Media Sector

Unit 6: Understanding the Creative Media Sector

How does Media Mogul Rupert Murdoch affect our lives 

on a day to day basis?

Murdoch is the 38th Richest person in the US and ranked 117th Richest person in the world. He has a current net worth of $7.6billion. He is an incredibly clever individual who has his hands in many media pies. Including television (both cable and satellite), film, newspapers, magazines and book publishing. He even owns a baseball team. It is said Rupert Murdoch is one of the most powerful people in the English speaking democracies.

He owns 37% of the newspaper circulation and 40% of the world media, I tend to think this is not right. How can one man own almost half of the media? I am not the only person who thinks Murdoch has too much power, due to the recent phone hacking scandal people have started talking about his incredible media influence. I have posted a link about a radio interview with journalist Toby Young and Political Columnist Henry Porter. They discuss the matter.

He isn’t a politician but obtains more power in the media and economics than any politician or celebrity.

Murdoch’s Chronology 

1931: Born.

1953: Earned Oxford degree.

1960: Bought major Australian newspaper.

1968: Aquired News of the World

1969: Became publisher of The Sun.

1973:Purchased the San Antonio Express-News

1974: Became publisher of The Times & Sunday Times.

1976: Bought New York Post.

1985: Purchased the 20th Century Fox Movie Studio – responsible for bringing you Star Wars, Home alone, That 70’s show, The Simpsons, Malcom in the Middle, Die Hard and Family Guy, just to name a few!

1986: Purchased 6 tv stations owned by Metromedia and went on to launch Fox Television network with the purchased stations at the nucleus of the network.

1989: Launched Sky Television and Murdoch’s News Corporation acquired Harper Collins, Book Publishers.

1990: British Satellite Broadcasting and Sky joined together to form British Sky Broadcasting.

1996: FNC was launched. Other wise known as Fox News Channel, it has grown and become the dominant cable news network in the USA. However some critics has said that FNC promotes conservative political positions. I don’t think this is right, I think the public deserves to have news brought to them in a neutral and non bias form.

1997: Bought Los Angeles Dodgers baseball team.

2005: Bought Intermix Media Inc. (which holds MySpace, Imagine Games Network and other social networking sites).

2007: Purchased Dow Jones and Company ( an American Publising and financial information firm) from which he aquired The Wall Street Journal, Barron’s Magazine and the Far Eastern Economic Review and Smart Money.

 Charlie Brooker analyses Fox News on his show screen wipe.

Richard Branson

Richard Branson tried to grow and sell Christmas trees and Budgerigars at the age of 14, he has tried to get into business from an incredible early age. When he was 16 years old, in January of 1968, he set up a business magazine called Student. In 1970, he started selling music records via mail order which did so well, he opened his first record shop a year later on Oxford street. A Virgin Recording Studio opened in 1972. 

The launch of the Virgin Records record label was in 1973 and seven years later, Virgin Records went international (1980) and it went to America in 1987Alot happened between 1983-1984 for Richard Branson, Virgin Games was launched and Virgin Atlantic Airways and Virgin Cargo. By 1985,  the Virgin Group included record labels, retail outlets, exported music publishing, broadcasting satellite television as well as film and video distribution.

BSB was founded by the Virgin Group along with Granada (the ITV contractor for NW England – programmes include Coronation Street, The Royal Family and University Challenge), Anglia (ITV franchise holder for East Anglia, it supports the Discovery Channel in the USA aswell as Channel 4 and Five in the UK) and Pearson (Global Media and Education Company based in London. Includes Penguin,Dorling Kindersley and Ladybird publishing. It also owns the Financial Times Group,(publisher of the Financial Times).

In 1987, Virgin set up ‘Music box’ as an independent producer of music programmes and also bought Rushes Post production in London as well as 525, a post production facility in LA (to make high end commercials and music videos). In this year he also bought 45% stakes in Mastertronic Group, which later became owned, entirely by Virgin.

