Unit 2 Learning Aim B - Structure of Media Sector: Patrick Urbanowicz

Unit 2 Learning Aim B –
Structure of Media Sector

Patrick Urbanowicz
Introduction
In this PowerPoint I will be comparing two different Film organisations
and comparing them with each other.
The two film organisations that I chose to research are the BBC and
Netflix. The BBC is a publically funded organisation while Netflix is
commercially funded.
Comparison between the two organisations
The BBC is a broadcasting and Netflix is an online streaming
film corporation based in the service and broadcasting
UK that is owned by the corporation owned by multiple
government. American investors.
The BBC is responsible for Netflix distributes their films in a
broadcasting many TV and modern way by having them
Radio channel in the UK. available for streaming online via
It is one of the oldest British their websites subscription service
Broadcasting corporations as it
was founded in 1927
Structure of BBC
The BBC is publically owned which means that all of its funding is
received from public funding. The BBC acquires most of this funding
through the TV License, which is required to legally watch any form of
TV in the UK. The license is used to pay for broadcasting costs and the
BBC’s production budget. The BBC’s total income in 2013/2014 was 5
billion pounds from fees collected and revenue from selling their
programmes abroad and merchandising. Almost all of this is used to
pay for the entire BBC system and makes next to no profit as the
corporation is government owned and not for profit.
Structure of Netflix
Netflix is primarily an online subscription-based streaming service that
typically relies on other producers to make films and TV series to
distribute on the platform, however the platform is also used to
distribute “Netflix Original” TV shows and Films which are films entirely
funded by Netflix and exclusive to the platform. The Service gets a
monthly revenue from all of the subscribed customers which is then
used to fund the films made by Netflix and to pay for licenses to
distribute third party films and TV Series. In 2018 Netflix made £12
billion in revenue and most of it was used to fund licenses and original
films, giving them a profit of £423 million.
Competitors of Netflix
Netflix’s biggest competitor is Amazon Prime Video, they are also a
video streaming subscription service and original producer of Films and
TV and follow a similar model. Amazon Prime Video is a part of a larger
conglomerate unlike Netflix which means they have a much higher
budget and do not need to make money directly from selling
subscriptions to fund original productions and new licenses. Amazon
Prime Video also offers a yearly subscription service that offers more
for the customer than Netflix as it also features access to Amazon
Prime Music, Amazon Prime and many more benefits. This encourages
the user to pick them over Netflix at a similar price. However Amazon
Prime Video does have a smaller selection and makes less revenue.
Competitors of The BBC
The BBC’s main competitor in the UK is the ITV and Channel 4. Both of
these companies are privately owned and have multiple terrestrial
channels which makes them direct competitors to the BBC. ITV and
Channel 4 both make their revenue from selling advertising slots on
their breaks and selling their programmes to other distributors
overseas. ITV and Channel 4 both offer their own original content that
can attract a different audience to the BBC and also take some of the
audience away from the BBC.
Horizontal vs. Vertical Integration
A Vertically integrated company is one that owns The BBC is a Vertically Integrated Media
multiple other companies in different sectors of the Company that owns companies in many
same industry. For example a company that owns a different sectors of the media industry.
magazine, radio and tv channel would be considered a
Vertically integrated company.
They own multiple television channels,
multiple radio stations and also have a
news network both online and on TV.
A Horizontally integrated company is a company that Netflix on the other hand, are a
may own multiple companies but all in the same sector. Horizontally Integrated Media Company
For example if a company only owns and distributes
multiple different magazines then it would only be
who only produce and distribute their
considered a Horizontally integrated company programmes on their online subscription
streaming service.

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