Tuesday, 16 June 2015

Ownership and Funding Blog Post

Ownership and Funding


Public Service Broadcast (PSB)

Public service broadcast is a broadcaster (e.g. BBC) that broadcasts for the public's benefits rather than for an advertising and financial gain. Ofcom has a part in this as their regulations mean that certain TV/radio broadcasts are required to include a specific amount of public service broadcasts as their license to broadcast(1). The BBC Trust is the governing body of the BBC, they keep the BBC in line with the regulations and one of their priorities is to improve the quality of new 'peak time' dramas and to ensure the overall performance at the BBC is to the requested standard.(2)


This is the annual report to show where the BBC license fee is spent and their overall year collection of their fees.

The BBC Trust sets the target and direction for the BBC's distribution arrangements and in accordance to this, the trust has stated that BBC should provide every household in the UK with efficient access and free (at the point of use) to BBC services. This is where there is a 'value for money' included because the BBC do not gain anything, the BBC are financed by the tax payer and therefore they have no money to gain from adverts as they are not a commercial broadcasting company. Their distribution platforms include:


Commercial Broadcasting 

Another ownership concept is commercial broadcasting is where the company is financed by the advertising they show for other corporate company e.g a cleaning/ cleaning advert. ITV broadcasts a large variety of content for it's millions of viewers. It is the largest commercial television channel in the UK, programming is mainly all funded by the advertising revenues and ITV had the largest share in the advertising market 45.9% in 2014 (4). 'Since 2009 we have maintained our market leading position as the only commercial broadcaster consistently able to deliver mass audiences to our advertisers, and over this period we have grown our share of broadcast from 44.7% to 45.9% in 2014.' - (5)
ITV have exclusive commercial partners, in which they broadcast 
premieres of the Sainsbury's Christmas advertising campaign, also in links with the Warner Brother studio, advertising for LEGO and other attractions and films that exist within that company. Additionally with shows like the X-factor where they gain funding from the public voting is also a type of commercial broadcast, however is from the people and not a corporate company.

Corporate and Private Ownership 

Corporate and Private ownership is where an individual or a group of shareholders who invest in a company purely for a profit. A good example of corporate ownership was the creation of Miramax films in 1979 founded by Bob and Harvey Weinstein, it later developed into the Weinstein, this shows a company that started from the bottom and raised up top become what it is today. Another example more of an example of private ownership is Megan Ellison she is the daughter of a multi-billionaire her father who is the CEO of Oracle  invested in films like Avatar (2009) and American Hustle (2013) this is more about the individual, still for the same reason, to make profit.

The Weinstein Brothers.

Megan Ellison

Global Companies 

Global Companies are corporations that produce their products worldwide whether it be in media or industrial work. An example of global media company is Universal Studios an american owned film studio that serves its products worldwide. They have universal theme parks and resorts situation in american itself, in partnership with NBC (National Broadcasting Company) which transports their media products worldwide. Another global company is the Walt Disney Studios, they are associated with ABC family cable channel which is also a worldwide company and shows their products worldwide, they also have resorts in American, Tokyo, Paris, Hong Kong and Shanghai. An additional global media company is Paramount Motion Pictures Group who are in partnership with Viacom Media Network which is worldwide. The ownership is the body that owns the worldwide distribution networks, there are different rules for different countries, for example the legal age of consent is 18 in the UK, however in the US it is 21, this caused a stir in the industry because of a TV programme called Skins that was originally from the UK however the US took it to their screens and it caused an issue because they were showing underage sexual content where the actors were not at the legal age in US law.

Paramount Motion Pictures.

Universal Studios.

Vertical Integration & Horizontal Integration.

