“Vertical Integration actively stifles creativity in the movie industry”
Vertical
integration is the process by which a media institution owns several companies
at different stages of production or the supply chain. 20th Century Fox is owned by News Cooperation
and 21st Century Fox, which is a huge an American multinational mass
media corporation. It is one of two companies created from the 2013 split of
News Corporation (as founded by Rupert Murdoch in 1979); 21st Century Fox
retains the previous News Corporation's broadcasting and film assets and serves
as its legal successor, while its publishing assets were spun off to form News
Corp at the same time. Among its holdings are Fox Entertainment Group—owners of
the 20th Century Fox film studio and Fox television network among other assets,
and pan-Asian pay channel operator STAR TV.
In terms of
infrastructure in the film industry, an early example of vertical integration
would be the merging of companies of two different types. For example The Fox Film Corporation was formed in 1915 by
theatre chain pioneer William Fox, who formed Fox Film Corporation by merging
two companies he had established in 1913: Greater New York Film Rental, a
distribution firm, which was part of the Independents; and Fox (or Box,
depending on the source) Office Attractions Company, a production company. 20th
Century Fox now owns companies at each stage of the supply chain enabling the
institution to maximise profits and tap into new global markets. 20th
Century Fox’s more recent titles are currently available in cinemas, on digital
HD, Blue-ray and DVD. The company owns Fox Studios in Los Angeles and Fox
Studios Australia which is Australia’s largest film and television studio. Fox
Broadcasting Company also owns Fox TV channels which show popular programmes
such as Glee, New Girl and Family Guy. 20th Century fox also owns
DVD rental shops, they have ownership over all of these different chains so
they can make money from every part of it. Vertical Integration allows them to
make money, therefore actively stifling creativity as film companies are
constantly thinking of ways they can maximise their profits.
X-Men: First class (2011) is a good example of
how 20th Century Fox has used vertical integration in order to maximise
the potential earnings from productions. It was produced by 20th
Century Fox, Marvel Entertainment, Bad Hat Harry Productions and the Donners’ Company.
It was then distributed by 20th Century Fox which also distributed
all the other X-Men films. The X-Men franchise is one of Hollywood’s biggest
franchises. X Men: First Class was the fifth instalment in the franchise about
superhero mutants, a big-budget action movie based on a popular comic book
series. However, in X-Men: First class, “X-men” is a vastly different creature
from the other films which presented some unique marketing challenges. It
lacked a big name star and is set in the early 1960s, a period unfamiliar to much
of the films target audience. Therefore,
it had to use marketing successfully in order to attract the audience’s
attention. The entire production had to be immersed in the culture of that era,
and there was one method used to help bridge that time gap in the minds of
viewers – stunt casting. One of the most
critically lauded television shows airing today is the advertising period piece
“Mad Men”, and replicating that feel was clearly a goal, having “Mad Men” cast
member January Jones as one of the main mutants helped to achieve that
goal. The motion picture magazine Total
Film got involved in both the contemporary marketing and the throw-back vibe of
the production. 20th Century Fox exhibits its X-Men films to an
international audience, showing the films in cinemas all over the world. On the
20th Century Fox website it says “As the digital revolution reshapes
all aspects of the entertainment industry, 20th Century Fox remains on the
forefront, embracing new technologies that take our audience deeper into our
films.”
In November
2012, 20th Century Fox announced plans to create their own shared universe,
consisting of Marvel properties that it holds the rights to including the
Fantastic Four and X-Men, with the hiring of Mark Millar as supervising
producer. This shows how 20th Century Fox uses vertical integration
to appeal to its audience.
Vertical
Integration is important for multi- national media conglomerates because it enables
them to squeeze out competition from independent film makers who cannot compete
to the same level. Since 20th Century Fox is able to produce,
distribute, market and exhibit its products using its own integrated companies it
means that anything produced by 20TH Century Fox takes priority over
anything produced by a different company’s studio. In conclusion, Vertical
Integration does actively stifle creativity as it enhances competition between
film studios. Vertical Integration is a threat on independent studios. For
example, a British independent picture wouldn’t necessarily have the same
advertising space or marketing tools as a 20th Century Fox picture
would.