Unit 1 - Introduction, Ownership, Operating Models, Products, Market Position, Competitors

VIDEO: https://www.youtube.com/watch?v=6EVxZ7dLVYY

Hi my name is Matthew and I work on behalf of educational company Education Wise to provide you, the viewer/reader with a sample analysis of content in the form of an interactive style presentation or video; relating to world leading media giant, 20^th Century Fox. Twentieth Century Fox are a conglomerate company (a company consisting of smaller companies (subsidiaries) of different relational sizes, to make up the complete company 20^th Century Fox) whose aim is to provide worldwide media to the global population in the form of Film, Television and readable content. Within this article you will find information on ownership of the company, the operating model of the company, products the company offer and also the market position and close competitors of media wiz Twentieth Century Fox. As the company is a conglomerate this means they are not independent. Independent companies are not owned by, or own themselves, other companies in or out of the media industry, which therefore means all content produced by the company is developed and operated by itself.

Ownership

The company 20^th Century Fox is owned by Rupert Murdoch. Rupert also went on to create 21^st Century Fox which was a re-brand of his original company News Corp. The company itself is a conglomerate, meaning it has smaller companies called subsidiaries which work together to make the whole company. Although these subsidiaries are normally deemed to be standalone companies; in the 20^th Century Fox broad image, its subsidiaries also make up other conglomerates. Similar companies with the same style of structure include ‘Disney, Universal, Twitter, Microsoft and Comcast’. In a normal day over 4 billion people will somewhere encounter 20^th Century Fox’s media in different forms. For example, 20^th Century Fox also own company ‘Sky’. One of the most popular TV broadcasting companies in the world. The company itself (as mentioned above) is a Conglomerate meaning it consists of different sized smaller companies (which may also be conglomerates). These smaller companies are names subsidiaries.

20^th Century fox operate as a cross media company (CMC). This is when a company owns more than one type of media product by owning companies that produce different media. An example of 20^th Century Foxes CMC is FOX TV (a television broadcasting company), FOX home entertainment (providing the ability for consumers to view fox media at home) and News Corp (later rebranded 21^st Century Fox) which provided newspaper articles, and news TV channels.

This ability of being a CMC also works by allowing 20^th Century fox to promote their own content across different platforms. This is known as ‘Synergy’. Having this ability means that fox can make a lot more revenue in a shorter period of time.

Operating Model

20^th Century Fox operate under a certain model, which involves different styles of integration, one being vertical, and one being horizontal. These different integration techniques allow the company to operate fluently between different sections of the PDE process (production, distribution and exchange of media products). Some would argue that one type of integration is more important than another, but both are needed for a conglomerate such as 20^th Century Fox to operate correctly. For a company to gain revenue for products easier, they can have business partners (aka affiliates) that work alongside each other. One example is dreamworks which have worked alongside 0^th  Century Fox to be a joint venture. Another name for this process is horizontal integration which creates synergy via cross promotion. In horizontal integration the company creates or acquires production units for media which allow their products to be passed to the consumers over multiple different platforms and areas. This in turn means that a wider audience is reached which generates more revenue for the company. Examples of this for 20^th Century Fox are: FOX TV (television), Talk Radio (radio), Fox Home Entertainment (DVD/Bluray) and The Sun (newspaper).  Another method which only affects conglomerates is vertical integration; the ability for a company to control the production, distribution and exchange of its products. Each section does something different with the media for example the production is the making of the media, the distribution is the providing of the product to retailers – marketing also comes under this section – and the exchange: Where audience consumption occurs. The ability to do such makes it much easier for produced media to pass from the creator to the consumer. This is because companies like 20^th Century Fox have subsidiaries to PDE their media. This integration process can also be known as the film production cycle. Another model is the film production process. This is the way companies can control ‘Pre-production’, ‘Production’ and ‘Post Production’. Pre-Production consists of sourcing actors for films, Scouting for a suitable location, gathering props and selecting a budget, creating scripts and of course… finding a director.

After Pre-Production comes the production process. This is when the actual ‘film’ or ‘media’ is created. This includes filming the scenes, Dress routine, acting, pyrotechnics (aka on set effects) and possible chromakey.

Following the production process comes the final part of the film production process; post production. Here editing occurs, potential creation of a trailer and CGI implementation, audio and editing the composition.

