horizontal & vertical integration

Horizontal & Vertical Integration

Owning the stages of production and distribution.

Vertical integration: An ownership structure in which one conglomerate owns or operates all aspects of production and distribution within a single segment of the media industry; for example, production studio, talent agency, Online distribution company, CD

manufacturing plant rental stores.

What are the benefits of being vertically integrated?

Horizontal Integration

Owning a range of companies at the same production level.

An ownership structure in which one conglomerate owns or operatesdifferent kinds of media (for example, movie studios, television networks, music labels and

radio stations), concentrating ownership across the different segments of the media industry.

What benefits arise from being horizontally integrated?

Group Activity

In 3 groups create a presentation on one of the big 3 (your teacher will designate you a label) which answers the following

questions.You must provide critical depth and analyse your examples.

Presentation Questions

• What subsidary labels does your conglomerate own?• How does your label use the internet?• Considering the portfolio of labels and the artists signed to

them, is there any evidence of the long tail?• How is your label horizontally integrated? • How do they use this to their benefit? (refer to specific

examples)• How is your label vertically integrated? ( how do they profit

from the different stages of music production, distribution and consumption)

• What is synergy? Are there any examples of your conglomerate using it?

• What are your conglomerate’s current strategies to combat piracy?