LO1 Script one: Ownership,Operating Model, Products, Market Position and Competitors

Introduction:

Hi, I'm Taighlor McNally from Education Wise to tell you about media products and the institutions that make them. The Institution I will be using as an example is 20^th Century Fox.

Ownership:

20^th Century Fox is a  conglomerate; this is a company that is made up of other companies that are called Subsidiaries (subsidiaries), think of a conglomerate as a pie, when you cut it into pieces the ‘slices’ are the subsidiaries. Unlike a conglomerate, a company can be an independent company which means that it isn’t owned and operates on its own; they also get to keep all there profit. Sometimes a company can have a joint venture which means that 2 commercial companies that are not associated with each other or are not owned by the same conglomerate work together to make a product. A commercial company is a company that aims to make a profit.

 

 

 

 

Rupert Murdoch is founder and CEO of 21^st Century Fox and News Corp, 21^st Century Fox, which is a conglomerate, owns 20th Century Fox as a movie subsidiary which have made movies such as ‘Avatar’, Fox TV as its TV subsidiary that make shows like ‘The Simpsons’, National Geographic which makes documentaries and Fox Sports Radio which is its radio subsidiary. News Corp on the other hand makes Newspapers like The Sun. 20^th Century Fox has its own subsidiaries like Blue Sky which is there animation department that have made movies like ‘Ice Age’ and 20^th Century Fox Home Entertainment which is a subsidiary that distributes video tape films but since 2006 they make DVDs and Blu-Rays, a recent release was ‘Smosh: The Movie’. 21^st Century Fox in a whole is a cross media ownership company that uses its subsidiaries to make more than one type of media to promote their products by owning companies that make the other different media, just like Sony.

 

Operating Model:

The Operation of a conglomerate like 20th Century Fox is a really big deal as it's what gets the company profit so it can carry on to make more products and the cycle goes round an round. There are two types of integration in the film production cycle, which is what 20th Century Fox makes, and these are vertical and horizontal.

Horizontal Integration is when a conglomerate and subsidiary, a parent company or joint venture works together to cross promote a product like a movie or game. This create synergy which means that their products are better promoted. All the media made in a conglomerate are made by subsidiaries or joint venture like what 20th Century Fox did with Blue Sky to make Ice Age, but if it’s an independent company it is made with a parent company or joint venture. These will make different media’s like TV, radio, film, games/electronics, website or newspaper/magazine. For example, 20th Century Fox has Fox TV which obviously make TV as it's in the name and Fox Home Entertainment which makes DVD/Blu-ray.

Vertical integration on the other hand is only for a conglomerate whilst Horizontal is for both a conglomerate and Independent company. A vertical integration is only for a conglomerate because it needs multiple subsidiaries which an independent company doesn't have, it has 3 stages that it controls; Production, Distribution and Exchanging. Production is the process of making the media such as a film from 20th Century Fox, distribution is were the profit is made as this is advertising and distributing the media, so in the case of a film its sold to Cinemas or is sold as a DVD to shops like Blockbusters and finally Exchange is the consumption of  the media, so this would be the customer buying the DVD or ticket in exchange to watch the movie.

 

So the pre-production stages is the planning, and this means that they make storyboards, scripts and work plans. Storyboards and scripts are used for the narrative part of a movie or game, and then the work plans are used as milestones and deadlines for filming or developing the movie or game. The company also needs to get a demographic of their target audience as this helps them get an understanding of how they're going to make the media as it needs to appeal to the target audience. Then they also need to start listing and gathering assets and equipment such as camera's and sound equipment. One of the important things they have to do is design concepts for the characters and locations, especially if the media is a game, but it can also be done for movies to help with  costumes, make-up and sets. They also have to think about locations, specifically movies and TV as this is where they'll film the scenes, as well as this, they have to think about the crew and cast as they're the people who are going to star or help in the movie or TV, the crew help with the production from setting up the equipment to applying the make-up. But with games they'll just have a cast of people who'll do the voices for the characters in game, but the crew will be people like programmers and concept artists. Even if it's a big company that's making the media, they still have to respect copyright and legislation, so when their gathering assets like music they have to pay the company that owns the music in return to let them use it. The most important thing about the pre-production stage is working out how much of a budget they're going to need and this doesn't just include the production but advertising and distribution, so they need to think real careful about how much equipment and casting is going to cost.

