...It doesn’t take intense or in depth analysis for one to conclude that the movie industry as a whole is heading on a negative path. This negative growth trend is heavily influenced by a number of contributing factors which individually impact the various components of the movie industry value chain but more specifically the exhibitors. Throughout this paper I will be focusing on improving the future strategic plans of the exhibitors while assessing their contribution to this decline and what they and their counterparts could do in order to maximize future revenues and profitability. There are several external factors contributing to the slowdown of this giant industry (technology being the biggest one),we will try to address the key factors throughout this paper. Let us start with the production studios, which in my opinion are the dominant party in this relationship and therefore will not be suffering the most impact in the next decade. The exhibitors on the other hand will be subjected to the most detrimental recession due to their shrinking targeted demographics and the lack of assistance from their suppliers (the studios). Starting with the root of this problem, the shrinking market, which can be solved by realigning this industry’s business model in order to target a wider frame of the population coupled with a more mutually beneficial alliance between the studios and the exhibitors since currently the boat is mainly being steered by the studios. This could begin by varying...
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...At? Oh, those were the days. Remember high school? Oh, high school. A world without subject-by-numbers, p-sets, all-nighters, or worries. There wasn't much of anything to do, period. The most exciting thing that could happen to you in high school was probably go to a keg party-er, did I say keg? You know I meant cake, and going to the big premiere of "Spider-man." Friday night at the movies with your buds was a sure-fire way to pass two or three hours of your endless free time. What else did you have to do? Fill out the MIT application? Most teenagers, myself included, probably look at movies as entertainment, rather than as art, and most directors will confirm this. The movie industry has capitalized on this "entertainment" view of movies. More than ever, the movies industry is dominated by blockbusters and, to many's dismay, sequels to previous blockbusters. According to the website of the Motion Pictures Association of America (MPAA), from 1999 to 2002, the average theatrical cost of an MPAA film rose over 80%. Over this 3-year period, a whopping 25 out of the top 50 highest grossing movies in the American film history were produced, all of which made over 200 million dollars. Among these blockbusters were "Spider-man," "Finding Nemo," and "Star Wars: The Phantom Menace." We all know why "Star Wars: The Phantom Menace" exploded at the box office. But why did the other two gross over $340 million each? Because they were thought-provoking? Hardly. "Spider-man"...
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...Computers and The Movie Industry Nathaniel Ephriam III ITT Technical Institute Abstract Changes in the movie industry because of computers are far reaching. The amounts of movies made in today’s market that have some kind of computer imaging in it have more than doubled. Nearly all of your Big Budget films use computer technology to add realism to their projects. It is nowadays included into the budget. No longer is special effects alone enough to sell the film. However with the combination of both computers and special effects, even hard to please directors are becoming tame. Even Animation is seeing unbelievable results using computer technology. No current Animation is considered a serious project unless they use some form of computerization. In the last decade more and more films are made in this new way. The use of computer technology has also been responsible for many awards currently being received by movie companies. Awards such as Oscars, Academy Awards and Golden Globes, you name it computers are responsible for it. Computers and the Movie Industry Hollywood has released some of the most memorable films the world has ever seen. Films like The Wizard of Oz, The Towering Inferno, and Titanic are more than just great cinema. They show the connection of computers and the movie industry. All of the films mentioned earlier and hundreds more were all made with some level of computer aid. The term “special effects” meant very little to the public when it was...
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...Melody Chen Professor Noroski Intermediate Microeconomics December 19, 2015 The Oligopoly in the American Movie Industry Movies and films have been in our lives since the late 1890s. Over the years, it has transformed from a 3-minute silent film, to a 120 minutes feature movie. From the American classic, The Great Train Robbery, to the infamous Star Wars series. Before the movie starts and the thrilling story begins, we are often greeted by 10-seconds short introductions of the movie studios. The Big Six, Warner Brothers, Paramount, Walt Disney, Columbia, Universal, and 20th Century Fox are the ones we see most often. And it’s these very companies forms a oligopoly market in the movie industry. An oligopoly market structure is in which there are small numbers of firms controlling the market, and the dominance is shared between these firms. The film industry is a good example of oligopoly. The big six as mentioned above, control well over 87 percent of the film industry in the U.S., with other smaller companies and independent studios share the rest of the market inconsiderably. We can say that the film industry is highly concentrated. So with such concentration ratio, how can the movie studio compete with each other? Strategy becomes an important part to the studios. Since the studios are interdependent to others, because the high demands of the market and the competitions, studios must anticipate the likely response of a rival to any given change in their output...
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... 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...
