Media Industries

Theories 

1 - Power and media industries - Curran and Seaton

(film industry, newspapers, radio, video games, magazines)

• 'The media' is controlled by an increasingly small number of companies who are driven by profit and power
• By concentrating media production in to the hands of so few companies, there is an increasing lack of variety, creativity and quality
• We need more socially diverse and democratic patterns of ownership help to create varied and adventurous media productions.

Key work –

Power Without Responsibility

2 - Regulation - Sonia Livingstone and Peter Lunt

(film industry, newspapers, radio, videogames, television, magazines, online media)

• 'Regulation' refers to the rules and restrictions that every media industry has to follow. For example the UK film industry must use the BBFC's age certifications, and television must adhere to OFCOM's regulations
• There is a struggle in recent UK regulation policy between the need to further the interests of citizens (by offering protection from harmful or offensive material), and the need to further the interests of consumers (by ensuring choice, value for money, and market competition)
• The increasing power of global media corporations, together with the rise of convergent media technologies and developments in the production, distribution and marketing of digital media have placed traditional approaches to media regulation at risk.
• Online media production, distribution and circulation in particular often allows producers to completely ignore media regulations

14 - Cultural industries - David Hesmondhalgh

(film industry, newspapers, videogames, television, online media)

• 'Culture' and 'industry' are two terms that are often at odds with one another
• Producers try to minimise risk and maximise audiences through vertical and horizontal integration,
• They also standardise and format their cultural products (e.g. through the use of stars, genres, and serials)
• The largest companies or conglomerates now operate across a number of different cultural industries.
• The radical potential of the internet has been contained to some extent by its partial incorporation into a large, profit-orientated set of cultural industries.

Key work –

The Cultural Industries

Key Words

1) vertical integration; when 1 company owns more than 1 stage of production/media chain. 

2) horizontal integration; Horizontal integration is the process of a company increasing production of goods or services at the same part of the supply chain.

3) cross media convergence; Convergence of media occurs when multiple products come together to form 1 product with the advantages of all of them.

4) synergy: when two or more media institutions work together to create a consistent image and/or brand for a single product . Media Convergence is similar to Synergy in that is involves two or more media institutions. However, when they come together it usual involves one product, e.g. Product Placement.

Vertical Integration

Vertical Integration is when a Media Company owns different businesses in the same chain of production and distribution. 

When a company expands its operations into areas that are at different stages of the same manufacturing process, such as when a manufacturer owns its supplier and/or distributor. Vertical integration can help businesses cut costs and improve efficiency by lowering transportation costs and shortening turnaround times, among other benefits. However, rather than being vertically integrated, it is sometimes more effective for a company to rely on the expertise and economies of scale of other vendors.

GE/Comcast (NBC, Universal), News Corp (Fox News, Wall Street Journal, New York Post), Disney (ABC, ESPN, Pixar), Viacom (MTV, BET, Paramount Pictures), Time Warner (CNN, HBO, Warner Bros.), and CBS controlled 90% of the media in the United States by 2011. 

Advantages of vertical integration 

• Being able to keep the decisions and projects "in house" as opposed to having to outsource them to other companies
• maximizing market control 
• Companies that are vertically integrated can offer their products at significantly lower prices than companies that pay each organization in their supply chain for their services.
• Bigger budget for shows and movies as the company has a means of finance and don't need to outsource as much companies 
• More control over content from how it's produced, distributed and exhibited
• Bigger target audience 

Disadvantages of vertical integration 

• Minimizes a company's access to diversification. 
• Companies must invest a significant amount of capital to establish or purchase factories. The plants must then be kept running in order to maintain efficiency and profit margins.
• Lack of competition in the market leads to lack of innovation. The companies at the top are producing content at rapid rate however, a lot of them are watered down. This is due to companies prioritizing quantity over quality. 

Case Study : Comcast Corp. 

Comcast is a global media and technology conglomerate that began in the 1960s as a cable company. Comcast has grown over the years through acquisitions such as NBCUniversal and movie producer DreamWorks Animation. Comcast's many platforms, such as Xfinity and Sky, provide broadband, cable and network television, streaming internet, phone, and other related products, as well as television and film production. 

As seen in this poster, Comcast owns their own streaming services, tv channels, movie studios, media companies, etc. 

