There are many different parts that make up the media sector of

film. In this essay I will be looking at some of the bigger film

production companies from the UK, such as Film4, BBC and
United Independent Pictures, and bigger film production
companies from the US, such as Warner Bros, Columbia and Walt
Disney.
The first part of Ownership in the film industry is Vertical and Horizontal
Integration. Vertical Integration is where the production company owns
everything. This means having ownership of production, distribution and
exhibition.

https://www.youtube.com/watch?v=wdr-ygKW6-8 - this
video shows every part of the film process.
This maximizes the amount of profit they make from the film. Horizontal
Integration allows the business to expand into different parts of the media
sector. This means a company can develop in a different area of
production to, again, make more profit. Walt Disney uses both Vertical and
Horizontal integration. They own the production company, they market
the film and
distribute it
themselves. They
also produce all of
their own
merchandise.
Horizontal
Integration helps
Disney out a lot
because it allows
them to make films
and products that
arent for their core
target audience.
Their main film genre
was 2D, but they
now make live action films. Disney has 4 main areas of production. These
are: Movies, Television, Parks and Resorts & Consumer Products. Walt
Disney is conglomerate, which is a company that owns a big number of
companies in various mass media, including Television, Film, and Radio
etc. Disney is the 3rd biggest global media conglomerate, with 27% of their
earnings from parks and resorts, 24% from studio entertainment and 17%
from media networks. They own, Walt Disney Pictures, but also Touchstone
Pictures, Hollywood Pictures, Caravan Pictures and Miramax Films. It is
also a multinational company, meaning it has production of goods and
services in more than one country. Disney is one of the biggest
multinational companies, with the majority of the population of the world
knowing what it is and probably having paid for one of the many things
they produce.

Private Ownership
Private Ownership is different from Public Ownership. There are two types
of Private Ownership, ownership can be held by one or person or a small
group of people, or it can be held by shareholders. Privately owned media

outlets mainly focus on staying in the market and making a decent profit.
An example of a privately owned company is Newmarket Films, who
owned production and distribution. They looked to produce and distribute
films that were different to others. Examples of some films they have
produced are Cruel Intentions and the Christopher Nolan films, they have
also distributed films, in North America, such as Donnie Darko, Monster
and Whale Rider.

Multinationals
Quite a few of the bigger film production
companies are multinational. For example,
Sony, which is headquartered in Tokyo but
has locations around the world. These
include New York City, Dubai and Berlin. The
full list of locations is in the photo on the
left, taken from Wikipedia.

Independents
Independent Films, or Indie Films, is where a feature film
is produced pretty much completely away from the major
film studio system and then distributed by independent
entertainment
agencies.
Independent
films
and
companies may face challenges against conglomerates
and multi-national companies, they have to work a bit
harder as they are not usually well known, and do not
have a budget as big as the huge studios. This means
they have to make sure they make the film well and, in
particular, advertise it as much and as well as multinational companies do. A lot of British production companies, such as
Warp films, produce their films independently and work with Film4 and the
BBC for distribution. An example of a very successful independent film is
Paranormal Activity, which was produced by an American with a budget of
$15,000. He used Paramount Pictures to distribute it in North America and
made well over $190 million.

Conglomerates

Another way to produce films is in a conglomerate. This is a group of

businesses within the field of media, who put a lot of money into film
production companies and market their film through other companies.
This is called a synergy. The Big Six, who are the 6 major film companies,
are known as the six diversified media conglomerates whose film
production and distribution makes up around 80-85% of the American and
Canadian box office revenue combined.

Cross-Media
Big film companies often use Cross Media when they have
produced a big blockbuster. This is when they produce other
things to go with their film. Companies that use this include
Miramax Films, 20th Century Fox and Columbia Pictures. An
example of cross media used by Columbia Pictures is the
James Bond film Skyfall. Not only did they distribute the film, they and Eon
Productions (who produced the film) created and produced a Skyfall game
and soundtrack. The soundtrack featured Adele, and her single, which was
named after the film, won an Academy Award.

Vertical and Horizontal Integration

Vertical and Horizontal integration is used widely by film companies,
mainly conglomerates. Vertical integration means the production company
has the ownership of every part of the film making process. This is good
because it gives complete control and ownership
to the studio or company that produced the film,
and also can collect 100% of the profits that the
film makes. Horizontal Integration is where the
company expands into other areas of the industry.
It does mean, however, it will cost the company
more money as they are providing for the whole process, this might not
pay off if the film produced isnt popular. Horizontal integration is good to
companies for expanding where they are getting their money. It allows
them to diversify their products so they dont have to rely on just the
cinema for their profits. Sony use both vertical and horizontal integration.
Columbia Pictures distributed it, which is a Sony owned company, and it
was released on Blu-Ray which is a Sony product. Sony also produced the
soundtrack. Throughout the film there is product placement of the Sony
brand, including Sony laptops, cameras and phones. The James Bond
theme was also released on Guitar Hero, which plays on a Sony console.

