Industries: Ownership and control

Most media companies are owned by one of the big six - massive conglomerates that dominate the media industry.

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

Create a new blogpost called Industries: Ownership and Control and complete the tasks below:

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

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

3) What is synergy? 

4) Give an example of a brand that appears across different media products and platforms.

5) Research the different companies that are part of the Disney media empire. This BBC article on Disney buying 21st Century Fox might help. First, list 5 companies that are owned by Disney. This graphic may help you: 

Extension questions

1) Look at the BBC article linked above. Why did Disney buy Fox - what are the benefits?

2) Now read this article from Recode about Facebook’s acquisition of Instagram. Why did Facebook buy Instagram for $1bn in 2012?

If you don't finish these questions in the lesson, complete for homework - due date on Google Classroom.