KENYATTA UNIVERSITY

B.A COMMUNICATION AND MEDIA STUDIES

CCM 425
MEDIA MANAGEMENT AND ENTREPRENEURSHIP
GLORIA MUTHONI F109S/13678/2019
NJOROGE
MWAKA SAMUEL F109S/15229/2019
TIM MAKILA F109/4381/2019
DANIEL PATRICK ODUOR F109S/18655/2016
KANANA PATIENCE JAN F109/3514/2019
STRUCTURE OF THE MEDIA INDUSTRY

Introduction
Media industry refers to the collection of businesses that allows information to be shared. This
includes operations such as radio broadcasts, websites, and newspapers.
When it comes to the structure of the media industry, it is divided into monopolies, oligopolies
and limited competition. The print, recorded music, and film industries are generally oligopolies;
television is generally monopolistic competition; and live event ticketing is essentially a
monopoly.

MONOPOLIES
monopoly occurs when one controls a product or service—for example, a small town with only
one major newspaper.
Monopolies are large economic associations, such as cartels, syndicates, trusts, or concerns,
which are owned by individuals, groups, or shareholders and which control industries, markets,
or entire economies through a high concentration of capital and production
Their aim is to deny other producers the opportunity to compete. Their domination of the
economy is the basis for their influence on all spheres of life.
Monopoly of media outlets such as newspapers, film, television, radio, and satellite broadcasting,
may be on a national or international level. Monopoly may be commercial or governmental, in
which case it may be used directly or indirectly for propaganda purposes.
GOOGLE
The Justice Department and a group of eight states sued Google on Tuesday, accusing it of
illegally abusing a monopoly over the technology that powers online advertising, in the agency’s
first antitrust lawsuit against a tech giant under President Biden and an escalation in legal
pressure on one of the world’s biggest internet companies. [ bbc news
The lawsuit said Google had “corrupted legitimate competition in the ad tech industry by
engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by
publishers, advertisers and brokers to facilitate digital advertising.
KENYA
We have the kenya power limited company.it is the only supplier of electric power to homes and
industries
Safaricom was a monopoly but the emerging companies that offer the same has changed it,
The now KBC was known as voice of kenya was a monopoly,The station opened at 5 pm in the
evening and closed at midnight seven days a week. There was no choice for viewers but to stick
this schedule.
Under the leadership of President Daniel arap Moi, KBC became powerful, with statutory
powers to issue radio and television licences to all Kenyans buying those items. Lack of radio or
television permit then could lead to prosecution. [ nation africa]
K.B.C also was granted the power to air parliamentary live coverage by the government and it
barred other media stations from covering the same content without its courtesy.

OLIGOPOLIES
When companies within the same industry work together to increase their mutual profits instead
of competing doggedly within with one another is known as an Oligopoly situation.
An oligopoly refers to a market structure that consists of a small a small number of firms, who
together have substantial influence over a certain industry or market. While a group holds a great
deal of market power, no one company within the group has enough sway to undermine the
others or steal market share. As a result the prices in this market are moderate because of the
presence of a certain degree of competition. When one company sets a price, others will respond
in fashion to keep their customers buying.
The term oligopoly is basically related to the economics and the market. It is a market
controlling term. May be defined as a market situation in which only a few producers affect the
market. In other words, oligopoly is defined as the market strategy that consist of several small
numbers of firms.
Types of oligopoly
Oligopoly market industries are classified into the following types:
Pure oligopoly
Its also known as perfect oligopoly. It has a homogeneous product.
Open oligopoly
Refers to the market strategy where the new industries can enter in the market and compete with
the existing industries.
Collusive oligopoly
Its basically a cooperative market strategy. It occurs when few firms collaborate to an
understanding in reference to the price and results of the products
Competitive oligopoly
This is basically the opposite of collusive oligopoly and it’s a competitive strategy. It occurs due
to lack of understanding between the industries of the market. Due to which they create
invariable competition for one another.
Organized oligopoly
As the name suggests this is an organized structure of oligopoly. In this strategy an association is
formed to fix prices, quotas and output.
Syndicated oligopoly
This is the opposite of organized oligopoly. In this strategy the industries are allowed to sell their
product through a centralized syndicate.
Characteristics of Oligopoly
Interdependence
As in an oligopoly market, the decision of one firm influences the process and working of
another firm. Thus, it induces interdependence in the network. It is the most important feature of
an oligopolistic market. As this affects the prices and output of the market. A small change in a
small firm has a direct impact on its rivals. In order to match the impacts induced, the competitor
firms might change their prices and profits. Thus, the oligopoly market is a totally interdependent
network.
Advertising
Advertising is the key characteristic of the oligopolistic market. The firms are supposed to
employ aggressive market techniques to defend the competition in the market. Due to
interdependence, it is essential for the forms to invest a huge amount in the marketing and
promotional activities.
Variable selling price
An oligopolistic market is a factor driven market and has interdependence on various factors.
Thus, the selling price of the products in this market is quite unstable and varies at different
instances.
Entry barriers

