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Movie Exhibition Industry Case Analysis

In: Film and Music

Submitted By narayangovind
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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. Being a medium to low profitable venture, this industry is not a very attractive one to enter unless you are targeting a very niche market. Theater chain iPic is a classic example. They have differentiated themselves from the larger chains, offer a luxurious experience, command higher margins and their target market is small. Profitability of theatres have drastically declined due to two main…...

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