Sony is a large, vertically integrated media conglomerate that owns divisions across electronics, gaming, film, television and music. It has a complex ownership structure with shareholders including banks and trusts. Sony faces competition from companies like Apple and Samsung in consumer electronics. As a large conglomerate, Sony has the advantage of synergies across its divisions but the disadvantage of potentially less flexibility. It has undergone restructuring to focus on core competencies in entertainment and electronics. Sony faced issues when laptop batteries it manufactured were recalled in 2006 due to fire risks.

1. Media Company Case
Study
Task 1 Understand the structure
and ownership of the media sector
Shauna leacy

2. Example: MTV
Private ownership is funded by advertising. Private ownership's is more able
to satisfy the company shareholders instead of the public’s interest. Private
ownership defiantly has more of a channel choices. You find with private that
certain channels are only aimed at one type of audience like MTV is only
aimed at an audience between the ages of 16 - 24 the advertisements on
these channels would be different from the adverts on like the discovery
channel
A advantage of private ownership is that its run on advertisement funds
because a lot of companies want to advertise their product on popular TV
channels like MTV this being popular it costs more to advertise on it
A disadvantage is that if they have a idea for a TV show they don’t do any
research like a public ownership would like the BBC and they wouldn’t be
able to have the publics input so they could fund it but it’d be down to the
fact that the show is good
Types of ownership: private ownership

3. Example: BBC
Public ownership is funded by the government like the British Broadcasting
Corporation BBC As the BBC is government run they have to cater to the
Public wants and interests. For example the Public are able to complain and
give feedback and BBC will take in the feedback and make changes
A advantage of Public ownerships is that the BBC is run on what the public
wants so they have to design it around them therefor you will get a variety of
different shows for different people get a huge amount of audiences tuning
in to watch different shows that are targeted at them.
A disadvantage is that more people are willing to subscribe to companies
such as 'Virgin Media' and 'Sky' and would prefer to pay them money rather
than pay for a TV license that only funds one Channel as the BBC. This may
mean that the TV License has a good chance of being scrapped.
Types of ownership: public service

4. Types of ownership: independent
Example: 21st Century Fox
Independent business ownership is privately held organizations.
Sometimes, independent businesses are also termed as sole proprietorship
companies, which have only one proprietor.
A advantage as a business owner, you are your own boss. You answer to
no one and you make all the decisions. You set your own work hours and
work independently. Depending on the type of business, you may be able to
work anywhere.
A disadvantage owning a business can be a struggle financially. you may
have to go into debt or invest personal funds to start your company. You
may lose it all if your company isn't successful. You may have to work huge
numbers of hours in the early years

5. Example: The Walt Disney Company
conglomerate media group is a company that owns large numbers of
companies in numerous media like television, radio, publishing, movies, and
the Internet. Media conglomerates attempt policies that enable their control
of the markets around the world
A advantage conglomerate grows and gains more companies, it can take
advantage of the greater flexibility it has to develop newly-bought companies
and increase their size and success.
A disadvantage many numbers are revealed rather than separately for
each business. The difficulty of a conglomerate's accounts make them
harder for managers, investors and regulators to analyse, and makes it
easier for management to hide things
Types of ownership: conglomerate

6. Types of Companies:
Horizontal Integration
Example: Apple
Horizontal Integration is where an organization develops by buying up competitors
in the same section of the market e.g. one music publisher buys out other smaller
music publishers.
A advantage is the lower costs with a large company which produces more
services and products, the larger the company has more power over suppliers
and customers also less competition and access to new markets
A disadvantage is that it can lead to control its highly discouraged due to lack of
competition governments have to approve.

7. Types of Companies:
Vertical Integration
Example: Warner Bros
This is where an organization shares or owns each part of the production and
distribution process. For example: Warner Bros Entertainment calls itself a fully
integrated broad based entertainment company which owns film studios and the
means to distribute the films as well as some of the cinemas they are shown in.
Warner Bros in itself is part of an even bigger conglomerate called Time Warner
which is a huge media conglomerate institution which uses horizontal Integration to
consolidate its power and profits.
A advantage are that the business costs can be controlled if a firm acquires the
other firms in the vertical chain, then one separation of the same company will
transfer goods to other divisions. So, business costs in form of transport, cost of
negotiation, cost of control.
A disadvantage large organizations are harder to manage and are less flexible in
introducing innovations to the market.

8. Cross Media convergence
Media convergence is combing two or more mediums different mediums
are TV, film, computer graphics, radio and websites.
Media convergence in the film industry can happen In production,
distribution or exhibition it also happens when an artist from the music
industry brings out a single for a film.
Music working with games

9. Synergy
Synergy can be used most often by bigger companies as the different
elements them often a media conglomerate work together to promote
linked products across different media. If they bring out two products or
more they will promote each other for example skyfall has the film,
soundtrack, game and perfume. Conglomerates like song can use synergy
to increase because they own lots of different companies. Synergy works
when different elements of companies promote each other for example film
studio, record label, video game division all link eg. Film, soundtrack, video
game.

