Vertical integration is where a company owns all the organisations required to complete the production of their work. To put this into a more simpler example, if a factory was making toys, they would also own all the different companies needed to supply the parts needed to make the toy.
Why would a company want to do this? Firstly, by owning everything needed to complete production, it keeps cost down as they will not need to pay any 3rd party companies during production. Secondly, they have full control over everything. Because the company is not relying on another company, the different departments that are doing the different stages can co-operate at the best times and in the best ways in order for success. And thirdly, they get to keep all the profit made in their productions as no company has a cut in the production.
A real life film and TV related example of vertical integration is the BBC. Vertical integration applies to the BBC because they have absolutely everything required to complete a production. They have BBC Worldwide which sells program overseas, BBC DVD and iPlayer, BBC Television (BBC1/2/3/4), BBC Studios and Post Production (studio and editing) and BBC creative departments. All these departments work together to create what we know as the BBC.
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