Ownership and Control

 Ownership and control: blog task


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

To gain profit because Instagram is a competitive social network and a high revenue and also Facebook was afraid of their popularity causing rival bids.

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

The benefits are: a higher profit, greater economies of scale, low costs and decreased quality concerns.

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

Reduced competition,  revenue growth, increase in profit and creative control.

4) What is a subsidiary?

A smaller company that is owned by a larger company.

5) Give three examples of media companies that have used synergy to maximise the profit from a brand (there is one above to help you).

  • Coca cola and Pepsi- by bundling all market spend on a single brand, while driving greater penetration and trial of the product sub- brand.
  • Disney and Marvel- publishing, licensing and creative and product development
  • Sony and Spider man  

6) Read this BBC article on Disney buying 21st Century Fox. List 10 companies that are part of the Disney media empire. This graphic may help you: 
  • Film studios
  • Walt Disney studios motion pictures
  • Disney theatrical group
  • Disney music group
  • Disney studio services
  • A&E networks
  • The Walt Disney company Europe, Middle east and Africa
  • The Walt Disney company Latin America
  • ESPN
  • Marvel Studios
7) Why did Disney buy Fox - what are the benefits?
 
Disney can expand itself, increase market share and raise market competitiveness at the same time through the horizontal merger with Fox. Also, to produce more content and increase revenue.

Grade 8/9 extension tasks

Read this Inverse feature on Disney buying Marvel. Why does the article suggest it may not have been good for the movie industry overall? 


It might not have been a good idea for the movie industry overall because the article states that even though Disney taking over Marvel was a good decision for Disney itself as they earned a lot of money, they aren't sure that it was the best decision for movies itself. They also say that, Marvel studios are having unreasonable demands that they would like all the other companies and industries to keep up with and aren't grateful for Disney, who saved them in the past. If it wasn't for them, Marvel would not be where they are now but if they don't show their appreciation, it might not have been a good idea for Disney to help them in the first place as the movie industry now has to keep up with all these unreasonable demands from Marvel that they don't even approve of.





























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