Case Study : Netflix

Presently, Netflix promotes its original content alongside programming licensed from studios through its distribution model. Rather than relying solely on the content of others, Netflix uses vertical integration to become more involved in the entertainment development phase sooner.

Netflix has its own production, distribution and exhibition companies. As netflix is a streaming site, they distribute and exhibit their content all from the click of one website that operate under the parent company. 

Example of Netflix's media chain

Over-the-top (OTT) services are businesses that provide world wide web delivered content, however the definition specifics vary depending on interpretation (Radosinská 2017; Kim et al. 2017). Within entertainment industry, OTT services are often recognized as subscription video-on-demand (SVoD) or video streaming services.

The graph depicts the current state of the entertainment industry following OTT players' expansion into their own exclusive products. Broadcasters have expanded vertically into OTT services, while network companies have expanded into content creation and OTT services. The dotted lines from the other major players' content sections represent the less contentious relationship OTT services had with broadcasters and network companies regarding licensed content. The broadband connection required by OTT players from networks now has a dotted line, indicating the increased importance of network control over broadband as net neutrality principles deteriorate.

It is evident that the emergence of Netflix and other OTT services to the entertainment industry, as well as Netflix's own vertical expansion strategy, has compelled vertical integration strategies from those other industry players. Moreover, innumerable other literary works sources suggest that Netflix's business model modifications have urged industry incumbents to take action. As reported by the Economist (2018), Netflix's vertical integration served as a rallying cry for its rivals, such as AT&T's acquisition of Time Warner and HBO.

Horizontal Integration 

Horizontal Integration is the ownership of several businesses of equal value by a media company. A Media Company can own a magazine, a radio station, a newspaper, a television station, and books. Almost all media companies are vertically integrated. It helps to generate more revenue and increases the company's popularity among readers. Furthermore, not all media consumers prefer to read magazines. People who are more technologically literate will read the magazine online, so horizontal integration helps to reach a larger audience. 

The acquisition of Instagram by Facebook (now Meta) in 2012 for a reported $1 billion was one of the most definitive examples of horizontal integration. Both companies were in the same industry (social media) and had similar stages of production for their photo-sharing services. Facebook wanted to strengthen its position in the social sharing space, and it saw the acquisition of Instagram as a way to increase its market share, reduce competition, and gain access to new audiences. All of this was realized through Facebook's acquisition. Instagram is now owned by Facebook, but it continues to operate as its own social media platform. 

The Walt Disney Company's $7.4 billion acquisition of Pixar Animation Studios in 2006 was another notable example of horizontal integration. Disney started out as an animation studio aimed at families and children. Nevertheless, the entertainment behemoth was experiencing market saturation as well as creative stagnant growth with their own ongoing operations. Pixar competed with Disney in the animation space, but its (digitally) animated films used cutting-edge technology and an innovative vision. The deal is widely regarded as literally and metaphorically reviving Disney, expanding its market share, and increasing profits.

Advantages of horizontal integration 

• Horizontal integration can benefit businesses and is most common when they compete in the same industry.
• Using horizontal integration allows for the creation of economies of scale, meaning that the company would have cheaper production costs.
• Horizontal integrations enable businesses to grow in size, diversify their product offerings, reduce competition, and enter new markets.
• Purchasing an established and most well brand may be less expensive in the long run than organically growing a brand; this may raise entry barriers for potential rivals, resulting in higher long-run monopoly profits.

Case Study : Amazon buys MGM Studios

Amazon and MGM have reached an agreement worth nearly $8.5 billion. MGM is the film and television studio responsible for the James Bond franchise, Legally Blonde, and other well-known films.

AT&T announced last year a merger of WarnerMedia and Discovery, encompassing major networks such as HBO, CNN, HGTV, and others, to create a streaming behemoth. This plan was approved by the US government last month. The European Commission concluded that the Amazon-MGM merger "would not significantly reduce market competition." The US government has not yet evaluate in on the deal, but the two businesses have signed off on it regardless.

Disney acquired LucasFilm and Marvel Studios, allowing the company to create exclusive content for Disney+ based on Star Wars or Marvel Universe storylines and beloved characters. As a result, the company has created hugely popular programs such as Loki, WandaVision, and The Mandalorian. Amazon wants to do the same thing, which likely means building on popular series like Rocky or the James Bond franchises. Consumers may enjoy spin-offs based on their favorite stories and characters, but they suffer in other ways, according to Offenberg. As Amazon churns out revamps, there will be fewer unique stories.

