Media IndustriesTrigger 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 Integrationrefers 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 Integrationrefers 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 actAwards 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 AuthorityThe 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

Librariesrefers 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)

Brandsrefers 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.

Distributionrefers 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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