...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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...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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...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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...Case Study Movie Exhibition Industry - Research Papers - Kimsaline 10/9/12 2:01 AM Case Study Movie Exhibition Industry Strategic Analysis of Movie Exhibition Industry By: Kim Saline February 24, 2010 Objective: To provide an analysis and make recommendations to increase 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...
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...Comprehensive Exam Case Study Fall Semester: 2012 / 2013 The Movie Industry in 2008 (Case A & B) MBA Student: Waseem Hasan Ismail Submit to: TAGSB Administration 27 February 2013 Table of Contents Introduction 3 The Movie Industry in 2008 (Case A) 4 PESTEL Analysis – External Environmental 4 Porter’s five Analysis 4 Profitability Model for movie theaters 4 Key strategic issues facing movie theaters 4 Strategic actions that exhibitions might consider 4 The Movie Industry in 2008 (Case B) 4 Outlook for the movie industry improved by 2011 4 Strategic actions might exhibitors take in 2011 and beyond to improve their situation 4 References 4 Introduction The movie industry had benefited from the technology development such as the digital camera and digital screens in the sense of suspense and excitement. However, this technology had become a big challenge to the management in the motion picture industry value chain. This technology encourages the moviegoers to experience watching a movie at house with the same picture’s quality resolution and the sound’s effects as the theaters providing for audiences. The management dilemma is at maximizing their revenue and profit which falls into two difficult components; the uncontrollable and unpredicted revenue and limited profit. Because of the ticket price exposed to competition and each chain is serving different geographic market, thus the ticket price can’t be increased more. Also, the revenue streams...
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...Environment Analysis The motion picture industry value chain consists of three stages: studio production, distribution, and---the primary focus here---exhibition. When analyzing the external environment of the movie exhibition industry, we will look at the competitiveness of existing firms, threat of new entrants, strength of suppliers, strength of buyers, and threat of substitute products or services. Competitors Four companies dominate the industry: Regal, AMC, Cinemark, and Carmike. There is a great deal of competition between these four companies, but it all comes down to how far the theater is from home, convenience of parking, and proximity to restaurants. These factors play an important role on the competitiveness of movie exhibitors because there is not much differentiation between what each theater offers. The prices are relatively stable from one theater to another, generally, the same movies will be showing, and most theaters offer the same concessions and services. Theaters must find a way to differentiate themselves from their competitors with the look and quality of the theater and the quality of technology used. Threat of New Entrants There is not really a threat of new entrants in the movie exhibition industry unless a new entrant targets a niche market that has not been well served. Startup costs are very high and most new entrants cannot compete with the four major competitors that already dominate the industry. There are generally enough existing theaters...
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...Case # 16: The Movie Exhibition Industry 7/14/2013 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...
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...Case 16 Movie Exhibition The strategic issue in the movie exhibition case includes the decline in attendees. The customer base is declining and is hurting the net income of the exhibitions. The most profitable sectors are the concessions and advertising. An increase in the price of ticket sales may drive attendees even further away. If attendees keep decreasing, advertisers will withdraw their purchases and the entities will be left with concessions. The industry as a whole is feeling the effects of declining attendees. The overall fixed costs are out of the control of the operating management. In the exhibition industry the fixed costs are steep. This limits the profitability margins with declining attendees. The strategic issue is how to increase the number of attendees? The exhibitions do not control the types of movies being produced but the movies are the driving force for attendees. The fixed costs are the same at one attendee to several thousand attendees and an effective strategy of how to cover the fixed cost plus profits need to be developed. The recommendation is for each individual exhibition to perform a balanced scorecard. Each entity can look at how well they are continuously improving and creating value, what are their core competencies and operational excellence, how satisfied are their customers, and how they are doing for their shareholders. After identifying which strategies are creating value and which strategies are not...
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...Based on the case “The Movie Exhibition Industry 2013” in the McGraw Hill article, answer the following questions using concepts and frameworks we have discussed in class. Answers should be completed in a short five page write-up using the templates provided below. Short answers / bullets are acceptable; however, you must include some level of detail / information regarding the trends and analysis you are including independent of the bullet points. The hard copy write-up is due by the start of class on February 25th. We will be having a discussion based on this assignment in class. It would be helpful if each group member had a copy of the finished assignment in front of him/her. Please provide a cover page that includes the Assignment name, “Mgmt 478”, Section number (006, 007, 008, 300) and the group members’ names. The cover sheet is the only page that includes this information. Also each page must have a page number. All pages must have a staple. Failure to follow any of these formatting issues will incur a grade penalty. All words must be spelled correctly and all sentences must have correct grammar. 1a) Perform a general environment analysis. What are the relevant trends in the environment that are affecting the movie industry by the 5 segments listed below? Demographic Socio-cultural Economic Technological Political / Legal 1b) What are the biggest opportunities and threats in the industry? (Pick no more than 2...
