1 Number 022 www.curriculum-press.co.uk Vertical and Horizontal Integration in Media Institutions – A Focus on Film M tudies S edia The aims of this Factsheet are to: • Define the concepts of vertical and horizontal integration using the Hollywood film industry as a case study • Evaluate the effect of vertical and horizontal integration on the production and consumption of media texts • Demonstrate what vertical and horizontal integration tell us about the construction of audiences as well as the pleasures the audience experience Introduction The purpose of studying Institution is to better understand how the organisation of media industries affects the types of products created by the industries and the manner in which audiences access those products. AQA/WJEC/OCR? Institution is an important part of all specifications. An understanding of the relationship between institutions and their audiences will be assessed in all examinations for all awarding bodies. Vertical Integration When a company oversees the planning and creation of a product, through to the marketing, advertising and distribution and then on to the retail of the product to the public, the process is known as vertical integration. A company which is vertically integrated has control over all the stages of a product’s life. In the case of the media this means that a vertically integrated company has control of three processes: 1. Production – this includes writing, planning and the creation of the product 2. Distribution – taking the finished product to the retailer and marketing the product 3. Exhibition – the point at which the product is sold to the customer. A film is exhibited at a cinema or on DVD, a TV show may be exhibited on TV and also on DVD. The internet is becoming a popular mode of exhibition for many products. Vertical Integration in Film Vertical integration emerged in the film industry in the 1920s. By the 1930s the industry was dominated by five vertically integrated companies: Warner Brothers, Paramount, RKO, MGM and 20 th Century Fox. Vertical integration enabled studios to achieve control over the entire film industry and this studio system (from the 1930s to the1950s) affected the way films were made and the way they were watched. Mass Production and House Styles in Hollywood’s Studio Era Films were made very cheaply during the studio system. The same sets were used over and over again and cast and crew worked to very tight deadlines. Each studio developed its own way of mass producing films, known as a house style. For example, Warner Brothers employed a European art director called Anton Grot to develop a low-key lighting style which would obscure the fact that the set was made up of props that had appeared in many other films. To encourage efficiency the crew were split into production teams who worked with each other on the same films. Also, when the studios realised that a star became particularly popular in films of a certain genre then the star would become typecast and would repeatedly star in the same genre. These approaches to film making could be followed because the same company was in charge of production, distribution and exhibition. By owning the production company they could standardise the way films were made and keep production costs down. Mildred Pierce (1945) www .classicfilmpreview .com The image from Mildred Pierce (Curtiz, 1945) demonstrates Anton Grot’s low-key art direction. A sparse set is lit to connote a large empty background and water bounces light off the floor to create the look of a road’s surface. This type of image was typical of Warner Brothers during the studio era and demonstrates a direct relationship between institutional economic needs and the construction of media text. Classical Hollywood Narrative: Institution and Audience Vertical integration allowed the studios to gather information from both distribution and exhibition points. The distributors and exhibitors could report back to the studios to let them know which films, or parts of films, were popular with the paying customer. Using that information the studios were able to design films which were specifically aimed at attracting the largest audience possible.
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Mar 25, 2016
Vertical integration enabled studios to achieve control over the entire film industry and this studio system (from the 1930s to the1950s) affected the way films were made and the way they were watched. Vertical integration emerged in the film industry in the 1920s. By the 1930s the industry was dominated by five vertically integrated companies: Warner Brothers, Paramount, RKO, MGM and 20 th Century Fox. 1 Introduction Mildred Pierce (1945) www.classicfilmpreview.com Vertical Integration
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Number 022www.curriculum-press.co.uk
Vertical and Horizontal Integration in MediaInstitutions – A Focus on Film
M tudiesSedia
The aims of this Factsheet are to:• Define the concepts of vertical and horizontal integration using
the Hollywood film industry as a case study• Evaluate the effect of vertical and horizontal integration on the
production and consumption of media texts• Demonstrate what vertical and horizontal integration tell us about
the construction of audiences as well as the pleasures theaudience experience
IntroductionThe purpose of studying Institution is to better understand howthe organisation of media industries affects the types of productscreated by the industries and the manner in which audiences accessthose products.
AQA/WJEC/OCR?Institution is an important part of all specifications. Anunderstanding of the relationship between institutions and theiraudiences will be assessed in all examinations for all awardingbodies.