Cross Media Convergence

Convergence of media occurs when multiple products come together to form 1 product with the advantages of all of them. 

For example ( past paper question? ) "How important is cross media convergence and synergy to the institutions that you have studied?" 

• What benefits are there when different products come together when a film is produced, distributed and exhibited?
• What new experiences do we get?
• What are the advantages?

Case Study: Ray Ban and Top Gun Maverick

According to myth, Ray-Ban was having a bad time in the 1980s. So, in order to increase their popularity, Ray-Ban hired a product placement agency called Unique (now known as UPP) to get Ray-Ban into the biggest films and on the faces of the hottest celebrities. And they did exactly that. Tom Cruise first wore Ray-Bans Wayfarer sunglasses in 1983's RISKY BUSINESS, followed by their Aviators in TOP GUN (1986). To this day, these are arguably two of the most iconic sunglasses models in the world. This is due in large part to product placement.

Ray-Ban received over eight and a half minutes of screen time in TOP GUN: MAVERICK (2022). As a result, less than in the original. It did, however, have a higher quality of exposure because its logo was visible 19% of the time. Miles Teller wore Caravans while Tom Cruise wore Aviators from the original film. The same model as his character's father. Bashir Salahuddin as Hondo also contributed significantly to Ray-Ban exposure. For the majority of the film, his character wore Ray-Ban optical glasses.

According to Bloomberg Newsweek, the actor's latest blockbuster, Top Gun: Maverick, is not only entertaining moviegoers around the world this summer, but it's also inspiring them to buy sunglasses. Since the film's release in late May, sales of the classic Ray-Ban aviators worn by Cruise have increase

This appears that perhaps the sequel's successful box office performance is reaping benefits more than just Paramount Pictures. According to a representative for David Clulow, one of the UK's largest sunglass retailers, the RB3025 Aviator has become one of its best-selling models this summer. According to GQ, this isn't the first time Ray-Ban has seen a spike in sales of the model due to the release of a Top Gun movie.

Along with the film and ray band, the Top Gun franchise audience reaped benefits. Aside from the marketing, the audience received merchandise in the form of Ray Ban sunglasses. Uses and Gratification theory, the theory is attributed to researchers Jay G. Blumler and Elihu Katz. It suggests an approach to understanding why and how people actively seek out specific media to satisfy specific needs. It is possible to attribute personal identity.

Synergy

Case Study : Men In Black

Having started the lavish collaboration between Sony Pictures and Lexus, which named the automotive company as the film's official vehicle supplier! All through the film, Lexus vehicles were featured as the official fleet of Men in Black agents worldwide, with the 2020 Lexus RC F taking on a starring role as the vehicle of choice for Men in Black agents... (and can also be seen in the trailer!).

The 2020 Lexus RC F was the show's star, but the Lexus RX Hybrid and Lexus LX SUVs also had supporting roles and an alien encounter or two throughout Men in Black: International. Men in Black has a brand image of being sophisticated and having a wealthy lifestyle, fancy cars, lovely alcoholic beverages, so partnering with Lexus stands to reason because it ties in with their overall brand image. Lexus may also want to be involved in a partnership with MIB because they are perceived as an advanced and powerful vehicle that is used elegantly.

In total, Sony Pictures and Lexus collaborated on the film, a co-branded TV spot, a specially made Men in Black RC F, and endorsement of the film's premiere. Not to mention, the hero car moved Hollywood megastar, embellished out with the Men in Black symbol decal and rim light features, attended the red carpet event alongside other A-list talent.

The Men in Black agents' high-end luxury goods and bling, including their cars, watches, sunglasses, and suits, are part of a prolific estimated $75M promotional push for Sony's June 14 reboot of the hit franchise Men in Black: International. Lexus, with its 467 horsepower RC F sport coupe, is at the top of MIB's list of global partners. The pitch: Men in Black (MIB) agents are on a new mission to find a mole within the organization and save the universe, with the help of a full fleet of Lexus vehicles. Lexus provided cars for the film's production and backed it up with a multi-territory campaign that included television, digital, dealership activation in 160 US dealerships, stunts, and sponsorship of the US premiere.