Industries: Ownership and Control

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

Facebook bought Instagram to help secure Facebook's dominance in social media for years to come.

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

• Eliminate dependency on external suppliers
• gives a business independence from external suppliers
• Saves time
• Reduces costs
• Increased expertise
• Improves marketability
• Increased market control/share
• Creates economies of scale

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

Undergoing horizontal integration can benefit companies and typically takes place when they are competing in the same industry. The advantages include increasing market share, reducing competition, and creating economies of scale.

4) What is a subsidiary?

A company that is owned by a larger company.

5) Give three examples of media companies that have used synergy to maximize the profit from a brand.

• Disney makes movies but then also has related stage shows, theme parks, merchandise, soundtracks and events.
• The Lion King is just a movie however has many events, merchandise, songs and theatre productions
• IshowSpeed a famous streamer has gone off to also create music, play sports, sell merchandise and create videos

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

• Walt Disney Pictures (Live Action Movies)
• Walt Disney Animation Studios
• Walt Disney Studios Motion Pictures (including Buena Vista International and more)
• Pixar
• 20th Century Studios (including Fox Family and 80% share in New Regency Productions)
• Lucasfilm (including Industrial Light & Magic, Skywalker Sound, and more)
• Disney Digital Studio Services (Post-production)
• Disney Nature (Disney nature documentaries)
• Searchlight Pictures
• Disney+

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

They are able to build a horizontal interrogation for Disney as then they have a wider audience since they are also delivering Tv and news among they're other entertainment services. This will then make them more dominant among the media industry.