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A Horror Show at the Cinemaplex - Essay Example

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Summary
The entertainment industry, especially the movie or film making business, underwent a few major changes over the past recent years…
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A Horror Show at the Cinemaplex
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"A Horror Show at the Cinemaplex"

Download file to see previous pages This brief paper is a case study of this entertainment sector that tackles major issues facing them. The word horror in the title of this case pertains to the financial bloodbath in this industry. Discussion The format of this paper follows a question-and-answer format and there are five major questions to be discussed in the case study pertaining to the film industry and its major players. 1. Perform a comprehensive analysis of the five competitive forces. Discuss what level of competition can be expected amongst industry rivals. A major determinant for industry profitability is the ability to provide content which are the films produced by the major movie studios. These studios dictate and control the release and the timing of new film releases, and with just a few major studios left today (without thinking of the independent film producers), supplier power is highly concentrated in these movie studios. A film distributor or a film exhibitor is at the mercy of these studios which can dictate their terms. The threat of new entrants is much less, taking into account the high cost of producing a decent movie which ranges in the US$100 million and above; therefore, the barriers to entry is a very prohibitive barrier indeed (Gove and Matherne, 2009, p. 218) with a third of the costs going to marketing and distribution expenses. The only threat are the few independents who can make a few films which may not do well at the box office. Costs of putting up a theater is going up.
The availability of alternative modes of watching movies such as cable television and a DVD player gives the buyers (moviegoers) considerable discretion with regards to movies. This means people need not go to theaters purposely to watch a movie since they can do these at the comforts of their homes without all the aggravations and accompanying hassles. Buyer power is not so concentrated but if moviegoers decide not to watch a movie, then nobody can force them. Two key considerations are the core demographic group (12-24 year olds) is a very fickle group and the other key factor is that there is no magic formula when making movies as box office hit. Buyer power is also shown by flat ticket sales, with revenue increases due to higher ticket price. It is the threat of substitutes that had caused some movie exhibitors into bankruptcy. A slew of new technologies such as the DVD player, cable television and now, the Internet using a new mode of distribution which is movie streaming, are the main reasons for the sharp decline in movie attendance. Rental firm Netflix (and also Blockbuster before) has a considerable archive of classic and new films in addition to television shows (re-runs), sports and musicales. Better home viewing technologies like cheaper and larger television sets with flat screen has now made watching a movie at home a good approximation of the so-called “movie experience.” There is no more need to drive to a theater, find a parking space, buy snacks and then go back home. The degree of rivalry within this industry is bound to increase some more. With fewer people going to theaters because of all the hassles (long drives, sticky floors, projected pictures not in focus, noisy people chattering away in the next few rows and cellphone interruptions, etc.) and the core demograp ...Download file to see next pagesRead More
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