Industries: Ownership and control

Notes

Industries: recap

Industries are the producers, the companies that produce (make) and distribute the media product. 

Industries have a strong interest in who their Target Audience is so that they can best appeal to them. 

Some companies dominate the industry which means they own more of the content and therefore make more money (revenue).

Vertical integration

Vertical integration is when one conglomerate owns different companies in the same chain of production.

E.G Disney owns film studios, CGI specialists, film distributors and TV channels such as the Disney Channel. This gives Disney the chance to make money at every stage of production. Complete ownership = more profit.

Horizontal integration

Horizontal integration is when one company buys other companies at the same level of distribution.

E.G Facebook acquired Instagram in 2012 (at a cost of $1 billion) so that they could cancel out the competition by making money from both.

Horizontal integration allows companies to widen their audience and find other ways to make money.

Synergy

Synergy is when a company creates a brand that can be used across different media products and platforms.

E.G Disney makes movies but then also has related stage shows, theme parks, merchandise, soundtracks and events.

Ownership and control: blog task

Read this article from Recode about Facebook’s acquisition of Instagram and complete the tasks below:

1) Why did Facebook buy Instagram for $1bn in 2012?

They brought Instagram because so they could have have more profit and revenue for their company

2) What are the benefits for media companies of vertical integration?

The benefits of media companies that have vertical integration are making profits

3) What are the benefits for media companies of horizontal integration?

The benefits of media companies that have horizontal integration are making revenue

4) What is a subsidiary?

A subsidiary company is the one that is controlled by another company, better known as a parent or holding company. The control is exerted through ownership of more than 50% of the voting stock of the subsidiary. Subsidiaries are either set up or acquired by the controlling company.

5) Give three examples of media companies that have used synergy to maximise the profit from a brand (there is one above to help you).

facebook,instagram and snapchat.

6) Read this BBC article on Disney buying 21st Century Fox. List 10 companies that are part of the Disney media empire. This graphic may help you: 

1) SKY

2) star wars movies

3) marvel

4)Avatar

5)deadpool

6)modern families 

7) simpsons

8) ABC
9) Lucasfilm
10) The History Channel

7) Why did Disney buy Fox - what are the benefits?

According to Disney's CEO Bob Iger, the idea of purchasing Fox's assets came after Disney acquired majority control of the streaming company BAMTech with anticipation to develop its own streaming service (which would eventually be called Disney+, launched in November 2019).