Unit 8 Assingments: Know about ownership and funding in the television and film industries

BTEC LEVEL 3 DIPLOMA IN CREATIVE MEDIA PRODUCTION

UNIT 8 – UNDERSTANDING THE TV AND FILM INDUSTRIES

LO – Know About Ownership and Funding In the Television and Film Industries

Task 1

My role in this is to have an understanding of what happens in the TV and film industry. Another role of mine is to try and earn my place at a film studio for work experience. In order to do this, I will need to analyse a few things for the assignment. I will be finding what ownership and funding is in the TV industry, for example, how the industries are structured and how the company are funded. I will be using a few case studies such as the film Ill Manors (2012), So Television, the BBC and other examples that I have researched.

Ownership in the industry refers to the structure and organisation of who controls and owns the media. For example, the television and film industry is made up of conglomerates, independents, public service, commercial and vertical and horizontal integration. Furthermore, funding refers to the ways in which the television and film industries gain their money to operate.

In the UK, one of the way in which the industry is owned is through public service broadcasting, in the UK this is through the British Broadcasting Corporation (BBC). Public Service Broadcasting is a service that is provided in the UK which benefits the public. The BBC is one of the largest broadcasters in the world. The BBC is funded by the taxpayers paying TV licence. With all the money they get from the licence fee, they use it to pay for TV, radio, online services and more. ‘For TV, every household has to pay £7.96 every month, for radio, every household has to pay £2.11 every month and for online, every household has to pay £0.66 every month’ (bbc.co.uk, 18/09/13). Anyone in the UK or who watches television gets covered by a TV licence. Most people in the UK have colour television which means at the end of the year, they are paying the BBC £145.50. In the BBC, they have to have values which have to be kept. They have to respect one another and appreciate the diverse people that they have so that everyone can do their best. They have to take pride in the quality that they deliver so that the money that they earn is well earned. Because the audience is at the heart of everything they do, they have to make sure they produce shows that catch their eye and shows that will make them watch it weekly. Another value for the BBC is that trust is the foundation of the BBC. They have to be honest at all times and independent. The BBC hosts a variety of diverse shows so that they have different audiences viewing in their shows. BBC One usually host shows that involve drama, affairs and entertainment, BBC Two usually host shows about knowledge, drama and arts and BBC Three usually host shows that are entertaining for teenagers and young adults. What BBC do with their programmes is that the shows they show in the morning appeal to people who are old and in the evening, they show programmes that appeal to more of the younger generation. This is because in the morning, the younger generation are at school or college so there is no way that they can watch it. Likewise, shows that come on in the evening are for the younger generation because they are likely to be up and it suits their generation. At this time, the adults will be trying to get sleep for work in the morning or looking after their younger children. Shows in the morning that come on in the morning for that particular age group are programmes like Cash in the Attic and Bargain Hunt whereas in the evening there are programmes such as Eastenders and Waterloo Road. The reason why shows on BBC are divided into time difference is because different shows appeal to different age groups. Waterloo Road and Eastenders have episodes about what goes on in an everyday teenager’s life whereas Bargain Hunt and Cash in the Attic are about bargains and selling antique stuff which adults like to know about as they might want to get involved in.

The biggest types of companies in the world are the conglomerates which own smaller companies which are called subsidiaries. Media conglomerates are large companies that are well known around the world. They have multiple media interests and as well as global multinational organisations. ‘According to the 2013 Fortune 500 List, Walt Disney is the largest conglomerate in the United States’ (en.wikipedia.org, 18/09/13). Disney have a lot of other subsidiaries under control such as Marvel Studios and the Discovery Channel. When it comes to film, these conglomerates are allowed to take risks when making a film because if the conglomerate has money left over so even if they don’t make enough profit, they will still have money. Also they will not need to coproduce with anyone to secure funding because they are at the top so their already securing money without needing to collaborate with anyone. Because the conglomerates are at the top of the media chain, they are likely to work with bigger stars as money can be coming in for the both of them, special effects are more than likely to be used to get their film to be one of the best and they can travel to better locations to make everything seem realistic. We all know that the size and the power of the conglomerate is huge and because they more money, they are likely to have better links to bring in to make their films better. Media conglomerates also use synergy to gain profit. Synergy is when the conglomerate use their subsidiary company to promote each other so that profit can be made between them.

