Vertical Integration
Vertical Integration is when the production company has the ownership of the means of production, distribution and exhibition of the film by the same company because receive all of the profit. An example would be 20th century FOX. This production company owns the studios in Hollywood and they also own the cinemas, DVD rental shops and TV channels. they own these as a chain production so they can make money off of it. So buy selling themsleves as their own brand through these sectors builds their own image, Fox buy out different platforms to gain publicity and profit. They don't lose money by buying out other companies and then having a share this makes them an independant production company. By buying out all the cinemas and then publicising their name they make more money as a pose to buying other production companies. The cinemas can be seen as already being very popular for example Odeon, VUE, Cineworld etc all have a lot of customers who watch via these businesses so FOX would already save a lot of money by buying these companies, kind of like a step ladder to promote their own name instead of sharing the stage with another production company.
Horizontal Integration
Horizontal Integration is when a Production company expands into other areas of an industry. This is when that company can develop a particular area of production or they can buy out another company that deal with these areas. An example of a company that uses this method to gain profit would be Disney buying into other production companies such as ABC, ESPN and Pixar and many other big names. These companies have been bought out by this main leading company so whatever profit they then make would be shared (of a majority) with Disney. This makes all the companies involved some form of money however Disney would ultimately profit from this as it only reaches out to more people with their name getting more popular which in effect means more money as they can release products like merchandise.
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