Film Industry: Structure & Ownership
For this part of the assignment I have looked at the structure and ownership of the film industry As I was researching this industry I discovered that there are six big companies that are involved within the film industry.
The Big Six
In the film industry the six big companies, known as the 'Big Six' are Disney, General Electric/ Vivendi, Viacom, Time Warner, BBS and Newscorp. Within these big companies the main ones own smaller companies within. The first one that I found was Disney. Disney is a worldwide company that was founded on October 16 1923. As well as the movies and companies, Disney also owns many radio channels and TV Channels. This specific company owns several companies and these are: Touchstone, Miramax, Pixar Animation Studios, Buena Vista International, Marvel and Lucasfilm. These companies , although they are well known anyway are owned by this one company which allows the companies to work alongside Disney and also allows Disney to earn money from the other movies being made.
The next company that I looked at was General Electric which is also known as Vivendi. This company owns two companies which are Universal and Working Title. Although the is a film company it is also one of the biggest music producers in the world. For example they have worked with Katy Perry. Also, due to General Electric owning Universal it enables them to have theme parks such as Universal Theme Park and Universal Studios. This allows the company to receive large amounts of revenue and money from the rides that promote certain films. For example Jaws and ET.
Following this company I researched Viacom which stands for Video Audio Communication. This company owns Paramount Pictures, Paramount Classics, MTV Films, Nickelodeon, DreamWorks and Paramount Home Entertainment. Viacom was created in December 2005. It is the 5th largest broadcasting cable company and has 7 million subscribers.
I next looked at Time Warner which buys up small companies to build itself up. Time Warner owns Warner Bros. Pictures, HBO, AOL, CNN, New Line Cinema, Castle Rock, Warner Bros. International Cinemas, Time Magazine, DC Comics, NME and In style Magazine. Within these companies Time Warner own films and TV Shows like Harry Potter, Looney Toons, Lord of the Rings and The Hobbit.
I then researched the company CBS. This company owns no distinct film companies however, CBS is the distributers for CSI and many other popular TV Shows. CBS stands for Columbia Broadcasting System. It broadcasts radio networks and television networks. And broadcasts everywhere in America.
The final company involved in the big six is News Corp. This company owns smaller companies like Fox Searchlight Pictures, Fox Music, 20th Century Fox Entertainment and many other various Fox branches across the world. This includes Newspapers like The Sun, The Times and The New York Post. News Corp now also own 7.5% of ITV and 39.1% of SKY.
The Old Hollywood Big 5 & The Studio Era:
As well as the 'Big Six' I also discovered that there was an old version that only consisted of five main companies. These five companies were: Fox Film Corporation, Loew's/ MG, Paramount Pictures, RKO Radio Pictures, Warner Bros. These 5 companies were also involved in the studio era. I researched the studio era and found that it is when there was a studio system that involved the distribution of films by the big 5, these films were distributed by creating advertisements from each company from films that the other companies were involved in making.
Media Ownership
I then looked at the ownership of the media companies relating to the film industry. The Media Ownership is where companies have the capability to grow through joining together and buying out smaller companies that may or may not be struggling but only if the main company is in need of more money.
As with many things that work out in companies there is always good and bad sides to things. The good side of Media Ownership is that if a certain film requires a song from someone who is involved in a company that is owned by a bigger company, then the film company would be able to use this song or piece of material, without having to pay the person who made the material that they want to use. For example if Universal wanted a Katy Perry song they could used it if they were both part of Universal or General Electric. Another good example is Time Warner owning DC Comics which gives them the rights to make a film without needing permission from DC. Also if a film is bad then a newspaper or magazine from the same company can make the film sound good and make people watch the movie giving the company more money.
The bad side of Media Ownership is that if a newspaper writes an article that has a bad opinion then other newspapers could be brought down by the other newspaper just as badly because they are both linked together in the companies. This could lead to a huge money drop for these companies. An example of this is News of the World, when it had problems these may have affected the company that owns it and the other newspapers that the same company owned. Another bad thing is that not only will the other companies lose money, they would need to get people to trust them again.
