Media Ownership and Funding

OWNERSHIP


Public Service Broadcasting

A prime example of our country's Public Service Broadcasters would be the BBC. It's a PSB because it's not funded by the government or commercially through advertising. Instead they fund themselves through the national TV license fee, and their aim is to 'inform, educate, and entertain' as opposed to selling their audience to advertisers and exploiting them.

Commercial Broadcasting

Commercial broadcasters exist solely to make a profit. Their main income is usually through advertisers, so they function more as a business than anything else. Examples for these include ITV and Channel 4, and as a business their primary customers are, in a way, the advertisers - their product is the audience which they sell to the advertisers.

Corporate and Private Ownership

This is simply the difference between two types of company. If a company is corporately owned, it is listed as a public company, and a private company is one that is owned by an individual.

Global Companies

The name is fairly self-explanatory, as global companies are companies that span the globe. One such example is Sony, which is a company that umbrellas over many many different divisions and smaller companies.

Advantages of being global include vastly increased userbase, but problems include ensuring different markets and different cultures can identify with the product properly.

Concentration of Ownership

This is a term used to describe the fact that ~90% of media in the world is owned by just 6 companies:

Disney

News Corporation

Vivendi Universal

Time Warner

Bertelsmann

and Viacom.

An advantage of such a world oligopoly is that things can be better integrated with one another, and cross-platform communication is a lot easier, but a negative is that there is less competition and that always leads to an inferior product.

Vertical Integration

If you think of, say, film production as a grid of sorts, with a row of production studios, a row of distributors, and a row of cinemas, the 'vertical' and 'horizontal' analogies begin to make a lot more sense. Vertical integration is where one company owns a whole vertical column on this grid, meaning they own the studio, the distributor, and the cinema.

An example of a company that demonstrates this (albeit not in the film industry) is Apple. They own many facets of producing products like their iPhone, such as processor design and software development.

Horizontal Integration

If we look the other way on our metaphorical grid, there are also companies that own rows, meaning they own a few companies within the same level of production/distribution. An obvious example here is Disney, who own various other production companies like Pixar, Marvel, and Lucasfilm.

FUNDING


The License Fee

This is the BBC's main form of income. It is unique in that it shows the BBC as a company funded neither by the government or by advertising, which means that it isn't government propaganda or exploiting its audience. This is integral to the beeb's image of total neutrality and lack of bias.

Subscription

Perhaps a classic form of funding, and normally billed as an opposite of sorts to one-off payment. Subscriptions are paid by the consumer on a weekly, monthly or yearly basis, in order to keep receiving the product that they are paying for. Some examples in the media industry would be MMO games such as World of Warcraft or Elder Scrolls Online, and subscription services for film include Netflix, Hulu and Lovefilm.

One-off Payment to Own Product

Perhaps the classicest form of funding, this has been standard in the film industry (and almost everywhere else) for years. After paying a one-time fee, the product is yours to own forever. Examples pertaining to our topic include purchasing DVDs and Blu-Rays, or permanent download options from services like iTunes.

Pay Per View

Similar to one-off payments in many ways, pay-per-view is rather self-explanatory: Consumers pay once every time they use the service, and have to pay again if they wish to use it again. This is common in wrestling programmes on TV in particular, but there are examples in other areas, such as services like iTunes offering 'rental' options on their downloads, or even cinema tickets.

Sponsorship

Vaguely similar to advertising but not quite the same, one or two companies will fund the product in exchange for short 'bookend' slots on either end of ad breaks during a programme broadcast, examples of which would be TalkTalk's relationship with the X Factor or Cadbury's with Coronation Street. This is even coming into prominence with online video, with 'shows' like Minutephysics or Film Riot being sponsored by smaller, online brands. It's useful over regular advertising slots because the brands become tied to the show and therefore more memorable to the viewer.

Advertising

Between shows and programmes, TV networks run short, minute-or-so slots for your conventional TV advert. After the ad has been made, the company must pay the TV network for their slot, the price thereof varying depending on the time of day and the popularity of the programme the ad will be shown alongside.

Product Placement

A more subtle form of advertising, product placement is when products from a certain brand or company actually appear in the show or film. For the sake of consistency I will again use Sony as an example: In the Amazing Spider-man series, a lot of Sony products are in use by the characters. That example is slightly different to conventional product placement as a Sony studio actually produced the film, but usually product placement works a little differently.

It can work in one of three ways:

 - The product is deemed appropriate and beneficial to the scene by people working on the film; the company making the product is not contacted and no transaction takes place,

 - The filmmakers and the brand have a deal in which the product is provided for the crew in exchange for placement (for example if Coca Cola had a deal with a film there would be lots of free cans on set for the crew)

 - Similar to the previous arrangement, but instead of giving the product to the crew there is a more conventional monetary transaction and agreement.

Private Capital

This is essentially a slightly more contrived way of saying the producers paid 'out of their own pocket'. It's a useful way to start one's career and get on one's feet as demonstrated by Freddie Wong and the Rocketjump team who now have a financial relationship with Lionsgate after making 3-or-so minute shorts in their own time on their YouTube channel for 4 years.

Crowd Funding

Crowd-funding is a relatively recent form of funding, pioneered by websites such as Kickstarter and IndieGoGo. Users can sign up for an account, and if they have a good idea for a product (anything from a film to a range of designer jars), they can start a project on the website. The project will remain active on the website for an average of 2 or 3 months, and during that time other users can 'back' the project by pledging a certain amount of money towards it. If the project reaches its goal before the end of the allotted time then the project will be funded, and the producers will get the money. If not, everyone who backed will be refunded. Examples of films that were crowd-funded include Zach Braff's Wish I Was Here, Brooklyn Castle, and Veronica Mars.

Development Funds

This is special money giving by organizations to budding filmmakers in hopes of keeping the industry fresh and exciting. In our country we have the BFI, who get lottery money to give to filmmakers for various projects.