Media industries operate similarly to large businesses by manufacturing products, creating demand, and seeking profits. However, media production has additional complexities like unpredictable costs and demand, and short product shelf lives. Large media companies dominate the market and pursue global strategies to exploit new areas. Ownership and control of media is an important issue due to the ability of owners to influence cultural messages and ideology in media products for business and ideological reasons. Modern media companies are increasingly large and global conglomerates.

1. Media Industries
Trigger sheet
Like other Businesses
Media industries much like other large business corporations. Media production is an industrial
process. Manufacturing product , Supplying & constructing demand at a profit. Have fixed
assets, production areas, distribution and exchange. Use marketing and research.
Media industries exist in saturated and highly competitive market. (west)
Large profits to be made, attracts individuals (Murdoch ) and large conglomerates in search of
wealth , power and influence. Many companies have fallen along the way e.g., Utd Artists,
and many smaller film co.’s, Sunday correspondent, new media co’s etc.
Many media conglomerates are now developing global strategies to develop power/influence
and profits in under exploited areas of the world e.g. Asia (China). see. Murdoch‘ Star’ TV.
Differences with traditional business
- raw material not homogenous (cultural and aesthetic dimension)
- costs and demand unpredictable
- staff costs usually higher
- shelf life of product can be very short (see news stories)
- large amounts of revenue do not come directly from product sales but from advertising space
advertisers can influence product.
Media production is a complex and risky business large profits or losses possible
OWNERSHIP AND CONTROL
Big issue in Media Studies - why? - to do with nature of product. The Media product
contains
- ideology (ideas) - factual material (news) - cultural messages to do with how we understand
ourselves and the world around us. Possible Commodification of culture.
Given nature of products opportunities exist for owners and producers to influence the product
for ideological and business reasons (profit,control) . Large businesses dominant -
opportunities and access for smaller independents etc. are limited.
Control of the media = power and influence see. Hitler, Stalin, totalitarian regimes.
Murdoch,Gates.
Modern Media companies a becoming larger and more Global in Nature and are usually parts
of conglomerates. (larger companies)
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Conglomerates - ‘ divisions within a much larger company on the principle of multiple
profit centres which reinforce each other ... designed not only to generate revenue and profits,
but to keep such monies within the company’ Gustafson 1988.
Some of the major media conglomerates or large corporations 1999.
- News international ( 20th cent. Fox, Newspapers etc.) Microsoft, Disney (miramax etc.)
Viacom (paramount) Time Warner ( films ,cinemas, CNN, music, books etc.)
- British/European BBC, Reed Elsevier, Carlton, Pearson
Changes in ownership - keeping on the bandwagon
The contemporary media business environment is constantly changing new takeovers and
incorporations are almost daily events. Who owns who? it is difficult to keep up with.
Company’s are very active - the promise of larger profits driven by new media technologies
and the emerging global market has contributed to a sometimes chaotic scramble for influence
and power within the new market place.
Structure of Media Industries - integration
How industries are organised and structured can have an influence upon the nature of the
product produced. The issue of integration has always been important.
Vertical Integration
refers to when an organisation has control over all areas of the production process.
e.g. the Hollywood studios have from time to time controlled all areas of production ,
distribution and exhibition. In the past it has meant that newspaper companies even owned
the trees from which paper was made.
Horizontal Integration
refers to when media industries aquire control of their competitors in a segment of the
production process ( see cinema chains, BskyB, news international)
If one organisation is deemed to control nearly all the market then a monopoly may occur.
This is sometimes seen as anti competitive and governments may intervene. (see Microsoft)
An Oligopoly is when a small no. of media companies of roughly equal status control the
market - most media industries are oligopolies.
Governments attempt to regulate Media industries and anti monopoly laws etc.exist. It is
becoming increasingly difficult for national governments to regulate large international
conglomerates. ( world government ? W.T.O ).
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Types of Business
With reference to the Media Industries the terms Public sector and Private sector will
frequently be used.
Public Sector organisations - usually set by and funded by governments to provide a service
to the community and to be some way accountable to it. Most countries have some form of
public service broadcasting. Usually via TV, radio and often film industries are subsidised.
e.g. The BBC is a public service broadcaster.
5 main characteristics of public service broadcasting (Hesmondhalgh)
- accountability to public - deomocratic, beyond accountability to market forces
- Some element of public finance - i.e. licence fee, sale of programmes, income fed back into
programming
- regulation of content - restrictions on adverts,violence etc. balance, impartiality, serve
interests of minority groups
- universal service - service across all nation to and for all peoples and interests
- audience addressed as citizens - not consumers, schedules not determined by ratings,
a distance from vested interests i.e markets, goverments etc.