Generally, it is difficult to enter an oligopolistic market, even in an open oligopoly. (open

oligopoly is a type of oligopoly that refers to the market strategy where the new industries can
enter in the market and can compete with existing industries). It has to compete as a small start-
up industry with large and economically stable firms.
Examples of Oligopoly

USA
According to an article by Matt Banschbach in 2020, The big five media conglomerates in the
US are Comcast, Disney, AT&T, National Amusements, and Newscorp. There exists a symbiotic
relationship between these entities, created by frequent corporate deal-making and the holding
and sharing of stakes in each others’ properties. A prime example of this is Hulu, of which a
majority stake was previously shared by AT&T (TimeWarner) and Comcast before Disney
acquired a majority stake. In the 1980s, 50 companies controlled most media in the U.S. The
most rapid consolidation of media outlets occurred after the passing of the Telecommunications
Act of 1996. While the goal of the act was to increase competition and create a better consumer
experience through higher quality and lower prices, the act’s deregulation of the field was the
nail in the coffin of distributed media. The number of companies controlling that 90% of U.S.
media shrunk from twenty-five to just five, with the remainder owned by marginally smaller
entities. In its current state, the industry is anticompetitive.
We can see how this handful of corporations reach every media-consuming household by
examining their holdings. National Amusements owns CBS, Viacom, Nickelodeon, MTV, BET,
Spike, Simon & Schuster, and CNET. Disney owns ABC, Vice, Pixar, ESPN, Marvel, the
History Channel, and Lucasfilm. News Corp owns Fox (and its subsidiaries), MarketWatch, the
New York Post, the Wall Street Journal, Harper Collins Publishers, ITV, and The Sun. AT&T
owns CNN, HBO, TNT, Time Magazine, TBS, and Cartoon Network. Finally, Comcast owns
NBC, Universal, Dreamworks, USA Network, SyFy, Focus Features, Fandango, and E!. These
are just samples of everything owned by the five, without mentioning the holdings of other
companies like Verizon (Huffington Post, Yahoo, TechCrunch, Complex), Advance Publications
(Discovery, Condé Nast, Reddit), Sinclair (150+ television stations), and others. Majority of
Americans have one or two news sources that they get nearly all of their news from, which leads
many Americans to succumb to confirmation biases and seek out sources that align with their
beliefs. The big five are uniquely qualified to fulfill individuals’ hunger for affirmation, given
their ownership of 5 major broadcast news networks. They can create news personalities that
people enjoy watching, effectively formulating a loyalty system that benefits ratings.
According to an article by Robert W. McChesne, media concentration was in the form of
"horizontal integration," where a handful of firms tried to control as much production in their
particular fields as possible. The U.S. film production industry, for instance, has been a tight-knit
club effectively controlled by six or seven studios since the 1930s, which remains the case today:
The six largest U.S. firms accounted for more than 90 percent of U.S. theater revenues in 1997.
All but sixteen of Hollywood's 148 widely distributed films in 1997 were produced by these six
firms, and many of those sixteen were produced by companies that had distribution deals with
one of the six majors. The newspaper industry underwent a spectacular consolidation from the
1960s to the 1980s, leaving half a dozen major chains ruling the roost. U.S. book publishing is
now dominated by seven firms, the music industry by five, cable TV by six. Nearly all of these
are now parts of vast media conglomerate. In 1983, Ben Bagdikian published The Media
Monopoly (Beacon, 1984), which chronicled how some fifty media conglomerates dominated
the entirety of U.S. mass media. By today's standards, that era was downright competitive.The
mega-media firms have enjoyed a staggering rate of growth in the last decade. In 1988, Disney
was a $2.9 billion a year amusement park and cartoon company; in 1998, Disney had $22 billion
in sales. In 1988, Time was a $4.2 billion publishing company and Warner Communications was
a $3.4 billion media conglomerate; in 1998, Time Warner did $26 billion of business. In 1988,
Viacom was a measly $600 million syndication and cable outfit; the new Viacom is expected to
do $22 billion worth of business in the coming year. Moreover, each of these firms averages at
least one equity joint venture--sharing actual ownership of a company--with six of the eight other
media giants. Rupert Murdoch's News Corp. has at least one joint venture with each of them.
AT&T Liberty owns nearly 10 percent of both News Corp. and Time Warner. What these media
conglomerates have learned is that the profit whole is greater than the sum of the profit parts.
Viacom/CBS, for instance, will now be able to produce a movie at Paramount or a TV show at
Spelling studios, air it on Showtime and CBS, advertise it on its thirty-four TV stations, as well
as on the 163 Infinity Radio stations, and then sell it at Blockbuster Video--all owned by the
same merged company.

