Cost Variance Analysis In The Motion Picture Industry

1419 Words6 Pages
In this paper, I will discuss the cost and management accounting considerations in the motion picture industry by addressing the following issues: 1. The Value chain of the motion picture industry; 2 The competitive landscape in the motion picture industry using Porter’s five forces analysis; 3 The notion of net profit in the motion picture industry and cost allocation considerations; 4. Key elements to consider when conducting a cost variance analysis for the motion picture industry. The Value chain of the film making process is production, marketing, distribution, marketing, and exhibition. Production has several sub group including development, pre-and post-production alongside production. In development, a project producer takes an original idea from a source and pairs with a writer to develop a script. This is a rather lengthy process as the script is drafted and redrafted to perfection until ready to pitch to potential financial sources, such as banks and investors. Once backed by funding the film goes into pre-production where a carefully designed plan is set forth and managed by the films production crew. Production is when the cameras are rolling, Post production is where the editing and CGI take place, a rather expensive even found more so in sequels and hi tech films. Distribution is the means of where the film will be made available to the public. In today’s market, there are many distributors Rental, DVD, Pay Per View, Television and other media
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