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Industries: Ownership and Control

 

1) Why did Facebook buy Instagram for $1bn in 2012?

Facebook bought Instagram back then because they knew social media was a very popular and growing market that they could cash in on.

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

The company owns lots of different types of media and is most likely a conglomerate. They could probably own TV stations, streaming services, film/music studios, and more.This allows them to have more creative freedom and thus, make a lot more money.

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

Horizontal integration is when a company purchases another company. For example, Facebook bought Oculus in 2014 as they knew VR technology would be the future and they could cash in on a potential future market. Horizontal integration can widen said company's audience, and make them even more money.

4) What is a subsidiary?

A subsidiary is a branch/different company owned and controlled by the parent company. For example, Pixar is a subsidiary of Disney. Subsidiaries allow parent companies to make more money and appeal to more people.

5) Give 3 examples of media companies using synergy to maximise profits

1. Disney is one example as they own different types of media, and spread their brands to said types of media. 

2. Google is another example as they own a lot of different online services, they make a lot of physical products and they supply software to other companies.

3. Sony is also another example as they control and own music, TV, video games and more. They own many different types of media.

6) List 10 companies that are a part of the Disney media empire

1. Fox

2. Marvel

3. Lucasfilm

4. Pixar

5. ESPN

6. ABC

7. Hulu 

8. Vice

9. A+E Channel

10. Disneyland

7) Why did Disney buy Fox? What are the benefits?

Disney bought Fox to expand their streaming/media business, making their empire larger and more appealing to consumers, beating competitors. There are many benefits; for example, Disney can now use Fox properties in their services/products, like Disney+ or even implement those IPs into their own Disneyland/world theme parks, like they've done with Marvel and Star Wars.

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