advantages and disadvantages of media conglomeration advantages and disadvantages of media conglomeration

Media has very important roles to play in democracy such as; projecting the problems of the people to the public, and protecting the fundamental rights given in a Constitution. This is because the content of mass media is very powerful and it has become a agent of socialization which can shape peoples behavior or even influence the ways of how people think. To unlock this lesson you must be a Study.com Member. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Mass media is communication whether written, broadcast, or spoken to reaches a large audience. Advantages of Conglomerate Merger Diversification of Business Gain Synergies Utilization of Excess Cash Improves Customer Base Utilization of Human Resources Economies of Scale Disadvantages of Conglomerate Merger No Past Experience Shift in Focus Complication Governance Issue Horizontal Merger Vertical Merger Conglomerate Merger Concentric Merger In the context of Anglo-America, domination could not be possible without the assistance of media which strives to expand its hegemony while fending off challenges and interventions from the very classes and groups it seeks to subjugate," (Split Image, African Americans in the Mass Media). This has made many daily tasks easier for people, such as looking up a recipe or getting directions for a trip. This trend has met with considerable resistance, but it does provide advantages as well as pitfalls. Over the years, technologies have been gradually advancing and have played an important role in todays fast growing societies. It is believed that the government censors as a way to have control not to protect citizens; by knowing more, they have the upper, Before media, politicians and other newsmakers had to rely on word of mouth to communicate the various messages they were espousing. It has been contaminated by political influences. Since 1950 media conglomerate has become a regular feature of the global economic system. Lack of focus, and inability to manage unrelated businesses equally well. 1. The first part, digitalization, refers to media companies moving to and expanding their media on digital platforms. Powerful acts of political representation can position audiences to perceive the accompanying outcomes and values as either positive or negative. All told, we have more ways to reach more people than weve ever had in the history of humankind. Accounting disclosure is less useful information, many numbers are disclosed grouped, rather than separately for each business. However, in recent years the media has, like other agencies, come under the influence of politicians. Deregulation refers to government deregulation over these companies' size and functions. One implication is that media economic research is mostly focused on media conglomerates like Bertelsmann, Disney, News Corporation, Time Warner and Viacom. Now, the entire world often sees and hears the same cultural influences. Consumers' choice & minimal government control. The argument can be made that, instead of appealing to the lowest common denominator in the public, at least some media should give the more informed and critical segment of the people what it wants (Lazere 305). Print media take advantage of the internet as well. Conglomerates can also be created when a company expands its operations into new markets or industries. Media convergence is the process by which multiple media technologies are brought together into one computerized device. The target company then becomes a subsidiary of the conglomerate. Media convergence is driven by the development of computer technology, such as smartphones. Conglomerates offer many benefits to their parent companies. The complexity of a conglomerate's accounts make them harder for managers, investors and regulators to analyze, and makes it easier for management to hide issues. Conglomerate Merger: A conglomerate merger is a merger between firms that are involved in totally unrelated business activities . The research methods that Sobieraj and Berry use within their argument are quantitative and qulalitative. Inertia prevents development of innovation. Barry Levinsons thought-provoking, satirical black comedy, Wag the Dog (1997) demonstrates the power that media has in our society and its effects, through an exaggerated perspective, which emphasises the way media manipulates the public 's beliefs, thoughts and the way they interact. Media consolidation refers to a trend in which a single company or corporation owns multiple media outlets in a given market (area of distribution or transmission). It has its advantages and, unfortunately it also has its disadvantages. Conglomerate firms often have greater access to capital markets and can spread research and development costs over a larger number of businesses. For example, Berkshire Hathaway has been able to use the synergies between its subsidiaries to save on costs and gain access to new markets and technologies. For example, schools are using these technologies as an alternative way of teaching students. There are an abundance of ways to obtain free flowing information that ultimately can be beneficial to our daily lives. Direct medium of communication; 2. advantages of physical proximity and, usually, both sight and sound of sender and receiver; 3. allows for instant interchange of opinions views, attitudes instantaneous feedback; easier to convince or persuade; OC advantages contd 1. allows for contribution and participation from all present. Diversification can, however, have disadvantages. Cultural. Later the radio provided another source to achieve the majority. There are more than 32,000 broadcast radio and TV stations in the U.S.,* along with hundreds of cable TV and satellite radio stations. Conglomerates offer a number of advantages, including economies of scale, greater financial stability, and access to new markets. Small media operations often cannot afford to produce programming, hire the talent or the quality of technical staff to compete with larger media companies. The former says that, up to a certain point, companies will consistently lower relative costs as they grow, and the latter that advantages can be increasingly gained from complementary services available within a growing entity. