David Hesmondhalgh's cultural industries theory

Recap

• Horizontal integration is when a company buys other companies which do similar things on the same part of the media production process. The benefit of this type of integration is chiefly diversification and increased output to minimise risk. It also limits direct competition.
• Vertical integration is when a company buys other companies which do different things in the media production process. The benefit of this type of integration is to maximise profit by keeping the cost of using external company's services down.

Both of these types of integration are key strategies used by media conglomerates to ensure that they minimise risk and maximise profits.

Hesmondalgh's theory:

• His theory states that there is an inherently high risk in producing products in cultural industries such as the film industry:
• Hard to predict success
• High production costs
• Low reproduction costs
• Risk of piracy
• He believes that companies need to minimise risk and maximise profit with audience in order for success. 
• So, media companies like Disney need to be vertically and horizontally integrated to minimise risk and maximise profit.
• There is a reliance of creating big hits to cover the cost of failed productions. This means products become formulaic as they rely on repetition of previous successes - big stars, safe genres, franchises, repeated narratives.

Does this theory apply to the TV industry?

Not particularly true of traditional broadcast television:

• PSB is protected by public funding and regulation requirements
• Audiences figures do not necessarily reflect success of a show i.e. you watch something because it happened to be on after a show you wanted to watch or because there is nothing else on
• Once a programmes has been commissioned. it has a run of shows to attract an audience. Less impetus on being a one-off big hit.
• More or less a solid revenue from advertisements

True for streaming services like Netflix and Amazon Prime:

• Must attract audiences and convince them to pay for service
• New streaming services need to expand rapidly to compete in a crowded entertainment marketplace
• Streaming services need 'flagship' shows to be their big-hitters to attract audiences. This is why LFTVD on Netflix often rely on star actors (such as Stranger Things, who has a popular, classic 80s film actress such as Winona Ryder) high production costs and have a 'must-see' factor about them.
• But:
• There is a reliance on streaming shows to be the creative vision of a 'showrunner' - similar to an auteur director in film - to give the show a distinctive stamp and thus make it stand out from the formulaic TV shows.