Ownership and funding

Ownership concepts:

Public service broadcasting is not for commercial purposes and they cannot get sponsorship from companies, they are programs such as the news and important notices that channels have to do as part of their licence. One example of this would be ITV news, ITV advertise before every program except for the news because it is a public service broadcast. This also applies to the radio not just on TV. OFCOM are in charge of whether companies stick to these rules in the UK.

Commercial broadcasting is where companies advertise brands and products on their TV and radio channels in order to gain revenue from other companies as they do not get money from subscriptions and licence to watch or listen. The BBC is not a commercial broadcaster as it is funded by licence fees. An example of a Chanel that is commercial would be Channel four as they have adverts and sponsors for each program as well as adverts in breaks in films and TV programs.

 
Corporate and private ownership is when a Chanel or broadcasting company is state owned or privately owned, the BBC is technically owned by everyone that pays the licence fee and has to produce programs suitable for a very large age range however privately owned or corporations can do programs for any age range. Privately owned companies have to please there sponsors and shareholders and not necessarily their viewers. An example of a privately owner channel would be MTV, they make programs to appeal to a younger audience so the adverts and programs would be different to a Channel aimed at older audiences.
   

Global companies are worldwide media companies that engages a very wide audience and get sponsors for each program in each country across the world. YouTube is a good example of a global company as it is widely available on the internet in all countries and has adverts before most videos with adverts constantly next to videos. Being worldwide gets them much more revenue than if a company was just national as supposed to international.  

Vertical integration is where the productions steps are controlled by one person or company so that it saves money. This is done by purchasing the companies below and above you so that they do not have to spend more money than they would at trade price. Merging with other companies increases their overheads but it will save them money if for example they where a production company they could merge with editing companies to save them from paying more for each production. This would in turn make them more money if it works out than if they had just the one company. An example of vertical integration is Warner Brothers as when they where making big films they would get shares in newspapers to advertise the films more and increase sales.     

Horizontal integration is where companies buy other businesses in the supply chain to make more money and decrease competition. Apple is a good example of horizontal integration as they have monopolised the market with their products as they are supposedly better than all the other products on the market and other phones and computers do not look as trendy or cool. Apple does not allow other companies to have similar products and will buy out companies or take them to court if they have similar products.      

Funding types:

The licence fee is paid by each household in the UK, it helps fund the BBC and any other Public service broadcasters. The licence fee costs £145.50 each year and this is how the BBC can afford to not have advertising to fund it. 

Subscription is where you pay a monthly, annual or weekly subscription fee to be able to watch programs and films on the internet and TV. One example of a company that charges subscriptions is Netflix which is a company on the internet that has thousands of series's and films and it costs £5.50 per month.

One off payments to own products would for instance be something like buying a DVD so that you do not have to pay for each time you would like to watch it. Companies make lots of money off selling DVD's to individuals as they are relatively expensive and bought by millions of people across the world.

Pay per view is when you pay to watch something once. This is essentially renting something to watch once. There are lots of companies where you can do this such as Sky as they charge you to watch things like boxing matches in order to gain more revenue. Even if you have the most premium and expensive Sky package they still charge you £14.99 to watch things like wrestling. 

Sponsorship is when companies pay TV and radio channels in order to advertise there products, sponsors pay a lot of money for this right and they gain more revenue because more people purchase their brands. Most TV and radio channels get all of their money from this as the source of income. The BBC does not advertise other brands so they source their income differently. The most expensive slots of sponsorship advertising is before really popular programs such as the X factor and coronation street.

Advertising is when brands pay for their products to be in ad breaks to get more recognition and increase income. Many brands pay for this one example is Unilever, Their adverts are on Channel four and other TV and radio channels. Advertising slots before popular programs are very expensive as the have the largest audience.      

Product placement in programs and films is when sponsors brands are shown subtlety. James Bond films have large amounts of product placement as they have lots of sponsors like Landrover and Jaguar, These car brands are shown in numbers and are made out to look very appealing and 'cool'. Before each program that has product placement in it there is a small P in the corner of the screen to let you know.

Private capital is where you get a private investor in a film as supposed to getting a loan or crowd funding to get money. Megan Ellison is a private capital investor who helps aspiring film makers get enough money to produce their film. She has funded hundreds of films that have become famous and has produced films such as American Hustle. This is similar to Dragons Den where entrepreneurs go on TV to pitch their ideas in front of investors and they can decide if they would like to invest or not.  

Crowd funding can be done on websites such as Kickstarter, on here you can pitch your business and film ideas to the world and get donations from people all over the world to develop it. Lots of films have been funded by crowd funding such as Veronica Mars which did really well in cinemas. Many companies pitch there product on this and give you there products dependant on how much that you invest into them, for a film you may get merchandise and DVD's for funding them. 

Development funds are designed in order to promote interest in film production and directing in the UK. One company that does this is the British Film Institute (BFI), They have funded many films by aspiring directors to help them get famous. This is not a loan this is just a company that invest in you and will expect a percent of the productions profits. Many British films that are shown on the BBC are funded by the BFI.