Industries: ownership and control

• 1) Why did Facebook buy Instagram for $1bn? 
• •He wanted to keep his company, and to keep being the Instagram visionary, just with none of the risks of independence. Facebook's network was already helping Instagram grow — and if Instagram was part of Facebook, they'd have unimaginable resources to keep growing, faster. This argument seemed to appeal to Systrom.   
• •2) What are the benefits for media companies of vertical integration? 
• •Vertical integration may lead to lower transportation costs, smaller turnaround times, or simpler logistics if the entire process is managed in-house. This may also result in higher quality products as the company has direct control over the raw materials used through the manufacturing line. 
• •3) What are the benefits for media companies of horizontal integration?  
• •Undergoing horizontal integration can benefit companies and typically takes place when they are competing in the same industry. The advantages include increasing market share, reducing competition, and creating economies of scale. 
• •4) What is a subsidiary? 
• •Synergy is when a company creates a brand that can be used across different media products and platforms. 
• •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). 
• •, linking advertisements in a glossy magazine to television commercials can generate more interest in the product or service. Most online stores post updates and offers on their various social channels to direct users to their website to make a purchase. 
• •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:  
• •Disney Entertainment 
• •Film studios. 
• •Walt Disney Studios Motion Pictures. 
• •Disney Theatrical Group. 
• •Disney Music Group. 
• •Disney Studio Services. 
• •A&E Networks. 
• •The Walt Disney Company Europe, Middle East and Africa. 
• •The Walt Disney Company Latin America. 
• •7) Why did Disney buy Fox - what are the benefits? 
• •Moreover, Fox was a strong competitor for Disney in the film industry originally, and the threat made by Fox will disappear after the acquisition. Also, Disney can expand itself, increase market share and raise market competitiveness at the same time through the horizontal merger with Fox.