Different Types of Ownership

Globalisation

Globalisation is the process in which the world is becoming far more interconnected and as a result companies expand and are recognised globally for their services. This type of ownership was first established when given a name in the 1960's, absoloute advantage also occurs when the company generates less costs per unit produced than its trading partner. This means importing, exporting and distributing their product becomes less expensive because of the turnover per annum.  When a media institution gains multi-national status, the company will be linked with other co-producers internationally. This can make the company harder to regulate, more difficult to tax and even more difficult to challenge in the national and cultural interest.

In order for these global giants to succed they need to regulate correctly in approach to supply-chaining goods, services and labour whilst outsourcing.

Some business experts believe that globalization has changed the world for good, and that globalization is growing at such a fast rate and it appears as though it only will continue to both economically, culturally and politically. Although most of its critisim lied with the middle classes, the middle class communities are growing rapidly in the Third World as industrialisation takes root in those countries. Some believe globalization profits to make the rich richer and the poor poorer. Homogenization is another bad factor, which is the result of taking away a places unique indentity that sets them apart from one another for example having a string of Mcdonalds restaurants situated in ancient homelands and a Starbucks coffee shop on every corner this does make nations more asimilar to one another no matter where you travel to. A regulation in Paris was agreed when McDonald's wanted to purchase a plot and open another franchise restaurant there, the condition was that the sign would glow white the only sign of its kind in the world. This was maybe to show they could bend the rules and retain some identity.

Merger

A Merger is where two companies are fused to make one entity. The most common reason for two companies to merge is usually due to a financial crisis or a downfall in logistics, distribution and failing technologies. By merging, the two companies' can benefit in a number of ways usually from more successful marketing. 

British Sky Broadcasting is a result of two companies merging to succeed together; those companies were Rupert Murdoch’s Sky Television and the once independently ran British Satellite Broadcasting. Both companies were suffering from continuous financial loss but the merger of both companies contributed to the now successful BskyB. Sky Television had limited advertisers but British Satellite Broadcasting were linked with a better advertising sources which solved the companies’ issues to produce funding. Another example of a merger the failing French global media corporation Vivendi which at one point owned Universal Pictures, Vivendi came to an understanding by negotiating a merger deal with General Electric. This method of integration will ultimately mean that the company would only need half of the workforce. Employee dissolusionment is a common trait when two companies merge as some benefits may be pulled from pension schemes and rendundancies will be made where due, awarding one company and failing another is also common. Another disadvantage would be that two companies cannot merge without the permission of its shareholders, usually it takes a majority opinion of atleast two thirds of their shareholders before a merger can be finalized.

Penguin/Random House publication merger

Perhaps one of the most shocking developments in the publication industry is that of the merger between Penguin publications and Random House publications. Both Bertelsmann and Pearson signed a deal that will merge both companies assets together but have instilled that their independent approach will remain intact. The companies said 53 per cent of Penguin Random House would be owned by Bertelsmann, and the other 47 per cent would be owned by Pearson.  

Takeover

This occurs when one company purchases another company’s rights ultimately assuming control over another one. Many of the big six conglomerates have taken over a series of companies over the past three decades. A new example of this would be the new ‘hip’photography application Instagram.  The company was first backed by iPhone, iPad and iTouch all subsidiaries of Apple Mac, the company was also supported by android camera phones. 

Instagram were taken over by Facebook with plans to keep the program independently managed. Facebook made an offer (with all 13 of its employees) for $1billion in cash. The office of fair trading give the deal the green light on August 14 2012. This is attributed to a key investment by adding this to their product line the social network will only continue to find new ways of maintaining its popularity.

Vertical Integration

Vertical integration refers to the direction of business ownership, in which a company launches other companies which relate to the core business for example telecommunications.  This is because these corporations want to assume as much control as they feasibly can over their production, distribution, exhibition and market retailing.  News international own 33 TV stations in major cities in the US which gaurantees some exhibition of its products. Rupert Murdoch's Newscorp bought 21st Century Fox to gain control over film production and distribution.  Another example of vertical integration would be Richard Branson's multi-national conglomerate Virgin Group which provides services for transportation (aeroplanes, trains) Virgin media (cable satellite TV) Virgin Radio, Virgin Records, Vfestival (UK festival) Virgin Mobile USA, Virgin Active (a UK fitness franchise)  as of 2008 Richard Branson's Virgin Group was estimated a net worth of £5.01 billion.

Horizontal Integration

Horizontal Integration is where a company moves across by buying different media, for example moving from television, into radio into interactive online media services. A good example of horizontal integration would be the Walt Disney Company, with its interest in film production owns Miramax and Touchstone pictures aswell as its original Walt Disney Pictures. In regards to television in the US the company owns the ABC network, Touchstone and Buena Vista Television aswell as other additional cable channels.  Furthermore the Walt Disney Company also owns ABC radio networks and music labels Disney and Hollywood Records. This shows that the company not only wants to control the services the company provides but what is advertised to its audience, regulating product placement (paid for by advertisers) and expanding on the power of distribution.

