...revenue in the movie exhibition industry. Overview: Ticket sales for movie theaters are at their lowest point since 1996. With the core demographic group expected to grow slower than the US population and with technological advances growing at speeds faster than the industry can keep up, ticket sales will continue to decline if the current business strategy continues to be followed. Concession sales and ticket sales are the two biggest sources of revenue for a movie theater. Both continue to increase in cost to the consumers and may have reached a price point that is starting to drive consumers away from going to see a movie. With the advancements in home entertainment systems consumers are investing thousands of dollars into their own home viewing systems. They have several options to stream video content into the comfort of their own homes. Theaters have implemented digital content and 3D but it’s not enough to keep up with the competition of technology. My analysis will give you information on the threat of competition from substitutes and the change in buyer behavior and demographics. I will use the five-forces model of competition and a SWOT analysis along with other sources of analysis. The information and recommendations that follow will provide you with the insight and building blocks to compete in the movie exhibition industry. Analysis: ! SWOT 1. Internal strengths: digital technology, 3D capability, the current real estate/locations of theaters, the venues lend themselves...
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...ranks just 13th since 1980. The 1.364 billion tickets sold is down 13 percent from the most recent high in 2002 of 1.575 billion (see Exhibit 2). 2012‘s record revenues resulted from ticket price increases, not more attendees. At $7.94, the average ticket price has risen 24 percent since 2005. But over the long term, prices keep pace with inflation, raising questions about the creation of differentiated value (see Exhibit 3). - The long-term per-capita trend is negative. In 2012, the average number of films seen per capita was 3.9.2 In 1946, the peak of moviegoing in America, the industry sold four billion tickets, and the typical American went to 28 films per year at the theater. - Movies are more widely available than ever, creating new substitutes for where, when, and how to view movies. Exhibitors are especially anxious for moviegoers to return to the...
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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...
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...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 to create a competitive advantage in the movie exhibition business is to cultivate good content. Nearly every movie theater in the country offers the exact same movies at the exact same time. There is always an appeal for big box office movies that cost millions to produce with big name actors, hardly any substance and crazy special effects. Many people, however, favor a good...
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...Abstract Conducting, comparing and contrasting surveys are a very important part of research. This assignment will review three various types of surveys and evaluate the information that was derived from them. This paper will also include a simple survey to provide a demonstration of the understanding of a sample size determination and the use of a sample size calculator. Survey Sample Size Introduction: This assignment will compare and contrast three different surveys that relate to three separate venues and determine which one would be the most accurate. Part 1 Entertainment Survey: This article was written about the travel and tourisms importance in some major cities as a source of economical gain. The cities that were polled included 1,110, but only 463 of the cities participated. This survey showed that 54% of the city leaders realized the direct affect that tourism and travel had on their own city’s economies (Poole, 2000). This type of survey can show a media group or a supporting company that more investments should be put into a city to make that particular city travel friendly and provide more entertainment for tourists. By reading this type of survey a company can determine the best areas in which to initiate projects that could attract more tourists as this can increase the company’s revenues. Political Survey: A great example of a political survey is the one that was conducted by The Project for Excellence in Journalism’s News Coverage Index. This...
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...family entertainment through its movies, theme parks, television and characters. Ever since Disney’s most famous character, Mickey Mouse, was first released in 1928, the Walt Disney Company has continued to entertain children and adults alike with imagination and creativity. They continue to update their theme parks, movies, and merchandise to keep up with the current trends. Walt Disney said it best “Disneyland will never be complete, as long as there is imagination left in the world”. Walt Disney Company has five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive Media. Media Networks Economic Trends Current trends in television viewing include mobile video viewing, online video viewing, diversity in sports viewership, and increased in spending on television advertising. The media research group Nielsen has found that Americans between the ages of 12-34 are actually spending less time in front of the television than in years past, as opposed to those older than 35 who are spending more time in front of the screen (Watch, 2012). Consumers’ appetite for media continues to grow. New and enhanced technologies only fuel the demand for video content. The average American watched 34 hours 39 minutes of TV per week in Q4 2010, a year-over-year increase of two minutes. (Nielsen, 2011). 143.9 million Americans viewed video online in January 2011, spending an average of 4 hours 39 minutes viewing video online. In Q4 2010, 301...
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...consumption habits. Access to the internet allows a virtually limitless source of entertainment. Movies, which once could only be seen in theaters eventually became available in the home through VHS and ultimately through BluRay. Brick and mortar stores like Blockbuster had immense success offering consumers the ability to rent movies upon release; but today these retail stores are close to extinct. Newsprint and radio are becoming dying forms of media, and the successful brands will prove to be the ones that are able to adapt through an online market. A study done by the Pew Research Center found that “more people continue to cite the internet than newspapers as their main source of news, reflecting both the growth of the internet, and the gradual decline in newspaper readership (from 34% in 2007 to 31% now)” (Pew, 2011). While television still seems to remain a powerful medium, there is no doubt however that it's viewership is at risk of more and more decline as companies like Netflix and Hulu become more dominant (Goodman, 2013). Websites like Netflix and Hulu are changing the way people watch their favorite shows and movies. Now people are no longer limited to their television or even their computer screen, with applications on multiple devices consumers can access media through their mobile phones, tablets, gaming console, and multiple other devices from virtually anywhere. The benefits of these sites, in many ways can even prove to outweigh those of cable television. For considerably...
