Ownership and funding

Ownership concepts:

Public service broadcasting:
[1] PSB is a media outlet such as TV, radio, internet etc. entirely focused on public service, these outlets are normally funded by the government. In the UK the biggest PSB outlets are the BBC and Channel 4 these channels provide news and information that pertains to the general public. The UK also currently has 228 OFCOM funded radio stations for local areas in the UK which provide traffic reports and news for the local area, as well as playing music that appeals to the general population of that area.




Commercial Broadcasting:
Unlike the non-profit PSB model in the UK commercial broadcasting is more common in the United States and is simply privately owned media outlets that play advertisements in order to gain profit.

Corporate and private ownership:
Expanding on what I was talking about previously some media outlets are not owned by the government but are owned by an individual or a corporation. If a media outlet is owned privately by an individual all the profits go to that individual allowing them make alot more money than they would advertising with someone else as well as giving them total control of the content the show/play. If an outlet is owned by a corporation it is very much beneficial for the same reasons as a privately owned outlet, it also allows for corporations to expand to new audiences and increase their area of operation.

This info graphic shows which companies own TV stations.

Global Companies:
Companies that operate globally are in most cases multi national conglomerates that own many different companies in many different areas of business, for example a company such as Time Warner own many different companies across the globe operating in all forms of media as well as production, distribution and marketing (more information in vertical integration).

HSBC is a conglomerate that operates across the globe.






Vertical Integration
Vertical integration is when a company buys out the supply chain that produces their product. For example a TV manufacturer may get materials from local factories and pay them for the material so they can build their product. However if the company is particularly wealthy they can buy out these factories and business' into their own business cutting down on production and distribution costs and increasing overall profits. This also means that they can now provide material to other companies for a charge which means more profit and more contacts in the industry which helps build the companies wealth and reputation.


Horizontal integration    
Unlike vertical integration instead of looking down the production chain larger companies will look across the chain at other companies/conglomerates who provide similar services and products and look into buying them. For example a conglomerate that produces smartphones may have a competitor in the market that provides a similar product and instead of trying to compete they can offer a large amount of money to buy out the company eliminating competition and effectively doubling size and profit.

However if a particularly large conglomerate begins to buy out all competition this can result in monopolisation which is when a company practically owns an entire market making any competition impossible. This practice is not necessarily illegal but is incredibly harmful to any other business' in the same market since the monopoly can set price and quality of the product and not have to worry about the price being beaten or competing with a higher quality product since there are no other companies left that haven't already been bought out.

Funding Types:     

The Licence fee:

[2] In the UK any resident who owns a television and watches or records live television transmissions is required to hold a TV license which as of April 2010 stands at £145 per annum. All the money from TV licencing goes into maintaining the PSB outlets I mentioned earlier.  

Subscription:

Subscriptions are set payments usually monthly in return for access to services. HBO for example is only accessible through a subscription plan of $15 per month. The money from the subscription goes to the company and to maintaining the channel.

One-off payment:

This service is when a user pays a set price in order to get the product permanently. For example digital distribution platforms such as Steam and Origin allow users to buy video games that are then linked to that users account and can be downloaded any played anywhere providing that users logs into their account.

Pay per view:

This service is used almost exclusively for live sports events, for example a boxing match may be shown at 11pm worldwide and the users will pay a set price in order to view the event on TV.

Sponsorship:

This when a company provides monetary support to an event in exchange for more brand awareness and advertising. For example, in Formula 1 many racers and their vehicles are covered in stickers and graphics representing companies and their products. 

Advertising:

Shown/played primarily on TV and radio advertisements are very similar to sponsorship in that they promote brand awareness and try to gain new customers. 

Product placement. 

In television shows and movies you many notice products placed conspicuously in the frame, product placement is when companies pay studios to place there product in movies in order to promote the product and increase awareness. 

Private capital:

Private capital is when a larger company provides funding to smaller/start up companies in order to get them off the ground.

Crowd funding:

Crowd funding is funding entirely from the public. An example of crowd funding would be if a games developer wanted to create a game but did not have enough of their own money they may use a site such as Kick starter in order to get the funding they need for their game.

[4] The KickStarter for the game Yooka-Laylee was very successful, so much so that the developers hugely surpassed their goal of  £175,000 and received £2,090,104

Market Development Funds

[3] Also known as Co-op funds, MDF is when a manufacturer or a brand provide funds to advertisers, distributors or re-sellers in order to increase awareness of the brand/product. An example of this funding method may be that a small company that is struggling to sell it's product gets funding from a larger company in exchange for the larger company to get more awareness for it's brand as well as allowing the smaller company to sell more of their product.  

             

Bibliography

[1] http://en.wikipedia.org/wiki/Public_broadcasting#United_Kingdom
[2] http://en.wikipedia.org/wiki/Television_licensing_in_the_United_Kingdom
[3] http://en.wikipedia.org/wiki/Market_development_funds
[4] https://www.kickstarter.com/projects/playtonic/yooka-laylee-a-3d-platformer-rare-vival/description
[5] All images taken from google images.