advantages and disadvantages of media conglomeration
It has both positive and negative consequences. As a member, you'll also get unlimited access to over 88,000 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. 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. Copyright 2023 IPL.org All rights reserved. Distance is not a barrier. Digitalization facilitates fake news and manipulative media content. All other trademarks and copyrights are the property of their respective owners. These subsidiaries include GE Aviation, GE Healthcare, GE Capital, and GE Industrial Solutions. These media conglomerates exist in Europe, Asia and Latin America. Andersen, R,.Thomas, H., Kominski, & Gerald. 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. Contemporary Journalism & Its Role in Society, The Media Industry: Roles, Impact & Ethics. Devices such as smartphones, tablets, smart TVs, and smart automobiles spur and facilitate this process. On one hand, media convergence has expanded access to media, simplified media production, and democratized the base of media producers through user-created content. 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. For example, a conglomerate may have a subsidiary that manufactures cars and another subsidiary that manufactures tires. This comes at a drawback. The Article 10 allows all citizens the absolute freedom as not restricted by the government. Those concepts are: globalization, media concentration or conglomeration, electronic colonialism, and consumerism. There are four specific effects that will be discussed. Hence, the term conglomeration refers to the procedure by which a conglomerate is formed when a parent firm starts to acquire subsidiaries. Definition, Benefits and Techniques. Disadvantages And Disadvantages Of Broadcasting Media Boeing is a multinational conglomerate that has a number of subsidiaries that operate in different markets. The three C's of media convergence are computing, communication, and content. Deregulation refers to government deregulation over these companies' size and functions. A conglomerate ( / knlm.r.t /) is a multi-industry company - i.e., a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Media function as social control agents by gathering information, the media engage in surveillance of the social environment. Conglomerates can become so diversified and complicated that they are too difficult to manage efficiently. 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. Media is one of the most influential aspects of our lives. The Pros And Cons Of Global Media - Internet Public Library Media: 10 Advantages and 10 Disadvantages of Media Small operations that compete with large operations often suffer for or go under from a lack of resources. Media bias has a very large effect on society and most often in a negative way. From reporters bringing us stories of people in difficult situations to social media allowing one persons thoughts to go viral and spread across the world, mass media can lift up an individual voice that would otherwise have gone unheard. Totalitarian regimes have used mass media for nearly a century to control what their people believe. Media convergence describes the process by which computer devices and digitalization bring together various media technologies. The new company, known as GE Alstom, was jointly owned by both GE and Alstom. 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. What are the advantages and drawbacks of, allowing large conglomerates to control the mass media? Media corporations often employ multiple media formats, such as TV, print and the internet to enhance their offerings. Finally, conglomerates may be less responsive to change than companies that are not conglomerates. Copyright 2023 IPL.org All rights reserved. As a result, the conglomerate may find it difficult to utilize its economies of scale to save on costs. It has become a major factor in the society as people are depending on it to accomplish specific tasks. Edition: 2nd ed. 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. Healthy market based competition is absent leading to slower innovation and increased prices. 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. Also, read about its importance, pros, and cons. Would the alternatives be more ethical or virtuous? A financial adviser who wants to recommend a risk-averse approach will inevitable talk about diversity and a diverse portfolio of investments. Investopedia: Conglomerates -- Cash Cows or Corporate Chaos. Now, we are all connected. That is not to say that digitization has been only a beneficial process. Enrolling in a course lets you earn progress by passing quizzes and exams. Course Hero is not sponsored or endorsed by any college or university. Media has detrimentally influenced. 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 *Federal Communications Commission, Broadcast Station Totals as of September 30, 2016, on the internet as a PDF at https://apps.fcc.gov/edocs_public/attachmatch/DOC-341807A1.pdf. The whole is often worth less than the sum of its parts. Fill out the form and we will contact you to provide information about furthering your education. Here are a few of the pros and cons. The digitalization of information has allowed people to have unprecedented access to educational and informative content on their devices. Economic convergence has three parts: digitization, conglomeration, and deregulation. A conglomerate can also show the growth of earnings, this is by acquiring companies who have shares that are more discounted then their own. Cultural convergence is the way in which cultural output is affected by these developments, such as through trans-media storytelling and social media use. We also have entertaining programs like music program on the radio and on the television. 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. Advantages 1. Some conglomerates own a series of companies . Why are you taking this course? What is media convergence? Newspaper firms have started to search for online delivery channels so as to retain the young readers. 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 '. Conglomerates also have access to new markets and technologies. A conglomerate can show earnings growth, by acquiring companies whose shares are more discounted than its own. Some of the popular examples of multinational conglomerates are-. According to Figure 1, only newspaper division has kept declining since 2007. General Electric is one of the largest conglomerates in the world. Conglomerates offer a number of advantages, including economies of scale, greater financial stability, and access to new markets. Man on the Moon is a biographical movie with a drama and comedy genre about the late American entertainer, actor, and performance artist named Andy Kaufman. 