SOUTH AFRICA
South Africa’s media is dominated by a handful of large corporations, with their interests
stretching from newspapers to magazines and the internet. Radio is mostly the domain of the
state broadcaster. There are three main players in television: the SABC , which has three
channels (SABC1, SABC2 and SABC3); the free-to-air broadcaster, e.tv ; and Multichoice ,
which has sewn up the pay channel market. Its bouquet is large, and it regularly adds new
channels. When it comes to newspapers and magazines, the major media owners are Media24 ,
Independent News and Media , Avusa , and the Caxton and CTP Group . These four own almost
all the major newspapers and community newspapers, most of the consumer magazine titles and
a slew of specialist magazines, and have a finger in internet and broadcast pies.
For the past years, SABC was the only broadcaster in South Africa in 1936 when it was
established. This happened as there was no other alternative broadcasting service\channel that
can compete with the SABC. In 1986sabc monopoly was challenged when M-net was
formulated, and furthermore, in 1998 the e-TV launched the first free-to-air channel, so it is
imparable that SABC does not operate in its market.
Since m-net and e-TV were launched that is when SABC experienced oligopoly since there are
competitors in the broadcasting market/ industry. Furthermore broadcast television and stations
are functioning in an oligopoly market structure in South Africa.
According to the Saarf Amps figures, state broadcasting channel SABC1 has far and away the
highest viewership, at 70.6% of the adult population. This is followed by SABC2 with 60%, e.tv
with 57.1%, SABC3 with 47.6%, the main MNet channel with 6.4% and all of the DStv channels
with 16.8%.
We can therefore examine how these holdings reach every media household according to an
article published on 21 Nov 2007 by Brand South Africa Editor,
SABC, which was established on 1 August 1936 by an Act of parliament, has its national radio
network comprising of 18 radio stations, 15 of which are dedicated specifically to public service
broadcasting. These are 11 full-spectrum stations, one in each of the official languages, a cultural
service for the Indian community broadcasting in English, a regional community station
broadcasting in isiXhosa and English commmunity station broadcasting in the !Xu and Khwe
languages of the KhoiSan. Its television network comprises four television channels – three free-
to-air (SABC1, SABC2 and SABC3) and one pay-TV (SABC Africa) broadcast 24 hours a day
on the DStv digital satellite platform.
Caxton owns 128 newspapers, many of which cover the smaller cities and towns in which the
other big media houses have no presence, and 13 magazines.
Independent News and Media owns 14 national and regional newspapers, publishing newspapers
in most of the major cities. In Johannesburg, it has the Star, the Saturday Star, Business Report,
which is also carried in its morning titles in Durban, Cape Town and Pretoria, and the weekly
Sunday Independent, which is sold nationally. In Durban, the Independent Group publishes the
Mercury the Daily News, the Post (aimed at the Indian market), the Zulu-language daily
Isolezwe, the Independent on Saturday, and the Sunday Tribune. Isolezwe’s huge growth is part
of South Africa’s tabloid-newspaper explosion, and the paper launched the world’s first Zulu-
language website. In Cape Town, Independent owns the dailies Daily Voice, its tabloid, as well
as the Cape Argus and Cape Times, and the weekly Saturday Argus and Sunday Argus. It also
has the Diamond Fields Advertiser, which covers Kimberley and the sparsely populated
Northern Cape, and Pretoria News in the capital.

