2. Walt Disney became the parent company of Marvel Entertainment, which
became their subsidiary company. The companies that were involved in
this deal are Walt Disney and Marvel Entertainment. Disney own multiple
subsidiary companies that are in the same stage in production as them,
that is know as horizontal integration. Horizontal integration allows
companies to to dominate sectors in the production cycle. Walt Disney are
also vertically integrated, which means they own companies in multiple
stages in the production cycle.
3.
The companies that are involved are famous for two slightly different
things. Walt Disney are famous for their cartoons such as Mickey Mouse
and Marvel entertainment are famous for their comic books, movies and
programs. Disney’s most successful movies are The Lion King, Beauty
and the Beast, Aladdin, The Little Mermaid and Finding Nemo. Marvels
most successful comics are The Avengers, Ironman 3, Spider-Man,
Spider-Man 2 and Spider-Man 3.
4. Walt Disney became the parent company of marvel
entertainment on Monday 31 August 2009. this deal was
worth 4.24 billion and took place because Disney wanted to
be even more horizontally integrated so that they was
dominating. This is Disney’s attempt to become a
monopoly. Marvel was also filed for bankruptcy in 1996 as
they had a lot of debts which caused a lot of problems for
the company. This forced marvel to have another parent
company which could manage their debts, this company
was Walt Disney.
5. This deal made a big impact on the agreed takeover
is for a mixture of cash and stock, with Disney
shares accounting for roughly 40% of the buyout
price. Both companies take characters which
capture the popular imagination and promote them
vigorously around the world on every possible
media platform and through third-party licensing
deals. This means there is very small competition,
which means they are a monopoly. This means
Disney has enormous power and dominating the
cartoon side of the film industry. This takeover has
combined two different target audiences together,
which has made the Disney's target audience
huge.
6. The impacts this takeover has on other film companies are
related to their up and coming domination of their
specific market, because they are now dominating they
have a budget advantage over their competition. This
allows them to use more famous stars in their
production, which will attract more people to the film.
This would also make the competition levels between
the other members of the major six to increase.
Because of the widened market by Disney, the other
companies might have to consider expanding their
target market.
7. The three main issues with this particular ownership deal are to do
with Disney not having full ownership over Marvel and being
inexperienced with certain thing; such as comic books. The first
issue consists of Disney wanting to create a movie that includes a
range of marvel characters, but only have full ownership over one
of them (Ironman). The second issue is the duration of each
production, because of their lack of experience with marvel
movies, the production duration will most likely increase and cause
more money to be wasted. The third issue is the lack of
experience with creating and selling marvel comic books, this
could jeopardise the quality of the comic books and could also
take long to produce. Overall these issues could make Disney lose
money in the long run.
8. Throughout my research I have discovered how beneficial
it is to be a parent company, Being horizontally or
vertically integrated allows a company to dominate a
market and become a monopoly or an oligopoly.
Companies can also benefit from gaining more income
if a well known character or actor is included in a film
they create, this is beneficial as the viewer would want
to see more films with the characters and actors they
like more. Some companies may also decide to
become a subsidiary company if their company is
failing, to stop them from becoming bankrupt and to
pay off all their debts.
9. Sponsorship
Product Placement
Product placement is when a product or
service is referenced or shown in a film.
So the company pays for their product to
be shown in the film or to be referenced in
some sort of way. This is beneficial for
both companies because it advertises a
product and adds to the films production
budget, which will ultimately result in a
better final result.
Sponsorship is similar to product
placement, but includes more money
and a heightened use of that companies
product. A company or organisation
would financially support the film so that
they have the ability to put their product
or service in their film.
Corporate Investment
Private Investment
Development Funds
Private investments are
individuals investing money
into a film, normally to get
some of the revenue after
the film is finished. A private
invest could be any
individual not directly related
to a company in the public
sector.
Development Funds are indirect
sales where funds are made
available by a manufacturer or
company to help affiliate, channel
partners, resellers, VARs or
distributors. That help sell their
product and create local
awareness about the company
and/or brand.
Corporate investment is
when another film company
decides to help create the
film, which allows both
companies to increase the
amount of ideas produced for
the production and the
budget accumulated. This
allows them to increase the
quality of the production
because they can afford to
perform more stunts and
might be able to get a more
famous actor to act in their
film.
10. Product placement is when a product or service is referenced or shown in a film. So
the company pays for their product to be shown in the film or to be referenced in
some sort of way. This is beneficial to both parties because it advertises the
product for one, which will result in a sales increase and it is beneficial for the other
because it adds to their budget. An example of a recent film that has used product
placement to fund their film is World War Z, as you can see in the image there is a
vending machine filled with Pepsi’s. this is indirectly advertising Pepsi, because it is
shown in the production, but isn’t telling you to buy one. Another famous example
is ‘Back To The Future II’ which used a record amount of product placements to
fund their production, they used brands such as Texaco, Pepsi and Nike because
of how significantly their brands logos have changed over a few decades were
made relevant to their movie.
11. Independent film companies will use a range of strategies to fund their
production such as product placement, sponsorship, private funds,
development funds and corporate investment, which have all been
explained in previous slides on how they work and why film
companies would use them. Development funds are basically like
funding schemes, which are events held to create brand awareness
and to also possibly promote the upcoming film production. Examples
of events taken place to increase brand awareness are film festivals
and music festivals which promote specific brands and allow sneak
peaks of some production work. Some advertisements broadcasted
on television can be a part of development funding, these
advertisements can sometimes be interviews with the star actors in
the production or insights on how the film is being made.
12. Sponsorship consist of a individual or group to support something
which could be an event, activity, person, or organisations financially
or through the provision of products or services. A big blockbuster film
that used sponsorship was ‘The Avengers Assemble’, they used
sponsorship from Acura cars to help fund and support their
production, which was beneficial for both parties because marvel
received the funds and support required for their production and Acura
Cars received advertisement within the production, which they could
use to their advantage and they received some of the revenue after
the production turned out to be a success. This type of funding runs at
a risk because if the avengers movie failed to be a blockbusters hit
then, Acura cars would have lost out on a lot of money.
