Chapter 7: The growth of business in the audiovisual industry.

How any new business is established and thrives is the subject of many management theories and textbooks, and a copious number of case studies. How businesses are established, expand or decay in the audiovisual industry is also a subject of much debate, although unfortunately not often analysed objectively and critically enough to try and clarify why one business succeeds where another one fails. It is difficult to think of any other industry whose very structure and inception is devised and controlled by a government -- an industry that would without doubt fail if government and international bodies did not reach some level of agreement in trade and technology, through EU regulations, directives, GATT and bilateral agreements. The BBC was incorporated by Government Charter in 1926, and Channels 4 and 5 were established by the Government. The structure of the original regional franchises provided the framework for the establishment of the independent television companies (ITV). Whilst the principle is one of 'at arms length', the tension between state control and interference vis-à-vis the free market remains. In the UK, the growth of the independent production sector (IPS) flourished with the establishment of Channel 4 in 1982. Enormous changes and opportunities for the IPS came about because the Thatcher Government put a legal requirement on the BBC and the independent franchise companies to contract out a percentage of their work. In essence, the audiovisual industry is highly volatile, regulated by government, and dominated by media conglomerates. For the small firm, success or failure can turn on the opportunities of a single production. As we move into the twenty-first century, with the impact the number of digital channels will have on the consumer, we may get the final shake-up in the still relatively 'cosy' media environment that is the UK broadcast industry. The questions this raises are: • If, to date, Government regulation of the television industry had been as loose as that of the film industry, would the UK have a television industry as vibrant as it is now? • In addition, would the UK television industry be struggling to survive in the same manner that the film industry seems to be? This chapter begins its examination of the growth of the media company with a discussion on innovation and the role of the entrepreneur. The Greiner Growth Model is used as a means of explaining the structure of the individual production firm. In Chapter 1 we took a macro approach to the IPS, a consequence of government policy and technical changes. This chapter takes a micro-view as to the growth of the media company. We will consider the small and medium-sized enterprise (SME), and review the buyer--supplier relationships in the British audiovisual industry. It has been said that there is no business like show business; the issue for many struggling in the audiovisual industry is whether there is any business at all. [ABSTRACT FROM AUTHOR]