Disney Co. Network Division and ABC

Paper Summary:

This paper analyzes the reasons behind the two entertainment mega-powers' - Disney Co. and ABC - decision to merge in the content and distribution sections of their value chain. It investigates textually and graphically the economical advantages and the potential effects this decision will hold on the companies individually.

From the Paper:

"Another trend in the value chain is to integrate downward towards the end customer. In other words, companies will sell packages of content tailored to an individual's tastes and preferences, instead of a bulk package sold to everyone (disney.com, 1998). This is another advantage that the acquisition of distribution provides. The acquisition of distribution provides closeness to the customer and cross-selling opportunities. It provides the possibility of developing new products, differentiating existing products, and catering to individual customer needs Catering to individual needs can yield higher profit margins than selling an undifferentiated commodity."

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