Vertical Integration is where a company/corporation owns each part of the production and distribution process, for example Warner Bros calls itself fully integrated broad based entertainment company as they own film studios and distribution of its films which are shown in cinemas owned by them.(6) Vertical integration could also be through two businesses merging together or through one company taking over another.
Horizontal integration is where an organisation/company grows by purchasing competitors in the same market as themselves, for example one film company buys another smaller company. News corporations's television industry is a good example to use because it owns 14 cable channels and they all draw a large number of viewers and are not always competing against each other. Rupert Murdoch is a managing director of Australia's news limited, inherited from his father, furthering it to the United Kingdom in 1969, taking over News of The World and The Sun, leading onto owning 8 different news papers in the UK and in Australia, these include:

- Daily Telegraph
- Herald Sun
- Sunday Times
- The Advertiser
- The Australian
- The Courier Mail
- The Mercury
- The Sunday Telegraph 



The Licence Fee

A way in which a a TV channels can receive funding is through a TV fee that the public have to pay in order to receive live TV from the broadcaster. It usually takes £12 a month to have the access of live TV and therefore if you do not pay, you cannot watch live TV, however you can watch on demand for example on streaming engines like BBC IPlayer and ITV catch up.


People can subscribe to a specific bundle to receive a specific type of genre of television, they pay this monthly or weekly depending on how they want to pay it and what type of bundle it is, Sky TV is an example as they sell specific TV bundles that people can subscribe to.  


different bundles will cost different amounts, however this is another way that television companies can gain funding from it's consumers.

Another example of a subscription website is NowTV(7.5) 'Now TV is a non-contract Video on Demand service powered by Sky TV and was initially launched in the summer of 2013. It's Sky's big push to counteract the might of VOD giants Netflix and Amazon Prime Instant Video, and the broadcaster has big plans for the service.'  It is arguably seen as an alternative to Netflix(9) . 

One-off payment to own a product

A one-off payment means there is no monthly or annual fee to own a certain product, an example of this is the Apple TV(8) it is a one off payment of £60 therefore after that there is no further payments to complete, you now own that. However there is no live TV this is because it is a one-off payment there is no monthly fee to pay for live streaming TV. Although the company Netflix(9) has a monthly payment of roughly £6, and doesn't contain live TV either, it is more of an on demand service for films and TV series that has once been on the TV.

Pay-per view

This is where you pay for all content that you want to watch, if there is a specific TV programme or a film there is a direct charge in comparison to on demand where it accounts into your monthly bundle. Purchased broadcasts can be seen at anytime after the stage of payment has been completed, the charge can be payed through an on-screen guide or via a telephone. An example of this is when it comes to the sports events (10), as if you have not purchased the sport bundle along with your television package then you cannot watch a certain show that is on the channel. Therefore pay-per view comes in useful when you want to watch one single event and not to pay monthly into another bundle, you pay for the event and can watch it in real time.


Sponsorship is when you gain funding from being supported by a certain brand and/or company, this way the person who is sponsoring can gain exposure by being shown to support a popular brand and the company being sponsored can gain exposure from the company sponsoring if it is popular also. An example of how sponsoring can work is with the Talk-Talk and X-Factor deal, as X-Factor is on at prime time, it is a successful way to gain exposure for whoever sponsors them (11). 'TalkTalk gets significant mileage out of its wide-ranging association with the show, with the sponsorship proving to be a significant driver of its fast-growing TV service, which has signed up almost 1 million customers to its YouView-based pay-TV operation.'  
This is a quote from the news article that reinforces the idea of how effect a sponsorship can be and shows how much money can be invested into a project sponsorship like this, the Talk-Talk and X-Factor sponsorship cost £30 million.(11) 


Advertising and Product Placement

Advertising is a well-known and very successful way of funding, this is where advertising companies will pay a broadcasting company to promote their company by advertising in a programme break to grab the attention of the audience or a specific audience. This also links into product placement as a company can place their product so that it is seen by a specific target market. For example an advert about a children’s toy would be targeted at children, therefore they would place the advert on a children’s channel like nickelodeon and possibly around 4 o’ clock as that is when children are home from school and perhaps watching TV. However it could be placed on a TV channel like channel-4 or ITV because that is then placing the product at the consumer who would be purchasing it, it also would give the adult ideas on what to buy for their child, therefore product placement is crucial in the marketing industry. This also applies for distributing film trailers and media products, you can advertise on the TV and in areas that your target audience would be able to see, therefore creating effective exposure for the product.

