This report is going to investigate the television industry. It will examine the ownership of the industry, looking at private and public ownerships, and different companies including multinationals, conglomerates and independents. The report will also look at examples of companies within the industry and dissect them in order to gain a better understanding of the television sector.
The television industry is structured in several ways. Firstly, there are the major broadcasters such as the BBC, ITV and Channel 4. These companies are responsible for much of the programming that we watch mainly due to being the most popular channels. Figures from BARB show that the percentage of audience share of the year ending September 2013 show us the top 3 channels where BBC 1 with 20.8%, ITV with 16.1% and Channel 4 at 5.9% with BBC 2 coming a close fourth with 5.8%. As well as the major broadcasters there are the smaller broadcasters, such as UKTV with much smaller audience shares like DAVE with 1.3%, and also production companies who produce programming for or with broadcasters and television networks. An example of such a company would be Hartswood Films.
Hartswood Films is an example of an independent company in the television industry. Founded in the 1980’s, they work closely with the BBC producing a variety of programs, the most well-known being Sherlock, but have also produced programs aired on ITV and Channel 4.
Many companies in the media sector are multinational meaning they operate in more than one country and the television industry is no exception. There are many companies that operate all over the world. The BBC is a good example of this. Although it is based in the UK it has channels airing in countries such as the United States with BBC America showing well-loved British programmes like Doctor Who and Top Gear. Top Gear is an example of a franchise, the BBC sells the rights to Top Gear around the world for it to be remade but using the same model. This can be shown with Top Gear USA. It is basically the same show, however it is produced by NBC in America with different presenters but with the same trade mark items that make it “Top Gear” such as the logo. Top Gear is also licensed by the BBC to allow it to be shown on other channels such as the UKTV run channel DAVE which shows past episodes. Through franchising and licensing, a version of Top Gear is shown in 170 different countries with 350 million viewers per week showing the power of franchising and licensing in reaching an audience and generating revenue.
Some companies are or are part of conglomerates, a combination of two or more companies. Comcast is the largest broadcasting and cable company in the world by revenue and is a conglomerate. NBC, one of America’s main commercial broadcasters, was taken over by Comcast in 2011 falling into this conglomerate. This merger also meant that NBC became vertically integrated into the Comcast corporation. Vertical integration is where a company can do everything “in house” as opposed to horizontal integration where a company buys out its competitors. In the example of Comcast, they own the method of producing material via NBCUniversal and also the means of distribution via their cable television operations. The merger caused a lot of debate due to the concerns that vertical integration will stifle competition and cause prices to increase to consumers.
Comcast can also be taken as an example of cross-media ownership. As well as owning the broadcaster NBC they own Universal studios who produce films therefore spreading into different areas of the media industry as a whole but still under the control of the Comcast corporate umbrella. Another example of cross media ownership is 21st century fox. They own the film studios 20th century fox who have produced major films like Star Wars, Titanic, Avatar and Die Hard. They also have the broadcasters Fox, Fox Sport, FX and the National Geographic Channel. From the National Geographic Chanel there is a publishing arm in the form of the National Geographic magazine. This variety of media industries that 21st Century Fox has operations in makes this cross-media corporation potentially very powerful.
While most companies are privately or commercially owned, such as NBC who are owned by Comcast and 21st century Fox who are owned by the media baron Rupert Murdoch, some are public service companies. While most privately owned companies are only there for commercial gain, public service media companies are for the public. The BBC is the best example of such a company. They are the oldest and largest broadcaster in the world and are funded by the licence fee, a fee paid by everyone with a television in the United Kingdom. As a result, much of the programming is for public service purposes such as the local news, arts and religious broadcasts (OFCOM). OFCOM dictates that certain channels in the UK must show so much public service programming, the BBC is one of these channels. Because the BBC is publicly funded, everyone who is paying into it should get something back in the form of programming that is relevant to them, for example putting as much diversity into programming as possible. That is why it is in the BBC’s remit and also what OFCOM is trying to achieve. Commercial companies operate differently. Their purpose is to attract advertisers. So, for example, a channel showing just sports, such as ESPN and Eurosport’s will attract a lot of advertisers that want to latch onto this specific market, such as manufacturers of sports equipment, therefore not having a high diversity of programmes is not a big issue for them.
