Vertical Integration Gets Even More Vertical

The saga of “vertical integration,” that mysterious and weird process by which huge corporations co-ordinate the efforts of the networks they own and the production companies they also own, has taken another step forward with ABC’s announcement that they will be putting one guy in charge of their network and their studio.

The newly formed ABC Entertainment Group will combine ABC Studios and ABC Entertainment, with all operations of the two separate units reporting to Mr. McPherson. The new division’s primary mandate will be to develop and produce compelling programming for broadcast on ABC. However, when appropriate, the studio will look for outside opportunities.

I’ve been over the ups and downs of this process before on this blog, so I’ll be brief in summarizing them again. On the plus side, it gives a show more security because the network has a direct investment in its future. Even when shows are owned by the same company that owns their network, the relationship can still be the same as if they were separate entities, because the production company and the network are supposed to operate as separate entities. Even after networks were allowed to own their own shows, it was perfectly common for the production company to gouge a network owned by its own parent company, and vice versa. The streamlining of production and broadcasting is supposed to prevent this.

The downside is, well, just look at the decline of both NBC and Universal television since they merged together and lost their individual corporate identities.

Ah, well, we still haven’t quite made it to the future predicted by David Mirkin in Newhart 20 years ago, where all the networks would be run by one guy (the speeding-up is intentional):