News Corporation is one of the world’s largest entertainment companies that includes Twentieth Century Fox films,

News Corporation is one of the world’s largest entertainment companies that includes Twentieth Century Fox films, Fox Broadcasting, Fox News, the FX, and various satellite, cable, and publishing properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows:



For a Recent Year
(in millions)
Filmed Entertainment $ 7,631
Television 4,228
Cable Network Programming 7,038
Direct Broadcast Satellite Television 3,802
Magazines and Inserts 1,192
Newspapers and Information Services 6,087
Book Publishing 1,269
Other 1,531
Total revenues $32,778





a. Provide a vertical analysis of the product segment revenues.

b. Are the revenues of News Corporation diversified or concentrated within a product segment? Explain.


Answer:

a.
 For a Recent
Year
(in millions) Percent
Filmed Entertainment $ 7,631 23.3%
Television 4,228 12.9%
Cable Network Programming 7,038 21.5%
Direct Broadcast Satellite Television 3,802 11.6%
Magazines and Inserts 1,192 3.6%
Newspapers and Information Services 6,087 18.6%
Book Publishing 1,269 3.9%
Other 1,531 4.7%
Total revenues $32,778 100.0%






b. News Corporation is very diversified. The Filmed Entertainment segment has the largest percent of revenues to total revenues at 23.3%. This is a low percent for a single segment, suggesting little concentration. In addition, four additional segments have a percent of revenues to total revenues in excess of 10% (Television, Cable Network Programming, Direct Broadcast Satellite Television, and Newspapers and Information Services). The three smallest segments total 12.2% (3.6% + 3.9% + 4.7%) of revenues to total revenues. Overall, News Corporation is a highly diversified entertainment company, deriving significant revenues from multiple sources.