Vertical IntegrationWhen a company oversees the planning and creation of a product,through to the marketing, advertising and distribution and then onto the retail of the product to the public, the process is known asvertical integration. A company which is vertically integrated hascontrol over all the stages of a product’s life. In the case of themedia this means that a vertically integrated company has controlof three processes:
1. Production – this includes writing, planning and the creation ofthe product
2. Distribution – taking the finished product to the retailer andmarketing the product
3. Exhibition – the point at which the product is sold to the customer.A film is exhibited at a cinema or on DVD, a TV show may beexhibited on TV and also on DVD. The internet is becoming apopular mode of exhibition for many products.
Vertical Integration in FilmVertical integration emerged in the film industry in the 1920s. By the1930s the industry was dominated by five vertically integratedcompanies: Warner Brothers, Paramount, RKO, MGM and 20th
Century Fox.
Vertical integration enabled studios to achieve control over theentire film industry and this studio system (from the 1930s tothe1950s) affected the way films were made and the way they werewatched.
Mass Production and House Styles in Hollywood’s Studio EraFilms were made very cheaply during the studio system. The samesets were used over and over again and cast and crew worked tovery tight deadlines. Each studio developed its own way of massproducing films, known as a house style. For example, WarnerBrothers employed a European art director called Anton Grot todevelop a low-key lighting style which would obscure the fact thatthe set was made up of props that had appeared in many other films.
To encourage efficiency the crew were split into production teamswho worked with each other on the same films. Also, when thestudios realised that a star became particularly popular in films of acertain genre then the star would become typecast and wouldrepeatedly star in the same genre.
These approaches to film making could be followed because thesame company was in charge of production, distribution andexhibition. By owning the production company they couldstandardise the way films were made and keep production costsdown.
Mildred Pierce (1945)www.classicfilmpreview.com
The image from Mildred Pierce (Curtiz, 1945) demonstrates AntonGrot’s low-key art direction. A sparse set is lit to connote a largeempty background and water bounces light off the floor to createthe look of a road’s surface. This type of image was typical ofWarner Brothers during the studio era and demonstrates a directrelationship between institutional economic needs and theconstruction of media text.
Classical Hollywood Narrative: Institution and AudienceVertical integration allowed the studios to gather information fromboth distribution and exhibition points. The distributors andexhibitors could report back to the studios to let them know whichfilms, or parts of films, were popular with the paying customer. Usingthat information the studios were able to design films which werespecifically aimed at attracting the largest audience possible.
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022. Vertical and Horizontal Integration in Media Institutions – A Focus on Film Media Studieswww.curriculum-press.co.uk
Classical Hollywood Narrative is a structure employed in the story-telling aspect of films which attempts to please as many people aspossible by constructing a single audience. It bases itself on theidea of a single audience who share the same Uses and Gratificationswhen watching a film.
Some features of Classical Hollywood Narrative are:• A clear beginning, middle and end• A tight chain of cause and effect• A heterosexual love affair• A goal oriented protagonist• A firm resolution where all preceding problems are solved
ActivityEven though Classical Hollywood Narrative is a structureassociated with Hollywood’s studio era, it is often still the coreof contemporary Hollywood texts.
Consider some recent films you are familiar with and identifywhether they still use aspects of Classical Hollywood Narrativein the construction of their story.
The uses and gratifications that accompany the Classical HollywoodNarrative are related to the idea of watching a film as a group andcreating a sense of belonging within the audience. One of thepleasures created, therefore, is a social one.
Vertical integration and the information it provided allowed thestudios to construct texts which met audience needs, not only innarrative terms but also in terms of genre. The repetition of genrecodes across a number of film helped audiences to form expectationsand also provided gratifications when these expectations were met.For example, in the 1930s Universal Studios became known for their‘monster’ movies. As with Classical Hollywood Narrative, this alsokept production costs down as the visual look of these films aresimilar as are the filming techniques.
Product
ClassicalHollywoodNarrative
Uses and Gratifications
Social pleasures: watching a film with otherpeople. Reinforcement of personal identity:feeling as though you belong in a groupRepetition of dominant values within thenarrative provides comfort and reassuranceAudience expectations met as narrative followsa set of conventions and uses a familiarstructure – again creating comfort andreassurance
Universal Monstershttp://www.briansdriveintheater.com/index.htmlhttp://wolves.dsc.k12.ar.us/jrhigh/media/%20ACE/Psalms%2023/good%20depression/stein.jpg
Classical Hollywood Narrative could not have existed withoutvertical integration. In fact it was the logical result of verticalintegration, because by controlling production, distribution andexhibition it became clear to the studios what type of film wouldappeal to the broadest possible audience. Therefore verticalintegration had a major impact on the way films were made (massproduction and production styles) and the type of films that weremade (Classical Hollywood Narrative and Genre films) as well as theUses and Gratifications that audiences experienced when watchingthose films.