Private Sector - Companies set up to provide income and profits for individuals and
shareholders. A large proportion of media industries are in this sector.
Types of private enterprise would include, sole trader, partnerships, Public limited companies
( capital raised through shares), Private companies, co-operatives (see Magnum).
Regulation
The trend is away from publicly owned companies towards privatisation (lightly regulated
organisations) has continued since Thatcher like policies of the 1980’s not just in this country.
In England the 1990 Broadcasting Act - aimed to keep broadcasting services as independent
as possible. Regulatory bodies such as the ITC (independent television commission) were set
up. As were Channel 4 , S4C and about 50 independent local radio stations.
Channel 3 ITV, was released from its obligation to act as a public service.(C 4 still has this role)
BBC required to commission 25% of broadcast material from independent producers.
Led to ‘producers choice’ the increased use of outside production facilities. (cheapest)
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Direct Consequences of the Act on Broadcasters
* Production base of BBC and major channel 3 companies has shrunk
* British Broadcasters make some types of programmes with co-production deals (often
with overseas broadcasters
* More small independent companies
* Broadcast staff more likely to be freelance or employed on fixed term contracts.
Other areas of regulation that that affect Media Industries include;
Defamation laws (civil and criminal)
Libel - when an unjustified attack is written, published or broadcast in some way.
Most media producers, particularly journalists need to be aware of this.
Slander - a verbal defamation
The media can justify their output
if it can be proved to be a complete fact.
If something is deemed to be fair comment, in good faith.
If something is in the greater public interest and is protected like parliamentary reporting.
National Security - producers most be aware of laws such as The Official Secrets Act 1911,
and The Prevention of Terrorism Act.
Copyright
Part of intellectual property law. Originators of material such as books, plays, songs,
photographs etc. have automatic ownership of that piece of work - although its advisable to
obtain legal protection. You cannot copyright an idea, only the application of that idea.
Such work cannot be used or copied without the permission of the originator , usually with
some form of royalty or payment.
A difficult area to regulate. (see songwriting challenges).
Regulatory bodies
There are a number of bodies who have been appointed to oversee the regulatory framework
within which the UK Media operate. These include;
ITC & Radio Authority , British Board of film classification (BBFC), Monopolies and Mergers
Commission, Press Complaints Commission (PPC) Advertising Standards Authority (ASA)
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ITC - set up by the 1990 broadcasting act
Awards licences to independent broadcasters inc. cable and satellite. Regulates content.
The Radio Authority does much the same thing for Independent radio.
The British Board of Film Classification
An independent, non government body which establishes the classification of films.
It is local authorities who decide whether to show a film in their area, although they usually
follow the BBFC,s advice.
Some important laws have to be adhered to incl. the Obscene publications act , The
Cinematograph Film (Animals ) act (1937) , blasphemy, libel and the Protection of Children
Act 1978.
Issues of censorship
- Who censors ? the board, individual, parents, government. ? cultural factors
- Why censor ? do we need censorship , in what areas.
Issues of freedom and public interest
Issues rarely clear cut. see areas of propaganda, new media, individual preference.
The competition commission (1999) (replaced the monopolies & mergers commission)
Set up to ensure that no company has too much control over the sensitive media industries.
Becoming increasingly important, due to trends in cross media ownership.
Press Complaints Commission
Created by the newspaper industry itself in 1991, replaced the press council. following criticism
over intrusions of privacy.
Its role today includes the following areas; (based on the 1993 Code of Practise)
the right to reply - gives people or organisations the right to reply to criticism in the press.
Although this is not enshrined in law.
chequebook journalism - to do with bribing people to give exclusive stories to newspapers
Other areas include - printing inaccurate, misleading or distorted material.
Newspapers are expected to distinguish between comment, conjecture and fact.
Other issues include privacy , use of listening devices , misrepresentation , harassment,
discrimination and the interviewing and photographing of children.
Advertising Standards Authority
The ASA code demands that advertising is Legal, Decent, Honest and Truthful.
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Future development of Media Industries
General areas of interest would include the challenges of new media, new formats, satellite and
cable tv, globalisation and conglomeration. Non linear scheduling, broadband and consumer
choice. Funding of the BBC, competition and ‘dumbing down’ of content.
