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Four Questions about Media Question 1. I

In 1989, Sony Corporation of Japan acquired Columbia Pictures for $3.4 billion. For this amount of money, Sony could have readily elected to develop its own production film and television studio, but chose instead to purchase a U.S.-based company with an established reputation, market presence, and clear competitive advantage in what Hoskins, McFadyen, and Finn (1997) have characterized as the largest domestic market. At the same time that Sony acquired Columbia it acquired a production center that was possessed of the characteristics of the U.S. industry, more than competent in the Hollywood system, and fluent in English language filmmaking. These characteristics are seen by Hoskins, et al (1997) as highly instrumental in making an outright purchase of an existing production entity more valuable than developing a company from the ground up.

Further, Hoskins, et al (1997) noted that another facet of the large market size served by Columbia in the U.S. is the effect on the optimal production budget. Bigger domestic markets are associated with larger budgets for films. The U.S. involves audiences that expect big budget films and demands that studios respect these interests. Generally, Hoskins, et al (1997) state that the larger U.S. domestic market results in a larger optimal and profit-maximizing production budget for films and television programs. What this means is that it can be difficult for producers in other countries to compete effectively. While higher budgets do not always equate to greater quality or greater consumer response, there is an association between these variables.

Another factor undoubtedly shaping Sony's decision was that Los Angeles, where Columbia has its headquarters, is the single physical location in the world where the necessary ingredients for a successful feature film are readily accessible. This includes stars, production skills and infrastructure, directors, industry lawyer, script wri...

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Four Questions about Media Question 1. I. (1969, December 31). In LotsofEssays.com. Retrieved 02:06, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1704202.html