Key words in media

Globalisation

Globalisation refers to how countries across the world are becoming more interconnected. This results in interrogation of economics and markets globally. An example of this in media would be the broadcasting company Viacom which are active in countries worldwide. Globalisation is essential in  a companies growth if it wishes to be successful. This is because if the company has a larger presence worldwide then they will be more renown. This will increase the amount of consumers in which the company have. Therefore, increasing sales.

Merger

This is when two companies merge together to make a much larger and more powerful company. An example of this in media would be the two companies sky television and British satellite broadcasting. These two companies merged in 1990 to create bskyb. A benefit of companies merging could be the potential to make the company more wide-spread. This is due to the fact that if two companies from different locations or countries merge then they will be situated in both places were the original companies were. This means that the company will become more recognized nationally increasing sales in various different locations. Also it is more financially efficient. This is because the merged company will have more funding for research and development resulting in the company being more profitable. A disadvantage could be the fact that is reduces competition. Therefore, one company could potentially gain monopoly power over the specific market. Mergers could also disadvantage the customers as it leaves them with less choice.





Takeover

Takeover refers to when one powerful company takes over another smaller one. Usually by buying out there stocks and becoming the majority shareholder or by simply buying the company out. This normally happens when the smaller company is struggling or not making profit. An example of this in media would be googles takeover of the mobile phone company motorola. This could be beneficial if the company that is taking over has more knowledgeable or resources for the specific product. This means that taking over the original company would improve the products, possibly raising public awareness therefore increasing profits. However the advantages and disadvantages of this process depend on the perspective in which you look at it from. For instance a takeover would cause employment cuts. Obviously this would be a disadvantage for employees. Although, it would be advantage for the company as a whole due to the fact they have to pay less wages. Another pro of a takeover would be the fact it increases the growth of the overall company. This can help globalisation occur within the company giving them a larger presence. However, the company may set a bad name for themselves if they continuously takeover smaller companies. This would effect the general public's perception of them. Therefore, reducing sales and lowering their profit margin.

Vertical integration

This is when companies expand there business into different areas. However they are different from there initial production path. An example of this would be the company apple who make many products ranging from phones to computers and t.v's. This method of integration can be beneficial to a company in many ways. Mainly due to the fact they are manufacturing a range of new products. This overall results in increasing the amount of products they sell which makes there company name more known. This obviously results in more profits being made as well as more business opportunities for the company. A con of vertical integration would be there consumers losing faith in the company. This is because they may ruin their brand name due to appearing as sell-outs. Also they may start making new products and dismissing there original ones which the public know an love. This could decrease sales and change public perception.

horizontal integration

This is similar to vertical integration however the company stays within there types of production. Although, they expand there company into other markets and companies. An example of this would be the broadcaster BBC who market different channels across the world but stick to media broadcasting. This is beneficial for the company as they can branch out into similar products within their industry. Due to the fact they are sticking to the same production path, the company would already be experienced in manufacturing them types of products. However, due to the fact they are staying within their own production path it could hinder diversity. This means that new innovative ideas will not come into the company. This would be a con as less original products will be produced by the specific business

Sources of income in the Media

Every sector of media makes some sort of profit this is done through many ways. These are the media industry's methods of income;

• Premium telephone lines
• Merchandise
• Licensing
• DVD Rental
• CD and DVD sales
• Franchises
• Cinema box office
• License fees
• Product placement
• Sponsorship
• Downloads
• Advertisements

Some examples of company's using these would be the BBC charging a license fee. This gives them a source of income other than advertising. Another example would be product placement. This is huge in the U.S however the laws of it in the UK are very tight. However rights on product placement in the UK are slowly becoming more open. 

Here is an example of product placement used recently in UK television.

Television

The television industry gets their income from a range of various places. There main source being from either advertisements or license fee's. Whether they get their income from advertisement's or license fee's depends on the channel or the production company. For example due to he fact that BBC channels do not show advertisements they need to earn money from elsewhere. The money lost through advertising is made up through the licence fee scheme.This means that every t.v owner has to pay a monthly fee for the right to watch BBC channels. Other channels will gain their money from companies which pay them to air their advertisements on the channel. Other than this the television industry will get their income from various other places such as :

•  Premium telephone line - Many television shows will give viewers the option to participate in the show itself. This can be done through getting them to call into the T.V show. This is done on many television programmes such as the X-Factor were viewer call to vote for performers. They make money of this by making the line a premium telephone line. This means that the phone owner will be charged a premium rate for each call.
• Merchandise - If a show becomes popular enough, then this means a brand identity could be formed. This results in the show being able to sell merchandise related to the programme to fans of it. For instance possibly t-shirts or mugs related to the show.
• CD and DVD sales - with the majority of television shows (if they are successful  DVD'S will be sold of the series. This means that people can buy the series on DVD format and watch them at home. Also sometimes songs of the show or the soundtrack may be sold on CD.
• Product placement - As I explained earlier in the post companies will pay television shows to host there products within the show.
• Sponsorship - Many companies may pay to sponsor a T.V show. This helps the company advertise their brand by endorsing a popular programme.

Publishing

The publishing industry relies heavily on advertising and the endorsement of products or services. Many newspapers or magazines may include advertisements for particular products . The publishing company will gain money from the company just for the right to advertise the clients company in their publication. Also they are often paid to commission journalists or writers to publish articles about a specific product, brand or company. The writer if the article will endorse the product and speak fondly of it. The rest of the publishing industries income will come from the selling of the publications themselves.

