As GCSE Media students, we need to learn how media companies are bought, sold and controlled.
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?
2) What are the benefits for media companies of vertical integration?
3) What are the benefits for media companies of horizontal integration?
4) What is a subsidiary?
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).
7) Why did Disney buy Fox - what are the benefits?
If you don't finish these questions in the lesson, complete for homework - due Thursday 5 December.
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