 

Next is the production stage, which is the stage where the movie or game is made and this can take up to 12 months. Firstly, there is the filming and recording of the actors as if its an animated or CGI movie they'll need voice recordings for the characters, and this goes for games as well, but then there are also triple a games that get massive budgets and normally if they're story based they sometimes use motion capture to make the characters look more realistic as a human other than the computer made movements. Most of the time movies use Chroma key, which means that they use green screen as a way to create CGI and sets without having to make them physically and instead just film and then edit it on to the green screen. The director of photography is the person who organises the camera crew and makes sure that the movie is filmed properly so he is an important person in the production stage especially when it's a movie. If the movie is an action or sci-fi type film they'll need to be a Pyrotechnic who professionally helps with fires and explosions. Finally, they'll need to get the assets such as props, sets, costume, make-up and prosthetics, which is basically specialised make up that make the person look like an alien for example.









Finally it's the post production stage and this is where all the special effects and editing go into the product, as they collect all the footage for example and add all the after effects like adding back drops to the green screens, adding CGI alien for films that fit into the science fiction genre for example, as the costume or design of the character was too sophisticated to make in reality so they had to make them on computers and they also can use CGI for stunts and scenes that need it like the ground breaking in half because of a massive earthquake.

 

Products:

Products are the outcome of a production and what the customers consume, 20th Century Fox has a wide selections of products which are what its subsidiaries can make, Fox TV makes TV programmes like Empire and The Simpsons. 20th Century Fox have made many films such as 'Alien' and 'Fantastic 4'. Products like newspapers have to be mass produced as they are read all around the country, this may only be on a national or local level but it is still read by a lot of people. If it was a mainstream movie production company it will make a movie on a international level so that it can reach out to a very wide audience, they'll mostly distribute it to country's like America, United Kingdom and China. Mainstream just means that its a popular and trending thing.

Market Position:

Market Position means how successful a company is in its field of expertise like food, media, electronics et cetra. You can find out how successful a movie is by looking at several things, you can look at its market share which shows how much a company and its subsidiaries are worth in the

 

 market as this can show how successful its products have been by looking at how much profit it has made. The sales of the product, so how many were sold or how many Box office hits did it get as this can show how many people like the products they make or how popular the product is. How many good reviews or how many awards of the product there are also effect the market position, as the better the review, or the more rewards given, the more likely people will buy or consume the product which gives better profit and makes the product more popular. Another example could be how old, experienced and popular the company is, because if the company has lasted a long time it means their good at what they do and so they're less likely to fail and not make a successful product. How they differ from other rivals who make the same kind of product can also effect the Market position, because if your company is different from a generic company then your company is going to stand out from the crowd and that means people will familiarise with it as it's different. Finally, if the company is international or just national can also effect your market position because if your international it means your going to be known all throughout the world, but if your national your only going to be known in one country or locally which means that your product might not sell as much, but if your a small national company you can still be successful as it doesn't just depend on your popularity but also how much profit you make.

 

The market position for 20th Century Fox today is 10.1%  with a gross of 806 million dollars with their films so far in 2015 and are ranked 4. Universal is ranked 1st with 27.9% of the market share and a total gross of 2,230 million dollars, 2nd ranked is Buena Vista who are a Walt Disney subsidiary with 18% and have 1,440 million dollars in gross and finally at 3rd ranked is Warner Bros. with 16.1% of the market share and a total gross of 1,286 million dollars. 20th Century Fox's film 'Home' had the highest gross this year in the box office at $177,397,510, compared to Universals top grossing film 'Jurassic World' which came up to $649,905,696, you can see why they are ranked 1st but this movie may of only got a huge profit because it brought back a huge movie franchise, meanwhile 'Home' is a new movie with out any predecessors.

Competitors:

Back to talking about 20th Century Fox, they make films but so do other companies out there and this can be a competition between them to get the most box office hits and profit, a big rival of 20th Century Fox is Walt Disney Studios and they are quite equal to 20th Century Fox in the way that they make about the same profit, but they are quite different as a company. Recently they have made films similar to 20th Century Fox as Disney has made a few new action films such as 'Avengers: Age of Ultron' which is a recent and popular film as it has a wide range of audiences from little kids to comic loving grown men. They also keep making films as a joint venture with Pixar such as the new release 'Inside Out', which is hugely targeted at kids and they have been successful with that tactic for many years as kids continue to love them. Disney stands out from the crowd, especially from 20th Century Fox, as Disney focuses on kids movies and that's what they are good at, but  20th Century Fox has only done this a few times by working with Blue Sky Studios and making a well known series called 'Ice Age'.20th Century Fox stands out from Disney is that it has worked more with Marvel to make movies like 'Fantastic Four' and 'X-Men series' which have been quite successful but this may be about to change as Disney owns Marvel and has been making big budget films with them like 'Avengers'.

Conclusion:

Well that's it with todays episode of Education Wise as we have gone through how institutions operate, what makes them successful and that there can be competition in the world of media. This was Taighlor McNally. Goodbye and stay wise!