Horizontal integration

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A diagram illustrating horizontal integration and contrasting it with vertical integration.


Horizontal integration is when a company acquires competitors in the same industry doing the same stage of production. This is to reduce competition, increase market share and use economics of scale. For example, a car manufacturer acquiring its competitor who does exactly the same thing.

Horizontal integration is the opposite to vertical integration, where companies do more stages of production.

Benefits of horizontal integration[edit]

Horizontal integration allows:

Media terms[edit]

Media critics, such as Robert W. McChesney, have noted that the current trend within the entertainment industry has been toward the increased concentration of media ownership into the hands of a smaller number of transmedia and transnational conglomerates.[1] Media is seen to amass in centre where wealthy individuals have the ability to purchase such ventures (e.g. Rupert Murdoch).

Horizontal integration, that is the consolidation of holdings across multiple industries, has displaced the old vertical integration of the Hollywood studios. The idea of owning many media outlets, which run almost the same content, is considered to be very productive, since it requires only minor changes of format and information to use in multiple media forms. For example, within a conglomerate, the content used in broadcasting television would be used in broadcasting radio as well, or the content used in hard copy of the newspaper would also be used in online newspaper website.

What emerged are new strategies of content development and distribution designed to increase the “synergy’ between the different divisions of the same company. Studios seek content that can move fluidly across media channels.[2]

References[edit]

  1. ^ Thorburn, David and Jenkins, Henry (eds)(2002) Rethinking Media Change, MIT Press, Cambridge, Massachusetts, pp.283.
  2. ^ Thorburn, David and Jenkins, Henry (eds)(2003) Rethinking Media Change, MIT Press, Cambridge, Massachusetts, pp.284.

See also[edit]