The Success of Fox Broadcasting Company - Case Study Example

Introduction/Background One of the most interesting industries in the global market is the media industry due to the variety of innovative entertainment it provides to its clientele. According to a report written by Robert McChesney on Global Media Giants, “the two largest media firms in the world, Time Warner and Disney, generated around 15 percent of their income outside of the United States in 1990” (1997, par. 3). Further growth and developments in this endeavor resulted in nine media giants domineering the global market, with the five giants enumerated herewith: “Time Warner (1997 sales: $24 billion), Disney ($22 billion), Bertelsmann ($15 billion), Viacom ($13 billion), and Rupert Murdochs News Corporation ($11 billion)” (McChesney, 1997, par. 4). As indicated, Rupert Murdoch’s News Corporation is included among the giants in the global media industry. Included under News Corporation’s list of holdings is Fox Broadcasting Company, owned by Fox Entertainment Group (part of Rupert Murdoch’s News Corporation), established and operated on October 9, 1986. (Freebase, 2010, 1). Latest statistics reveal that “from 2004 to 2009 Fox was the highest-rated broadcast network in the 18–49 demographic. In the 2007–08 season, Fox became the most popular network in America in household ratings for the first time in its history, replacing CBS” (Freebase, 2010, 1). The Fox Broadcasting Company, commonly known as simply Fox, has ten affiliated stations and boasts of a total of more than 60 programs. Fox owns Fox TV Stations known to reach about 38% of the population of the USA. Fox has a wide list of local affiliates scattered in all over the country. Fox has four broadcast content producing FOXCAST: So You Think You Can Dance; FOXCAST: The Simpsons; FOX News Talk Everywhere; and FOXCAST: Family Guy. ((Freebase, 2010, 1). Finally, Fox has consistently won Peabody Awards since 1992 up to 2005. In this regard, this management report on Fox Broadcasting Company would proffer an analysis of the internal and external environment of the firm through secondary scholarly studies. The discourse would identify the firm’s strengths and weaknesses, opportunities and threats; and other relevant external influences including future trends that would mark the success of Fox Broadcasting Company. Finally, suggested recommendations on appropriate corporate strategies to ensure sustainability and continued success in the future, in the light of changes in the internal and external environment, would be presented. Internal Analysis Strengths: Fox’s core competency is identified as its business of direct broadcast satellite communication. With various affiliated stations, Fox has emerged as one of the world’s preeminent company with a transnational scope of highly diverse media products and services. Leadership is acknowledged as one of Fox’s sources of internal strengths. At the helm of its corporate hierarchy is its Chairman and Chief Executive Officer, Rupert Murdoch, known for his powerful leadership skills and style. (Mondo Code: Rupert, 2010, 1) His keen acumen in business and entrepreneurship enabled him to acquire vast ownership in media companies in the world. In the earnings release for the 2nd quarter of 2009, News Corporation’s Rupert Murdoch reported that the leadership position being enjoyed by News Corporation stems from their ability to center on content based on the demands of their clientele. Their strong management and leadership team enables them to focus on its core capabilities but be able to discern taking risks. The latest film showing of Avatar proved to be tremendously productive enabling the corporation to surpass forecasted earnings (News Corporation, 2009, 1). The reported 10% growth in revenues is tantamount to an increase in the company’s financial resources making Fox adequately funded. As revealed, the company is competent in taking calculated but creative and innovative risks (like the showing of Avatar) which contributed to its stronger foothold in the industry. Being owned by News Corporation, its expertise and range of entrepreneurial quests are diversified into international media and entertainment with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and the Pacific Basin. (CBS Interactive, Inc., 2010, 1) As such, there are various opportunities available and open for Fox’s future growth. Aside from leadership, Fox’s strength comes from its wide range of viewership and choice of programs and shows enabling them to garner citations and awards. The official website of Fox, found in News Corporation, boasts of its strengths the area of number of viewership, more appealing demographics, and numerous awards. As noted, the corporation’s programs catered to the demands of contemporary viewers enabling them to capture a higher percentage of the market in the predominant demographic scale. The Fox Broadcasting Company, one of News Corporation’s business affiliates is considered the top network in the country numbering 27 stations from the Fox Television group to other television programs in Eastern Europe. (News Corporation: Television, 2010, 1) According to Swanson (2007), Fox has extensive and updated resources to undertake its core competencies. With advances in technology, Fox has delved into digital capabilities including television transition, broadcasting, and