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Many of these terms, such as globalization . The perspectives and working style may be different for different multi-agency, however the core objective of the agency are centred on these three elements (Cheminais, 2009). Or we can simply say that *Federal Communications Commission, Broadcast Station Totals as of September 30, 2016, on the internet as a PDF at. In this advance era, mass media plays a significant role towards all of us and we can truly admit that mass media is one of the basic essenssial that used by everyone in their daily life. Therefore, the media no more writes about the peoples grievance but in support of the ruling government party. Global convergence is the globalizing influence of digital media, which allows cultures to affect one another around the globe through media. A conglomerate benefits the subsidiaries and the parent company by reducing business risks, sharing the resources and increasing its market share in several industries. An error occurred trying to load this video. People get the latest news in a very short time. We also have entertaining programs like music program on the radio and on the television. Conglomeration means a few large media companies own a large proportion of various media. Conglomerates are less popular today, but were quite popular in the 1960s and 1970s. These are, it undermines the publics trust in the media, it leads to a decline in productive discussion, it can ruin the reputation of businesses or individuals. Due to these media conglomerates the theory of media imperialism evolved which states that due to over concentration of mass, A media source which ignores or censors important issues and events severely damages freedom of information. This article was written by the Bizfluent team, copy edited, and fact checked through a multi-point auditing system, in efforts to ensure our readers only receive the best information. When the media broadcasts negatively charged reactions between political journalists or politicians, their ratings go up. A smartphone or tablet computer puts an entire library, a GPS, a telephone, and a postal service into the palm of the user's hand. All rights reserved. A conglomerate can be made up of many businesses within the same industry or from different industries in order to diversify the business and mitigate financial risk. What is the e Why does economics drive most media companies? Two final aspects of media convergence are organic convergence and global convergence. The demise of mom-and-pop grocery stores at the hands of chain supermarkets serves as an analogue to the likely fate of small media outlets. Hi, I am an MBA and the CEO of Marketing91. 11) Beefing up media bias Also a conglomerate can create internal capital market if one of the external companies are not developed fully. Sony is a multinational conglomerate that has a number of subsidiaries that operate in different markets. Thus we can simply say that all this have given rise to cultural imperialism. As the merging companies operate in distinct industries and/or markets, the merged company is less vulnerable to declines in sales in one industry or market. Copyright 2023 IPL.org All rights reserved. Investopedia: Conglomerates -- Cash Cows or Corporate Chaos. Doing so may also assist the parent company to save money on operational costs while at the same time requiring less manpower. Typographic Contrast Overview & Principles | What is Typographic Contrast? Economic convergence has three parts: digitization, conglomeration, and deregulation. Three important aspects of media convergence are technological convergence, economic convergence, and cultural convergence. A media conglomerate or media group is a company that owns large numbers of companies in various mass media such as television, radio, publishing, movies, and the Internet. Series. Conglomerates more easily run the risk of being, This page was last edited on 4 January 2023, at 19:05. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Only a few companies representing the interests of a minority elite control the public airwaves. Some conglomerates are able to utilize the synergies between their subsidiaries to create value for shareholders while some face difficulties in handling so many different businesses together. Conglomerates are often large and multinational . That is not to say that digitization has been only a beneficial process. Conglomerates also have access to new markets and technologies. The majority of conglomerates offer a variety of products and services that arent always connected. As a result, the conglomerate may find it difficult to utilize its economies of scale to save on costs. This move to multiple formats does not end with TV. An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows: Quantity Price ($) Adults Children 5 15 20 6 14 18 7 13 16 8 12 14. Concentration of media ownership the absence of diversity. The Heritage Foundation:The Myth of Media Concentration: Why the FCC's Media Ownership Rules Are Unnecessary. The main disadvantages of the conglomerate model are as follows. As far as negative consequences go, fake news, pirating, and increased surveillance are among the most notable. In order to handle this, the corporation may sell off its holdings. VII. Newspapers such as the NY Times, Denver Post and USA Today maintain websites, as do major magazines such as Time and Newsweek. Faulty advertisement tactics: