IMAX Case Study
Malika Drumgoole
Frank Thomas
Rondell Rush
Donte Rucker
Amadou Berete
Deshantelle Rogers
Seminar: Issues in Management
Instructor: Dr. Yao
October 14, 2011
Abstract IMAX is in a dilemma as to whether it should be sold to other giants such as Sony, Disney or Time-Warner. The general environment of the movie industry is discussed. Porter’s five forces model is used to help identify the opportunities and threats for IMAX. An explanation of how the resources, capabilities, and core competencies support both business and corporate strategies follow the model. A reason for the company changing its business and corporate strategies and if it can survive as a niche player that only produces large
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There have been efforts to organize and lobby political actions to do away with these concerns in the industry. If there is success to doing this, then there might be a new law to regulate the industry. Movie producers and movie theaters would suffer in the long run. The article talks about the changes in the movie production and exhibition that has happened since the Studio Era. The U.S. Supreme Court’s 1948 antitrust ruling forced Hollywood film producers to sell theater chains that they owned. The antitrust rule that was forced set a standard stating that film producers could not own theater chains. IMAX doesn’t violate this, because they are in the production and distribution industries. Piracy is also a major part of the political segment. The article states that “the US film industry lost more than $3 billion annually because of piracy” (Nair, 2009, p.9). Ever since the 1982 amendment of The Copyright Act of 1976, piracy has been taken very seriously. Violating this law can be considered a serious felon, because violators can be subject to federal criminal charges and civil lawsuits.
Economic Factors
The case talks about how the United States has the highest per capita rate for people who attend the movies. The case also states that the owners of the movie theaters use commercials before they finally show the movie in order to try and generate more
In Porter's 5 forces model, the five underlying forces for an industry's structural attractiveness are the barriers to entry for new competitors, the intensity of rivalry among existing competitors, the threat of substitute products or services, the bargaining power of suppliers, and the bargaining power of buyers. In analyzing Blockbuster's business model and current position, it is evident that it faces issues in all five areas.
2. What forces are driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
By mid 2002, the company had 349 screens in 31 locations and had generated a reported compound annual rate of return well in excess of 20% for its initial investors. 2-for-1 Wednesdays In the spring of 2001, Cinemex’s competitors began offering a special deal: any customer who purchased a ticket to see a film on a Wednesday (traditionally a slow day at the box office) would receive a second ticket at no additional charge. This ploy cut into Cinemex’s attendance figures (Exhibit 3). On five of the first six Wednesdays after the deal’s introduction, Cinemex’s attendance was less than in the same week during the previous year. Heyman faced a difficult decision. Should he offer his own two-for-one deal on Wednesdays? This might raise attendance, but since many tickets would be given away for free, it might also reduce ticket revenues. Or should he do nothing, hoping that the appeal of Cinemex’s customer service package would eventually bring customers back? Heyman’s first step was to review his attendance data. What made this difficult was that week-to-week attendance was highly variable, depending on (among other things) the time of year, the popularity of current films, local weather conditions, and the timing of holidays. The question was how to disentangle the impact of these factors from those of Wednesdays at Cinemex Page 2
4. Din, Yangon. (2007). Titled: The dynamics of the movie industry: Theatrical Exhibitions & DVD rentals. The University of Wisconsin.
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
There are some other issues like Piracy which prevail in the entertainment industry which estimated cost the US economy $20 billion per year. Piracy prevents the people in this industry to not get their full royalty for their intellectual talents.
Concession sales and ticket sales are the two biggest sources of revenue for a movie theater but the exhibitors has limited control over both revenues and profits because those two are important aspects. Attendance allows for profitable sales of concessions and advertisements, but there are significant caps on the volume of concession sales per person, and selling price seem to have reached a maximum. Both continue to increase in cost to the consumers and may have reached a price point that is starting to drive consumers away from going to see a movie.
company. The technology used to film and edit programming impacts the operations and distribution of the company’s original content. Within procurement’s 33% share of revenues, technology makes up the largest share as firms in this industry must invest to compete. The linkages here are vertical; without the newest technologies, it takes longer to produce and edit new series to the standard customers expect. If Disney’s technologies fail to deliver visually high-quality content in a timely manner, consumers will watch elsewhere.
2. What forces are driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
4. The bargaining power of buyers: The outlook for the target market isn’t favorable for the movie industry because it will not be growing as fast as the overall population. Buyer power is a strong force because of the target market and several other factors including: the undifferentiated product offered, switching to an alternative is simple and low cost, and customers can stay home and watch movies. The consumers are also complaining about concession and ticket costs, along with the advertisements before the film is shown.
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
A market analysis was first taken out on Reading Courtenay; one cinema under the Reading brand name situated in Wellington. From this analysis, it became apparent that the Internet was one of the company’s largest competitors. Upon further research, the problem revealed to be at such a large level, one single cinema would not be able to control it alone. The view for the marketing plan had to be changed and instead would now support a company-wide view.
Released in 1988 by director Giuseppe Tomatore, “Cinema Paradiso” follows the life of a young boy in Italy who dreams of being a filmmaker. The road the boy, who eventually becomes a famous Italian film director named Salvatore Di Vita, takes to reach his goal is difficult and includes many sacrifices and trade-offs. Today, the film is widely regarded as one of the most popular foreign films ever to be released in the United States. Given that foreign films are fairly common in America, it is fair to consider why “Cinema Paradiso” received such critical acclaim, as well as relative mainstream popularity. “Cinema Paradiso” received critical and popular praise because the film includes several timeless themes
Direct Cinema The term 'direct cinema' was coined by American director Albert Maysles, to describe the style of documentary that he and his contemporaries were making in the 1960s as a result of a lightweight, portable 16mm camera and high quality lightweight audio recorders becoming available. The introduction of these, together with film-stock which was sensitive enough to give a good quality close-up monochrome picture under most lighting conditions (Including hand-held lights) led to a revolution in Documentary filmmaking, allowing film crews to be much more flexible. Gone were the days of bulky, virtually immobile 35mm cameras; now manufacturers improved their 16mm stock and accepted it
The demographics of the population that like animation encompasses baby boomers, adults and large numbers of children alike, leads to an improvement in the revenue and exposure for the animation industry (See Exhibit 1 for Percentage of total births). Therefore the social factors are also favorable.