultfiction.FledglingPressisanindependentpublisherbasesinEdinburghwhopublishsmall
runs of book/eBooks.Thiscompanywasformedin2000 and theypublishinavarietyof
categoriesthatinclude comicbookandadultfiction.
Conglomerates are a groupof companiesthatare independentbutare ownedbyamuch
largerumbrellacompany.E.g.‘Com-cast’isthe No.1 largestmediaconglomerate.Aswell as
‘Time Warner’(TW own‘DC Comics’and‘Warner Brothers’.All the companiesthatTW ownthey
all act andwork independent.Influencesinthe mediasuchasfilm, TV and publishing.E.g.New
Line Cinema(film)andHBO(TV).Commonownershippatterns,beneficial forcompaniesinthe
mediabecause itcan be expensive.
Voluntary or ‘not for profit’ organisations aimto make profitsand go backin to helptheir
cause.You don’tgeta lotof these inthe media,alotthemare quite small.Mediacompaniesare
builtbymoneyanddrive/thrive onit.VoluntaryorNotfor Profitare quietsmall.E.g.Wikipedia
and BBFC are examples(thereare onlyasmall few).
What are some of the challenges faced by independent media companies?
One of the problems media companies face are keeping up quality and relevance
with people. As well as with the constantly evolving market trends and keeping up
with them for their audience. Such as mainstream media companies due to them
working with television, radio, newspapers, etc. Many television companies
compete with one another for being the dominant channels with their featured
television shows. However alternative media companies tend to be smaller
companies, which are virtually polarised making them less known throughout the
media world. Without being well known they will most likely receive less funding
and support altogether losing business.
What are some of the challenges faced by multinational media companies?
Regulations and laws can change between countries. Also, managing and
maintaining multiple companies can be difficult because your focus can’t be on
every company in every country/ continent you have one. Critics also argue that
multinationals lead to less choice for the consumer as well as the fact that you’re
putting too much power in too small a group of people.

4. BTEC Extended DiplomainCreativeMediaProduction
What is cross media ownership?
Cross-mediaoperatesbyowningmore thanone type of MediaCompany.A companythat owns
interestinnewscooperationanditworksacross the media. Owningvariousnewspapers(e.g.
the Sun) and digital televisioncompanies,Internetconnectioncompanies,etc.The printand
interestsincable networks.E.g.Kerrang!IsbasedinGermanyby BauerMedia Group.It’sa good
thingby havinglotsof interestsinmultiplecompaniesisbecause you’re reachingoutinto
differentbrands(diverse yourbrandwithdifferentplatforms).Aswellasmoney,you’llgetmore
withthe multiple companies.Youcan alsocarry ‘lose makingbrands’meaningacompany(one
of yours) will slowly,orquickly,lose profit(e.g.magazinesbecause of digital media.Synergyor
entrypoints.Thisallows youtobranch outa varietyof productswiththatone brand. E.g. A
Disneybrand(e.g.HannahMontana) will use DVD’s,CD’s,televisionshows,merchandise,the
internet(websites),live shows,magazines,videogames,(you’ll have toworkwithcompanies
like Nintendotomake a game (aswell asgame makers)),etc.Allow youtoworkindifferent
sectors,whichwill allow youtowidenyouraudiences.
What is diversification?
Diversification is where you start off with one thing and branch out bit by bit to do other
things. E.g. you make a record company and then branch out to have a radio station. You
want to be diverse. E.g. Virgin is a good example; diversification is like cross-media in a
way but sticking with your brand primarily. Virgin started off as a music distributer that
expanded to a record label, radio, mobile phone provider, book publishing, etc.
What is horizontal integration?
Horizontal integration is where you own more than one company and have them spread
across the board. E.g. TimeWarner. Is the same as cross media ownership, owning a
record company as well as a publishing and radio company, etc.
What is vertical integration?
Vertical integration is companies owned that go through different levels of production.
Once production (filming, editing, producing, etc.) is done you need to distribute the film
(to homes and cinemas) and then exhibition (they’ll show other films as well, and if it’s a
new line filmit’ll earn even more money).
What are some of the advantages of these different ways of structuring a
company?

