Cost Variance Analysis In The Motion Picture Industry

Given our analysis of the motion picture industry, we recommend that Arundel carefully select the major film studios from which they intend to purchase sequel rights. The net present value of hypothetical sequels taken from the available previous years shows not only that the industry is highly volatile, but also that certain production studios are more volatile than others in terms of their recent performance. In addition, some studios are consistently less profitable than others. (See "NPV for Each Production Company" chart in appendix) Since the success of film studios are relatively stable in the short term (see "Rental Shares of Major Film Distributors" table and graph) Because of this stability, it is possible for Arundel to approach more profitable studios with their offer to purchase sequel rights. Out of all the major film studios, only MCA-Universal, Warner Bros., and The Walt Disney Company generate a positive net present value on a per-film basis. However, according to casual inquiries, it is unlikely that any movie studio would enter negotiations with Arundel on a per film price that is less than 1 million. Instead, the film studios seem to

In the digital era of convergent media, the most obvious about the change of cinema is the storage which rely on celluloid that you can touch in the past. Now, however, it is stored as electronic packets of 1s and 0s which is virtual. The changes of the cinema is not only about the film storage, but also the production，post-production, exhibition and distribution which is the main part of the film industry structure. In the era of celluloid, the four steps of movie is relatively independent and has its sequence. In digital movie, whereas, the connection and integration among four parts of industry structure are ever close.

After one has proved the “Chain of Title,” then one can get insurance and distribution, and begin to create the story synopsis. When creating the screenplay, there is a very specific format used for writing a screenplay. Format is regulated by tradition not law; 3 acts, pages 30 and 60 have plot reversals or plot points, 102-120 pages, 12 point font, and finally 3 hole punch, but only use two “brads.” There are many tools, tips and books available to help a person while writing a screenplay. The software Final Draft automatically puts a written screenplay into the correct format. Also, books such as Story by Robert McKee and The Foundations of Screenwriting by Syd Field are wonderful books to read on how to set up the proper screenplay format. Like always, it is a good idea to keep a story file or notebook of all the ideas and stories a person has written. After all that, a person needs to copyright ones work. There are two ways of copyrighting. One way is by using the Common-Law Copyright which means a person mails a copy to ones self via registered or certified mail. The second way is the WGA registration which a free form from WGA. After the copyright, a contract is made based on payment, contingent payment, credit, how many rewrites, and set visits. Next an agent is hired who is managed by the state as well as a manager who is not regulated by the state and a lawyer. A person wants to always hire

My analysis will cover competition from substitutes and the change in buyer behavior and demographics. I will use the five forces model of competition and a SWOT analysis along with other sources of analysis. The information and recommendations that follow will provide you with the insight and building blocks to compete in the movie exhibition industry.

The Canadian entertainment industry that is served by Cineplex has been recording sustained growth since 2011 where a growth of 5 percent was recorded. PwC’s Global Entertainment and Media Outlook for 2014-2018 (PWC, 2014) indicate that the industry is set for a take-off. The industry has a

Motion pictures are a key driver of the market for entertainment products, one of the largest export markets in US. Motion picture industry consists of three stages: studio production, distribution, and exhibition. The studios produce the lifeblood of the industry, the films that are its content. The biggest players at this level are the majors, big studios which integrate production and distribution, as do the slightly smaller mini-majors. The next stage is distribution. Distributors are the intermediaries between the studios and exhibitors. Distribution entails all steps following a film’s artistic completion including marketing, logistics, and administration. Distributors coordinate the manufacture and distribution of

As the structure of the media network division is not traditional in terms of applying the value chain to an organization’s functions, some of the most important components are intangible. When looking at the breakdown of industry costs found in Appendix E, one can see that procurement (33% of revenue), wages (7%), and marketing (4.1%) are key in understanding the industry’s profit structure (IBISWorld).

In this case, a movie industry analyst is asked to evaluate a proposed venture in which a group of partners would purchase the sequel rights to movies produced by the major studios. Your objective is to 1) discuss and evaluate the basic concept; 2) determine the value of the sequel rights on a per-movie basis; 3) evaluate the possible upside and potential drawbacks to the proposed plan. As you will see, the ideas here incorporate elements of capital budgeting coupled with a “real options” analysis.

To provide an analysis and make recommendations to increase revenue in the movie exhibition industry.

The film industry has continuously changed since its inception due to rapid technology advancements. Camera technology has been a key factor that has influenced the growth of filmmaking. The first motion picture in the world was produced in the early 1880s, and the first public screening occurred ten years later. It didn’t take long for the quality of films to improve as new filmmaking equipment emerged. Ever since the first movie was produced, the film industry has been continuously changing in response to emerging filmmaking technology. Introduction of digital photography and digital data storage along with the development of internet significantly influenced the film industry (Barsam, 2015). These technologies contributed

Based on our valuation of the investment, as outlined below in the Analysis portion of the report, we have determined a per-movie-value of $8.9 million when considering purchasing the rights to the entire portfolio of 99 movies analyzed in the sample data. Based on production of 10 sequels, the per-movie-value of the portfolio would be $52.25 million. Our calculations based on the hypothetical portfolio is that Arundel Partners should make this investment as long as the present value of the expected cash flows from the sequel revenues exceeds the cost of production plus the cost of the investment. Depending on what value a studio will accept as payment per sequel, there appears to be significant profitability in the investment.

The film industry has always been somewhat of a dichotomy. Grounded firmly in both the worlds of art and business the balance of artistic expression and commercialization has been an issue throughout the history of filmmaking. The distinction of these two differing goals and the fact that neither has truly won out over the other in the span of the industry's existence, demonstrates a lot of information about the nature of capitalism.

The costs, methods of distribution, and themes of Hollywood and Nollywood films reflect strongly their target audiences; how the target audience affects the production of a film and how the production of a movie is designed to capture a specific

Every so often a movie is released with such tense anticipation and glamorous visual art that the public is drawn to this dramatic rendition of life in the theatre. For even just two hours or so, you are put into a different lifestyle. Action, drama or comedy it may be. We are thrust into a different way of thinking. We are forced to learn the characters thoughts and feelings. The hard work and artistic skill that goes into these magnificent films is not an easy thing to mimic. Out of the thousands of movies released worldwide each year only a handful are truly worthy of the label film art. Most of the great movies are either produced by a multi million dollar

The five forces of competition of the movie rental industry presents little force against a competitor’s market position based on buyer power, supplier power, and new entrant threats. However, threat of substitutes and rivalry among competitors can affect the amount of profits a company will gain and retain.