Vertical and Horizontal Integration

Key Words

·         Conglomerate

·         Parent Company

·         Subsidiary –smaller companies under main Parent Company

·         Vertical integration –Two firms in the same industry but at different stages of production come together. E.g. a television studio may buy up a production company that produces some of its television programmes.

·         Horizontal integration – Two firms in the same industry

Integration – merging together – the act of being together, not the act of coming together. E.g. If a company is well integrated, all the departments work well together (Times Warner)

Harry Potter Moodboard

This mood board demonstrates how the rights to Harry Potter content have been sold by Warner Bros. to other institutions, allowing the development of merchandise and memorabilia.

Media Convergence and Synergy

Learning Objective:

·         Understand the concept of a value chain

·         Explain the significance of the value for the global institution

Value Chain -

A string of companies working together to satisfy the needs of the intended market.  E.g. Creative (idea) – Production (shooting film) – Distribution (promoting, marketing, selling to film exhibitors) – Exhibition (showing the film to the audience)

A value chain sees a product from its conception (creation) to its reception (consumption). More profit is made by the company that owns most of the value chain.

Synergy -

‘Working together’, promotion and sales of a product throughout various subsidiaries of a media conglomerate e.g. films, soundtracks or video games

Walt Disney pioneered synergistic technique: they allowed other firms the right to use ‘Mickey Mouse’ in products and ads. This helped to advertise the film, increasing the film’s sales.
Licensing is when companies make deals to have rights to use characters and logo's from other media products. These licenses can be used for merchandise, video games etc. (EA, Lego, Universal Studios.)

Cross Media Convergence -

'Coming togther.'  It happens in two ways:

1. Media Buyouts - when one Media company buys another.
2. Two types of technologies come togther, converging on the internet.

TIME WARNER ---BUYS---> ROCK STEADY
Larger companies buy the smaller companies to reduce potential competition, expand empire and influence and also to allow synergy; The film industry can now use their charcters in the gaming industry.

British Films

Film Industry – Exam section B, Institutions and audiences

Key Words

·         Institutions

·         Funding

·         Cultural Test

·         Co-production

Tax Relief: Why do British Films get tax relief?

1.       Encourage investments

2.       Facilitate the development of UK film industry, making a large net

http://www.ukfilmcouncil.org.uk/media/pdf/i/r/TheEconomicImpactofthefilmIndustry–June2010.pdf

Why is the British economy so strong?

·         Tourism: Around £1.9 billion of visitor spend a year might be attributable to UK films

·         Merchandise: DVD sales support 7,000 jobs

·         Toys, books, clothes, soundtracks, and computer games

·         UK brand: boost demand for UK products

BFI: Two categories to be classed as a British test

·         Cultural tests

o   Must score 16 points out of 31 to be British

      Set in UK – Culture content

      British Contribution

      Hubs – British studio

      Practitioners –British

·         Official Co-production

o   Australia

o   Canada

o   France

o   India

o   Israel

o   Jamaica

o   New Zealand

o   South Africa

To Summarise

·         What makes a film British?

A film is British if it scores 16 out of 31, therefore has British content, culture, hub and contribution. Also a film is British if it is produced/co-produced by British producers.

·         Being certified a British film is good for a production company because…

There is tax-relief and funding available

·         A strong film industry is good for Britain because…

It brings profits to the British economy, namely through tourism, advertising, merchandise and boosting the UK brand.

·         Britain’s position as a global player is…

Healthy and growing, but completely reliant on USA’s financial input.