Horizontal Integration: Institution and AudienceModern media industries are organised differently and, therefore,approach the construction of texts, the identification of audiencesand marketing the products differently. Film companies do not simplyproduce films. They will be part of larger entertainment corporationswhich will produce music, video games, T.V. programming, magazinesand will have a new media presence too. It was in the 1980s thatstudios started to work with the other media formats, rather thanagainst them. By achieving ownership of several different forms ofmedia at once the studios became multi-media conglomerates andquickly saw that the different forms of media could work together toincrease profits. This is horizontal integration.
Rather than thinking about the audience as a single group sharingsimilar tastes and behaving in the same way, industries considertheir audience as being a set of diverse groups with different desires.Media texts are packaged and marketed with a view to meeting thevarious gratification needs these audiences have. The various armsof the entertainment corporations are able to create products whichcan fulfil diverse interests.
A horizontally integrated company owns or has shares in lots ofdifferent companies and these companies can be used to produce,market and supply products. For example, a film can be purchasedin many different ways:• As a feature at the cinema• Rented on DVD• Purchased as a download• Purchased as a DVD
Additionally, related merchandise can also be purchased, such ascomputer game tie-ins, soundtrack albums, board games, books,clothing and many other types of products. Ideally, a horizontallyintegrated company would be involved in almost every differentform of the product, such as the DVD, the CD, the book and thegame, so that they make a profit from all the different formats of theproduct.
ActivityConsider your own activity. Identify different ways you‘purchase’ a film text - either the film itself or its relatedproducts.
1)
2)
3)
4)
5)
6)
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022. Vertical and Horizontal Integration in Media Institutions – A Focus on Film Media Studieswww.curriculum-press.co.uk
http://en.wikipedia.org/wiki/Columbia_Pictures
These various versions of the film show an industry which isattempting to appeal to different audiences’ needs, rather thanconstructing one large audience based on the same assumed usesand gratifications.
Mode of Distributionfor Die Hard 4.0
Wide cinematic releaseat multiplexes
Early DVD release
Special edition DVDrelease
Director’s cut DVDrelease
Die Hard ‘Quadrilogy’DVD
Audience
Mainstream audience who enjoyblockbusters with action and specialeffects
Fans of the series and people whoreally enjoyed the film
Fans who want to watch a slightlymore violent version with strongerlanguage
Film fans who enjoy specialist releasesto keep as part of their collection
For devoted fans of the series andfans who enjoy having a specialisedcollection – also for new fans who maynot have copies of the earlier films inthe series or who wish to replace olderversions
Film and DVDAlthough films are made to be watchedby lots of people, they are marketed anddistributed in such a way that they canplease people in different ways. Forexample, for maximum profit a cinematicrelease will still try and please a broadaudience whilst DVD versions of thesame film may try and please differentaudience groups. Consider the exampleof Die Hard 4.0 (Wiseman, 2007).
Case Study: The Sony CorporationThe Sony Corporation is a major entertainment company. Theyown a number of film production companies under the name ofColumbia Tristar - every time you see a film begin with theColumbia ‘mountain top’ or the Mandalay tiger you are watchinga Sony product. They also own a DVD and video distributioncompany called Columbia Tristar Home Entertainment as wellas a television company called Sony Pictures Television Group.In addition, they make computer games, are a record companyand music publisher… plus they make the playstation, mp3players, walkman phones, televisions, computers and DVD players.
ActivityImagine that Sony and an independent film company, whohave no links to other forms of media, are releasing films at thesame time. What marketing methods could Sony use that wouldbe unavailable or unaffordable to an independent filmcompany?
http: / /www.bri t f i lms. tv/v3/u s e r _ f i l e s / I m a g e /Die%20Hard4.jpg
ActivityLook at the list of Modes of Distribution below and select anaudience from the box that you think is appropriate for thatparticular mode.
