What is vertical integration in the film industry?

• A. A company controls multiple stages from production to distribution to exhibition
• B. A company merges with a rival at the same production stage
• C. A company focuses only on development
• D. A company distributes films only online

Answer: (A)

Vertical integration means one company controls several stages of the film process along the supply chain—from making the film (production) to getting it out to audiences (distribution) and showing it in cinemas (exhibition). This control over multiple steps lets the company manage budgets, timelines, and release plans more tightly. That’s why the answer describing a company that oversees production, distribution, and exhibition is the best fit.

Merging with a rival at the same production stage is horizontal integration, not vertical. Focusing only on development is specialization and doesn’t cover multiple stages. Distributing films only online describes a distribution channel, not a situation where a single company controls production, distribution, and exhibition.