Drug and alcohol use appears cool in this medium, which can be harmful to a country's youth. Potato chips might be the first product offered by a food conglomerate. While diversity still clearly exists, there is the risk that mass media might reduce cultural variety, leaving us with less art and fewer inspirations. People could easily access to the latest news and scoops of both hard news and soft news through television-news broadcasts to keep themselves updated with the occurring or happenings around the world. This helps keep our economy going. In the stock market, it is understood as portfolio diversification. According to the Fortune 500 list of 2014 The Walt Disney Company is America 's largest media conglomerate in terms of revenue with 21st Century Fox, Time Warner, CBS Corporation, and Viacom are amongst the top five. On the internet, you can see all of the worlds artistic masterpieces or learn about the particularities of a culture far removed from your own. This movie was written by Scott Alexander along with Larry Karaszewski and the movie was directed by a Czech film director, Milos Forman. The Walt Disney Company, for example, is a media conglomerate that owns and operates businesses in the entertainment, parks, resorts, and consumer products industries. Smartphones combine numerous technologies which used to be available on separate devices: a computer, a watch, an alarm clock, a GPS, a newspaper, a credit card, etc. If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. The two companies merged to form DowDuPont Inc. (DWDP), a new company that would be equally owned by shareholders of both firms. Conglomerates are usually formed via acquisitions, in which one company buys a controlling stake in another firm. He also satirises the. Websites and applications such as Facebook, YouTube, Twitter, and TikTok have seen unprecedented, explosive growth in the last decades. Recently conducted studies examine e.g . Groups of people that hold a certain belief or have an idea different from other groups. Some of the advantages include minimal control by the government. Organic convergence is when one person uses multiple media technologies at once. 84 lessons. Boeing is a multinational conglomerate that has a number of subsidiaries that operate in different markets. Previously researchers have found that all types of electronic media whether its TV or computer or internet or social media have negative impact on children but now researchers are focusing on educational aspect of media and how educational programs can help in developing cognitive thinking among children. One popular example of acquisition can be found in the energy sector. User-created content has disrupted established practices in media companies and narrowed the gap between professional and amateur media content creation. While MEG's broadcasting decreased 17% and digital media increased 8%, its newspaper was down 43%. Berkshire Hathaway is another conglomerate that has a number of subsidiaries that operate in different markets. There are other big stars that plays in the movie, such as Courtney Love, Danny DeVito, and many others. This can be seen as an insurance policy for the parent company, as the performance of one subsidiary may offset the performance of another. For example, smartphones can do the jobs which newspapers, GPS's, and telephones used to accomplish separately. A successful conglomerate is a company whose parts are made up of several smaller independent companies that operate in various sectors. It is often argued that the existence of a democratic society necessitates the existence of information outlets whose duty is to provide the populace with authentic, unbiased and relevant material. They do not have the freedom to express what they really want to which deprives them of their rights. Digitalization facilitates fake news and manipulative media content. You estimated that as a result of the increased competition, the demand elasticity has increased from -2 to -3, ie you face more, 2. The aforementioned two subsidiaries can help conglomerates to gain access to new markets and technologies. The movie debuted on 22nd of December 1999, the movie length went on for 1 hour and 58 minutes. Why are you taking this course? Do you think they are good or bad for the economy? From newspapers and radios to televisions and social networks, the various forms of media have provided the public with more knowledge and accessibility to information and connectivity to others than ever before. - Definition, Types, Influence & Examples, What Is Media Convergence? Economists warn that conglomerates may become too big to function properly. Before mass media, you could live your entire life knowing nothing about the world outside of your village. Another mass media is the electronic media include like radio, television, and internet which is used by most of the people nowadays. The deal gave Exxon a controlling stake in one of the worlds largest undeveloped natural gas fields. The vast majority of business carried out in the United States is conducted by companies that have been incorporated. The involvement of ranges of professionals in an integrated way provides a strong platform which helps to attain a positive outcome for the young generation and the children. Bagdikian writes of the conglomeration effect stating that "the awesome power of the contemporary mass media has in one generation been a major factor in reversing the country's progressive political, social and economic momentum of the twentieth century." (pg. Conglomerates can also benefit from scale economies. This comes at a drawback. 