other facilities and infrastructure. The traditional broadcast equipment in analog form was already completely abandoned. In addition to digital equipment, the following resources were updated and utilized to ensure success: “digital cameras, dolby audio equipment, production trucks, splicers, editing machines, digital recording equipment, and satellite systems” (Swanson, 2007, 1 – 2), among others. In addition, Swanson averred that a consumer campaign designed to educate the viewers on Fox’s comprehensive and multi-faceted approach was implemented amounting to $697 million. Fox was considered to belong to one of the 95 broadcasting companies that promoted this educational campaign. (Swanson, 1997, 3). Weaknesses Because of its controversial clientele and format of programs, Fox Broadcasting Company is susceptible to legal issues emerging from viewer complaints on perceptions of freedom of expressions. The New York Civil Liberties Union (NYCLU) reported a case entitled “Fox Television Stations, Inc. et. al. v. FCC et. al.” which stipulated that “ten broadcasters were found guilty of indecency and six were also found guilty of profanity. The Commission imposed monetary fines on six of the ten, but for four programs that had only "fleeting expletives," it imposed only warnings.” (NYCLU, n.d., 1) Further, since Fox compete with three major networks in the country identified as the National Broadcasting Company, the American Broadcasting Company, and the Columbia Broadcasting System, their marketing and corporate strategies employ more of a reactive stance depending on the initiatives of the major networks. Fox Broadcasting Company under the direction of Rupert Murdoch has potential weaknesses in terms of delegation of authority. Speculation of reigns of control would surface as Murdoch delegates his leadership to his older children. His personal and professional entrepreneurial skills are unique and the future direction of Fox Entertainment Group would remain to be under the tutelage of a new breed of Murdoch heirs. A report by Swanson indicated that regulations on broadcasting must be monitored and strictly enforced to prevent piracy and vagrant copying of televised programs. (Swanson, 1997, 6). In this regard, stricter media regulations on this area must be enforced to prevent illegal copying and piracy. Finally, the number of stations being monitored under the corporate responsibility of Fox, coupled with the diversity of programs offered, activities and corporate strategies could also be a potential weakness in terms of control and governance. It requires the skill and expertise of a genuinely enthusiastic leader to continue with the direction and focus that Fox Broadcasting Company treads in. Recommendations The future of Fox remains in the control of highly skilled management team, professionally competent human resources, its adequate financial resources and asset base. This management report on Fox achieved its goal of proffering an analysis of the internal and external environment of the firm through secondary scholarly studies. The discourse was successful in identifying the firm’s strengths and weaknesses, opportunities and threats; and other relevant external influences including future trends that would mark the continued success of Fox Broadcasting Company. In this regard, it is appropriate to propose recommendations on appropriate corporate strategies to ensure sustainability and continued success in the future, in the light of changes in the internal and external environment. With the continuing advancement in technology, the future of broadcasting projected to veer into satellite TV shows on the computer online with use of pc satellite TV packages. In addition, in a report by Capgemini (2010), the advancement on technology provided viewers with gadgets such as video recorders, mobile and fixed broadband, and other media platforms according them with the capacity to record various programs without due licenses. (Capgemini, 2010, 1). Fox must align its corporate strategies to delve into advances in technology which would replace contemporary programs and packages in current and future target markets. Reference List Capgemini, 2010. Future of Broadcasting: A New Model for Profitability. Viewed 26 February 2010. < http://www.capgemini.com/insights-and-resources/by-publication/future_of_broadcasting/> CBS Interactive, Inc., 2005. Fox Seeks Transfer of its Owned Television Stations to News Corporation. Viewed 23 February 2010. Freebase, 2010. Fox Broadcasting Company. Viewed 26 February 2010. < http://www.freebase.com/view/en/fox_broadcasting_company> Freebase, 2010. Peabody Award. Viewed 26 February 2010 < http://www.freebase.com/view/en/peabody_award> Mondo Code, 2010. Rupert Murdoch. Viewed 23 February 2010. New York Civil Liberties Union (NYCLU), n.d., Fox Television Stations, Inc. et. al. v. FCC et. al. Viewed 23 February 2010. < http://www.nyclu.org/node/1061> News Corporation, 2010. FOX TV Stations, Inc. Viewed 23 February 2010. News Corporation, 2009. News Corporation Reports Second Quarter Revenue Growth of 10% to $8.7Billion. Viewed 23 February 2010. < http://www.newscorp.com/investor/download/NWS_Q2_2010.pdf> Swanson, D. 2007. "Status of the DTV Transition - Part 3". Viewed 08 March 2010. < http://archives.energycommerce.house.gov/cmte_mtgs/110-ti-hrg.103107.Swanson-testimony.pdf> Read More