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...BUS4040 2013-2014 Semester 1 Group Assignment 2 (Session 1) Oct 28, 2013 Read “The Movie Exhibition Industry: 2011” (Case 16 in text) and answer the following questions: 1. Assess the situational environment for the movie theater: a. Why do people go to the movies? How has this changed? b. What is the trend in attendance at movie theaters? Why is this problematic? What explains this? c. 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? d. For 1A-C, which of these are symptoms? Which are causes? What is the key strategic issue facing movie theaters? What are three alternatives (i.e., new actions / initiatives) that exhibitor’s might consider to resolve this strategic issue? Which would you recommend? What did theater owners pursue for alternatives? Has their situation improved by 2010? What alternatives can exhibitors take in 2011 and beyond to improve their situation? What are the opportunities and threats for the exhibitors to expand into China? 2. 3. 4. 5. 6. Instructions on the assignment: • • • This is a group assignment and is due on Nov 6. There will be a discussion on the answers for each question on the same day the assignment is due. The following groups will present the answers and lead class discussions for the questions as follows. The time allotted for each group is 15 minutes each including Q&A). Group “April” - Question...
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...Since the invention of tape recorders and the widespread of VHS, pirates has taken a slot in the movie industry. The profits that should be placed in the movie production company has continuously reaching the decrease in sales because of the pirated movie copies from the internet and CDs. Laws implemented such as No Electronic Theft Act Law (NET Act) and implied protection to prevent copying of DVDs have decreased the cases of piracy. However, focusing to dispose unauthorized websites and copyright infringement will not tackle the issue. The movie industry should create new ventures that will attract consumers to find authorized provider of movies. To lessen piracy and avoid the unequal profit distribution, the industry should make a new business design underscoring admission to authorized online streaming sites in an inexpensive and timely manner. The first thing that hurts the economy is the use of unauthorized software and websites to upload and download different movies. This illegal site has taken the profitability of the industry especially in the field of movie production because of the free and illegal access they give to the consumers. It does not only bring pain to the economy, but it also carries liabilities that may be impose to the consumers. As what...
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...When creating a movie to release in such a competitive industry, assurance is needed that there will be a return on investment as well as that their movie will be well-received by the public and entertaining to make it a popular hit at the box office. Using a sample of 100 motion pictures from 2005 and numerical methods of descriptive statistics, including measures of location, variability, distribution shape and the detection of outliers, the motion picture industry can be analyzed more specifically in order to learn how these variables play a part in the success of a motion picture. The main concern of management in this case would be with regard to revenue, profit, and entertainment. In this case study it was found that there was a high correlation between the total gross sales and the opening gross sales, time spent in the Top 60 and the number of theaters played in, indicating that movie makers should take these variables into consideration when trying to predict or plan for a successful movie. The motion picture industry is a cutthroat, multi-billion dollar industry involving a diverse number of contributors to making a successful movie. From production crews, actors, and directors to marketing crews, distribution companies and movie theaters, there is substantial time and effort put into these creations and there are four variables commonly used to measure the return on this investment. These variables include the opening weekend gross sales, total gross sales...
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...MGMT-780-623 - Week 3 Assignment The Movie Exhibition Industry: 2011 SWOT Analysis Strengths Internal – new digital technology with 3D optional feature, buildings (whether rented or owned) are large (most are multi and megaplex style) External – leverage in both the concession industry and the distribution industry Weaknesses Internal – rely on concessions and advertisements, concession pricing, experience largely the same as every competitor External – content, consumer income, marketing of movies relies on studio production companies, split sales with distributors Opportunities Internal – content choices, experience, concession options External – growing middle class, rebound from recession Threats Internal – only way to increase revenue is through increased concession costs or increased advertising before movie viewing External – home theater technology, release windows getting shorter, streaming video companies How can a company achieve a competitive advantage in this industry? For a company in the movie exhibition industry, a few simple things can be done to achieve a competitive advantage over other companies in the industry. First, let’s define competitive advantage. Competitive advantage, as defined by our Strategic Management textbook, is a “firm’s resources and capabilities that enable it to overcome the competitive forces in its industry.” Independent Content, Customer Experience, Local Concession Options One way for a company...
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...Internet piracy will destroy the movie industry During a keynote speech at a conference about piracy, Matt Mason said that pirates are the greatest innovators of our time. This might sound unconventional and rather paradoxical but it is very true. The movie industry was built on piracy. In the early 20th century Thomas Edison, who owned a patent on the movie-making process, demanded high fees for the use of his technology. In an attempt to avoid his fees, many movie makers headed to the west coast of the USA to ‘illegally’ make their movies. The town that these artists went to was Hollywood. It is somewhat ironic to see that the very thing the movie studios are fighting is the same thing that birthed their craft and their beloved town. Movie studio executives love to play the ‘blame game’ and complain about how piracy is costing them money. However, in the past years, the box offices broke records regarding cinema visits. Going to a theatre and experiencing a movie on a big screen with other people will never be destroyed. Just because of the very fact that you cannot destroy an experience. On the other hand, the genre and type of movies that still can be profitable being screened in a big theatre is going to change, because of piracy. If you look at the list of movies that are on top of the box office you will notice that most of these movies are either filled with effects with fast paced narrative, promoted very heavily or critically acclaimed. With time the mediocre movies...
