LO1 - Script

Introduction

Hello, my name is irrelevant! and im here to talk about the layout of companies in the film industry, the creation of films in said film industry, the audience of the film and how that effects the production of the film, 

Ownership

Who owns 20th Century Fox?

20th Century Fox is owned by 21st Century Fox as a subsidiary and 21st Century Fox is governed by a number of people, chief among them being Rupert Murdock and Lachlan Murdock as co-executive chairmans, James Murdock as CEO and Chase Carey as vice-chairman.

What does 20th Century Fox own? 20th Century Fox owns all the rights to the products that they create and being a conglomerate (a company that owns other companies) they own subsidiaries which are a company owned by another company. An example of the subsidiaries that 20th Century Fox own would be:

Blue Sky Studios

(Used its in house rendering software, they handled the animation and visual effects, but later devoted itself to solely creating animated films, is first being Ice Age.)

Fox Star Studios ( Based in India)

(They are the dedicated production and distribution arm of 20th Century Fox, and generally create Hindi and Regional films through co-production or just creating them in house.)

20th Century Fox Home Entertainment
(The home video division of 20th Century, the handle the distribution of films in the form of DVDs to be viewed at home.)

Fox Television Studios(This studio was designed to house the smaller production of movies and TV production.)

20th Television(Created to separate the production of TV products from the movie production, previously handled by 20th Century fox itself. This was created to increase the output of the respected products.)

20th Century Fox Television

(the TV division of 20th Century Fox)

TSG Entertainment

(A film financing company that mainly funds live action films. Created in 2012 to replace Dune Entertainment)

They work as a cross media company, meaning they product many different types of media within their company, either with the help of their subsidiaries or using the resources they have inside 20th Century Fox itself.The different types of media they create are things such as films (James Cameron's Avatar, X-men days of future past), TV shows such as The Simpsons and American Dad, music in the form of soundtracks for its movies and TV shows.

The company synergises its films, using Twentieth Century Fox Home Entertainment to repackage them as videos and DVDs, Fox Music to deal with soundtracks, and Twentieth Century Fox Licensing and Merchandising to promote them and earn secondary revenues. 

They also work with 21st Century Fox who in turn works with News Corp to promote their films through the use of things like newspapers, as News Corp owns subsidiaries like the Star, a popular newspaper in England.

Operating Model

A company either has two types of integration, horizontal or vertical. Vertical integration would be a company that is able to produce, distribute and exchange its own products. This is because they own the subsidiaries that allow them to do that. Horizontal integration is where a company does not have the resources available to produce, distribute and exchange. Instead they have to out source some of the work to other companies, typically the distribution part of the process as it is generally the most difficult and costly.

Vertical integration is better than horizontal because you have full control of the production, distribution and exchange of the product, it is also faster, as you do not have to use time out sourcing the work and setting up deals, furthermore you can keep a closer eye on the work and its progress.
The operating model of 20th century fox is one where they create a product in house, mostly by themselves and use their marketing and distribution abilities that they have within their conglomerate, such as their subsidiaries advertising their products creating synergy. Now synergy, theres an important word right there, as synergy means the interaction or cooperation of two or more organisations, substances or other agents to a produce a combined effect greater than the sum of their separate effects. A simpler way of saying it would be two things working well together to create something they couldn't alone.
So because 20th Century has synergy as an important part of their operating model they have an ENORMOUS advantage when it comes to their competitors, as they can both create the product and decide how they would want to market and distribute it. Another advantage would be the ability to advertise their products through other media such as Newspapers, Radio, TV etc.

Products

The term production means what the company produces, and in 20th Century Fox's case they
create different types of media through the use of their subsidiaries, as 20th Century itself just creates films while companies such as Fox Television Studios, that 20th Century own, create TV programs such as the Simpsons and American Dad. This makes the companies more efficient in how they create their products, as they can focus on creating their respected product while a subsidiary creates the music and soundtrack for the product. Some of the products that they have created that are well known would be Avatar, Dawn of the Planet of the Apes and X-men Days of Future Past as they are both well received on reviewing sites such as Rotten tomatoes and IMBD. Furthermore they all did well in the box office, especially Avatar as it is still the highest grossing film they have produced. The main target demographic of the movies varies, as since 20th Century Fox is such a large movie making company, they can make films that cater to different audiences increasing their potential demographic and overall products.
For example Avatar would cater to a more mature audience that enjoys action, while Dawn of the Planet of the Apes is more drama/sci-fi that focuses more on the story than on action and finally X-men Days of Future Past appeals to an audience that is a fan of the original comic material.

Market Position

Market Position means how successful the company is in their field.
There are a number of things that shows 20th Century Fox is successful in its chosen market, film. For example:

The average quality of the films they create is 50 on Metacritic, a respected review site, and the highest scoring movie is 100 and the lowest is 5. This shows us that it creates products that are both very well received by the market, but also create films that are viewed as horrible and poorly done.

It has a large mass, in the sense that it can create a large amount of products aimed at many different audiences and still be effective.

The gross profit market margin annually for 20th Century Fox in 2014 would be $1,790.5 million, being the largest share holder in the market at 17.3%.

Their highest grossing product would be Avatar with a total gross value of $749,766,139 (£486,587,817.46).


20th Century Fox is generally well known internationally, as they have subsidiaries that distribute their movies in other countries such as Fox star studios who distributes films in India on behalf of 20th Century Fox.

Another way we can tell 20th Century Fox is successful is because of the market share it has in the box office for example. Since they CURRENTLY have 10% of the box office market shares, meaning that they get 10% of the entire income of the box office market in shares, it shows that they have a large influence in the market as well as having a large share of the profits. Furthermore this means that they are placed 4th in the overall box office, meaning that they are doing considerably well compared to nearly all of its competitors. However Universal is 1st with a considerable 28% market share, Buena Vista (A subsidiary of Disney who distribute films, such as Guardians of the Galaxy) is 2nd with 18.6% and Warner Bros is 3rd with 16.3%. This shows that 20th Century Fox has a considerable share in the market, but compared to Universal they don't even have double their shares in the Box Office. To 20th Century's credit though, everyone bellow it on the list drops from 10% to 7% then to 4%, which is nothing compared to the 4 major film production companies.

*All images and statistics were taken from Boxofficemojo.com I did not create or contribute to gathering any information from the site, and all rights are owned by the creator of the site.

Competitors

Now because of the market position that 20th Century Fox has, there is bound to be competition. The main competitors to 20th Century Fox would be Universal, Beuna Vista (The film distribution arm of Disney) and Warner Bros. These 3 companies are competitors to 20th Century Fox because like Fox, they create films that also appear in cinemas. Examples of this would be Jurassic World for Universal, Guardians of the Galaxy for Beuna Vista (Disney) and The Dark Knight for Warner bros. All of these are big budget films that did extremely well in the Box office, showing that 20th Century Fox has strong competition, especially in the creation of comic book movies, a fast growing trend in recent years. These films are based around the characters in comic books, and are generally stories about heroes and loss. 20th Century Fox create movies such as the X-men franchise, while Buena Vista (Disney) creates Marvel franchise movies and Warner bros create DC franchise films. The reason for this increase in Comic book movies in the cinema is because comic book movies are generally super hero movies, with a hero that we can rally behind as well as a villain we can despise. Furthermore Comic books already have an established storyline that they can draw inspiration from or even just copy straight from the comic on to the cinema screen. Furthermore comic books already have a pre-established merchandise market, for example figures, T-shirts, cartoons etc. so it synergises with itself. So because of this increase in comic book movies in the past couple of years and these studios wanting to create similar movies, they can be seen as competitors because of that.