Ownership and control

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

"The buy today looks genius, even if it wasn’t so obvious back then. In fact, Facebook was about to IPO, and $1 billion was once considered a massive price, especially for a company that didn’t make any money."

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

companies make more money and they can maintain more control.

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

"Facebook acquired Instagram in 2012 (at a cost of $1 billion) so that they could cancel out the competition by making money from both.

Horizontal integration allows companies to widen their audience and find other ways to make money."

4) What is a subsidiary?

"a subsidiary is a company that belongs to another company, which is usually referred to as the parent company or the holding company."

5) Give three examples of media companies that have used synergy to maximise the profit from a brand 

The three examples are: Harry potter,Star wars and Marvel.
            

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: 

• Fox's film
• television studios
• regional sports network
• international holding
• Star wars
• The Simpsons
• Avatar
• Dead pool
• Modern family
• Hulu

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

Disney purchased fox because they didn't want to have any rivals and the profits didn't have a rival so got money just in case one company failed.