Vertical Integration
Overview of Vertical Integration
- Vertical integration refers to the practice whereby a single company owns and controls multiple stages of the production, distribution and exhibition chain.
- It is particularly prevalent in Hollywood, where major studios such as Disney, Warner Bros and 20th Century Fox assert control over the entire process.
- This refers to a unified control structure, where a media conglomerate manages all elements of a product’s lifecycle.
Advantages of Vertical Integration
- This system helps media conglomerates to maximise profits and ensure a return on investment by controlling the entire process.
- It can also reduce the level of financial risk, as conglomerates can control and predict costs more accurately throughout the entire process.
- Coordinated marketing is another key advantage as the same conglomerate manages the promotion of the product across various platforms and regions.
Disadvantages of Vertical Integration
- Such levels of control can lead to a lack of cultural and content diversity, as products are often designed for mass-market appeal rather than niche or local markets.
- It can stifle independent production companies or small businesses, as they struggle to compete with the vast resources of these conglomerates.
- The focus on profit maximisation can potentially neglect the creative aspects of media production and the representation of social realities.
Vertical Integration in Comparison with Wales
- Wales’ media landscape portrays a different picture, dominated by public service broadcasters like BBC Cymru Wales and S4C.
- These organisations prioritise the promotion of Welsh language content and focus on public service rather than solely profit.
- However, they too exhibit some level of vertical integration but mostly within the context of individual programmes or series.
Conclusion
- Understanding vertical integration helps comprehend how ownership and control within media industries work.
- It provokes critical thinking about how these processes impact the creation, distribution and consumption of media content.
- A comparison with the media landscape in Wales highlights the different goals these models can serve - profit maximisation versus public service.