Companies like the ITV and Channel 4 are both media conglomerates. The ITV is a commercial television network in the UK which is funded from advertisement and sponsorship. ITV is funded through advertisements and this is called the Ad Funded Programming (AFP). Ad Funded Programming ‘is a deal where your brand has a very close relationship with an ITV programme, either financially or creatively’ (itv media, 24/09/13). This goes above sponsorship meaning where the funding goes straight into the production of the programming. An example of this is the show Minute to Win It with the advertisement of Cadbury Spots VS Stripes. ‘A brand partnership agreement has been made between Cadbury and ITV will see the commercial broadcaster’s new game show Minute to Win It sponsored by the chocolate brand’s Spots V Stripes campaign’ (the drum, 24/09/13). This advert will come on just before the show starts and just as soon as it goes for a break. Another big conglomerate is Channel 4 which is a commercial company is funded through adverts and not license fee. All of their funding is from its own commercial activities. Sponsorship is funding provided to a television program or network to help pay for airtime (wisegeek, 2/10/13). Sponsorship is often with a television show that is based on the people viewing into the specific programme.

A type of funding for TV is something called subscription. This is ‘a service in which payment is made to be able to view TV content which is otherwise unavailable at a given location’ (dictionarycentral, 9/10/13). An example of subscription in the television industry is Sky. Sky allows you subscribe to their different packages that include sports, kids, movies and more. Subscribing to different channels is useful because it will allow you to view the different channels they show. If you subscribe to something like Virgin or Sky, they might give you different deals that benefit the both of you in order for you to have more channels on your television.

Another type of funding for TV is something called advertisements. Adverts appear on television and they are usually shown to spread a message so that particular product could be brought. The channels that allow advertisements are roughly around 7 minutes of advertisements an hour. A TV show can also get paid from a company by showing their advert just before it comes on and just after it goes off for a break. Adverts are designed for people to learn about it and recognise the product as well as buying it. Different adverts come on different programmes as different programmes have different audiences. For example, the Disney channel shows show adverts to do with the different programmes shown on the Disney channel and toys and products aimed at the younger generation.

Product Placement is ‘an advertising technique used by companies to subtly promote their products through a non-traditional advertising technique, usually through appearances in film, television, or other media’ (businessdictionary, 24/09/13). The company wants their product used or displayed will often have to pay a fee. Product Placement is important because companies will like to think that the audience will have look at their product and hopefully consider buying the product. An example of product placement in film is the film Casino Royale. The distributors were all owned by Sony so Sony put their products in the film for people to buy. These products included the VAIO laptop and the Sony Ericsson. An example of product placement in television is X-Factor. Samsung products will be used in the X-Factor series which is part of a “partnership which includes paid-for-placement” (thedrum, 3/10/13). Products such as tablets, cameras and mobile phones will be shown during the X-Factor, during the X-Factor Online Diaries, the website, the app and their official YouTube site.

But there’s a type of company which doesn’t own anything and isn’t owned by anyone and this is called an Independent Company. An independent company is a company that runs by itself and isn’t owned by any other company that is larger than them. Having an independent company can become a disadvantage because it can be difficult to manage as there isn’t any help from others and also, independent companies have to persevere and push on even though they are up against larger conglomerates. If an independent company becomes successful, it is likely that a larger conglomerate brings them up so that profit can be made between the two. An example of this was Graham Norton’s production company called So Television. This was first established in 1998 and now, it has become very popular as the independent company was fast growing in the UK. At this current moment, ITV own So Television as they bought it in a deal that is worth up to £17m. ITV must pay £10m upfront and depending on how the independent company does well from now until July 2016, ITV will furthermore add £7m in cash. So Television also makes The Graham Norton Show which is showed on BBC1. Another example of an independent company is the Michael Atwell Productions. They are an independent company in the UK who make programmes for broadcasters. They usually make documentaries about crime, arts, history and other things to do with human interests. They have made programmes for broadcasters such as BBC, Channel 4, Channel 5 and Sky. Their programmes have been dispersed worldwide which is good because people are starting to recognise the independent company and it means that bigger companies are likely to make good money deals with them. Their programmes have been released in countries such as the United States, Australia, France, South Africa and more.

