Case Study Movie Exhibition Industry Essay

1515 Words Mar 6th, 2012 7 Pages
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
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Conclusion of analysis:
Given the facts of my analysis there aren’t many reasons why a consumer will want to go to a movie theater in the near future. According to moviegoers many of the reasons they go are easily substituted. As technology advances consumer options for receiving content is also going to increase. Why wouldn’t the studios capitalize on a direct approach of business to consumer? Cloud computing is being implemented for data storage among many businesses which will make it even easier for businesses to go directly to the consumers through their various devices.
The movie theaters are also relying heavily on studios for a good product. The suppliers (concessions and movie rentals) are reaping the benefits by taking up to 38% of the profits as shown in Figure 1.
Figure 1

*source: February 2012 report from IBISWorld

Movie theaters have prime real estate to capitalize on and most have excellent sound and viewing capabilities. The floor plans of theaters also make them attractive options for other uses.
Recommendations:
There are alternatives for the use of a movie theater as we know it today. Since most theaters fall in between a miniplex and a megaplex with multiple screens and individual viewing areas, various test alternatives can be conducted without disrupting the current business. My recommendations of some alternatives are:
1. Try going local. Conduct some surveys; see what interests the community in the form

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