5. BTEC Extended DiplomainCreativeMediaProduction
Some advantages of these different ways of structuring a company/ companies
are that they are lucrative because you’re broadening your horizon and
audiences with increased market shares. As well as you owning each stage in
the product, you will have the final say. If one of your many companies goes
down, and stops making money, you don’t have to worry about losing all of your
money because it one of many. It can also be a smaller one so even less money
will be lost in comparison to if you were to loose a bigger one.
Use the following table to show how the Disney Company is structured.
Production Pixar Walt Disney
Studios
Marvel Studios
Distribution Disney Media
Distribution
Walt Disney
Studios: Home
Entertainment
Marvel
Television
Screening Hollywood
Pictures
Walt Disney
Motion Pictures/
Cinema
Marvel
Entertainment
What different ways can ownership be shared out?
Ownership can be shared out by; for instance, with larger companies can buy
shares within the company. The more shares that the company has the more
money they can make/ have. E.g. Disney can own parts of other organisations.
The more share that you have, the more power you have over the company/
companies you have shares with until you are the prime shareholder.
What is a merger? Why would companies merge together?
A merger are when two companies come together to work together so that they
can help with cut costs and increase the profits of their companies. And example
of this is ‘AOL’ merging with ‘TimeWarner’ to create the one company ‘AOL
TimeWarner’.
What is a takeover? Why do companies take each other over?
Takeovers occur when the companies want to produce the same benefits as you
can if you were to do a merger. However, it’s not always a mutual decision
between the two companies. Doing this requires having a smaller company being
purchased by a much larger one.

6. BTEC Extended DiplomainCreativeMediaProduction
What is cross media regulation?
Cross media regulations are created to control what will own what within a range
of different medias. Cross media regulations are there because of the restrictions
with national/ local newspaper groups and their ability to own different media(s).
Such as radio stations and/ or TV licenses. An example of this is if a national
newspaper groups owns more than 20% market share and keeps to their level of
ownership of 20%, rather than more, where they can go and run a national or
regional radio station. This is known as the 20/ 20 rule. Even though these
regulations have been changed over the years there are still restrictions that are
in place.
Should we have restrictions on the amount of media outlets people can
own?
I say yes because it’s known that, for instance, if someone owns multiple market
shares around the world (or even locally) they are more likely to be unable to
keep on track of all of them at a time. This causes many of them to fail. Having
multiple market shares can be good because if one business goes down you
have others to still feed off of. However, having too many can cause more
problems to multiple people and can give too much power to someone.
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.
What income streams does your chosen company have?
One of the ways is through sponsorship and advertising within the product.
Disney is one of the worlds biggest companies because of their connections
within the media. They have direct selling products such as films, television
shows, games, merchandise, magazines, etc. With many magazines, particularly
children’s magazines, they will have asked to advertise their new toy brands and
upcoming films/ television shows. As well as asking newspapers for advertising
their theme park destinations. Merchandising is a huge source of income
because of the films they make. Not only merchandise for children anymore as
well because they are sponsoring the new Star Wars films. So they will sell mugs,
clothes, posters, etc. As well as the more traditional dolls and stuffed animals for
children for Disney animated movies.
What is product diversity? How diverse is your company’s product range?
Disney’s product range is very diverse. Many believe that Disney is only for
children but now that they have deals with Marvel and the new Star Wars movies
they have a wider audience that ranges from children/ teenagers to adults. There
is something that appeals to everyone. Films, video games, TV shows, toys,
clothes, posters, mugs, etc. Which are all relevant to the films. As well as having
multiple theme parks around the world that feature all of the films from Disney,
Marvel and Star Wars.