Conglomerates
I next researched the term conglomerates. This is when large companies own other, smaller companies through merging them together or purchasing them. This includes if a company has purchased other companies with a wide variety involving different industries and being able to maintain a successful company from joining together. In simpler terms conglomerates are corporations that are made up of a number of different, unrelated businesses. In a conglomerate, one company owns smaller companies, which can have a way of doing business separately from each other. Each of a conglomerate's businesses runs separately from the other business areas. A good example of the film industry is Disney owning Marvel. This example also links well with a film company that is involved with other companies in different industries. If Marvel made a film that needs a song from the music area of the Disney industry then it will be able to use this without needing to pay as Disney already owns Marvel.
Vertical and Horizontal Integration:
After researching conglomerates I researched vertical and horizontal integration. I discovered that this is when a company owns a chain of supplies that is owned by the companies that the big company owns. This is only when the supply chain is from several different companies. These companies are able to get resources from the other company without having to worry about buying these resources as they already own the companies. Horizontal integration is when a company is allowed to share it's resources with another company that may be different or similar but as long as it is on the same level as the other company.
Distribution
After this I then looked at one of the main parts of the film industry. It concerns the film's entry and life in the marketplace. In America the distribution of film is usually operated through the use of vertical integration. In the UK there is more focus on marketing the movies so that companies can then gain more money and a wider audience by advertising these films. They also hold onto the film longer as a product in order to keep the audience interested. The traditional distribution departments involve the film sales that have the role of booking films into cinemas, the print department that has the role of making copies of the film for use in the cinema. However, nowadays films are put onto hard drives in order to distribute the movies to various places in the world. And finally, marketing which is responsible for launching a film and creating hype for the film in order to entice an audience.
One of the main, traditional distribution methods that is no longer used is by using film reel. Film reel is where all the images for the film are placed onto a strip and then reeled around a film reel for safe keeping so they do not get tangled or damaged. The film reel is then transported to the cinemas via a truck or if it is for another country it may be flown over. Nowadays films are distributed, usually, through having the film as a downloadable file to be sent to film companies so that it can be viewed in other places.
This image here is an example of the chain of how a film is produced. The film comes from the producer to the distributer and then these film reels are transported in vans or planes and then sent to the cinema to be shown to the customers.
The Box Office
This is mainly when distributer will work out an amount of money in order to consider how much money will be spent on the distribution of a film based on the following information: the box office figures for the particular movie, when films were rented they would also consider the estimated amount of rentals that this film would have, they would also research the common audience via the range of ages and gender. They also consider the cast and crew of the film in order to see how much the film should be worth. A big one that the box office looks at is the certificate range that the film should have, the experience of the company that the film was distributed by because if the audience likes a film made by this particular company then the audience would want to watch another. And finally how many copies were needed to show the film. These all link to the unique selling point of the films.
Unique Selling Point
I researched and found that the unique selling point is a good way of producing a product that is different from brands that are competing and this gives its buyers a reason to prefer this film as opposed to films in other brands. The unique selling point is an important piece for promoting a theme around which an advertising campaign can build. This also involves the use of marketing for the films. marketing is divided up into three areas which are as follows: advertising which is usually above the line of cost for the films. The publicity which is below the line of costs. And the promoting of the film.
Convergence
The convergence is when technologies that use media come together in order to involve the media industry. This can be done through the use of a mobile phones being able to be used as a still and video camera. Also quite a lot of mobile devices now have the ability to allow the user to watch films on and listen to music and also allowing access to the internet. The convergence usually refers to new technology moving towards single platforms and delivering multiple media outputs that can be used to reach audiences, for example, a PS3′s primary function is video gaming but you can download and watch movies and also watch catch up TV and music videos. This shows that technology has come a long way.
Synergy:
Synergy the is the promotion and selling of a product within various areas of media conglomerates. The most common examples of a synergy is in films, soundtracks and even sometimes in video games.
Synergy means that the companies are working together in order to achieve an objective that couldn't be achieved if a company was working on its own. Cross-media convergence links with synergy if companies are able to take advantage of the links between companies that they have created. Disney is an obvious example of a company involved in a synergy from the top down from film studio to kids’ TV channels where the channel is able to play and promote there films to the Disney Store.
Conclusion
To conclude there are many areas in the film industry that all relate to how companies are able to work together and build upon their own company in order to achieve an outcome that the companies both agree on. With companies working together to make films, the smaller companies will be able to gain the money that they require in order to keep the company continuing. But if big companies are buying smaller ones to make themselves stronger why is there a competition that reveals the same outcome.
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