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Media production companies
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- Edge Hill University (EHU)
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Student number: 21505969 Assessment 1: Media and Creative Industries - ReportReport: To explore the success of Paramount Pictures UK
The objective of this report is to highlight and analyse the major marketing developments, the business
structure and the performance of Paramount Pictures United Kingdom during 2015-16. This report will
collate samples of relevant data that explore the amount of films, revenue and the major media
competitors for Paramount Pictures UK.
The market and business structure of Paramount Pictures UK
The corporation of Paramount Pictures UK operates between eight divisions each acting as a secondary
market for Paramount UK responsible for generating DVD sales and rentals, pay per view entertainment
channels, digital downloads through iTunes along with distributing intellectual properties including
merchandise (Paramount Pictures UK, 2017). However, Holt and Sanson, (2013) argue that secondary
markets jeopardise the value chain of leading media conglomerates because cinematic releases
experience a decline in viewings instead creating audience awareness of the property for downloading
software and pay per view television. Likewise, table 1.1 below highlights that studio profits are no
longer as widely generated by DVD sales of an original movie release since the rise of technology such
as app downloads for digital audiences (BFI, 2016a). Paramount increased their market for audiences to
download video content and watch content on their digital devices which shows Paramount are
becoming a strong contender of media convergence (Picard et al, 2013).
Table 1.1 – Audience engagement with film by platform in 2015 (UK)
90
80
70
60
50
40
30
20
10
0
TV ra
y a op ad et e
m kt lo bl on
lu ne es a h
/B Ci / d o w T tp
D op /d ar
DV pt am Sm
L a
S tr e
Platform/device (s)
, Student number: 21505969 Assessment 1: Media and Creative Industries - Report
BFI (2016a, p3)
Though, as Holt and Sanson (2013) express Paramount have unlimited means of distribution for their
audiences yet they lack the business acumen to inform and command the attention of their consumers
about the cross-media experiences available. Therefore, Curtin (as cited in Holt and Sanson, 2013, p4)
illustrates further we are entering the ‘matrix era’ of connected viewing whereby there is a shift in the
number of distribution strategies and a rise in multiplatform programming strategies, challenging user
engagement and increasing digital audiences. This view is evident as Viacom, the parent company of
Paramount outline in their business conduct values they aim to be creative, innovative, honest,
accountable, team collaborated and optimistic though they fail to outline how their multi-platforms work
and how their audiences can access them highlighting their lack of distributing strategies (Viacom, 2016
and Picard et al, 2013). As Castells (2011) reinforces that there was prominence placed on the physical
capital accumulation but currently there is greater focus on digital accumulation for many studios yet to
keep the network society thriving a studio must have capitalist productivity to make profit.
Performance of Paramount Pictures UK
In 2016 Paramount lost a total of $137 million in profit in one year alone after releasing seventeen
movies in 2015 (James, 2016). As Epstein (2005, p125) states that the major reason for budget loss of a
successful media conglomerate is largely because they invest in variety by creating lower budget films
and largely profiting into satellite channels this is referred to as the ‘clearinghouse concept'. Paramount
have invested in lower budget films costing $60-90 million to produce whilst producing Nickelodeon
cartoons that are budgeted at $100 -$130 million to produce (Alessandro, 2017). As, Wascko et al
(2008) explain that when a big studio has fewer big blockbuster movies to rely upon it is challenging for
them to make enough profit to break even in Hollywood let alone in the UK. Although, Epstein (2005,
p111) expresses that as much as $150 million can be generated in revenue from a single television
production this process is similar the black box theory where money continually gets paid in and out.
Epstein (2005) claims that the more ambiguous the black box becomes the more control the studio gain
over distributing fees meaning the more money the studio retain and the more working capital they
make.
Consequently, Viacom are relying heavily on their flagships brands including Nickelodeon,
Nickelodeon Junior, MTV, BET, Comedy Central and the Paramount Network to generate revenue back
into Paramount (James, 2016). Paramount Pictures Home Entertainment have obtained high distribution
success rates as 52% of people in the UK pay for sports and comedy channels with most UK consumers
paying only for the entertainment channels (James, 2016). This highlights the entertainment company is
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