Media Ownership

Public V Private 

Broadcasting

There are two types of broadcast media, media funded by the national public and media funded by big business and investors; I will use the BBC and Sky as both public and private examples…



PUBLIC BROADCASTING

In the United Kingdom, the British Broadcasting Corporation supports multiculturalism and serves to everyone’s best interests with different radio stations and television programmes for all ethnicities and cultures.  This has contributed to the corporation’s notoriety, the BBC are praised internationally for its services.  The BBC employ roughly around 23,000 people, it also has a subsidiary BBC Worldwide, which has turned over successfully. The subsidiary reached a net profit of £160.2m in the year to 31^st March 2011.  These BBC funded worldwide domestic networks operate in various parts of the world, sealing their recognition as a longstanding, democratic source for imparting information:

·         BBC America

·         BBC Canada

·         BBC Entertainment

·         BBC Lifestyle

·         UKTV in New Zealand and Australia

·         BBC Worldwide (contributed £182million from the year 2010/2011 returned from
          investment in programming)

There are many advantages to this form of broadcasting

• The BBC provide a truthful and impartial service their journalists work in the best interests of the public always acquiring their information fairly and legally.
• They offer a wide spectrum of broadcast entertainment catering for people of different cultures with different interests.
• There is also a forum for their audience and it’s not infrequent for the public to post responses via The BBC’s webpage, or share opinions through the BBC's broadcast radio stations or post via Facebook and Twitter.
• The BBC cover everything from your local news, to national news and world news, always operating inside the journalistic truth.

But with advantages also comes disadvantages… with the BBC being publically funded in times of austerity and financial crisis, the institution has made cutbacks in order to fund and produce programming practically.


In 2010 there was an online networking campaign via Facebook and Twitter in the duty to fight against the scrapping of BBC Radio 6 which eventually proved successful the radio station is currently operating and is something of a cult phenomenon, catering to a more alternative target audience.


It was also reported in the fall of 2011 that the BBC were expecting a potential 2,000 job cuts by 2017. Overall the expenditure runs as follows TV broadcasting covers 66% of the BBC’s budget, Radio covering 17% other costs covering 11% and finally online funding costing 6%. This means that it is essential for the corporation to monitor its income and expenditure in order for the machine to keep turning. This would of course mean the BBC would have a much smaller estate by 2017.



In 2012 the board of directors were planning to cut spending for local radio stations, the cuts were expected be a total £15m that year and 280 job cuts in broadcasting for radio at the BBC. Thousands of listeners, authorities and MPs complained about the cuts claiming these stations played a vital role for the public.  It was also reported in fall 2011 that the BBC is expecting a potential 2,000 job cuts by 2017. Overall the expenditure runs as follows TV broadcasting covers 66% of the BBC’s budget, Radio covering 17% other costs covering 11% and finally online funding costing 6%. This means that it is essential for the corporation to monitor its income and expenditure in order for the success of its programming and service to the public.





PRIVATE BROADCASTING

Private broadcasting assumes a different agenda to that of public broadcasting, private broadcasting is driven by profit and a lot of up-to-date market research on what is chic and most loved for example ‘structured reality television’ it is integral that viewing figures meet their criteria, if not advertisers may lose interest and programs are usually scrapped. Rupert Murdoch's BskyB regulates worldwide media in the UK and Ireland. Rupert Murdoch (BskyB's creator) is essentially the kingpin of British media. His father was a regional newspaper magnate, after some shadowing of his father's efforts and with encouragement to carry on the family business; Murdoch went on to succeed his father. He bought off the struggling 'Sunday Times' newspaper (in Australia) and soon after other tabloids in order to improve their services in order to make their revenue grow. In 1968 Murdoch entered the United Kingdom with the aim to expand there. He bought the struggling daily broadcast 'The Sun' from IPC he turned it into a tabloid featuring scantily clad women on almost every page, important foreign issues often ridiculed and celebrities uncovered, usually accused of something profane and illegal.


In 1997 The Sun had a reported 10 million readers, making the newspaper immensely popular. Exercising his belief that profit comes first his aim once was to force the BBC to cut their licensing fee and charge for its content. While some people may argue that they could do without their TV Licensing Fee the BBC regulate well and act impartially cementing their humanitarian values. In regards to world news you can update and share news interactively in the UK and overseas via the BBC News home page.


BskyB was logged at a net worth of £11.47 billion on the London Stock Exchange as of 2011. However Murdoch’s enterprise has since come under legal scrutiny through the ‘News of the World phone hacking Scandal’ a trial followed and James Murdoch (Rupert’s son and successor) stepped down as a result. It was reported that News of the World journalists had been hacking worldwide recognised celebrities.