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...27, 2009 WILLY SHIH STEPHEN KAUFMAN DAVID SPINOLA Netflix Late one afternoon in January 2007, Reed Hastings had just concluded a meeting with his senior management team in the King Kong board room at Netflix’s corporate headquarters in Los Gatos, California. Hastings, the founder and CEO of the company, which pioneered online DVD rentals, was preparing to unveil Netflix’s highly anticipated entrance into the online video market. Many industry observers believed that the ability of customers to order movies through their computers for instant viewing, commonly referred to as video-on-demand (VOD), would quickly impact the large user base for Netflix’s core business. Hastings looked across the third floor of the office building and the conference rooms named for some of his staff’s favorite films. A love of movies clearly ran deep among Netflix employees, and he was confident that one way or another, his team would maintain the company’s position as a leader in the home video market. But, as he reflected upon the years of investment and discussions surrounding the new feature that Netflix would be offering its customers, he could not help but think of the merits of the paths not chosen. As the management team filed out of the board room around him, Hastings returned his thoughts to the present. While he believed that the DVD rental market would remain healthy for years into the future, he knew that this announcement would impact not just the market’s perception of his company...
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...RECORDS THIS HOLIDAY SEASON Wide Assortment of Plasma Models from Major Brands Supports Consumer Demand for Ultimate Home Theater Experience New York '' December 13, 2006 '' Industry reports that sales of Plasma television sets are soaring this holiday season affirm that consumers are now seeing at retail the clear advantages of benefits of Plasma for their big screen home entertainment center, according to the Plasma Display Coalition. On Black Friday alone, the NPD Group reports that Plasma experienced a 140 percent increase in unit sales, compared with last year. “Consumers are embracing Plasma in record numbers because they love the life- like picture that a big-screen Plasma HDTV delivers,” said Jim Palumbo, president of the Plasma Display Coalition. “It is evident that the outstanding picture quality, very high contrast and black levels, full range of color reproduction, and wide viewing angle that Plasma offers are resonating with people who are shopping for a new high-definition TV. For consumers considering a television above 40-inches, Plasma is the clear choice for the home entertainment center,” Palumbo added. Inundated with so many HDTV options at retail, consumers are arming themselves with information before heading out to shop. “They know that if they are looking to create the ultimate home theater experience to enjoy movies and sports, then Plasma is the TV of choice,” said Palumbo. In the store, consumers are finding better-trained sales...
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...Cox Cable vs. Direct TV Anyone who has turned on a television in the past few years has probably seen one of the many satellite vs. digital cable commercials. With the amount of half-truths and fine print in all of the advertisement, who can you truly trust and how can future subscribers filter this information? Two of the major providers in the local area are Cox Communications and Direct TV, a cable and satellite company, respectively. Analyzing hidden costs, joining benefits, and through subscribers’ first hand experiences, we can conclude that cable has the advantage. Direct TV is inferior both in price and quality to Cox Communication’s cable access. Watching a satellite picture and a digital cable picture side by side, it would be difficult to tell them apart as they both offer excellent picture and sound quality. With that said, there are even more common problems, lies, and bashings that it has become hard to pick out the truth when deciding between digital cable and satellite. It is not fair to say only one raise prices because, honestly, they both do and will continue to do so. Therefore, to compare prices and quality, we must compare packages as similar as possible. Cox Communications is a relatively large company with a monopoly in many of the areas it services. If someone is unhappy about the service Cox provides, they are usually only left with one of the satellite providers. Something that is not often expressed by this provider is that its prices...
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... WILLY SHIH STEPHEN KAUFMAN DAVID SPINOLA Netflix Late one afternoon in January 2007, Reed Hastings had just concluded a meeting with his senior management team in the King Kong board room at Netflix’s corporate headquarters in Los Gatos, California. Hastings, the founder and CEO of the company, which pioneered online DVD rentals, was preparing to unveil Netflix’s highly anticipated entrance into the online video market. Many industry observers believed that the ability of customers to order movies through their computers for instant viewing, commonly referred to as video-on-demand (VOD), would quickly impact the large user base for Netflix’s core business. Hastings looked across the third floor of the office building and the conference rooms named for some of his staff’s favorite films. A love of movies clearly ran deep among Netflix employees, and he was confident that one way or another, his team would maintain the company’s position as a leader in the home video market. But, as he reflected upon the years of investment and discussions surrounding the new feature that Netflix would be offering its customers, he could not help but think of the merits of the paths not chosen. As the management team filed out of the board room around him, Hastings returned his thoughts to the present. While he believed that the DVD rental market would remain healthy for years into the future, he knew that this announcement would impact not just the market’s perception of...
