Unit one - LO1 - conglomeration and ownership structures

What is conglomeration?

• Conglomeration is the defining business model of our time.
• A conglomerate is a large business which has become large through the process of buying other businesses.
• Think of a huge blob, ‘glomming’ on to everything else. That’s a conglomerate. It's an aggressive business practice that prioritises profit and growth over everything else.
• Typically, a conglomerate owns lots of little companies that are responsible for the production, distribution or exhibition of the film.
• And the companies a conglomerate owns are called subsidiaries

An example of a major conglomerate - Sony

Who are they and what do they do? You have five minutes to find out as much information as possible!

Facts and figures

• Founded in 1946 in Tokyo - post war Japan
• 59 office locations in 45 countries
• CEO - Kenichiro Yoshida
• 128 billion USD

Products and services

• High end electronic products, including monitors
• Cameras
• Playstation
• Products
• Robots
• TVs
• Record Players

Subsidiaries - a wide range of subsidiaries allows a conglomerate to appeal to multiple audiences!

• Sony Entertainment
• Sony Computer Entertainment 
• Stake in Marvel, in particular Spiderman
• Hawkeye innovations
• Aiwa 
• Gaikai
• Sony Music
• Sony music publishing 
• AWOL (record label)
• Crunchyroll 
• Funimation
• Spotify (stake)
• Insomniac
• Sony Pictures!!!
• Sony Marketing Inc

Vertical integration and horizontal integration

Back in the good old days of the early 20th century, organisations were typically vertically or horizontally integrated. Now, things have changed quite significantly, and enormous conglomerates are often both vertically and horizontally integrated. But what do these terms mean?

Horizontal integration: Is where a conglomerate owns other companies in the same sector

Example: Disney own and have bought out Marvel Studios, Lucas Film and Pixar

Vertical integration: Is where a conglomerate owns companies in different sectors. In short, they own the method of production and distribution. This practice is highly anti competitive

Example: Disney, own Disney Plus, a range of distribution and production services

Multimedia integration : Where a conglomerate uses digital technology to integrate business

Example: Netflix, who use digital tech to distributive and produce films and TV shows rapidly 

Convergence: the coming together of previously separate media industries

Example: use of mobile phones to access absolutely every form of media

Synergy: The advantages of convergence

Example: music videos are two previously separate industries that work particularly well together 

Case study: Sony and Spectre

Case studies are ridiculously important: you  will be asked to make reference to explicit examples in the exam. The more notes you make now, the better your mark will be in the exam. It's very straightforward!

Using the internet, research how Sony used its power as a conglomerate to produce, distribute and market Spectre. 

Find evidence of Cross media ownership, horizontal/ vertical integration, synergy, marketing, affiliations, and so on. Feel free to share information with those around you

• Production companies, distribution companies

Released in 2015

Produced by Eon Productions, famous for making James Bond films

Distributed by Sony Pictures

• Pre-production, production and post production details

Shot from December 2014 - February 2015

Most expensive exploion ever!

Filmed in five different countries, very expensive production, that allows it to target multple audiences

• Budget, box office (ticket) sales

880.7 million $$$ worldwide

245-300 million $$$

Huge financial success!!

70.4 million $$$ on opening weekend, second highest at the time

• Examples of marketing

Williams F1 team branded with Spectre Logo

Official website, with a range of teasers and trailers - allows Sony to target hardcore fans of the franchise

Teaser: short trailer with very little information to create hype and excitement among fans

Aston Martin unveiled new car as part of marketing strategy

• BBFC Age rating (and why)

Initally rated as 15 by the BBFC. Sony edited the film to make a suicide scene less prominant, which allowed the film to be released as a 12A

Commercial, mainstream films genrally avoid 15+ ratings in the UK, in order to maximise audiences

Make sure your research looks good! That means pictures, headings, variation in font... good!