3M is a conglomerate that has a number of subsidiaries that operate in different markets. The whole is often worth less than the sum of its parts. One of the most important disadvantages is that they can be very complex and difficult to manage. This means that with overall control being exercised by a management that does not fully comprehend the forces that drive success in some of its component parts, a conglomerate can become a confusing and dysfunctional entity that is not maximizing all of its potential. These media conglomerates exist in Europe, Asia and Latin America. There have been a number of negative and very impactful consequences of the restructuring of the media landscape: There are two sides to every coin, and media convergence is no exception. Course Hero is not sponsored or endorsed by any college or university. Narrowcasting Background, Use & Examples | What is Narrowcasting? Central Broadcasting System created Viacom in an effort to own cable television systems and to syndicate its own programs. Conglomerates can become so diversified and complicated that they are too difficult to manage efficiently. For example, if Berkshire Hathaway's construction materials business has a good year, the profit might be offset by a bad year in its insurance business. Advantages And Disadvantages Of Cartels 712 Words | 3 Pages. A newspaper company may begin by acquiring television and radio stations before purchasing book publishers. Global Convergence refers to the influence of media from different cultures spreading across the globe. Why does economics drive most media Companies? Laurentian university declares itself insolvent and subsequently closes a large number of its, Suppose the number of firms you compete with recently increased. Previously researchers have found that all types of electronic media whether its TV or computer or internet or social media have negative impact on children but now researchers are focusing on educational aspect of media and how educational programs can help in developing cognitive thinking among children. Advantages of Media Education: Media educates the mass. According to Baran (2012) mass communication can be defined as the process of creating shared meaning between the mass media and their audiences. This essay aims to discuss the degree to which we are shaped by our interaction with the media. In a May 2003 article appearing on the Heritage Foundation, James Gattuso - a senior research fellow in regulatory policy - reports that the ability to own multiple television stations, for example, allows the owners to provide programming for niche markets on the different stations. In the political context, this could be how citizens react to a speech a politician has made, commentary between politicians aired on television, and or commentary between political journalists. The Uses and Gratification theory by Elihu Katz came into existence when the theorist concocted the idea that individuals utilize the media to their advantage. These companies often own a number of smaller companies that operate in different sectors, such as television, radio, films, and the internet. Only a few companies representing the interests of a minority elite control the public airwaves. A Conglomerate merger is seen as a valuable move if the value of the two companies combined is more than they are valued . The point of view rose in the mid 1970 's as Katz and his two associates, Jay Blumler and Michael Gurevitch kept on extending the thought. A financial adviser who wants to recommend a risk-averse approach will inevitable talk about diversity and a diverse portfolio of investments. According to Lorimer et al, why does public policy "place a heavy emphasis on being able to exert national control over the broadcasting sector"? In The Outrage Industry, Berry and Sobieraj argue that the topic of media outrage is very multidimensional. Dongfeng Motor has been able to utilize the synergies between its subsidiaries to create value for shareholders. Some of these effects are positive, especially as concerns convenience, accessibility, and access to information: Not all the effects of media convergence have been positive, however. Due to these media conglomerates the theory of media imperialism evolved which states that due to over concentration of mass, Chris Hedges article, Our Country Is Lost Believing in What It Sees on Screens, and We Are Going to Pay a Nasty Price for It, highlights the negative influence electronic media has on society. The use of multiple formats allows media companies to offer extensive additional information. lessons in math, English, science, history, and more. While some enter the field with a business degree, a communication degree may better prepare you for the full breadth of careers available in mass media. Definition, Benefits and Techniques. As a result, the conglomerate may find it difficult to manage all of its subsidiaries effectively. The computer technologies which have become part of people's everyday lives are the physical site of media convergence trends. Smartphones, tablets, and other smart devices offer a plethora of services that used to only be available through various, unconnected technologies. An example of economic convergence is the large number of media mergers that occurred in the 1990s and early 2000s (Disney-ABC, Viacom-CBS, NBC-Universal, etc.). For example, in 2014, Amazon (AMZN) announced that it would be expanding its Amazon Web Services (AWS) cloud computing business into the government sector with a new GovCloud region. These subsidiaries include Dongfeng Nissan, Dongfeng Renault, and Dongfeng Peugeot Citroen. What is media convergence? Multimedia storytelling, such as when the Star Wars franchise released movies, books, comics, and video games, is one important aspect of cultural convergence. Copyright 2023 IPL.org All rights reserved. A conglomerate can grow by acquiring companies, whose shares are more discounted, thereby showing growth in earnings. As a result, they have transferred a considerable amount of their delivery channels from print to online format. For some small media outlets, consolidation with a corporation means survival. Required