INDUSTRIES: OWNERSHIP AND CONTROL

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

Facebook bought Instagram for $1bn because there are a lot of people using Instagram. Instagram is also popular as the app is free. In addition there are 30 million users uploading more than 5 million pictures every day.


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

The benefits for media companies of vertical integration is that the company owns different companies that they bought  to make more profit.


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

The benefits for media companies of horizontal integration is that the company buys other companies at the same level distribution which allows them to widen their audience and find other ways to make money.


4) What is a subsidiary?

A subsidiary is a small company, it is when a company is being held 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).

  • Disney - Pixar

  • Facebook - Instagram

  • eBay - Skype


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: 

  • ESPN Books
  • Maker Studios
  • Marvel
  • StarWars.com
  • The Muppets Studio
  • ABC Entertainment
  • ABC news and radio
  • A+E cable channel
  • ESPN
  • Hulu

7) Why did Disney buy Fox - what are the benefits?

Disney bought Fox to increase Disney's arsenal of general entertainment content. They also bought Fox to increase their market share and Disney would be able to provide more appealing high-quality content and entertainment options; to meet growing consumer demand.


Comments

  1. Anonymous28 November 2023 at 04:31

    Think about the demographics of Facebook and Instagram audiences - Instagram is much more aimed at a youthful demographic and Facebook was finding it harder to reach that market.

    ReplyDelete
    Replies
    1. Anonymous28 November 2023 at 04:33

      Also more focused on 'selfie' culture as it was originally about images and filters

      Delete
  2. Anonymous28 November 2023 at 04:33

    Make sure you know the difference between Vertical and Horizontal integration (for question 2, vertical integration means they own all stages of production and distribution whereas Horizontal integration is when the company buys up its competitors)

    ReplyDelete

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