01English, Database: Ashford, SOCIntroductions to Ethics & Social Responsibility. One firm controls a significant portion of numerous small firms that operate independently in a conglomerate. Doing so may also assist the parent company to save money on operational costs while at the same time requiring less manpower. A conglomerate can grow by acquiring companies, whose shares are more discounted, thereby showing growth in earnings. Healthy market based competition is absent leading to slower innovation and increased prices. As a result, the conglomerate may find it difficult to utilize its economies of scale to save on costs. 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. 12 chapters | The Uses and Gratifications Approach sees the gathering of people as dynamic, implying that they effectively search out particular media and substance to accomplish certain outcomes or delights that fulfill their own needs. 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. Conglomerates can also benefit from scale economies. 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. In this study positive side of media is highlighted as well as negative effects. A conglomerate is a business model in which many companies are collected into a single large corporation owned by a parent company. The mechanism of the multi-agency is mainly oriented with the three segments; they are multi-agency working, improving the services and positive outcomes for the children and related group. Why does economics drive most media companies. 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. All rights reserved. On the concluding note, it can be said that conglomerates are the big business houses that have many subsidiaries working under them and conglomerates have their own pros and cons. Increasingly, taking cross-enterprise synergy into account is essential for investors to properly evaluate future prospects has been done by GE effectively. Which is to say, mass media simultaneously benefits us and creates new problems. Since the creation of the internet and the mass media that comes with it, information can now be spread all the way across the world in the time it takes to hit the enter button on a computer or phone and upload it to the internet. What is the e Why does economics drive most media companies? Powerful acts of political representation can position audiences to perceive the accompanying outcomes and values as either positive or negative. Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career. 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. A conglomerate is a large, diverse company made up of many smaller businesses. Conglomerates more easily run the risk of being, This page was last edited on 4 January 2023, at 19:05. 14 Steps to Buy a Business, C Corporation - Definition, Benefits and Disadvantages, What is Compliance? Technological convergence is also sometimes referred to as digital device convergence. Privacy, What Does A Non Profit PR Person Do and Why You Need One, Ultimate Checklist: How to choose a domain name for your business, How to Fuel Manufacturer Indirect Sales with a Digital Conversion Funnel, Level up your Startups go-to-market and User Research with These Tools, Inspire Business Growth With These 4 Books For Your Summer Reading List, Global mass communication: pros, cons and what drives it. Common Cause reports that one company may own three TV stations, eight radio stations, a local newspaper and the cable system in a market. Conglomerates require less manpower than companies that are not conglomerates. 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.). Finally, conglomerates may be less responsive to change than companies that are not conglomerates. 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! By contrast, digital revenues on local websites have increased for many years, from MEG Annual Reports, various years. One hundred years ago nobody heard about the news or current events from Facebook or the newest tweet. This has made it harder for media companies to control the news narrative, which has led both to expose new, true information to the public and the propagation of fake and manipulative content. When confronted with said evidence, most media members blame it on education. As a result, the conglomerate may find it difficult to respond to changes in the market. Laurentian university declares itself insolvent and subsequently closes a large number of its, Suppose the number of firms you compete with recently increased. It consists of televisions, radios, newspapers and the internet. Conglomerate firms often have greater access to capital markets and can spread research and development costs over a larger number of businesses. Control of the media is said to be in the hands of an autonomous managerial lite who allow a considerable degree of flexibility to media professionals. Different radio stations with the same music, The effect of deregulation on today's radio. Only a few companies representing the interests of a minority elite control the public airwaves. 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. Citizen Journalism: Advantages & Disadvantages. Get unlimited access to over 88,000 lessons. In essence, owners no longer need to try to appeal to the widest possible audience in a single media format. Mass media is communication whether written, broadcast, or spoken to reaches a large audience. Conglomerates may also conglomerate via greenfield ventures, which is when a company builds a new facility from scratch rather than acquiring an existing one. And this can be a very good thing. We also have entertaining programs like music program on the radio and on the television. Numerous online universities offer communication degree programs, giving you the flexibility you need to complete your coursework from home and on a schedule that can let you continue working full time. Contemporary Journalism & Its Role in Society, The Media Industry: Roles, Impact & Ethics. As far as negative consequences go, fake news, pirating, and increased surveillance are among the most notable. 