LIMITED COMPETITION/MONOPOLISTIC
Monopolistic competition takes place when multiple companies offer essentially the same
product or service. Sellers compete among themselves and can differentiate their goods in terms
of quality and branding to look different.
Monopolistic competition is a type of market structure where many companies are present in an
industry, and they produce similar but differentiated products. None of the companies enjoy a
monopoly, and each company operates independently without regard to the actions of other
companies. The market structure is a form of imperfect competition.
This is a more realistic scenario that actually occurs in the real world whereby there are still a
large number of buyers as well as sellers. But they all do not sell homogeneous products. The
products are similar but all sellers sell slightly differentiated products.
In this type of competition, sellers consider the price charged by their competitors and ignore the
impact of their own prices on their competition because new companies enter the market with
differentiated products affecting demand, leading to less profit. The sellers can also charge a
marginally higher price since they may enjoy some market power. So the sellers become the
price setters to a certain extent.
Monopolistic competition is a type of market structure where many companies are present in an
industry, and they produce similar but differentiated products. None of the companies enjoy a
monopoly, and each company operates independently without regard to the actions of other
companies. The market structure is a form of imperfect competition.
The characteristics of monopolistic competition include the following:
1. The presence of many companies.
2. Each company produces similar but differentiated products.
3. Companies are not price takers.
4. Free entry and exit in the industry.
5. Companies compete based on product quality, price, and how the product is marketed
In addition, monopolistic competition thrives on innovation and variety. Companies must
continuously invest in product development and advertising and increase the variety of their
products to appeal to their target markets. Competition with other companies is thus based on
quality, price, and marketing.
Quality entails product design and service. Companies able to increase the quality of their
products are, therefore, able to charge a higher price and vice versa. Marketing refers to different
types of advertising and packaging that can be used on the product to increase awareness and
appeal.
Companies in a monopolistic competition make economic profits in the short run, but in the long
run, they make zero economic profit. The latter is also a result of the freedom of entry and exit in
the industry. This supports the Chamberlinian monopolistic competition concept where every
one of the firms have some monopoly power, but entry drives monopoly profits to zero. The
concept derived in 1933 gets its name from Edward Chamberlin the American Economist. The
Economic profits that exist in the short run attract new entries, which eventually lead to
increased competition, lower prices, and high output.
Such a scenario inevitably eliminates economic profit and gradually leads to economic losses in
the short run. The freedom to exit due to continued economic losses leads to an increase in prices
and profits, which eliminates economic losses.
Companies in monopolistic competition produce differentiated products and compete mainly on
non-price competition. The demand curves in individual companies for monopolistic competition
are downward sloping, whereas perfect competition demonstrates a perfectly elastic demand
schedule.
Examples of monopolistic competition in the media
Newspapers
Newspapers tend toward local monopolies and oligopolies, as there are generally few local news
sources.
In the past classified advertising made up a substantial portion of newspaper revenue. However,
the advent of the Internet—particularly free classified services such as Craigslist—has weakened
the newspaper industry through dwindling classified advertising revenues.
The highest costs of publishing a paper remain the editorial and administrative overheads. Back-
office activities such as administration and finance can often be combined if a company owns
more than one paper. The transition from the labor-intensive process of mechanical typesetting to
modern electronic printing greatly reduced the marginal costs of producing newspapers.
Unlike the historical restrictions on broadcast media that limited the number of stations owned
by a single network, print media has faced no such ownership limits. Because of this, a company
such as Gannett has come to own USA Today as well as mostly local newspapers in 33 states,
Guam, and the United Kingdom (Columbia Journalism Review, 2008). Other companies, such as
McClatchy, also run their own wire services, partly as a way of reducing the costs of providing
national journalism to many local markets.
In Kenya, the main competition is between the Nation Media Group whose publications include
Daily Nation and Taifa Leo and the Standard Group whose publication is The Standard.
Magazines
Like newspapers, magazines are largely owned by just a few companies. However, unlike
newspapers, many magazine chains are themselves owned by much larger media conglomerates
(something consisting of a number of different and distinct parts or items that are grouped
together).
Time Warner (an American multinational mass media and entertainment conglomerate who’s
parent organization is Warner Bros and Discovery)—the highest-ranking media company in
2003—owns numerous magazines, including Time, Fortune, and Sports Illustrated. Taking all of
its publications into account, Time Warner controls a 20 percent share of all magazine
advertising in the United States. However, many smaller publishers produce niche publications,
many of which do not aspire to a wider market. In all, magazines seem to be undergoing a period
of economic decline, with a net loss of some 120 publications in 2009 alone (Flamm, 2009).
Broadcast Media
Radio
According to the Telecommunications Act of 1996 by Albarran, radio traditionally has been
considered to be in a state of monopolistic competition in which there are many owners of
stations that appear similar to advertisers and audiences.
Since the 1990s, massive radio networks such as Clear Channel Communications have bought up
many local stations in an effort to control every radio station in a given media market by
designating the lower part of the FM radio band for noncommercial purposes, including
nonprofit programming such as educational, religious, or public radio station. These practices
help retain a certain level of programming diversity in the face of increased homogenization,
largely because such stations are not supported through advertising. Because they are funded by
donations or nonprofit institutions, these stations benefit economically from catering to a
minority of listeners who may support the station directly, rather than a larger majority that has
other options for entertainment.
In Kenya most radio are owned by few media companies. They include KBC (Pwani FM Coro
FM), Radio Africa Group(Kiss 100, Classic 105, Radio Jambo) and Royal Media Service(Radio
Citizen, Hot 96, Ramogi FM).