Branston & Stafford highlight 4 main trends to beware of and study - Libraries, Brands,
Distributions and Synergy
Libraries
refers to the growth in new digital media industries i.e. new media, satellite tv, cd roms , dvd etc.
that is new distribution systems.
Ownership/control over libraries or back catalogue can can generate new income by recycling
existing products in new media formats. eg vinyl to cd , hollywood to DVD etc. photographs
onto cd rom (see Microsoft) publishing rights to songs (see M Jackson, Beatles songs)
Brands
refers to the challenge facing companies to establish recognisable global brands/logos that cross
cultural boundaries (in the new global economy.) Developing different brands to appeal to
different countries/cultures is time consuming and expensive. Large companies can maximise
profits by developing successful international brands e.g. Coke, Nike, Macdonalds, major
Hollywood studios.
Cross Media ownership enables companies such as Warners to cut costs by combining
resources of its own related media companies. - see Batman where, movie, cinemas, music
publishing and merchandising in own shops + Macdonalds came together to promote the
product and maximise profits for a product that can have a restricted shelf life.
Distribution
refers to the scramble to control and set up large scale media distribution networks such as
cable TV companies and internet providers.
Such companies (mainly N American and USA in origin) are attempting to exploit new
broadband cable technologies ( the convergence of digital media forms, TV, internet, music,
interactivity) Spurred on by potentially large profits driven by advertising, these companies
prime interest is not in production but in distribution.
Mergers and takeovers of smaller specialist companies are a feature of this trend that is
becoming increasingly dominated by large USA and North American companies.
Synergy
refers to the coming together or integration of different but complementary business interests.
The new integrated conglomerate is seen to be better placed to produce new products, to create
and control markets and thereby maximise profits.
In the media industries examples of this trend can be found in areas such as
the coming together of cable and telephone supply (new media).
The takeover of Hollywood studios Columbia and Tri star (sony) and MCA (Matsushita) by
equipment manufacturers Sony and Matsushita (Hollywood content to Japanese video DVD
and computer games technology). Both ventures disastrous - clash of cultures and
management styles (Matsushita got out in 1995)
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TimeWarner’s control over films, publishing, music, cinemas, merchandising is a good
example of how the synergy between different but complementary media business’s can be
brought together to maximise profits. see Batman.
Many media conglomerates are now attempting to link up with new media companies to further
extend synergies. ( See proposed merger between A.O.L. and Time Warner.)
Employment in UK Media
4 main areas of employment in Media industries
Origination - ideas, research, locating finance and other pre-production work
Production - manufacture of the product i.e. film production , printing
Distribution - how product reaches audience i.e. satellite, cable, newsagents , cinema
Marketing - covers all areas and can be ongoing
Multiskilling/ transferable skills
Increased competition and streamlined media industries has seen the rise of staff who can
perform a range of related jobs. This can be cheaper and more efficient.
Developments in media technology have shaped the rise of the multiskilled, flexible worker.
Multiskilling refers to employees who can perform more than one job and/or operate a range
of equipment. e.g. the video reporter who operates camera, sound, presents and edits the
material.
Transferable skills are skills or knowledge that can be applied across different related areas.
for instance a radio journalist who can report for TV as well.
Freelance workers
Economic changes in the 1980’s has led to an increase in freelance and fixed term contracts.
These contracts can be less costly for industries and give more freedom for some workers -
others have less security and flexibility. More women are employed.
types of contracts given to media workers vary from the traditional permanent contract. to
renewable fixed term contracts, freelance contracts along with more part-time and home
work.
In 2000 Microsoft employs around one third of its staff worldwide on permanent temporary
contracts. Known as permatemps.
Other areas of change include the growth of independent production houses and the increase
in the number of specialists. Most media products are now digitally produced in some way.
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Training
A notoriously difficult industry to get into. Lots of competition (glamourous image)
Various ways. In house training , portfolio/reputation, college and degree level courses, work
experience, Nepotism and networking (who you know).
The Competition Commission is an independent public body established by the Competition
Act 1998 ("the Act"). The Commission replaced the Monopolies and Mergers Commission
("MMC") on 1 April 1999.
The Commission has two distinct functions. On its reporting side, the Commission has taken
on the former MMC role of carrying out inquiries into matters referred to it by the other UK
competition authorities concerning monopolies, mergers and the economic regulation of utility
companies. Secondly, the newly established Appeal Tribunals hear appeals against decisions of
the Director General of Fair Trading and the Regulators of utilities in respect of infringements
of the prohibitions contained in the Act concerning anti-competitive agreements and abuse of a
dominant position.
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