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 Conglomerates are often composed of companies in different industries that operate in different parts of the world. Conglomerates can become so diversified and complicated that they are too difficult to manage efficiently. Today, there are many various sorts of more specialized conglomerates, ranging from manufacturing to media to food. 14. 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. A conglomerate can show earnings growth, by acquiring companies whose shares are more discounted than its own. Viacom, a leading global media company, was formed in the 1970s by Central Broadcasting System (CBS). This is because different subsidiaries operate in different markets and empower the large corporation to further enter into other sectors and increase profitability. This includes television, radio, advertising, movies, internet, newspapers, and magazines. Those involved in multimedia studies have been answering this question in different ways for many years. In fact. I.,& Santa, M., (2014). As a result, the conglomerate may find it difficult to manage all of its subsidiaries effectively. While its true that mass media has its positives and negatives, its also true that mass media isnt going away. 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). Mass media can be divided into two categories, which is the print media include like newspaper, magazines, and books. For example, newspapers often offer digital versions with videos and weblinks. As a conglomerate grows and acquires more companies, it can increasingly take advantage of the greater flexibility it has to develop newly-bought companies and increase their size and profitability. Conglomerates require less manpower than companies that are not conglomerates. While almost all people experience major benefits from the convenient services offered by converged digitalized technologies, they also experience decreased levels of personal privacy and increased exposure to fake media content. The digitalization of information has allowed people to have unprecedented access to educational and informative content on their devices. Media convergence influences people's lives and society overall in countless ways. Another disadvantage of conglomerates is that they may be less efficient than companies that are not conglomerates. Conglomerates are usually formed via acquisitions, in which one company buys a controlling stake in another firm. 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. advertisers and government rather than to the public interest. Conglomeration: The process by which a conglomerate is created, as when a parent company begins to acquire subsidiaries. Creates a divide between those with access to computer technology and those without. The whole is often worth less than the sum of its parts. Now, we are all connected. A conglomerate benefits the subsidiaries and the parent company by reducing business risks, sharing the resources and increasing its market share in several industries. As a result, they have transferred a considerable amount of their delivery channels from print to online format. Nevertheless, the issues will be addressed from the perspective of the media conglomeration in Malaysia. Finally to increase learning among children researchers suggests that co-viewing of Parent and children should be promoted in families in Pakistan. Conglomerates offer diversification of risks to their parent companies. Advantages of a Conglomerate Merger. Media convergence is a transformative process. These subsidiaries include Dongfeng Nissan, Dongfeng Renault, and Dongfeng Peugeot Citroen. Global Village Overview & Concept | What is a Global Village? Typographic Contrast Overview & Principles | What is Typographic Contrast? Thanks to the business communication made possible by mass media, businesses can reach potential consumers faster and easier than ever before. 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. What is media convergence? Technological convergence is the process by which one device, such as a smartphone, combines functions of a number of previously separate devices (newspaper, GPS, post office, etc.) In short, the effect of mass medias influence is complicated. This limitation of scope goes hand-in-hand with another benefit: improved quality. Economic convergence is very beneficial to companies but has detrimental effects on society and the economy overall. There are two types of conglomerate mergers: pure and mixed. Organic convergence is when one person uses multiple media technologies at once. This is because diversity reduces risk, not only for unforeseen events, such as particularly adverse conditions in one sector or unexpected bankruptcy in one company, but also in the differing effects of the business cycle on individual businesses. Please use our International Form if you live outside of the U.S. Walden University is a member of Adtalem Global Education, Inc. www.adtalem.com, Walden University is certified to operate by SCHEV. But in the long run by conglomeration both industries will profit off of it because they will be able to widen the spectrum of their companies which means that they will be able to produce more shows and movies at once. Conglomerates may also find it easier to diversify their businesses because they can use existing resources and capabilities to enter new markets. America loves sensationalism. Since 1950 media conglomerate has become a regular feature of the global economic system. The big-company sickness is referred to as this. Lack of focus, and inability to manage unrelated businesses equally well. Like any other business, the purpose of the media is to earn profit and the only way they can do so, is by providing the viewers with whatever they want. Newspapers such as the NY Times, Denver Post and USA Today maintain websites, as do major magazines such as Time and Newsweek. 