So now that independent companies have been covered, it is now time to move on to the Media Subsidiaries. These are simply small companies that are owned and under control by the larger conglomerates. For example, Sony Pictures Entertainment is owned by Sony, Paramount Pictures are owned by Viacom, Time Warner owns Warner Brothers and News Corp own Fox.

Private companies ‘may be one that is simply owned by individual citizens, as opposed to being controlled, run and owned by a government’ (wisegeek, 6/10/13). A private company’s ownership is private so this means that it does not need to meet the firm securities. An example of this is the Warner Bros International Cinema. They are a company who provide movie experiences in countries like Japan, Italy and China. They are a subsidiary to Warner Bros.

‘Vertical integration is the process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity, in order to increase that company’s or entity’s power in the marketplace’ (bizdharma.com, 23/09/13). Every time we see a brand name on a product, many companies are involved in trying to develop the product. In film, vertical integration is when the production company owns the production, distribution and exhibition of the film by the same company and because of this, they gain all the profit. An example of vertical integration in film is the company Warner Bros, who are owned by Time Warner and how they used vertical integration in the film Harry Potter and the Deathly Hallows: Part 2 (2011) to make their earnings from the productions large. The film was created by Warner Bros and was then distributed by Warner Bros as well. When it came down to exhibition, Warner Bros used its international cinema chain to show Harry Potter to a worldwide audience. It was ideal for Warner Bros to focus on making the cinema industry bigger so that the future of Warner Bros can be successful in the future. Because Time Warner (conglomerate) can produce, distribute and exhibit their products using the companies they own, it means that whatever Warner Bros produces (Subsidiary) takes priority over anything that is produced by another company.

Horizontal integration is ‘an ownership structure in which one conglomerate owns or operates different kinds of media’ (answerbag, 6/10/13).With horizontal integration, a production company enlarges into other areas of one industry. The company can now develop in an area of production or they can buy out another company that deals with these areas. The advantage about horizontal integration is that if the company is larger than others, the company will have more power over its suppliers and customers. The disadvantage about horizontal integrations is that the larger organisations are harder to dominate so this means that they will be less flexible in the market. An example of a horizontal integration is Disney. Disney is a horizontal integration because Disney uses its characters to produce toys and other things to the kids who watch it. Disney uses other companies to do work on movies and TV programmes so then they can assemble the toys for the kids. An example of horizontal integration in film is the film Casino Royale. The film was made by MGM and Columbia Pictures but these both are owned by Sony. This shows that Casino Royal used Horizontal Integration because during the making of the film, it expands into other companies. The DVD that came out for Casino Royale was released on Blu-Ray which is a product of Sony.

The function of a pay per view is to provide a one-off entertainment show for paying customers. A pay per view provides a service where customers can purchase. The broadcaster produces the event at the same time so everyone can order it without problems. Pay per view’s can be brought via telephone or using the remote. There are many different pay per views such as films, entertainment and sports events. An example of a pay per view that gets broadcasted in the UK is WWE. Since 2002, Sky had the rights to all of the WWE pay per view events, showing them on the Sky Box Office. For every pay per view that is shown on Sky Box Office, customers must pay £14.95. Unfortunately for all HD customers, you can only view it in HD at the first preview of the pay per view. Pay per View’s come with repeats usually for 6 days then it will officially come off the box office. Here is an example of a pay per view show on Sky Box Office.

