This task requires me to create a case study for media company(ies) who benefit from vertical and horizontal integration. I will begin by defining what they both mean, and explain which global companies use them and how. I will then research into how much money they earn per year, explaining the benefits of this for both systems.
To begin, Vertical integration is defined as when a production company has the ownership for the means of production, distribution and exhibition of a film by their own company. This allows for them to avoid having to make investments elsewhere as all the money is spent and used within their own company.
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| Film4 |
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| Channels owned my channel 4 |
An example of a vertical integration company would be the British company Film4, which is owned and operated by Channel 4. This is a vertical integration company because it produces content which is used within the company itself. The films they produce will be distributed and exhibited to sister channels like; E4, 47, More4, 4Music, Channel4, Box upfront, Kerrange!
Another example of vertical integration is Disney and Viacom. Disney and Viacom produce their entire product on their own without the help of any other company or organisation from the production, to marketing and distribution: they don’t pass on their product to any other companies or organisations to produce or distribute for them. Some of Disney’s film productions are 'Alice in Wonderland, Snow White and the seven Dwarfs, Cinderella, Bambi, Pinocchio, Fantasia. Its first cartoon show was Mickey Mouse 1932' (Wikipedia 3). Some of Viacom's TV series and film productions are 'Blue Hawaii, Dora the Explorer, Pinky Dinky Doo , 'Invader Zim, The Hills, SpongeBob SquarePants, the Fairly Odd Parents.
One benefit to companies who get into vertical integration is that they have more control over
Another example of vertical integration is Disney and Viacom. Disney and Viacom produce their entire product on their own without the help of any other company or organisation from the production, to marketing and distribution: they don’t pass on their product to any other companies or organisations to produce or distribute for them. Some of Disney’s film productions are 'Alice in Wonderland, Snow White and the seven Dwarfs, Cinderella, Bambi, Pinocchio, Fantasia. Its first cartoon show was Mickey Mouse 1932' (Wikipedia 3). Some of Viacom's TV series and film productions are 'Blue Hawaii, Dora the Explorer, Pinky Dinky Doo , 'Invader Zim, The Hills, SpongeBob SquarePants, the Fairly Odd Parents.
One benefit to companies who get into vertical integration is that they have more control over
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| Showing horizontal and Vertical integration |
Horizontal integration is where a production company decided to expand into other areas of the industry. This allows for the company to develop in a particular area of production or can instead buy a company which deals with this area in particular. This also means that unlike vertical integration the company will need to invest into that other company they branch out to or are buying, which will cost them a lot of money of course.
The example I am going to be looking at here is Comcast which owns NBC, Universal Pictures and Focus features.
An advantage of horizontal integration in this case with Comcast is that it has a positive impact since it has acquired NBCUniversal in 2011. The image below is a direct quote from Comcast and explains this positive impact in more detail: This can include the making, designing and distributing of the product for example the film Titanic '1997' (IMDB 8), which should have been produced vertically but could not since the production company ran out of budget. Therefore, companies such as '20th Century Fox, Paramount Pictures and Lightstorm Entertainment' (IMDB 9) helped in the making of the film. Therefore, it was horizontally integrated because it was more than one company that produced the film.