10. Describe the Structure and of Ownership
of Either The Film, TV, Gaming or Music
Industry
Vertical –Sony and 4AD
One of the big three Sony Music entertainment the labels they have are: Arista
Nashville, Beach Street/Reunion Records, Bystorm Entertainment, Columbia
Nashville, Columbia Records, Day 1, Epic Records, Essential Records, Kemosabe
Records, Legacy Recordings, MASTERWORKS, Polo Grounds, RCA Inspiration,
RCA Nashville, RCA Records, Sony Classical, Sony Music Latin, Star Time
International, Syco Music, Vested In Culture, Volcano. It is a United States music
corporation owned and operated by Sony Corporation of America, a subsidiary of
Japanese conglomerate Sony Corporation.
4AD is a British independent record label that was started in 1979 by Ivo Watts-
Russell and Peter Kent, originally funded by Beggars Banquet Record. signed a
five-year distribution deal with Warner Bros. Records so that nearly all 4AD
releases would see release in the United States. While this seemed to be a simple
licensing deal, in reality executives from Warner Bros. took a lot of control during
this period, as 4AD shifted focus to the US market, signing more American bands.

11. Sony
Sony produces a lot of products like electronics TVs, laptops,
phones. Also video games and console. Also media and
entertainment (music and tv)
Sony is conglomerate it owns Sony Corporation (Sony
Electronics in the U.S.), Sony Pictures Entertainment, Sony
Computer Entertainment, Sony Music Entertainment, Sony
Ericsson, and Sony Financial

12. Ownership
Sony is a corporation that is owned by its shareholders. Sony has
many divisions that include electronics, music, audio, video and
many more types of products. (Sony’s shareholders: Japan Trustee
Services Bank, Moxley and Company, The Master Trust Bank of
Japan, Omnibus China Treaty, Japan Trustee Services Bank, State
Street Bank and Trust Company, Japan Trustee Services Bank,
State Street Bank and Trust Company, Japan Trustee Services
Bank, Mellon Bank)

13. Sony is vertical
Sony mergers and takeovers have allowed it to become a vertically
integrated company
Vertical

14. Competitors
Sony's main competitors are Samsung, LG, Panasonic and Philips. With cameras
its main competitors are Nikon and Canon.
Music sales in the United States have dropped 47 per cent since Napster first
debuted in 1999. The availability of free music has cost the music industry $12.5
billion in financial losses. To recover some of these losses, the music industry has
filed lawsuits against individuals who have been found to have illegally
downloaded music. In some cases, individuals have been sued for thousands, if
not hundreds of thousands of dollars.
Their biggest competitor is probably Apple.inc and Blackberry. Apple, and
Blackberry are also in the electronics department, and have many devices just like
Sony. Another competitor of Sony is Nintendo. Nintendo is in the gaming industry
and have many game console/devices just like Sony's PlayStation. Apple is
another really big competitor of Sony because they have made many sales with
their iDevices.

15. Sony targets all different types of people. They have devices for
everyone, which do not depend on age. Like cameras, or a T.V that
anyone can buy, and is not specifically for a certain age group. The
only thing is that if you are young you would probably want to buy a
gaming system, or a T.V and if your older you are probably interested in
cameras or laptops. Sony tries to make their products for everyone, so
they can get more sales that way.
Audience

16. As in a multidivisional organization such as Sony, the division’s become flexible
as in the sense that they are able to merge, add or close divisions. This is
apparent in the fact that Sony’s Mobile division merged with Ericsson to
produce Sony Ericsson range of mobiles.
When Howard Stringer joined as the CEO of Sony Global Japan he made new
strategies and used those strategies to restructure the organization to be in-line
with these strategies.
Firstly, he looked at the core competencies of the company and focused mainly
on the electronics, games and entertainment sector. He established a growth
strategy saying, “Our target is for the Sony Group to achieve consolidated
sales of over 8 trillion yen and an operating profit margin of 5% (electronics
4%) by the end of fiscal year 2007”.

17. Sony faced considerable controversy when some of its laptop batteries
exploded and caught fire in 2006, resulting in the largest computer-related
recall to that point in history
“The Dell laptop battery recall was announced on 15 August 2006. Dell
recalled 4.1 million of its notebook laptop batteries in response to concerns
that the batteries were overheating and catching on fire.”
“The laptop batteries were seen as a fire risk. If a laptop had caught on fire
on a flight it could have been particularly serious.”
The Sony-manufactured lithium ion batteries were used by many notebook
computer manufacturers, such as Apple, Dell, Lenova, Fujitsu and Toshiba,
who were all forced to recall laptops.

18. http://www.computerweekly.com/feature/Dell-Laptop-Battery-
Recall-The-Expert-View
http://www.sonymusic.com/
http://4ad.com/
http://www.investopedia.com/terms/v/verticalintegration.asp
http://www.investopedia.com/terms/h/horizontalintegration.asp
http://smallbusiness.chron.com/advantages-disadvantages-vertical-
horizontal-organization-24212.html
Bibliography

19.  When you have finished your case study, create a blog entitled
 YOUR NAME Unit 7 Understanding the Creative Media Sector
 And post this finished PPT with the title: ‘Task One Structure and
ownership of the media sector’
 Email me your blog address to
paul.rossington@salfordcc.ac.uk
Unit 7 Blog