The problem with the lack of plurality in the media sector is that individuals and companies are loyal to where they are making their money from which is mostly advertisers. They can then saturate the market with advertising for a product or a political idea for example and due to the exposure people will conform to what the advertisers want whether it be purchasing a product or voting a certain way. The lack of plurality and diversification can also lead to the decline of ideas and innovation as there isnt as much compotition. Local news broadcasts are an example of the lack of diversity on a programming level. There are only 2 station that air local news broadcasts, the BBC and ITV, meaning there is only 2 choices for consumers and a smaller diversity of stories, opinions and views.
The share of ownership in the television industry and the media industry as a whole is an important issue. The diversification of the media industry is becoming less, with fewer individuals and companies owning more. Rupert Murdoch is considered by some as one of the most powerful and influential people in the world. As the owner of News Corp and 21st Century Fox, in 2010 he tried to add BSkyB to his conglomerate but failed due to the phone hacking scandal. This is a classic example of the the lack of ownership diversification, where Rupert Murdoch was beginning to monopolise the media industry. Although he failed in his proposed take over bid, he still owns an almost 40% share in the company via 21st Century Fox meaning there is still a lot of his influence in the choices that BSkyB make. This takes us back to the example of Comcast and NBC. NBC is vertically integrated into the conglomerate therefore Comcast owns the spectrum from production to distribution. The reason why there was debate about the takeover was that this gives the people running Comcast the power to totally control the market for that particular product in this case NBC. The FCC (the Federal Communications Commission) received over 30,000 comments about the takeover and for good reason. Because Comcast control the production of the NBC product and also the method of distribution through cable television, they can control the price. A lack of competition likely means a lack of competitive prices which is bad for the consumer as there are less options available and will likely end up paying more. Going back to Rupert Murdoch and BSkyB, the proposed takeover would mean he owned the production with Sky making many programs, notably Sky Sports and the Barclays Premier League, and also the distribution due to the requirement of a Sky Box in order to access many channels. As well as this, he would have been owner of News Corps the vertically as well as horizontally integrated giant of the publishing industry. With holding both the publishing and broadcasting cards at once he would have a very strong grip on the United Kingdom's media supply and going back to previous points raised about the dangers of a lack of diversification and plurality this concerns many people.
In the future, the television and broadcasting industry will be moving more into the world of portability and on demand streaming services. Innovations such as the BBC iPlayer have radically changed how and when we consume products from this industry. Now we can view the shows, news and sports as well as ones we may have missed almost anywhere through portable technologies such as smartphones and tablets. Research from BARB has suggested that catch up and television on the go is most popular with ABC1 households and the 25-44 year old age group. The ABC1 social category is wealthier, therfore having a higher accessibility to technologies which are used for consuming on demand television and the younger age groups more tech savvy than some of their older counterparts which can add the this trend. As we are getting richer and younger generations grow up with newer and newer technologies, the consumption of catch up and on the go television is going to increase. This provides new challenges for companies within the television industry to keep up and move with the times or face being left behind. One way companies are able to tap into this new emerging market is the ability to cherry pick adverts being shown to consumers. Now companies can see what interests people and specifically chose adverts to show them for example if an app notes that someone is searching for local restaurants then adverts for restaurants can be specifically chosen which could result in more advertising revenue for the broadcaster.
In conclusion, the television industry is not as simple as it may first appear. There are many different sizes of companies and they do different things. Some are major network broadcasters. Some are small production companies. Some are independent while others are massive conglomerates. With the larger companies, especially the ones which are vertically integrated into each other, there are often issues and concerns regarding plurality and diversification which can be seen in the examples of Comcast and Rupert Murdoch. Companies within the television industry are also funded in different ways and as we look the the future with catch up and on the go television, they need to be careful not to get left behind as the industry reinvents itself and adapts to fit the modern world.
