American Entertainment Industry Porter's Five Forces

1736 Words Jan 15th, 2011 7 Pages
American Entertainment Industry – Porter’s Five Forces

In order to fully understand the buyer power involved in thee American entertainment industry, a macro environmental perception has to be incorporated to understand its three primary levels that affect one another. But to try and understand how American entertainment industry relates to Oprah, we will focus primarily on viewers of visual media rather than music and other forms of entertainment.

1. Bargaining Power of Buyers

Viewers of the entertainers buyer power with entertainers themselves , high buyer power - In the case pertaining to Oprah’s article, this would fall under the category of TV viewers watching her show. The viewers of TV shows in general, especially day time
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requires a lot of capital so it is not easy for anyone to just open one. Also to be as effective programe host as Oprah requires skills, personality, years of experience, as well as recognition of names among the consumers that years and decades to earn; which is not easy to acquire by new entrants.

- Access to industry distribution channel. ------> LOW Threat of entry.
If launching a new product using the reference of success of the previous product then that opens more distribution channel for the products. People might see O and reminds them to watch the show this week. They be fans of Oprah so they read O and watch the movies or shows. etc.

- Brand loyalty. ------> LOW Threat of entry.
It is pretty obviously that Oprah has a lot of influence on the audience’s thinking and behavior. Such as the cattle price fell to a 10 year low within a week of the show where she swears to not eat hamburger for the rest of her life, resulting in over $12 million loss in USA cattle production.
Also the books selected for her reading club increased substantially in sale (on average by 10 times) and found a place in the bestsellers lists. It is not easy for the new entrants to have so much influence on people’s thinking and behavior as Oprah does.

American Entertainment Industry – Porter’s Five Forces

In order to fully understand the buyer power involved in
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