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...Movie Production and Distribution Industry Industry Overview A major influencing factor in the general environment of the movie production industry is the implementation of new technology. The improvement of technology has always been a driving force behind the filmmaking industry. There are various kinds of technology forthcoming. A major one is the development and use of 3D, IMAX and digital film. These new developments have changed the way that movies are made and affect the cost and method of film production. New cameras and recording methods are required in production and this is forcing the directors, actors and other staff to adapt their techniques. Due to the vast array of technologies that can be utilized for movie production there are low barriers of entry for suppliers. The production industry has been able to maintain leverage over these new corporations through their economies of scale and their ability to influence the end user of the product. Another important technological development is the digital streaming and downloading of videos. This new technology is having both positive and negative effects for the filmmakers. The ease of digital proliferation has allowed production companies to widen their brands and make more films and television programs. This has created greater revenue for the industry. Digital streaming has made way for a new kind of company focused on this delivery method. The improvement of digital animation has also increased...
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...The movie exhibition industry holds one of the largest retail spaces after shopping complexes/malls. The greatest opportunity of this industry lies here. Being an industry that has been constantly adopting new technology and trends, I am of the opinion that leveraging this retail space not only for advertising space (standees, posters, etc.) but also for enhancing the cinema experience, would make profits soar in the long term. By having Bowling centers, Billiards tables and other in-house sporting activities, it lures the young adults and children alike. Introducing a diversified alternate content during the weekdays and off-peak hours would be another mechanism of generating greater profits. The experience of being at a movie theatre is the sole differentiator and maximizing it without adversely affecting the consumer interests should be the goal of exhibitors. The external threats to this industry lies in the very hands that feed it – the studios. Studios are poaching that sacred territory of exclusivity by introducing Video-On-Demand and reducing the gap between movie and DVD releases. This could be attributed the ever changing needs of the consumer. The rise of streaming options such as Netflix and Hulu have further bitten into the exhibitor’s share of the pie. The barriers to entry in the movie exhibition industry are relatively high. The major players, by their sheer number outpace any new entrant. The profitability levels also depend on the economies of scale here....
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...the ethical challenges surrounding the movie and music industries as they relate to the Internet? Today's technology makes it much easier to get and give away copyrighted material illegally. Many people are taking advantage of the access, downloading and sharing everything from games to movies to music to software. Unfortunately, people find the chance to get this stuff for free just too tempting, do not do it. It comes with large consequences, it is called digital piracy, and it is the act of illegally downloading copyrighted games, music, movies, TV shows, and software that you haven't paid for. Not paying people for their creative work isn't just an ethical issue, it's illegal. Under U.S. copyright law, offenders could be punishable by up to five years in prison and $250,000 in fines. We need to educate everyone on these issues and make sure you are downloading from authentic software from authorized sources to avoid pitfalls of piracy. We also need to lead by example with our kids today by letting them know cheap and easy downloads are not always better, they are usually illegal and can be harmful to your computer. How has education affected your views about the practice of downloading or copying multimedia content in these fields? Education has affected my view about the practice of downloading or copying multimedia content in these fields because downloading or copying multimedia content for free can cost the music or movie industry millions of dollars and the people who...
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...How American History Influenced The Movie Industry? The period of 1960’s is known as one of the most creative periods in the history of the Hollywood filmmaking. It was prominent due to usage of new narrative and style techniques in presenting changes in American values in the film industry at that time. The period of 60’s is known as a period of change, which was carrying an idea that the goal American society sets, can be successfully achieved. The most common topic in the movies of that period was America’s role in the World, as well as it’s controversial position. President of the US at that time, John Kennedy was promising that before the end of the decade men will step on the moon. He also lobbied for the civil right movement and the Civil Rights Act, which emphasized the end of the period of long segregation in the South. The latter finally gave the same amount of equality to Whites and Blacks. However, the decade ended with the Watts riots. All of these occasions summarized gave a clear sign that there was something wrong happening in America. The movies of 60’s were a way to respond to social movements, which were connected with the issues of civil rights, poverty, and feminism. Films were not only the representation of public view on the issues taking place in America, but also presented the favorable outcomes of values and institutions. Movies produced during the 60’s exposed the new figures to the audience. In addition, they presented the ways of thinking and suggested...
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...SUBJ: A Look at the Competition Within the Movie Rental Industry EXECUTIVE SUMMARY: Analysis: The competitive forces in the movie rental industry are quite strong, as I will explain through the five forces model. There are a vast amount of substitutes for watching a movie. You can go to a play, sporting event, concert, out the lake/beach, go for a run, watch regular television, go shopping; I could go on and on. Also, torrenting or pirating movies is growing increasingly popular. Buyers have a strong presence in this industry mainly because they are picky about how much they will pay to rent or stream a movie. With the amount of substitutes and their pickiness, they make this industry more competitive than what it may seem. Suppliers can make this industry very difficult because there is so much red tape in the movie industry. There are copyrights and restrictions on everything. This gives the supplier a lot of leverage and for the most part, they know that they can demand a price of just about anything. I see the potential and threat of new entrants being moderate to strong. First off; many customers have their loyalties whether it be to Netflix, Redbox or a local hometown movie rental. Secondly; pricing, availability and quality are all key factors. Lastly you have to have a large sum of money upfront in order to get the ball rolling. As I mentioned prior, gaining rights from movie companies is not cheap. The rivalry among the competitors is rather intense as they...
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