Limitations of Monopolistic Competition Market Structure

1. Companies with superior brands and high-quality products will consistently make
economic profits in the real world.
2. Companies entering the market will take a long time to catch up, and their products will
not match those of the established companies for their products to be considered close
substitutes. New companies are likely to face barriers to entry because of strong brand
differentiation and brand loyalty.

FAMILY-OWNED MEDIA STRUCTURE.

This is the ownership of media outlets by family members as a business or sometimes through
participation of family members management. Family owned media firms range in size from
small to large and many of the largest media companies worldwide are family media enterprises
even though no definite listing exist.
Example of family owned media are; New York Times owned by Sulzberger family in USA,
Daily Mail and General Trust owned by Harmsworth in UK.
Family owed media can influence public opinion, culture and social life.
Real life example.
Family owned media have historically been a central facilitator upon which Nordic culture,
identity and social activity have been based. Nordic Society recognizes the social roles and
responsibilities with protection on freedom of expression. In the late 20th century, public service
broadcasting across the Nordic region was expanded to include private, commercial radio and
television as means of increasing audience’s choices.
Many of private firms that were granted broadcast rights were family- owned or controlled that
previously had been active in print media.
Family-owned media plays an important economic role by providing employment opportunities
and contributing to turnover and value-added to the national economies.

CHAIN OWNERSHIP MEDIA STRUCTURE

In this structure, the same media company owns several media outlets in a single medium, for
example a chain of newspaper, a series of radio stations, a string of television stations or several
book publishing companies.
In a country like India this type of ownership is commonly applied to newspapers. There are
many publishing groups in India which have chain ownership, for example the group headed by
the Times of India, Hindustan Times, India Express , Telegraph etc.