Advert Example could possibly be on prime time TV because it is aimed at an older audience however broadband can apply to help the family unit, therefore prime time could be a good time to place this advert as all the family could possibly be together to watch. 

Here is another advert example, the ideal market for this would be adults as they are the ones purchasing, however a younger audience may be interested and this could be aimed at both audiences, therefore could arguably be placed on prime time TV or a TV station where there is a variety of shows aimed at all ages.

Private capital

Private capital is money provided to a business as a loan that does not come from a source like a bank or government. The money comes from private individuals or a group of individuals who make investments that have no involvement from the government. (free from government interference) A private capital investment usually happens as a one-on-one transaction between the business and the investor. A company can seek private capital at any time as it grows. (12) An example of a company is Goldman Sachs

Evidence from the website (13)

Crowd Funding

Crowd funding and sourcing from the public getting the public to believe in your product to donate a small amount of money into the media product. An example of how you can do this is through a website called kick-starter it is very effective for people creating a moving image media production that need help to fund it, 7.3million people have backed a Kick-starter project and 2.2million people have backed more than one project. – Source requirements for production blogpost (14) 


Development funds

An indirect sales channel where funds are made available by the brand/manufacturer, to help companies, partners or distributors with their projects, it sells the product and increases exposure around local areas for national companies. (16) For example Media Development Interest Fund (MDIF) are a good example of where funds are made available to help those in the media industry. Here are some examples of what they do and the success they have received:  


Additionally the BFI supports over 50 projects a year in development varying levels of progress, for progressing filmmakers seeking the funds to produce their feature film, the BFI is an effective help. The guidelines state that it relates to a single project of film development, and to look at the BFI NET.WORK  for details on short films. If the project is a first feature and the budget is under 2,000,000 then you might be entitled for a funding development programme. Although they cannot fully finance the feature film, they give new film makers a chance to develop their feature film.(17)


(3) - http://downloads.bbc.co.uk/bbctrust/assets/files/pdf/review_report_research/vfm/distribution.pdf
(4) - http://www.itvplc.com/about/what-we-do
(5) - http://ar2014.itvplc.com/strategic-report/strategy-and-operations/strategic-priority-1
(6) - http://media.edusites.co.uk/article/vertical-horizontal-integration/
(6.5) - http://media.litmuse.net/Industry/News-Corp/holdH
(7) - http://www.sky.com/products/sky-tv/
(7.5) - http://www.nowtv.com/
(8) - https://www.apple.com/uk/appletv/
(9) - https://www.netflix.com/gb/
(10) - http://www.sho.com/sho/sports/pay-per-view
(11) - http://www.theguardian.com/media/2014/may/06/x-factor-signs-talktalk-deal-simon-cowell-itv
(12) - http://www.ehow.com/facts_7339192_private-capital_.html
(13) -  http://www.goldmansachs.com/what-we-do/investing-and-lending/middle-market-financing-and-investing/private-capital-investing/
(14) - http://alanaenbtec14.blogspot.co.uk/2014/11/the-pre-production-process.html
(15) - https://www.kickstarter.com/
(16) - http://www.mdif.org/ 
(17) - http://www.bfi.org.uk/supporting-uk-film/bfi-film-fund/funding-production-development


  1. Alana,

    This is another really good post; you have covered and explained the types of ownership and the methods of funding and you have found relevant examples which are media related - well done.

    Can you please:
    - elaborate on your example for horizontal integration and discuss Murdoch/News Corp in more detail
    - find how the BBC license fee is spent and print screen it
    - change your definition of private capital so that more of it is in your own words (simplify it)
    - look at the BFI for development finds too (as they are so important)
    - Make sure the font is consistent throughout.

    Great start,