fields are marked *. Some of the ways through which companies conglomerate are-. Media help to correlate or co-ordinate various parts of the social system by gathering and disseminating valuable information. A multinational conglomerate can benefit from economies of scale and from the ability to operate in multiple markets. Chief Executive Officer (CEO) Roles, Responsibilities and FAQs, Self service technologies Definition, Meaning and 10 Examples, Data Warehousing Definition, Types, Advantages and Disadvantages, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! For example, newspapers often offer digital versions with videos and weblinks. A conglomerate is a business model in which many companies are collected into a single large corporation owned by a parent company. . Walden University is an accredited institution offering an online BS in Communication degree program. Pure . It has become easy for . If youre interested in mass media, there are plenty of opportunities to make this field a career. "Media conglomerates strive for policies that facilitate their control of the markets around the world." copyright 2003-2023 Study.com. The definition of media convergence is the process by which previously separate media technologies are brought together by digitization and computer networks. Tracking of computer programs threatened personal privacy and had led to greater surveillance. Conglomerates require less manpower than companies that are not conglomerates. The United States and many other countries see the internet as a threat and a means of control which is why information of the World Wide Web is censored (Bennett). Thanks to the business communication made possible by mass media, businesses can reach potential consumers faster and easier than ever before. By contrast, digital revenues on local websites have increased for many years, from MEG Annual Reports, various years. Media convergence influences people's lives and society overall in countless ways. Taking a look at the different Why Does Economics Drive Most Media Companies? Management costs increases due to size of the group Conglomerates have to face many accounting-related problems, for example, consolidation Deregulation refers to government deregulation over . The Pros of Mass Media It Can Keep Us Connected Before mass media, you could live your entire life knowing nothing about the world outside of your village. Economic convergence refers to the economic strategies (digitalization, conglomeration, deregulation) which occur in response to the advent of these new technologies. See also 10+ Advantages and Disadvantages of Technology. One professional consultant who pioneered these formats justified them by claiming, People who watch television the most are unread, uneducated, untraveled and unable to concentrate on single subjects more than a minute or two. (Lazere 306). Media corporations often employ multiple media formats, such as TV, print and the internet to enhance their offerings. The positive and negative aspects of deregulation, Conglomeration advantages and disadvantages, Conglomeration with TV and Movie Industry, Conglomeration changes in the TV and movie industries, Deregulation Changing the Industry for the Better. Organic convergence refers to the way in which one organism can consume multiple types of digital media at one time. All other trademarks and copyrights are the property of their respective owners. The societies rely on mass media for information, entertainments and even communications. I feel like its a lifeline. Personal Injury: Stunts portrayed in the media have led to severe injuries for some people who do them. Conglomerates can benefit from synergies between their subsidiaries to save on costs. In short, the effect of mass medias influence is complicated. Owned by media monopolist Rupert Murdoch, popular newspaper "The Courier Mail" is perhaps one of the most biased outlets of all popular newspapers. Economic convergence is very beneficial to companies but has detrimental effects on society and the economy overall. Dongfeng Motor is a conglomerate that has a number of subsidiaries that operate in different markets. This is because a conglomerate can have many different business types under one umbrella, which means that there are many different people with different skill sets working for the company. Mass Media is refers to every medium or source which is used to connect and communicate with a large number of people at once. A downturn suffered by one subsidiary, for instance, can be counterbalanced by stability, or even expansion, in another division. In October 2016, Exxon Mobil Corporation (XOM) announced that it would be acquiring InterOil Corporation (IOC), an oil and gas exploration and production company with assets in Papua New Guinea, for $2.5 billion. they cannot report what people need and/or want to know, they can only report what the government wants the people to know (Censorship Effects on Society). General Electric is one of the largest conglomerates in the world. Some people think that this is a bad thing because so many things that are uploaded can be either false information or simply information that is misleading and could teach individuals the wrong thing. But is this a good thing? Here are a few of the pros and cons. This is done by acquiring smaller companies that are not necessarily related to the corporations existing businesses. Citizen Journalism: Advantages & Disadvantages. Conglomerates may also be created through joint ventures, which occur when two companies come together to form a new company that is jointly owned by both firms. Rather, they can tailor programming to serve the needs of different segments of the viewing population. Although the acquisition of more and more companies may potentially enable better overall performance during business cycle fluctuations, this may not always be the case.