Vertical & Horizontal Integration

Vertical Integration is when a Media Company owns different businesses in the same chain of production and distribution. For example, a 20th Century Fox owns the studios in Hollywood, they also own the cinemas, the TV channels and the DVD rental shops. They own parts of chain so that they can make money from every part of it.

When a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor. Vertical integration can help companies reduce costs and improve efficiency by decreasing transportation expenses and reducing turnaround time, among other advantages. However, sometimes it is more effective for a company to rely on the expertise and economies of scale of other vendors rather than be vertically integrated.

  • The merger of Live Nation and Ticketmaster created a vertically integrated entertainment company that manages and represents artists, produces shows and sells event tickets.

In terms of the magazine industry, They own the Forests where their resources come from, in this case, the paper. They also own the buildings where the magazines are designed, they own part of the publishers, and the newsagents where the magazines are sold.

 

Horizontal Integration

Horizontal Integration is a Media Company’s Ownership of several businesses of the same value. A Media Company can own a Magazine, Radio, Newspaper, Television and Books. Almost all Media companies have horizontal integration. It helps to create more money and makes the company more popular among readers. Also, not all media readers prefer reading magazines. The more technology literate people will read the magazine online, so horizontal integration helps to reach a wider audience.

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