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Movie Exhibition Industry

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Submitted By raghavendra123
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Read the Case Study and answer the following questions: • Why do people go to the movies? How has this changed? • What is the trend in attendance at movie theaters? Why is this problematic? What explains this trend? • What determines profitability for exhibitors? Consider revenue components, expenses, and the controllability of these by managers. • What is the trend in profitability? What explains this trend? • Do trends in the general environment and industry structure affect profits?

The Movie Exhibition Industry 2013

IT IS APT that 2012’s top-­‐grossing film was The Avengers, because movie studios and exhibitors sought to avenge a dismal prior year at the box office. Domestic box office receipts climbed 6 percent from 2011 to a record—setting $10.8 billion in 2012.‘ Three films—The Avengers, The Dark Knight Rises, and Skyfall—grossed more than $1 billion each in global ticket sales (see Exhibit 1). Behind the scenes, the success, even the fundamental health of the exhibition industry, is far less clear, however. Consider these contradictions: -­‐ Domestic ticket revenues grew 6 percent in 2012, but that volume ranks just...

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