http://www.ofcom.org.uk/
http://www.barb.co.uk/
http://en.wikipedia.org/wiki/Comcast
http://www.hartswoodfilms.co.uk/
http://www.bbcamerica.com/
The television industry is structured in several ways. Firstly, there are the major broadcasters such as the BBC, ITV and Channel 4. These companies are responsible for much of the programming that we watch mainly due to being the most popular channels. Figures from BARB show that the percentage of audience share of the year ending September 2013 show us the top 3 channels where BBC 1 with 20.8%, ITV with 16.1% and Channel 4 at 5.9% with BBC 2 coming a close fourth with 5.8%. As well as the major broadcasters there are the smaller broadcasters, such as UKTV with much smaller audience shares like DAVE with 1.3%, and also production companies who produce programming for or with broadcasters and television networks. An example of such a company would be Hartswood Films.
Hartswood Films is an example of an independent company in the television industry. Founded in the 1980’s, they work closely with the BBC producing a variety of programs, the most well-known being Sherlock, but have also produced programs aired on ITV and Channel 4.
Many companies in the media sector are multinational meaning they operate in more than one country and the television industry is no exception. There are many companies that operate all over the world. The BBC is a good example of this. Although it is based in the UK it has channels airing in countries such as the United States with BBC America showing well-loved British programmes like Doctor Who and Top Gear. Top Gear is an example of a franchise, the BBC sells the rights to Top Gear around the world for it to be remade but using the same model. This can be shown with Top Gear USA. It is basically the same show, however it is produced by NBC in America with different presenters but with the same trade mark items that make it “Top Gear” such as the logo. Top Gear is also licensed by the BBC to allow it to be shown on other channels such as the UKTV run channel DAVE which shows past episodes. Through franchising and licensing, a version of Top Gear is shown in 170 different countries with 350 million viewers per week showing the power of franchising and licensing in reaching an audience and generating revenue.
Some companies are or are part of conglomerates, a combination of two or more companies. Comcast is the largest broadcasting and cable company in the world by revenue and is a conglomerate. NBC, one of America’s main commercial broadcasters, was taken over by Comcast in 2011 falling into this conglomerate. This merger also meant that NBC became vertically integrated into the Comcast corporation. Vertical integration is where a company can do everything “in house” as opposed to horizontal integration where a company buys out its competitors. In the example of Comcast, they own the method of producing material via NBCUniversal and also the means of distribution via their cable television operations. The merger caused a lot of debate due to the concerns that vertical integration will stifle competition and cause prices to increase to consumers.
Comcast can also be taken as an example of cross-media ownership. As well as owning the broadcaster NBC they own Universal studios who produce films therefore spreading into different areas of the media industry as a whole but still under the control of the Comcast corporate umbrella. Another example of cross media ownership is 21st century fox. They own the film studios 20th century fox who have produced major films like Star Wars, Titanic, Avatar and Die Hard. They also have the broadcasters Fox, Fox Sport, FX and the National Geographic Channel. From the National Geographic Chanel there is a publishing arm in the form of the National Geographic magazine. This variety of media industries that 21st Century Fox has operations in makes this cross-media corporation potentially very powerful.
While most companies are privately or commercially owned, such as NBC who are owned by Comcast and 21st century Fox who are owned by the media baron Rupert Murdoch, some are public service companies. While most privately owned companies are only there for commercial gain, public service media companies are for the public. The BBC is the best example of such a company. They are the oldest and largest broadcaster in the world and are funded by the licence fee, a fee paid by everyone with a television in the United Kingdom. As a result, much of the programming is for public service purposes such as the local news, arts and religious broadcasts (OFCOM). OFCOM dictates that certain channels in the UK must show so much public service programming, the BBC is one of these channels. Because the BBC is publicly funded, everyone who is paying into it should get something back in the form of programming that is relevant to them, for example putting as much diversity into programming as possible. That is why it is in the BBC’s remit and also what OFCOM is trying to achieve. Commercial companies operate differently. Their purpose is to attract advertisers. So, for example, a channel showing just sports, such as ESPN and Eurosport’s will attract a lot of advertisers that want to latch onto this specific market, such as manufacturers of sports equipment, therefore not having a high diversity of programmes is not a big issue for them.
