Media consolidation, also known as media convergence or media concentration refers to the process in which only a few individuals or organizations control a large number of shares in the mass media industry (McChesney, 2015). There is increasing consolidation in the mass media industry with very few people or firms dominating the vast industry.
The Walt Disney Company
Disney is an American international company and the world’s largest mass media corporation in terms of revenue (Birkinbine, Wasko, " Gomez, 2016). It has its headquarters in Burbank in the state of California.
Ownership history and holdings
Walt Disney Company was established in the year 1923 by Roy O. Disney together with Walt. The Company started with operations in the American animation industry before it diversified into other areas such as television, theme parks, and live-action film production. Disney Company has grown over time to create and acquire more corporate divisions with the aim of strengthening the quality of its content.
The Company holdings include a film studio known as Walt Disney Studio, Walt Disney direct to consumers and international, Marvel Entertainment, Lucasfilm Ltd, ESPN Inc, Walt Disney Parks, ABC broadcast network, consumer products as well as Disney media networks. Other holdings include 21st-century fox and Warner media.
Structure and strategy of Walt Disney Company Holdings
The company applies both horizontal integration and vertical integration in its operations. Horizontal integration is used to refer to the process whereby two or more companies that are in the same supply chain merges. An excellent example of this integration is when The Walt Disney Company acquired Pixar Animation Studios and ESPN. Vertical integration refers to the process by which a company acquires another one that supplies it with goods or buys products from the parent company. The main aim of vertical integration is to facilitate the parent company to have full control of all the production processes. An example of vertical integration as practiced by Walt Disney Company is when the company acquired ABC limited whereby Walt Disney Company can use ABC television networks as a platform where the company can broadcast its products.
Structure/Strategy of Marvel Entertainment Company
The merger of Marvel and Disney is horizontal integration because Marvel’s intellectual properties and Disney’s intellectual properties compete against each other for the same market. Disney has a large young female market share with little young male market share while Marvel commands a large percentage of the young male market but has a small portion of the young female market by intellectual properties. Therefore, Walt Disney’s acquisition of Marvel is beneficial to Disney as it enables the company to capture the young male market through Marvel entertainment thus increasing its economies of scale. Disney maximizes on Marvel by having the rights to utilize and distribute its intellectual properties produced in the realm of detective, superhero, and horror story comic-book-based characters.
The Walt Disney’s role in media concentration
The Walt Disney Company has encouraged media concentration through the following ways;
Mergers
The Walt Disney Company has in the past been participating in the takeover bids of other media company as it tries to increase its revenue as well as market dominance. With its objectives of reaching a large number of customers to increase its profits, the company has participated in the aggressive buyout of other companies, taking full control of their intellectual properties and other resources.
Oligopolistic market
The Walt Disney Company, together with a few other firms, dominates the mass media industry. These firms have become influential in the market and have near complete control of the industry. The dominant firms have forced the small firms out of the sector through competition and buyouts reducing the rivalry in the industry and thus created a concentrated media industry.
Media concentration is harmful to the audience and public interest at large
Media concentration whereby the mass media industry is dominated and controlled by a few large firms is harmful to the audience and public interest. Media concentration is detrimental to the audience and public interest in the following ways;
It may compromise media integrity
The ability of the media to serve public interests and democratic processes is at risk. When a small number of companies control the entire media industry, they may become subject to corruption and political clientelism thus compromising the integrity of the media (Dunaway " Grabe, 2017).
The threat to net neutrality
Media concentration is a threat to the net neutrality as the few companies controlling the mass media industry may conspire to decide the type of the information that they want to be transmitted through their medium. Therefore, media concentration may lead to restrictions on the content available on the internet.
The threat to the diversity of information
Media concentration reduces the diversity of the information as there are only a few sources of data. The information provided by the concentrated media is subject to bias and may lack credibility and accountability to be relied upon by the public.
References
Birkinbine, B., Wasko, J., " Gomez, R. (2016). Global Media Giants. New York: Routledge.
Dunaway, J., " Grabe, D. (2017). Mass media and American politics. Washington: Cq Press.
McChesney, R. W. (2015). Rich Media, Poor Democracy: Communication Politics in Dubious Times. New York: New Press.
