VUE CINEMAS

In the 30’s – 40’s the major film studios owned lots of cinemas in the USA and overseas. This is the studio system.

The studio system is a major film studios held staff long term contracts so they had main control of production and distribution.

In 1948 a Supreme Court ruling in the USA ended full vertical integration for production companies (anti trust law).

The history of VUE cinemas

The company was formed in 2003 when SBC bought Warner Village Cinemas from Warner Bros. for £250 million. At the time, SBC owned four cinemas, and Warner Village Cinemas owned 36.
In April 2005 the chain acquired the Ster Century chain from Aurora Entertainment; this included the highest grossing cinema in the UK or Ireland at Liffey Valley Shopping Centre in Dublin, Ireland^.
On 20 June 2006, Vue's executive team completed a management buy-out of the company with the backing of Bank of Scotland Corporate; the management team retaining a 51% stake. Also, as part of the buy-out, Vue took full ownership of the four Village sites it had been operating under contract from Village Roadshow. The private equity firm Doughty Hanson & Co acquired Vue in 2010.
Vue bought the company Apollo in 2012, retaining 14 new sites across the UK, making it the third largest cinema company in the UK behind Odeon and Cineworld.

1.      Vertical integration the combination in one firm of two or more stages of production normally operated by separate firms.

2.      Time Warner is a fully integrated company. This is because it also consists of many TV channels.

3.      Benefits of vertical integration include secured orders from future customers helps toi increase the revenue and help to reduce competition in the market and help to reduce all costs.

4.      The impact of vertical integration on smaller companies could be that by the larger companies expanding this result in the competition increasing and then makes the larger firms more established and popular.

5.      By vertically integrating this can cause there to be capacity issues this means that it will become difficult to control the supplies and the amount to be delivered. Distribution will be effected because the branches of the business will have to be place in areas that require them which ten means that the customers are affected.