Hollywood ownership, vertical integration and diversification

Overview

Vertical integration in the film industry, horizontal integration and diversification in a media conglomerate.

What you need to know

Answer each one before you reveal it.

Questions from this subtopic

Each one with the model answer underneath.

1. 1

   Define vertical integration in the film industry.

   Model answer

   Vertical integration is one company owning successive stages of the industry, such as production, distribution and exhibition.

2. 2

   Give one advantage vertical integration gives a studio.

   Model answer

   Owning the later stages guarantees a film a route to its audience and lets the company keep revenue that would otherwise be shared with other firms.

3. 3

   Which 1948 ruling forced the Hollywood studios to sell their cinema chains?

   Model answer

   The Paramount Decrees of 1948, the outcome of a United States antitrust case, required the studios to divest their cinema chains.

4. 4

   Define horizontal integration.

   Model answer

   Horizontal integration is the ownership of several companies at the same stage of an industry, such as one group owning a number of production studios.

5. 5

   Define diversification in a media conglomerate.

   Model answer

   Diversification is the spreading of a company's activity across different industries, such as film, television, streaming, theme parks, publishing and merchandise.

6. 6

   Explain what synergy means for a major studio.

   Model answer

   Synergy is the mutual promotion of a group's products, so a film drives merchandise, theme park attractions, games and streaming subscriptions, and each of those advertises the film.

Other ways to work this

The same content, four other ways.

What is inside Levo

Six ways to work the same material.