1. There are an abundance of ways to obtain free flowing information that ultimately can be beneficial to our daily lives. While diversity still clearly exists, there is the risk that mass media might reduce cultural variety, leaving us with less art and fewer inspirations. It has been able to reduce costs and gain access to new markets and technologies by leveraging the synergies among its subsidiaries. The societies rely on mass media for information, entertainments and even communications. If youre interested in mass media, there are plenty of opportunities to make this field a career. Before mass media, you could live your entire life knowing nothing about the world outside of your village. The conglomerate can utilize the synergy between these two subsidiaries to save on costs. Participating in a number of different enterprises might help a conglomerate firm diversify the risks associated with being in only one market. Conglomerates can trade at a discount to the overall individual value of their businesses because investors can achieve diversification on their own simply by purchasing multiple stocks. copyright 2003-2023 Study.com. It has also been effective in using the synergies between its subsidiaries for saving on costs and gaining access to new markets and technologies. However, there are times when such a firm grows to be unwieldy and inefficient. On one hand, media convergence has expanded access to media, simplified media production, and democratized the base of media producers through user-created content. Multimedia studies help us understand the benefits and drawbacks of mass media. People. 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. All other trademarks and copyrights are the property of their respective owners. Anyway, it cannot be denied that conglomerates play a very important role in the economy of any country. Tracking of computer programs threatened personal privacy and had led to greater surveillance. It is smartphones, computers, and other smart technologies which give people access to a wide variety of media at all times and in almost all places. Media and governments are able to manipulate the social construct to control and impose political motives on society, bringing out the best and the worst of human nature. You estimated that as a result of the increased competition, the demand elasticity has increased from -2 to -3, ie you face more, 2. Economic convergence refers to the economic strategies widely adopted in response to technological convergence by media companies. 3M is a conglomerate that has a number of subsidiaries that operate in different markets. From the in-depth movie analysis, this essay will be able to show that the media is able to influence the people and their stance towards certain topics by applying these media theories: agenda setting through gatekeeping, dramatization, and two-step flow of communication. 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. Print media take advantage of the internet as well. Hence, the term conglomeration refers to the procedure by which a conglomerate is formed when a parent firm starts to acquire subsidiaries. Digitalization facilitates fake news and manipulative media content. In nations described as authoritarian by most international think-tanks and NGOs media ownership is generally something very close to the complete state control over information in direct or indirect ways. It has come to our attention that media is changing since its origin. San Francisco : Jossey-Bass. What is the How will the print industry survive? I feel like its a lifeline. Finally to increase learning among children researchers suggests that co-viewing of Parent and children should be promoted in families in Pakistan. 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. Media consolidation can raise quality levels of local programming. Thirdly and finally, it will give . 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. Updated: People receive the latest news in a short time. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Also, read about its importance, pros, and cons. 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. A conglomerate merger provides the merging companies with the advantage of diversification of business operations and target markets. Why does economics drive most media Companies? It has become easy for . For example, in 2013, General Motors (GM) announced that it would be extending its Chevrolet brand into the bicycle market with the launch of a new line of electric bicycles. Philip C. Galanis states in his essay The Fourth Estate of The Bahamas For many decades, there has been historically a tug-o-war between the media and politicians in the Bahamas. The first part, digitalization, refers to media companies moving to and expanding their media on digital platforms. Multimedia storytelling, such as when the Star Wars franchise released movies, books, comics, and video games, is one important aspect of cultural convergence. Also a conglomerate can create internal capital market if one of the external companies are not developed fully. Media convergence is not one process but a number of different processes which occur simultaneously and influence one another. For instance if a particular movie and television industry were to combine they can put out a television show then sometime down the road the movie side of the corporation can make a movie of the television show. Rather, they can tailor programming to serve the needs of different segments of the viewing population. For instance, when a tsunami strikes, people all over the world hear about it within moments and can mobilize immediately to help. The Walt Disney Company, for example, is a media conglomerate that owns and operates businesses in the entertainment, parks, resorts, and