Horizontal & Vertical Integration

Horizontal and Vertical Integration is something that, although isn’t specific to a media company, it is vital for almost any company to be successful. It can be described as a business strategy. Vertical integration, is a company taking control of more stages of the production of their business. Horizontal integration is a company expanding it’s operations into different platforms.

For my example I will be using the retailer the HMV Group. The HMV Group originally started off making radios, televisions and radiograms until eventually opening a retail shop and selling them from there. The company has since evolved into selling CD’s, DVD’s and games, whilst ceasing production of their televisions and radiograms. Their choice to begin selling CD’s and DVD’s is an example of horizontal integration. This is horizontal integration because it is HMV expanding their reach across the various entertainment platforms. Another way HMV could horizontally integrate is by once again selling televisions or even starting to sell phones. HMV haven’t vertically integrated as successfully as they have horizontally, HMV have recently sold a large portion of their vertical integration, having sold their live venues and their club nights that they had due to having a poor sales record this year. However HMV still have their “Next Big Thing” festival. Another way HMV could vertically integrate would be the creation of a HMV greatest hits collection. This would be an improbability and wouldn’t make them very much money. It would be very difficult to get the rights to some of the greatest song ever written, even if they did, their cut would be so small, it probably wouldn’t be worth it.
Horizontal and vertical integration, however, isn’t just for companies, many people within the entertainment industry vertically and horizontally integrate.

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