7. BTEC Extended DiplomainCreativeMediaProduction
What advantages does this give your company in the market place?
Disney is one of the most dominant companies in the market place worldwide.
This is due to their connections in the market place, having branched out to
having so many different markets within their own company. Such as having a
theme park, live shows, film, songs, musicals, merchandise, etc.
Why is the profitability of a product range so important to a company?
The more profitability of a product range the company has the more power they
have as a company overall. Disney has many connections within the media with
pretty much every market place in the media. Disney’s biggest source of
profitability is with their films through Box-office. So far their most profitable film is
‘Star Wars: The Force Awakens’ with over $906 million dollars. And their least
profitable film at box-office is ‘Hercules’, but they still made over $99 dollars.
What advantages or disadvantages are there in making big budget,
mainstream products?
The disadvantage is that the fact that the mainstream product won’t do that well.
Usually it’s the film that has done the worst in box-office that won’t do well with
their merchandise. The advantage of using a big budget is that if they do well the
company will make a much bigger profit than expected. With a company like
Disney it is a kind of ‘luck of the draw’ because you never know if everyone is
going to like their new films.
What are some of the objectives of your chosen company?
Walt Disney’s mission statement was, “The Walt Disney Company's objective
is to be one of the world's leading producers and providers of
entertainment and information, using its portfolio of brands to differentiate
its content, services and consumer products. The company's primary
financial goals are to maximize earnings and cash flow, and to allocate
capital toward growth initiatives that will drive long-term shareholder
value.” Walt Disney was essentially setting out from the beginning of his career
to be a top leading provider for entertainment and information. As well as making
sure that as the years go by with this company they will still hold long-term
shareholder value. Walt Disney was promising and promoting value, quality and
all of this being long-term for years to come.
What are the advantages/disadvantages of taking part in a media
franchise?
An advantage of being apart of a media franchise like Disney is the fact that the
companies name itself is such a large cooperation in the media industry. If
someone like an actor or another company wanting to branch off of Disney they
will become much better known worldwide because Disney is worldwide for all
ages. A disadvantage is always the idea that taking part in said company is that
their work in the franchise might not workout. If you come up with an idea for a
new brand of merchandise and it doesn’t appeal to the consumer you will lose

8. BTEC Extended DiplomainCreativeMediaProduction
money.
What, if any, a product does your company license?
Whatever Disney makes, particularly with a new and up-and-coming film, they will
maker merchandise to support their sales for said film. With all of branching that
comes from that film they will license the costs and rights to them. For instance if
another company, such as a local store, makes something to their brand that is
similar and a copyright the company Disney has the licensing to take it away from
that store so they don’t make money off of their copyrighted product. The same
can come from someone pirating one of Disney’s new films that haven’t come out
on DVD yet. Whenever Disney does work with another store/ company to sell
their products they will receive a percentage of the money earned from that
product sold.
Who is in competition with your company? How successful is your
company in comparison?
Disney’s main competitor is Time Warner when it comes to studio market share.
They were ahead of them in 2013 grossing with $1.8 billion dollars, whereas
Disney grossed in 2013 with $1.6 billion dollars. When it comes to toys sales
Disney’s biggest competitors are stores that don’t sell their products. Many well-
known toy stores like “Toys-R-Us” already sell products from Disney for children.
However, companies like ‘Mattel’ have annual sales of $6.3 billion dollars. Disney
used to work with Mattel to make their toys but starting in 2016 they moved to
work with Hasbro, now making their biggest competitors in toy market sales
because they make toys for big companies such as ‘Fisher-Price’, “Hot Wheels’
and ‘Barbie’.
Who are your customers?
Disney’s has a wide range of an audience that branch from children to adults.
Because of their large stock of merchandise it ranges from items such as ‘All-in-
one’ suits for new-born babies and nursery cots to darker more adult feature films
such as ‘Pirates of the Caribbean’ and t-shirts for adult sizes. So Disney’s
audience ranges from new-borns to an adult audience due to their wide range of
products and attractions. For instance in their theme parks they have roller-
coaster rides have height and age restrictions based on who can go on them.
Yes there is a wide range for their diverse audience but there are restrictions
prepared for them.

9. BTEC Extended DiplomainCreativeMediaProduction
Which global media trends are affecting your company right now?
Global media companies that are affecting Disney’s company are rival movie
production companies such as Warner Brothers Studios. Both companies work
hard to produce anticipated movies throughout the year and compete for the best
hits at box-office. Disney also has been known to compete with sports channels
for ratings in comparison to their channels for children. Particularly when there
are large sporting events on.