consumer products industries. It is the image that tells us what is attainable in the vast cult of the self, what we should desire, what we should seek to become and who we are (Hedges, 4). There are a variety of consequences of media convergence, some positive, such as greater convenience for users, and some negative, such as less regulation of untrue and misleading content. Smartphones, tablet computers, smart televisions, and even automobiles now provide people with access to media content that was previously available only through separate channels. What are alternative ways the. A significant offshoot of social media has been the rise of user-created content. A smartphone exemplifies the three C's: a computer that allows every user to communicate with others by sharing content. OC disadvantages 1 The target company then becomes a subsidiary of the conglomerate. "Editorials" (Nation)) These subsidiaries include GEICO, BNSF Railway, and Berkshire Hathaway Energy. Berkshire Hathaway is another conglomerate that has a number of subsidiaries that operate in different markets. 3. All rights reserved. As a member, you'll also get unlimited access to over 88,000 Global Mass Communication: pros, cons and the driving force behind it. Within the media industry, more ratings equal a higher profit. Mass Media Research Concept & Examples | What is Mass Media Research? Conglomerates also have a number of disadvantages. Consumers' choice & minimal government control. Individuals frequently tuned in to get records of what is happening in the world, getting to know the current trends. Established industries, technologies, and standards have had to change drastically in response to computerization. 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). Concentration of media ownership the absence of diversity. 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. According to Figure 1, only newspaper division has kept declining since 2007. Or we can simply say that With this definition in mind, a conglomerate merger is a merger that involves two firms from unrelated business industries and activities. The enactment of the Multimedia and Communication Act 1998 strategises the local broadcasting industry for a positive and competitive future. Media convergence has a number of serious effects on society. Doing so may also assist the parent company to save money on operational costs while at the same time requiring less manpower. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity. If conglomerates control the mass media, and it is the people who decide what they want to see, then the control of the government is reduced. United States [ edit] "Media conglomerates strive for policies that facilitate their control of the markets around the world." In order to handle this, the corporation may sell off its holdings. Other major players are Comcast and Sony. These subsidiaries include Ferrari, Maserati, and Fiat Chrysler Automobiles. Some of the popular examples of conglomerates around the world are. . The returns from high performing business units within the conglomerate compensates for the low performing ones. First, conglomerates tend to have mixed results from their various business units. Conglomerates may also be created when a company extends its operations into new product lines or services. Fiat Chrysler is a conglomerate that has a number of subsidiaries that operate in different markets. These structures can create a capital market within the group to allow growth of the conglomerate. factions can be small and others can be big, but each one is different. This has lead to a proliferation of bias across the many media companies in existence today. Sony is a multinational conglomerate that has a number of subsidiaries that operate in different markets. lessons in math, English, science, history, and more. Conglomerates offer many benefits to their parent companies. Are you or your spouse an active or retired U.S. military service member?*. Try refreshing the page, or contact customer support. The majority of conglomerates offer a variety of products and services that arent always connected. Healthy market based competition is absent leading to slower innovation and increased prices. Conglomerate diversification is a strategy employed by large corporations to expand their businesses into new and unrelated sectors. How has Conglomeration Changed the Movie and Telev Conglomeration of the movie and television industry, Motion Industry and The Effects of Conglomeration. Synergy is the creation of value by two or more entities working together that is greater than the sum of the values of the individual entities. Media has detrimentally influenced. 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. 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. Survival of the Print Industry and Effects of Dema How will the print industry survive? This helps keep our economy going. While some sources of information are far more trustworthy than others, mass media as a whole is vulnerable to propaganda and its lies. A basic symmetry is seen to exist between media institutions and their audiences, since in McQuail 's words, the 'relationship is generally entered into voluntarily and on apparently equal terms '. In the same way, big conglomerates further enjoy upsides from synergies between their subsidiaries to create scale economies, diversify risks, and create new products and services as per their business interests. Which of the following is a possible consequence of the growing role of social media sites? Here are a few of the pros and cons. Inertia prevents development of innovation. . The people are considered to be the largest segment of the audience and that should be enough evidence for the media members to make the news tailor made for the viewing public.
advantages and disadvantages of media conglomeration
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