Interactive media

The interactive media industry's main source of income is downloads. This is due to the fact it interactive media products are almost always digital. Therefore, the products will be sold for a set price so the consumer can download them to a device. A prime example of this would be Apples 'App store.' This is were Apple device owners will pay to download user created applications. Royalties will be given to the creator and the company will keep most of the profits. Advertising is also commonly used in this industry as a means of income. This is an especially effective route to take if the application is free to download. Due to the fact that, they can make up from the money they would be making of sales through advertising. Less commonly, some interactive media products can earn money from merchandise. This is seen a lot in interactive games, for instance the Apple application 'Angry Birds.'

Radio

The radio industry acquires their income from a range of different sources. One source would be (like most sectors) advertising. They will be paid to air a companies advertisement in-between their show. Another source which is popular with radio is premium telephone lines. They will get people to call in as part of their show and the phone line may charge a premium rate. They will encourage people to call in due to competitions ad prizes. Downloads in another possible source. For example a station may sell their pod casts on iTunes and earn royalties for selling the product.

Film

Similar to t.v the film industry has money to be earned through product placement. This is apparent in many films in which characters may use a specific companies product. The company will pay the film company for advertising their brand name. As with many other sectors films can earn money from merchandise DVDs and CDs related to the production. They will also earn money from the box office by selling there films to cinemas. The cinemas will get a percentage of this revenue for hosting there film in there building.

The big six - media industry

The big six are the main companies which own the media worldwide. These six companies are made up of ;
viacom
Disney
Newscorp
CBS
GE
Time Warner

In the post i will be discussing each company and their sources of income.

Viacom

Viacom is an american based global company which own a majority of the entertainment industry. They brodcast to over 160 countries through the use of  television,the internet,mobile platforms and motion pictures. They own a range of assests such as;

viacom international,Paramount pictures,MTV films,Nickelodean movies,Comedy central,Logo,BET,Spike,TV Land, jr.,MTV,VH1,mtv2,TR3s,CMT,Palladia,Game trailers,Neopets and MTV new media. 

All in all they have a net worth of $14.914 billion in the U.S.

Disney

Disney is another multinational company based in the united states. They have a vast monopoly in the media industry ranging from theme-parks to television broadcasters. They are renown for there cartoons created by the founder Walt Disney. However, they also own many television networks such as ; 

ABC, ESPN, Disney channel soapnet ABC, ABC Family, ABC Kids, Walt Disney Distribution, Walt Disney Motion Pictures Group, Disney Channel, ESPN, Jetix, Walt Disney Studios, Walt Disney Parks and Resorts, Walt Disney Television Animation, Walt Disney Records, Walt Disney Pictures, Touchstone Pictures, Miramax Films, ABC Studios, Playhouse Disney, Disney Consumer Products, Pixar, Soapnet, Disney Interactive Studios, Muppets Holding Company, Disney Store, Toon Disney, New Horizon Interactive, and Hollywood Records.

All in all they have an annual revenue of around about $35 billion.

Newscorp

Newscorp is a multi-national company owned by Rupert Murdoch  He inherited the company from his father and expanded it by buying other assets such as the sun newspaper. Newscorp operates in USA, the UK, Australia, New Zealand, Asia, Africa and the Middle East, Canada, Latin America and Europe. Due to the vast amount of companies the company owns it has a huge impact on the media industry. This means it has a knock on effect on the way the general public perceive things. Newscorp has a total net worth of $7.6 billion.

CBS

CBS (Columbia broadcasting system) are a broadcasting company stationed in the U.S. In terms of television broadcasting they are the second largest in the world,the first being BBC. The company broadcasts to CBS broadcasts in, USA, Europe, Africa, middle east, UK, Ireland,  Australia, New Zealand and Italy. 
The various companies which they own are ;


Columbia Records, Publishing companies, Musical instrument division, Film Production, Home Video (MGM/CBS), Gabriel Toys(video game market), Viacom(broadcasting), CBS radio.

The owner of CBS (Sumner. M Redstone) has a total net worth of $4.4 billion.

GE

GE (General Electric) covers a large amount of media across the world. They mainly operate the company NBC which they own 80% of. NBC is a leading entertainment company which owns most of the highest viewed t.v shows broadcasted. They also own a large amount of other businesses such as GE energy and universal pictures. They have a total net worth of about $230 billion.

Time Warner

The Time Warner company operate in various sectors of the media industry. These sectors ranging from industrys such as film,television and publishing. Although, in the year 2000 AOL bought Time Warner for $164 billion. Now AOL own  of 55 % of Time Warner's stocks leaving the time Warner share holders with a stake hold of 45 %. The company has a total net worth of around about $46 billion.

Rupert Murdoch

Rupert Murdoch is at the top of the food chain in terms of media in the United Kingdon. He is CEO of the company News Corp, which is one of the big six. News Corp is the second largest media institution in the world. So you can imagine how much power he has over the uk alone. Rupert Murdoch first began in australia. His carrer started after the death of his father. He took the family business 'News limited' and turned it into a huge success in australia. Eventually he started business in the UK. This lead him into owning assets such as the sun and News Of The World. Due to the his high profile and astronomical amount of money Rupert murdoch has much sway in the world of politics. For instance he is a Labour Party supporter. Due to this his newspapers tend to lean towards promoting the party and their ideals. After the Thatcher era Murdoch supposobly built a close relationship with Tony Blaire. Being the leader of the labour party Tony Blaire was promoted in Murdochs newspapers. Many people think this close relationship he has with politicion effects the outcomes of elections massively. Overall Ruport Murdoch is a key high profile person in the U.K media industry. The media has the power to change peoples opinions and make a huge influence on society. Being at the top of the media food chain, Ruport Murdoch is probably one of the most infuention figures in the UK.