Modes of Distribution
Special Edition DVD witha higher certification:more violence or swearingor nudity
Narrow cinematic release,growing bigger on word ofmouth
Wide cinematic release inmultiplex cinemas
Director’s cut DVD withdocumentaries andcommentaries as ‘extras’
Special edition with newpackaging
Very narrow cinematicrelease in city centrecinemas or specialisttheatres
Audience Type
AudiencesMainstream audiences who enjoy blockbustersGenre fans Film buffs who build collectionsFans of art films Fans of particular directorsNiche audiences who enjoy special features
The use of different formats and anacknowledgement that differentaudience types have different needsthat can be met by specific productshelps to maximise the potential forprofit. Some texts may not have aspecific appeal to a mainstreamcinema audience but can still makemoney from carefully targeted andmanaged DVD releases. DonnieDarko (Kelly, 2001) did not havemainstream appeal but its reputationgrew and it became successful onDVD.
http://geraldpeary.com/reviews/def/donnie-darko.jpg
Exam Hint:-When discussing institution in exams alwaysconsider how the businesses behind the texts you arediscussing influence the construction of texts in order tomaximise the potential for profit. Some specific factualinformation on key institutions is helpful but not as importantas the relationship institutions have with production andaudiences.
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022. Vertical and Horizontal Integration in Media Institutions – A Focus on Film Media Studieswww.curriculum-press.co.uk
High concept production: Institution and AudienceThe vertically integrated companies of the studio system were ableto develop films which attempted to construct the broadest possibleaudience by pleasing as many people as possible. The horizontallyintegrated companies have used their multi-media interests to devisea product which is also designed to please as broad an audience aspossible, but this time they are considering specific audiences forthe different media formats. A high concept product aims to constructaudiences for a product in different formats, and encourages thoseaudiences to cross over into different media formats.
Resident Evil (Anderson, 2002) started lifeas a computer game, but it has also beenmade into a trilogy of films and has soldsoundtrack albums as well as promoting themusic of Slipknot. We can argue thatResident Evil is a high concept productbecause it is an idea that has been developedwith more than one media format in mind.The concept of synergy is critical to theformation of high concept products.
DefinitionSynergy: The relationship between two or more separate mediatexts or products that share similar characteristics so that onehelps market the other.
Furthermore, high concept productsencourage media audiences to experimentwith synergy. For example, if someone likesthe film Resident Evil it may encouragethem to try the game or to buy a Slipknotalbum. The Harry Potter films haveencouraged people to buy the books andthe video games as well as the extensivemerchandising.www.hotmovienews.com/images/news/994-harry-1.jpg
http://www.heroinecontent.net/archives/2007/05/Resident-Evil-3-poster.jpg
SummaryIt is important that you are able to demonstrate an understandingof the relationships between an institution, the types of mediaproducts they create and distribute and the audience whoconsumes it. Within the film industry this can be summarised in thefollowing way:
Exam Hint:- It is important in your exams that you demonstratean understanding of the factors that are involved in constructingan audience:· The institution: is it independent or part of a horizontally
integrated company?· The form: every media form has a different type of audience.
The audiences for cinema, DVD and TV are all have differentgratification needs.
· The release: remember the example of Die Hard 4.0. It hasalready had more than one DVD release so that it can caterfor slightly different audiences. Consider the release dateas well – a summer or Christmas release is usually aimingfor a broad, mainstream audience. Pay close attention andyou will notice that family films or films aimed specifically atchildren tend to be released around bank holidays and halfterms.
· The uses and gratifications: each form and release isconnected to a particular set of uses and gratifications whichrelate to specific audience groups.
••••• Vertical Integration and Horizontal Integration describe thestructure of a media companyo Vertical integration means a company has control of its own
distribution and saleso A horizontally integrated company has formal links with
other forms of media••••• Vertical Integration created the perfect conditions for the
Classical Hollywood Narrative and genre films, productsdesigned to please as many people as possible at the same time
••••• Horizontal Integration has paved the way for companies todiversify their product’s appeal for a range of different audiencegroups
Whilst this Factsheet uses the film industry as a case study,these issues apply to other media institutions too. Considerhow the BBC constructs specific audiences for each of itsterrestrial and cable channels, how it targets specific audienceswith DVD releases and how it uses synergy with BBCpublications including books and magazine tie-ins with specificTV programmes and genres.
Audience
A large audience sharingin the same uses andgratifications.
A large but diverserange of audiences,experiencing differentuses and gratificationsaccording to the mediaformat.
InstitutionalStructure
VerticalIntegration
HorizontalIntegration
Product
ClassicalHollywoodNarrative/GenreFilms – a singleproduct.
High Concept films– a single conceptpresent in a varietyof products.
Acknowledgements: This Media Studies Factsheet was researched and written by KevinMcMenaminCurriculum Press. Bank House, 105 King Street, Wellington, TF1 1NU. Media Factsheetsmay be copied free of charge by teaching staff or students, provided that their school is aregistered subscriber. No part of these Factsheets may be reproduced, stored in a retrievalsystem, or transmitted, in any other form or by any other means, without the prior permissionof the publisher. ISSN 1351-5136
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