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. Inertia prevents development of innovation. By becoming a diversified conglomerate across several industrial sectors, the parent company may reduce its exposure to single market risk. 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. Conglomerate Mergers: Definition, Purposes, and Examples - Investopedia The TV was a mix of the radio and the newspaper and individuals were interested in it. For instance, electronic news media typically favours one political party over another and their articles persuade individuals to vote for the particular. 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. Smartphones, tablet computers, smart televisions, and even automobiles now provide people with access to media content that was previously available only through separate channels. Newspapers were still sought after and still utilized frequently. A Conglomerate merger is seen as a valuable move if the value of the two companies combined is more than they are valued . Citizen Journalism Overview & Examples | What is Citizen Journalism? Each subsidiary business operates independently from the other divisions in the conglomerate, but the managers of those subsidiaries report to the senior management team at the parent firm that is responsible for overseeing the various businesses and making sure they are all performing well. Thus we can simply say that all this have given rise to cultural imperialism. Get unlimited access to over 88,000 lessons. 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. Conglomerates are less popular today, but were quite popular in the 1960s and 1970s. The Heritage Foundation:The Myth of Media Concentration: Why the FCC's Media Ownership Rules Are Unnecessary. Small media operations often cannot afford to produce programming, hire the talent or the quality of technical staff to compete with larger media companies. This is because conglomerates usually have a number of different subsidiaries that operate in different markets. United States [ edit] They also benefit from synergies between its subsidiaries to gain access to new markets and technologies. Examples of media convergence are all around us. Which is to say, mass media simultaneously benefits us and creates new problems. Advantages And Disadvantages Of Media Conglomeration copyright 2003-2023 Study.com. A newspaper company may begin by acquiring television and radio stations before purchasing book publishers. On top of that, we have daily newspapers, magazines targeting all kinds of readers, and, of course, the immeasurable breadth of the internet. The computer technologies which have become part of people's everyday lives are the physical site of media convergence trends. It has been able to reduce costs and gain access to new markets and technologies by leveraging the synergies among its subsidiaries. 1. User-created content has disrupted established practices in media companies and narrowed the gap between professional and amateur media content creation. Also a conglomerate can create internal capital market if one of the external companies are not developed fully. Hi, I am an MBA and the CEO of Marketing91. Diversification results in a reduction of investment risk. America loves sensationalism. Professional Codes of Ethics in Public Relations, Advertising vs. Public Relations | Differences, Purpose & Overview, Power of Social Media: Consumerism & Trends | Why Social Media is Attractive. Some of the advantages are that there is diversification, which can result in the reduction of investment risk. Global Village Overview & Concept | What is a Global Village? Media convergence is not one process but a number of different processes which occur simultaneously and influence one another. 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. Conglomerate (company) - Wikipedia At its worst, its a way for a tiny minority to seize power over the vast majority. The research paper also helps to understand the different types of multi-agency and their activities in the process of operation. 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. Many conglomerates are thus multinational and multi-industry organizations. In Malaysia, Law such as Publications act and printing presses give the Malaysian authorities the control over all the media. Over the years, technologies have been gradually advancing and have played an important role in todays fast growing societies. For example, newspapers often offer digital versions with videos and weblinks. However, they found this was an unreliable method of communication and the first newspapers and other media mediums were created. A successful conglomerate is a company whose parts are made up of several smaller independent companies that operate in various sectors. In general, the mass media simply means medium that gives out information. Generally, mass media is a print and electronic means of communication that spreads messages to the audiences and carries out information to the people in the society. Economic convergence refers to the economic strategies widely adopted in response to technological convergence by media companies. They do not have the freedom to express what they really want to which deprives them of their rights. Advantages and Disadvantages of Media - A Plus Topper Increasingly, taking cross-enterprise synergy into account is essential for investors to properly evaluate future prospects has been done by GE effectively. But along with conglomeration come many advantages and disadvantages. Advantages of Size 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. The author provides a realistic insight into the negative effects of electronic media. Deregulation refers to government deregulation over . 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. WHY DOES ECONOMICS DRIVE MOST MEDIA COMPANIES ? Cameras, microphones, servers, computers and the necessary editing programs have significant costs more easily handled by a corporate entity than an individual owner. 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. What is the i How will the print industry survive? 3M is a conglomerate that has a number of subsidiaries that operate in different markets. 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. 14 Steps to Buy a Business, C Corporation - Definition, Benefits and Disadvantages, What is Compliance? This advantage is enhanced by the fact that the business cycle affects industries in different ways. Required fields are marked *. The Advantages of Media Consolidation | Bizfluent Mass media is communication whether written, broadcast, or spoken to reaches a large audience. Thanks to the business communication made possible by mass media, businesses can reach potential consumers faster and easier than ever before.