Another resurgence of cultural significance this year was the Hillsborough disaster of 1989 where 96 Liverpool fans were crushed to death it was estimated that 41 out of the 96 victims could have been saved if the failings had been addressed correctly. New inquests were launched in 2009, never before seen documents were released to the Hillsborough Independent Panel this could lead to the original verdict of 'accidental death' being overturned in light of new evidence. The inquest found that police reports were altered and evidence was manipulated by a number of police officers and constables. The Sun, Murdoch's tabloid newspaper printed a front page headline 'The Truth' four weeks after the massacre in April 1989. The tabloid went on to state Liverpool football fans "viciously attacked rescue workers as they tried to revive victims" this was of course a slight, Liverpool fans were said to have stretchered many of the victims to safety and them themselves gave first aid to many of the injured. Kelvin McKenzie went ahead with the article which also stated a dead girl was abused during the disaster. Much controversy has followed as McKenzie was one of Murdoch's closest editorials at The Sun newspaper during the 1990s.

Kelvin McKenzie later confessed that his BBC Radio 4 apology was a "hollow apology" forced upon him by Rupert Murdoch. The Sun did release a new front page edition called "The Real Truth" (published 13/09/12) which detailed the truth about the disaster the article featured photos of family victims as the inquest concluded that '41 of those who died could have been saved if emergency services had not been guilty of a series of tragic mistakes'.

THE BIG 6

The big six are six conglomerate organisations that own all of world’s internationally recognized media. In 1983 90% of the media spectrum were regulated by around 50 corporations but since companies have been subsidized and liquidized or have merged or failed, due to mass consumption and the rise of media monopolies. As of 2011 the same 90% of companies are ran by only six media conglomerates. These conglomerates own, air and control the content consumers are received they control radio, cable television, wireless and telecommunications, film and print publications worldwide. The majority of these companies are vertically integrated they will constantly find new ways to appeal to their target audience to increase their profits and turnover usually favouring synergy producing a line of products and/or services that are interlaced with one another, this happens with many mergers. After a takeover takes place both horizontal and vertical integration maximises a media conglomerates’ profits and stimulates control over labour, goods and services.

·            General Electric (GE) ($230b)

·           NEWSCORP ($5b)

·           DISNEY ($31b)

·           VIACOM ($5b)

·           TIME WARNER ($13b)

·           CBS ($190m-$250m)

            GENERAL ELECTRIC

     

     The multi-national conglomerate General Electric (GE) established in 1890 by Thomas Alva Edison the inventor of the light bulb it is now the only standing company from the 12 listed business corporations on Dow Jones's industrial average of 1896. Some of General Electrics subsidiaries are Concast, NBC, Universal Pictures and Focus Features.



NEWSCORP

Newscorp was founded in 1979 by Rupert Murdoch In terms of revenue Newscorp are the world's second largest media group as of 2011. This company is controlled by Rupert Murdoch and some members of his family. Some of the subsidiaries ran by Newscorp are Fox, Wall Street Journal and the New York Post.

    

 DISNEY

      

The Walt Disney Company, founded in 1926 is the hallmark of childhood memoriesfor most, but unfortunately Disney's dream wasn't just making children smile with sublime emotions but was to make money. In 2004 the company made $5.8bn in retail sales worldwide. Subsidiaries of the Walt Disney Company are ABC, ESPN, Pixar, Miramax and Marvel Studios.

     

     VIACOM

     

      Viacom were established in 1971 the company were originally titled CBS Films inc. The company operate mainly in television some of its subsidiaries are Paramount Pictures, MTV, Nick Jr, BET and CMT.

    

     TIME WARNER

    

      Time Warner was founded in 1972 originally entitled in the mid to late 1970's the spin-off company made alot of money from Atari's gaming industry. As a result the company expanded over the decades investing in entertainment productions and as of May 2012 there was a reported profit of $583 million for the yearly quarter. Subsidiaries of Time Warner include CNN, HBO, Time and Warner Bros.

    

      CBS

  

      CBS were founded in 1927 as a radio broadcasting station, as the decades passed CBS made a conscious effort to offer a level of diversity to their programming. Leo Fender sold his company to CBS in the 1960s due to health issues. The company went on to invest in musical instruments further and even formed their own record label Columbia Records. CBS's subsidiaries are Showtime, Smithsonian Channel, NFL.com, Jeopardy, 60 Minutes.

The Disadvantages...

The disadvantages of media ownership are becoming more prevalent and its negative effects on the industry are often debated by social commentators and intellects across the globe. Media mergers have become an increasing concern as they become more concentrated and eradicate competition in the industry. This stabilizes their state control over what media is shared and consumed with usually bias interpretation, imposing political, economic and moral beliefs and sometimes skewed point of views which will affect how their audience react especially in the news and publishing industry, this will usually accommodate the interests of those who exist in the financial sector and not general people.

 

The Advantages...

The advantages to media ownership would be access to pooled resources, connectivity, forging new markets which would stimulate growth in the economy and create job opportunities.