The picture on the left shows how a pay per view is structured when ordering. An example of this is the wrestling event Wrestlemania 29(2013). It tells you how much the event costs for UK and Republic of Ireland customers (£17.95 and £24.95. It tells you how to order the event (using the remote, online or telephone. It also tells you day it will be on and what channel so people can view. It also tells you when the repeats are just in case you miss the first viewing.

(helpforum, 24/09/13)

‘Since July 2012, there has been something called NOW TV. Now TV is an internet-based instant streaming TV service powered by satellite provider’ (techradar, 18/09/13). NOW TV is trying to get people to stop using sites like Netflix and Love Film and join them. NOW TV can be used on different devices and most of the films on it are movies from Sky TV. NOW TV can only be used in the UK and movies cannot be watched from abroad. NOW TV allows you 30 days free service but after that, they start to charge 8.99 per month for the next three months then to £15 a month.

When it comes to British films, it is very hard to make the film progress and even harder to get the film exhibited into the cinema. This is because the company may not have a higher status than the others. British films are usually not recognised and this is because the American’s have much more bigger companies such as; Universal Studios, Paramount Pictures, Columbia Pictures, Walt Disney and more. An example of a British film that got recognised and did well was the film Ill Manors (2012). The film only had a budget of £100,000 (imdb, 7/10/13) but made £453,570 at the box office (wikipedia, 7/10/13). Because the film company that made Ill Manors was not a big conglomerate, the film HAD to make sure that it was good enough for the audience so that there was not any losses. The film Ill Manors was funded by the Film London, BBC Films, and the Mayor of London. Films can be funded through private investors and with Ill Manors; there was a private investor which was the Mayor of London. The private investor (Mayor of London) made sure the film went ahead and became successful by producing money for the film. A certain amount of money was given back to the private investor once the money was made. This was due to their participation of making the film successful. It was also funded by the UK Film Council which is a development fund. This has an aim to’ stimulate a competitive, successful and vibrant UK film industry and to promote the widest possible enjoyment and understanding of cinema throughout the nations and regions of the UK (bbc, 7/10/13). The UK film council’s job is to provide funding for film production and educate those who want to have an opportunity in the film industry. The UK Film Council currently has 75 employees and their job is to promote Britain as a film making location and British films that are produced away from the UK. An example of where a lot of British films are showed on is the channel Film 4. Film 4 is a British film company that is owned by Channel Four Television Corporation. In the year 2006, they moved from pay TV to being free-to-air. This was because it will allow more free access to home-grown and blockbuster films. Film 4 was produced so that more British films can be recognised for the hard they work do as well funding for new talent. ‘Winning 5 Oscars in 4 years and 3 BAFTAs in 2007 alone, Film4 has an incredible reputation for making and showing alternative and challenging films’ (channel4sals, 7/10/13). Another way film is funded is through distribution companies. This is where the company is in charge of the marketing of the film. They also help the film financially in order to make the film big so that a lot of money can be made. Their main attempt is to make sure the film gets sold at either cinemas or DVD’s. The company is in charge of how many DVD copies they want to make and they also show the movie to the buyers representing their theatres. An example of this is the director of Paranormal Activity (2007) Oren Peli. He went to Paramount Pictures and asked them if they can distribute and exhibit his film. The film made $193,355,800 in the box office.

To conclude this essay, I now understand that ownership and funding is very crucial in the film and TV industry. This is because if you subsidiary, you have someone who owns you with lots of money which can improve your business. Before this, I never knew anything about conglomerates of subsidiaries but researching this has made me think that owning businesses are very hard because you have a high target of trying to please your audience, meaning you will have to do everything you can to make the film/show very good. I also think that independent companies must try their very best to make their company well known because it would be much easier if an conglomerate comes and owns them so much more money can be made. I also feel that the British films should try and have well-known actors and better locations so their films can be recognised more. This means the UK film council should do their best to help them do that.

Bibliography:

Techradar: http://www.techradar.com/news/internet/now-tv-what-is-it-and-how-do-you-get-it-1131126 (Accessed 18/09/13)

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