The problem with the lack of plurality in the media sector is that individuals and companies are loyal to where they are making their money from which is mostly advertisers. They can then saturate the market with advertising for a product or a political idea for example and due to the exposure people will conform to what the advertisers want whether it be purchasing a product or voting a certain way. The lack of plurality and diversification can also lead to the decline of ideas and innovation as there isnt as much compotition. Local news broadcasts are an example of the lack of diversity on a programming level. There are only 2 station that air local news broadcasts, the BBC and ITV, meaning there is only 2 choices for consumers and a smaller diversity of stories, opinions and views.
The share of ownership in the television industry and the media industry as a whole is an important issue. The diversification of the media industry is becoming less, with fewer individuals and companies owning more. Rupert Murdoch is considered by some as one of the most powerful and influential people in the world. As the owner of News Corp and 21st Century Fox, in 2010 he tried to add BSkyB to his conglomerate but failed due to the phone hacking scandal. This is a classic example of the the lack of ownership diversification, where Rupert Murdoch was beginning to monopolise the media industry. Although he failed in his proposed take over bid, he still owns an almost 40% share in the company via 21st Century Fox meaning there is still a lot of his influence in the choices that BSkyB make. This takes us back to the example of Comcast and NBC. NBC is vertically integrated into the conglomerate therefore Comcast owns the spectrum from production to distribution. The reason why there was debate about the takeover was that this gives the people running Comcast the power to totally control the market for that particular product in this case NBC. The FCC (the Federal Communications Commission) received over 30,000 comments about the takeover and for good reason. Because Comcast control the production of the NBC product and also the method of distribution through cable television, they can control the price. A lack of competition likely means a lack of competitive prices which is bad for the consumer as there are less options available and will likely end up paying more. Going back to Rupert Murdoch and BSkyB, the proposed takeover would mean he owned the production with Sky making many programs, notably Sky Sports and the Barclays Premier League, and also the distribution due to the requirement of a Sky Box in order to access many channels. As well as this, he would have been owner of News Corps the vertically as well as horizontally integrated giant of the publishing industry. With holding both the publishing and broadcasting cards at once he would have a very strong grip on the United Kingdom's media supply and going back to previous points raised about the dangers of a lack of diversification and plurality this concerns many people.
In the future, the television and broadcasting industry will be moving more into the world of portability and on demand streaming services. Innovations such as the BBC iPlayer have radically changed how and when we consume products from this industry. Now we can view the shows, news and sports as well as ones we may have missed almost anywhere through portable technologies such as smartphones and tablets. Research from BARB has suggested that catch up and television on the go is most popular with ABC1 households and the 25-44 year old age group. The ABC1 social category is wealthier, therfore having a higher accessibility to technologies which are used for consuming on demand television and the younger age groups more tech savvy than some of their older counterparts which can add the this trend. As we are getting richer and younger generations grow up with newer and newer technologies, the consumption of catch up and on the go television is going to increase. This provides new challenges for companies within the television industry to keep up and move with the times or face being left behind. One way companies are able to tap into this new emerging market is the ability to cherry pick adverts being shown to consumers. Now companies can see what interests people and specifically chose adverts to show them for example if an app notes that someone is searching for local restaurants then adverts for restaurants can be specifically chosen which could result in more advertising revenue for the broadcaster.
In conclusion, the television industry is not as simple as it may first appear. There are many different sizes of companies and they do different things. Some are major network broadcasters. Some are small production companies. Some are independent while others are massive conglomerates. With the larger companies, especially the ones which are vertically integrated into each other, there are often issues and concerns regarding plurality and diversification which can be seen in the examples of Comcast and Rupert Murdoch. Companies within the television industry are also funded in different ways and as we look the the future with catch up and on the go television, they need to be careful not to get left behind as the industry reinvents itself and adapts to fit the modern world.
http://www.ofcom.org.uk/
http://www.barb.co.uk/
http://en.wikipedia.org/wiki/Comcast
http://www.hartswoodfilms.co.uk/
http://www.bbcamerica.com/