Once again this process is made easier by the company having subsidiaries which can all source information for the final film.

Products

20^th Century Fox are a mainstream company (meaning popular or international). This is because their subsidiaries consist of worldwide coverage with content produced and developed by fox, or developed for broadcasting by fox. As 20^th Century Fox are mainstream they are not a niche company (local or national company), which allows fox to make a lot more revenue per annum and focus on products reaching a wider target audience than a niche company. 20^th Century Fox themselves have produced a lot of successful films including Avatar (2009), Star Wars (created by George Lucas, distributed by 20^th Century Fox) and Home Alone (1990). 20^th Century Fox’s subsidiaries have also produced successful/mainstream media within companies like BlueSky, focusing on children’s animation media like ‘ice age’ and ‘rio’. This was also in collaboration with DreamWorks (as an affiliate) to once more help reach a wider audience. Other companies owned by 20^th Century Fox such as Sky have also created mainstream series especially on Sky Channel 1 which broadcast Idiot Abroad (bringing in 2,659,000 viewers) and Friends (with over 2,860,000 net views). Other well-known creations by subsidiaries of 20^th Century Fox are Family Guy (fox home animations), The Simpsons (Gracie films) and previously owned IGN (imagine games network) which was sold in 2013.

In terms of target audience, 20^th Century Fox focus on a worldwide and universal audience with each product being focused on a different audience. For example mainstream animation Family Guy is aimed at older teenagers whilst films such as Home Alone are focused at a wider family audience. Other target audiences include RIO (aimed at young children), StarWars (aimed at teenage to adult audiences) and Documentary channel national geographic (aimed for all ages). For focuses on multiple genres aswell from comedy (family guy, idiot abroad), family (ice age, home alone), action/sci-fi (star wars), RIO (children) and many more.

Market Position

20^th Century Fox can state their success in many different ways. One way is its revenue turned over in 2014 which was ~$31.867 billion in total. The success can be shown if you view the year before (2013) which made ~$27.675 billion meaning an overall increase of $4.192 billion in one year. Another way of viewing 20^th Century Fox’s success in the media market is it having a 10% market share in the box office by studio (details according to: http://www.boxofficemojo.com/studio/), which puts 20^th Century Fox in 4^th Position coming in under Universal, Buena Vista and Warner Bros.

Another measurement of success for 20^th Century Fox is its age in producing media content. 20^th Century Fox were created May 31, 1935 which to this year (2015) makes the company 80 years old in production of media content. 20^th Century Fox’s success can also be judged based on some of the awards given to the company for films created. One example of this is the film ‘Avatar’ which was a highly successful film created in 2009. The film was awarded ‘best-selling film 2010 in united states’ along with being ‘nominated for 9 academy awards’ of which included ‘best picture’ and ‘best director’ (source Wikipedia).

In terms of operation and success to similar companies (universal, warner bros), 20th Century Fox’s best film (avatar) generated over $2 billion in revenue compared to universal’s best (Jurassic World) which only generated $1.65 billion in profit; making 20th Century Fox’s production better in terms of revenue gained per top film.

As a mainstream supplier of media and film, it is important that 20th Century Fox have an international profile with consumers across the world to be a successful conglomerate. This is visible in 20th Century Fox’s FOX S.T.A.R Studios which is an Indian film and television production company which also is a subsidiary of 20th Century Fox.

Competitors

Close competitors to the 20th Century Fox conglomerate are Warner Bros and Paramount. These companies are considered as close competitors as they have roughly the same 2015 market share to 20th Century Fox. All companies are also in the film industry and therefore provides more reasoning to make them close competitors to 20th Century Fox. Furthermore all companies are conglomerates so have a high value in the media industry.

Examples of the company’s success arise within 2014 where 20th Century Fox’s market share was the highest out of all film industries. 20th Century Fox had a 17.3% market share whilst Warner Bros had a 15.1% share and Paramount fell 6th with a 10.2% market share. In 2014 20th Century Fox’s 2th Best Film generated more gross revenue than Warner Bros 2nd best (by ~$8million) and more than paramount’s 2nd best film (by ~$17million).

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Thanks for watching my video/blog and I hope you have learnt some new information about my researched media conglomerate.