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.