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...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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...COMPETITION CONCERNS IN FILM INDUSTRY 2013 A RESEARCH PROJECT ON COMPETITION CONCERNS IN FILM INDUSTRY UNDER THE GUIDANCE OF DR. K.D. SINGH DEPUTY DIRECTOR (LAW) COMPETITION COMMISSION OF INDIA BY TULIKA SINGH, VTH YEAR STUDENT OF B.A. L.L.B. (HONS.) AT CHANAKYA NATIONAL LAW UNIVERSITY, PATNA COMPETITION COMMISSION OF INDIA Page 1 DISCLAIMER COMPETITION CONCERNS IN FILM INDUSTRY 2013 This project report has been prepared by the author as an intern under the Internship Programme of the Competition Commission of India for the period of one month from 7th January 2013 to 31st January 2013, for academic purposes only. The views expressed in the report are personal to the intern and do not reflect the views of the Commission or any of its staff or personnel and do not bind the Commission in any manner. This report is the intellectual property of the Competition Commission of India and the same or any part thereof may not be used in any manner whatsoever, without express permission of the Competition Commission of India in writing. COMPETITION COMMISSION OF INDIA Page 2 ACKNOWLEDGEMENT COMPETITION CONCERNS IN FILM INDUSTRY 2013 This research project is undertaken by me as a part of Internship programme of Competition Commission of India. Dr. K. D. Singh, Deputy Director (Law) at CCI guided me through this project. His invaluable inputs and suggestions are deeply acknowledged. Library Staff of CCI also helped me throughout the internship period...
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...position in this industry? Support your answer by conducting PESTEL and Five-Forces Analyses. • How could a company operating in this industry react to the identified challenges? • How does the structure of the industry affects 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 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...
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...Why the decline in cinema exhibition and increase in video streaming A key creative industry in Australia is cinema exhibition and in most recent times is the video streaming industry. Film has come far in Australia from its origins of the first silent film produced in 1906 by the Tait brothers, The story of the Kelly Gang (Australia.gov.au 2015). Cinema in Australia followed the original format of viewing movies in drive ins. The movies of the time followed Ozploitation film genre or as writer/director Quentin Tarantino likes to refer to it as the genre of “Aussiesploitation” (Grindhousedatabase.com 2015) such as Razorback (1984) and Mad Max (1971). This genre was created by the Australian film industry and the only criteria for a film to...
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...the Hollywood Studio System 195 The Studio System’s Golden Age 205 The Transformation of the Studio System 209 The Economics of the Movie Business 215 Popular Movies and Democracy In every generation, a film is made that changes the movie industry. In 1941, that film was Orson Welles’s Citizen Kane. Welles produced, directed, wrote, and starred in the movie at age twenty-five, playing a newspaper magnate from a young man to old age. While the movie was not a commercial success initially (powerful newspaper publisher William Randolph Hearst, whose life was the inspiration for the movie, tried to suppress it), it was critically praised for its acting, story, and directing. Citizen Kane’s dramatic camera angles, striking film noir–style lighting, nonlinear storytelling, montages, and long deep-focus shots were considered technically innovative for the era. Over time, Citizen Kane became revered as a masterpiece, and in 1997 the American Film Institute named it the Greatest American Movie of All Time. “Citizen Kane is more than a great movie; it is a gathering of all the lessons of the emerging era of sound,” film critic Roger Ebert wrote.1 CHAPTER 6 ○ MOVIES 185 (c) Bedford/St. Martin's bedfordstmartins.com 1-457-62096-0 / 978-1-457-62096-6 MOVIES A generation later, the space epic Star Wars (1977) changed the culture of the movie industry. Star Wars, produced, written, and directed by George Lucas, departed from the personal filmmaking of the early 1970s and spawned a...
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...business to some extent. Limitation: * Study is based on secondary data thus only had limited scope. * Dummy used to establish the concept of the study, thus had limitations. Methodology: * The study is based on secondary data. * Most of the facts are assumed on the basis of data received from various secondary sources. BUSINESS OVERVIEW Film Exhibition Industry Film exhibition, which involves the exhibiting of movies in cinemas. The Indian film exhibition sector can be divided into two segments: single and double-screen cinemas and multiplex cinemas, i.e., a cinema complex with three screens or more. Indian media and entertainment industry is one of the fastest growing sectors with a market size of Rs 584 billion in 2008, recording a growth of 12.4 per cent and projected to reach Rs 1052 billion by 2013 India is the highest producer and consumer of filmed entertainment. The cinema exhibition industry in India is growing at 10% per annum driven by multiplexes, which are expanding rapidly in major metropolitan cities as well as second and third tier cities. South Indian cinema industry is pegged at Rs 17.3 billion with the domestic theatrical revenue stream being most dominant, accounting for nearly three-fourth (around Rs 12.6 billion). The four southern states have 50 per cent of the theatres in India and almost 25 per cent (1,200 theatres) of the 5,000 theaters in the south are digital....
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