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...cases started appearing, stories and music were used to overcome and surpass dark times in cultures throughout the world. In more recent historical examples, during the great depression, the largest break through for the entertainment industry began to show by way of movies, musicals, radio and early television. Movies really began to dawn as a way to escape the realities of everyday life and live vicariously in a world of wonder and enchantment, or love and drama, for those who had more serious worries in the real world. With the progression of technology, movies have become a literal escape, with millions of followers across the globe. The movie industry has made such dramatic leaps in technology that the demand for movies and theaters has grown largely over the past 20 years. At Regal Cinemas, being one of the largest franchises across the globe, business has been remarkable. “Regal Entertainment Group (NYSE: RGC) operates the largest and most geographically diverse theatre circuit in the United States, consisting of 6,862 screens in 538 theatres in 38 states and the District of Columbia as of February 21, 2013, with over 211 million attendees for the fiscal year ended December 29, 2011 ("fiscal 2012")” ("Reg Movies", 2013). Our geographically diverse circuit includes theatres in 43 of the top 50 U.S. designated market areas. We operate multi-screen theatres and have an average of 12.6 screens per location, which is well above the North American motion picture exhibition industry...
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...VHS video rental stores that emerged in the late seventies and early eighties. The immediate download of videos without having to drive to a brick and mortar building to return the video without incurring late fees is a thing of the past. In 1977 George Atkinson opened the first video rental store in Los Angeles offering videos for rent at $10 a day with a $50 or $100 membership to raise capital[1]. Since that first home theater store George opened, there have been a plethora of mom and pop video rental stores that sprouted up. As video renting became more popular due to the availability of the VHS recorder and the DVD player, larger movie rental chains entered the market with better buying power and lower prices. These larger chains were able to offer rental movies at lower prices with a larger selection[2]. The technology revolution has changed the landscape of video renting. Using Porter’s Five Forces model, entrance into the video rental business will be examined. Technologies used to stream movies, download full length movies, renting movies from store front, and renting from kiosks are the available avenues for the budding entrepreneur. With new TV commercials glamorizing owning movie rental kiosks, Porter’s model will be used to examine the attractiveness of the kiosk movie rental business. Buying Power Buying power for the video rental market is quite high in general. Buyers have many options when renting videos. These buyers have the choice of downloading...
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...Home Entertainment: Cable TV vs. Internet Streaming Service Miguel A. Resendiz Campbell University Home Entertainment: Cable TV vs. Internet Streaming In my household we are a family of four which includes my wife, my teenage brother, my daughter and me. When it comes to entertainment, we are very dependent on television. We have some shows that we enjoy as a family and because of the age difference and different interest we also have shows that we enjoy watching independently. The necessity of having a home entertainment that is low priced and adaptable to the needs of the family leads to analyze the decision whether to continue with cable television or switch to internet streaming. Home entertainment in America is constantly evolving side by side with technology. The Cable television industry has been dominating home entertainment market for many years but a new industry is now in the challenge, the new competitor is Internet Streaming Service and is also rising with technology. In his book, On-Demand Culture: Digital Delivery and the Future of Movies, Dr. Tyron explains, “Digital delivery not only affects the economic models of the movie industry but also promotes an on-demand culture, in which the practices of movie-going and the perceptions of media culture are transformed. Movie viewers are now re-imagined as individualized and mobile, able to watch practically anywhere or anytime they wish, while having access to aspects of film culture—such as film festivals...
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...movie well past its due date. Hastings’ initial investment of $ 2.5 million was to be used as start up cash for Netflix. The Netflix website was launched in April of 1998, employing a mere 30 employees and offering a limited selection of 925 movies available for rent via an online pay-per-rental model costing $4 per rental plus $2 shipping and late fees applied. In September of 1999 the month subscription concept was introduced, thereby eliminating the pay-per-rental model in early 2000. Netflix built a reputation on their business model of flat-free unlimited rentals without due dates, late fees, shipping and handling or per title rental fees. Netflix had their initial public offering (IPO) on May 29, 2002 selling over 5 million shares of stock at $15 a share and in June of the same year Netflix sold an additional 825,000 shares of stock at the same price. By 2005 Netflix had grown substantially, they were now offering over 35,000 title films and they were shipping a million DVD’s a day. In 2007 after delivering its billionth DVD Netflix began moving away from the business model of mailing DVDs and introduced video-on-demand via the internet. In September of 2011 Netflix announced that they would be re-structuring its DVD home media rental service leading to the loss of nearly a million subscribers. Things began picking back up for Netflix shortly after the initial announcement and by January 2012 they had gained over 610,000 subscribers. In early 2013 Netflix announced...
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