Share of Ownership

Share of Ownership is when more than one production or distribution

company have shares on a single organisation.

Mergers
Mergers are examples of horizontal integration and Takeovers are
examples of vertical integration. There are two key terms within Mergers
and Takeovers, which are Organic Growth and External Growth. Organic
Growth is a growth within the business (eg. New products) and External
Growth is the use of Mergers and Takeovers. In 1995, Walt Disney Pictures
did a takeover and bought Capital Cities/ABC Inc. for $19 billion. This
supplied Disney with top-ranking news and sports programming. This
helped Disney become vertically integrated.

Cross-Media Regulation
Cross-Media needs to be regulated. In the UK there are actually only a few
regulations. Ownership is only capped if the owner of a newspaper
possesses more than 20% of total circulation, like Murdochs New Co.,
they are not allowed to own more than 20% of ITV.

Sources of Income
There are different sources of income for films.
Cinemas make money through not only the
showing of the feature films, but also through
the sales of food and
drink, merchandise and
through advertising. Films
shown in 3D in the cinema
tend to generate more
income. At only a couple
of $/ more expensive to see it people opt to go for this option over 2D if
it is available. The highest grossing film shown in 3D is Avatar, which was
released in 2009. This was followed by Avengers Assemble (2012) and
Jurassic World (2015). Sales of DVDs and Blu-Ray is also a source of
income.

Product Diversity
A good example of a company with
product diversity is Disney. They
make the films but also all the
merchandise to go with it. They make
all kinds of merchandise to target a
huge range of ages. They make all
kinds of toys for very young children
up to the age of around 10, targeting
both genders in different types of
toys. They sell fancy dress costumes
of their most loved characters along
with more toned down clothing that
features the Disney logo. They also
have targeted the older market with things such as home-ware. To the
right is all of the genres of products they sell. Through the sales of their
films, their theme parks and their merchandise Disney make around $35
billion a year. At the end of 2013 The Walt Disney Company had taken in
$11.57 billion in the fourth quarter, making an overall profit of $1.32
billion for the quarter. Since May 2014, the huge conglomerate has been
worth around $143 billion.

Profitability of Product Range

Each production or distribution has to have organisational objectives. Film
Fours objective and role, for example, is to commission and develop
British feature films. It is made up of 3 teams: Programming, Marketing
and Creative Services. All together they manage the marketing and
programming of Film Fours Channel, which is under Channel 4s umbrella
of television channels. They have worked on around 200 British feature
films.

Licenses and Franchises

When making a film you need licenses so that everything you produce is
legal and can be used in your film. First you need to make sure every
actor or interviewee to sign a contributor release form. This gives you the
rights to use their performances in your production. With Child actors you
will also need to get a performing license from their local authority before
performing in any film. This has to be paired with a medical certificate and
likely working hours. If you use a Casting Director you need to remember
some important clauses for their contract. These include: the
responsibilities of the Casting Director, what the Casting Director must get
approval from the Producer of, the use of assistants, how long they will be
needed to work for, how much they will be paid and whether they will be

reimbursed for anything they need for the job. The final license you will
need to make sure you have is a location license, or a location manager to
find the licenses for you.

Competitors
There are different competitors in film. For
example, Film Festivals. The biggest film festival
in the Sundance Festival, which is held in the
US. It is also been called the worlds best film
festival. It was founded in 1981, and since then
the Sundance Institute grown and is now
internationally recognised as a resource for
loads of independent filmmakers. Another
competition in film is awards and awards
ceremonies, the biggest being the BAFTAs (In
the UK) and the Oscars (In the USA). Both of
these awards honour cinematic achievements in an annual awards
ceremony. They have become iconic and brilliant achievements for every
actor with one. In 2015 the best actor and actress for the BAFTAs was
Jason Watkins and Georgina Campbell and for the Oscars it was Eddie
Redmayne and Julieanne Moore. The films that win these two awards gain
a lot of coverage and a very high profile, meaning more people go out to
watch and buy the film.

Customers
There are many different customers of film, but there is a clear favourite
genre in the UK. In a poll, of 5000 people, the Telegraph took in 2009 it
came back that Comedy is Britains favourite genre. Over a quarter of the
5000 named British Comedy Hot Fuzz, starring Simon Pegg, as their
favourite film in this genre. Action/Adventure films followed comedies with
15% of the vote, and Rom-Com movies following with 12%.

This concludes all of the different parts that make up the media sector
that is film.