Media Company Case StudyTask 1 Understand the structure and ownership of the media sector

Zara Yaffe

Disney

Disney is part of the entertainment sector. They have theme parks, cruises, hotels, tours and shops. Disney is also part of the audio visual media sector as well as the gaming sector. Disney almost always has visual and audio content – films, theater shows and television programs – and so falls under the audio visual media sector. There are many video games for children made by Disney, such as Disney Magical Worlds (2014), and so falls under the gaming media sector too.

Disney produces all sorts of things. It has its own television channel where it only broadcasts its own programs and films, it has toys and dolls related to some of the programs and films, clothing, homeware/kitchenware, accessories, art and posters, shoes and music. Disney even has its own cruise ship , radio and holiday resort. If something from Disney becomes extremely popular, other things will be made. For example, the film ‘Frozen’ became unexpectedly unbelievably popular and products such as Frozen toothbrushes and Frozen mascots for kids’ parties were created. Shows have been created for Frozen, too, such as ‘Frozen on Ice’ and rumors have been heard of a second film being made too. A lot of actors and actresses grow up within Disney, starting off as children in television shows and films and carrying on their career in their teens.

Disney was originally owned and created by Walt Disney and Roy O. Disney in 1923, when Mickey Mouse was created. In 1984, the ownership of Disney changed. Michael Eisner was given the ownership of Disney after the company had experienced many unsuccessful CEOs since Walt Disney died. Eisner had success in gaining the highest profits, and during this period, Disney expanded its theme parks from what they already were. In 1999, the ownership of Disney changed again. The ownership was handed over to Mr Robert Iger after he had been in the Disney Senior Management Team since 1996. Mr Robert Iger does not own any companies and his contract with Disney ends in 2018. Disney is a privately owned company meaning they can do whatever they want, produce whatever they want and sell whatever they want. Disney can have adverts and sponsorship due to this, as opposed to the BBC who doesn’t use adverts or sponsorship because it’s a publically owned company.

Disney is generally vertically integrated. This means that everything Disney does it owns. Disney does not have to share any of its earnings with any other company as Disney is the only one that creates its products with no help from any other companies. Disney owns Pixar, Marvel Entertainment and Lucasfilm in order to produce films. Disney owns the ABC channel, Disney channel and also ESPN. The Walt Disney Company is the world’s largest media conglomerate.

The benefits of vertical integration is that Disney can profit from everything it produces by using only Disney owned companies that can produce, market and distribute products of and for Disney all around the world. Another benefit of vertically integrated companies is that if they produce something that doesn’t become popular and flops, they’re wealthy enough to be able to lose the money it should have earned from it. Disney can choose what it wants to do without any other companies interfering with it which is another benefit of vertical integration.

A disadvantage of this is that if a product does flop then the money lost is all their money, although it won’t matter too much as they’re wealthy enough to lose it anyway.

Disney has 3 main competitors. These competitors are:1. Twenty-First Century Fox, Inc.2. Time Warner Inc3. NBCUNIVERSAL MEDIA, LLCDue to these big companies being in competition with Disney, Disney will have to keep updating

and adding more films and merchandise to what it already has in order for the company not to go out of date and let the others take lead and leave Disney behind. Disney will have to make deals with other streaming sites and other companies, such as Netflix, so that it can keep up to date with what its target audience – children – are doing, which is watching Netflix and other things of the same sort, so that it can still keep up with the times and make sure it’s gaining the highest audience possible. Disney will have to target the audience in other ways than just having channels, in which it does. Children, as a whole, will always want to go on adventures and holidays and so Disney has created hotels, cruises, theme parks and amusement parks to keep children entertained while being with the characters they love. Toys and dolls are made, for not only the Disney store, but also for stores like Build-a-Bear and even just Asda, so that when children are out with their parents or going specifically for something, Disney products are always all around them, tempting the children to want and buy. Disney distributes more than 30,000 hours of programming to over 1,300 platform partners across 240 territories worldwide.

• The customers of Disney are one part 4-12 year olds. The children are both widely diverse boys and girls and start as children until they peak into the start of their teenage years. The other part of Disney’s customers are 35-55 year old men and women. These, too, are widely diverse and have lived through the ‘traditional Disney atmosphere’. These adults are more likely to have young children that enjoy Disney too and so both generations of children and adults are enjoying the same thing, as the parents may pick up on the interests their children may have.

• Disney has a multidivisional structure. It uses a line and staff organisation structure. For a film or movie, Disney uses all of its staff positions to support the making of the film, from the very start of just the ideas to where it goes into cinema and broadcasting. All staff in these positions are in support of this work flow. The corporative organised charts are made like a hierarchy, where at the very top is the most important – CEO – and lower down the authority the position has gets lower – Supervisory, Manager, Staff.

• Disney, as a whole, is a fantastic example of cross media divergence and synergy. As a multinational company, Disney gains an incredible amount of money. In closer detail, Frozen is a great example of this. Frozen began as a DVD, which is one type of media, and did so well and became so popular that Frozen karaoke machines were made, singing dolls were made, a ride in Disneyland was made, interactive board games were made, and Frozen on Ice was made. All of these new things that begun because of one DVD explain cross media divergence is one of the best ways possible. It’s when one thing starts off as one type of media and then expands into many other things and becomes many other types of media too. Disney is also a good example of synergy because Disney is a private company and therefore gains all the money it makes from itself and the products it sells. This is a win-win basis as there is no money lost in a synergy, all it does it gain money.

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obert-iger-gets-2nd-contract-extension-at-disney.html?_r=0

• http://thewaltdisneycompany.com/about-disney/leadership/board-of-directors

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