Integration
Horizontal and Vertical Integration
Vertical Integration - When a production company has complete ownership of the stages of production.
Vertical Chain of Production
1. Pre-production (research and development)
2. Production (the making of the media product)
3. Post-production (Editing, finalising media product)
- Pixar
- Walt Disney Studios
4. Marketing (promotion of media product)
5. Distribution (selling of product, and on what platform e.g. DVD)
6. Exhibition (how you watch, e.g. cinema)
- Buena Vista Pictures
- Cinergi
Examples of some media companies who have ALL of these are Disney, Warner Bros, Bauer Media, Sony
Advantages/Disadvantages
- More profit/Less costs.
- Speed: everything happens quicker.
- Lack of collaboration
- If company collapses - everything does.
- Narrow Audience
Horizontal Integration - different companies working together alongside each other to use each others expertise.
Advantages/Disadvantages
- Helps a smaller company in terms of recognition.
- Encourages more audiences
- Funding is being provided from more than one company. IF one company fails, the production still has funding supplied.
- Ownership - disagreements in distribution, production, etc.
- Profit - has to be split amongst companies.
- If the reputation of one company goes bad, it will jeopardise the whole production.
To summarise, vertical integration is when a production company has complete control over specific stages of production. This allows the business much better productivity, for example being able to have control over the marketing of a media product as well as the distribution of it, therefore the company can make more profit as well as reducing costs.
In addition, horizontal integration is where different companies merge to work alongside each other - this allows the companies to use each others expertise. As well as this, the smaller company can gain recognition, however their reputation may go bad if the larger company receives bad publicity. However this may consequently lead to ownership disagreements as well as having to share profits.
I know you did this lesson with Mr Hussain, but I'm not sure if you got through both terms? I can see you haven't got anything on Horizontal integration...you will finish this next lesson.
ReplyDeleteGood list of advantages and disadvantages.
To show your understanding, in a reflection comment or at the bottom of this post, please summarise in own your words what you understand by the terms vertical integration.
You'll then need to do the same once you've been taught about horizontal integration.
Miss Crader
Vertical integration is when a production company has complete control over specific stages of production. This allows the business much better productivity, for example being able to have control over the marketing of a media product as well as the distribution of it, therefore the company can make more profit as well as reducing costs.
DeleteHorizontal integration is where different companies merge to work alongside each other - this allows the companies to use each others expertise. As well as this, the smaller company can gain recognition, however their reputation may go bad if the larger company receives bad publicity. However this may consequently lead to ownership disagreements as well as having to share profits.
Absolutely excellent! Well done.
Delete