It created, marketed and distributed computer games software and SEGA consoles in several European countries. In 1988, Virgin Broadcasting was set up and Virgin sold its shareholding in BSB. In 2007, Virgin launched Virgin Media and Virgin America.

Virgin Group Products include :

Beverages/ Airlines/ Trains/ Games /Consumer Electronics /Films / Financial Services/ Internet/ Cable TV / Music/ Radio / Books /Cosmetics / Jewellery / Houseware / Retail / Mobile Phones /Commercial Spaceflight!!

  Richard Branson has recognised Rupert Murdoch’s massive influcence on the world through his huge control over world media. Branson is one of the only people can compete with Murdoch. He created Virgin Media to counterbalance SKY.

The British Broadcasting Corperation, otherwise known as the BBC is the largest and probably best known broadcaster in the world. It’s run by the BBC trust and was set up in 1922 but started being publicly funded in 1927. It employs around 10,000 people in London, some permanent staff and others on short term contracts. It also employs a large number of freelance staff in London. The BBC had the 2nd largest annual budget of any british broadcaster with £4.26billion, but where does this money come from? 

  • £3,446.8 million is collected from households as licence fees
  • £888.3 million comes from commerical businesses owned by the BBC
  • £293 million is from government grants
  • £112.9 million comes from other income such as providing content for overseas broadcasters and concert ticket sales.
The licence fee has  caused some controversy  because, it has been argued, we are now in an age of multi-stream, multi-channel availability and the compulsory licence fee is no longer appropriate.On what is all of the money spent?

The BBC is available on Analogue terrestrial television, satellite, cabel, online and on the radio. It also has some involvement in print.

Over the years the BBC has been involved in some controversies. I’m going to touch on two recent incidents that were memorable to me.

In 2007, Blue Peter ran a competition to choose the name for one of its cats. In September of that year, it was announced the viewers had chosen the name Cookie but supposedly a producer changed the result to Socks instead. The BBC were accused of a ‘breach of audience trust’ and they had to give an apology to viewers on the programme.

The following year, on 16th October 2008 (but broadcast two days later) Russell Brand had Jonathan Ross as a guest on his weekly BBC radio show, ‘The Russell Brand Show‘ made several calls to actor Andrew Sachs’ home. Brand claimed that he had had sexual relations with his granddaughter aswell as other unpleasant suggestions. The coverage it recieved from the Daily Mail newspaper led to a number of complaints which led to Brand and Ross being suspended nearly 10 days later and there was a investigation by the director of the BBC’s audio and music. Ross was suspended from all BBC shows, without pay, for a period of 12 weeks. During which time he was meant to be hosting the 2008 British Comedy Awards for ITV, so he had to step down. It is estimated that from his suspension he lost around £1,344,000 The BBC were forced to issue a public apology, to the license fee payers, over the incident on the 8th November and they also had to give a specific apology to Sachs and his granddaughter.


  • Horizontal integration: When a company expands its business  into different products that are similar to it’s current product, it is when a company focuses it’s attention to only one type of service and sometimes involves duplication of current model. Why do businesses integrate horizontally? Because it reduces competition. An example of this is the BBC, it has different formats by broadcasts the same products.
  • Vertical integration: When a company expands its business into different products that are different (can be related) to it’s current product. Backwards vertical integration is when a business merges with another business on a lower level. For example a tertiary industry joining with a secondary level business. It is good for a business because it guarantees the business’ service of raw materials and they can deny other businesses/competitors the raw materials they produce and it increases the business’ profit.  Forward vertical integration is similar to backwards vertical integration except instead of joining with a business on a lower level, it joins with one on a higher level. And example of this is Sony, they sell hardware like televisions but they also produce films. In Hollywood’s ‘Golden Age’ the studios also owned the cinemas.
  • Diversified Integration: When a company has a broad base of services and issues that may be unrelated, expands the business into an unrelated field. An example of this is Virgin recently buying Northern Rock, the bank, which is entirely unrelated to Virgins other products. The problem is that the boundaries of diversified and vertical integration can be difficult to see.

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