Read the Case Study and answer the following questions: • What changes in the external environment put companies in the difficult position in this industry? Support your answer by conducting PESTEL and Five-Forces Analyses. • How could a company operating in this industry react to the identified challenges? • How does the structure of the industry affects profits? The Movie Exhibition Industry 2013 IT IS APT that 2012’s top-grossing film was The Avengers, because movie studios and exhibitors sought to avenge a dismal prior year at the box office. Domestic box office receipts climbed 6 percent from 2011 to a record—setting $10.8 billion in 2012.‘ Three films—The Avengers, The Dark Knight Rises, and Skyfall—grossed more than $1 …show more content…
That same year, Paramount’s Thor grossed $449 million ($181 million domestically, $268 million internationally) giving the green light to a sequel. Studios focus on 14-24 year-olds, consistently the largest audience for movies. At just 15 percent of the U.S. population, this group purchases 21 percent of all tickets. More narrowly, 10 percent of the population are “frequent” moviegoers who attend more than one movie per month and are responsible for half of all ticket sales. Studios target this audience with PG and PG-13 fare, including 19 of 2012‘s top 25 releases. However, domestic demographic trends are unfavorable. While the U.S. population will increase 42 percent by 2050, this core audience will increase just 35 percent (19 million) or 475 per existing screen (see Exhibit 6). The risks for studios are significant as production costs are considerable (see Exhibit 1). Studios invested $1.6 billion for the 10 films that ranked among 2012's highest grossing ($165 million per film). Costs have increased faster than inflation. In 1980, the production budget for the highest grossing films averaged just $11 million. In the 1990s, films turned to special effects and costs reached $102 million (up 827 percent). Today, special effects alone can top $100 million for a major production. These investments are
I played the game on my Xbox 360 console. To capture the experience of the Wild West, Rockstar consulted some historical experts in the field, along with channelling a lot of time and money into the graphics of the game. According to a New York Times online article, Rockstar spent between 80-100 million dollars on developing the game (Schiesel 2010). I mention this statistic because this comes to show the new era of devotion Rockstar brought to video game production.
The film was to be financed by the production company RKO/ Mercury. A major problem arouse with the budget before shooting began. Because of the shrinking international film market, RKO had set a maximum budget in Welles’ contract of $600,000 for The Magnificent Ambersons (Higham213). Also, according to the arrangement that RKO had made with its bank, no film from the studio was ever to exceed $750,000. A pre-budget estimate of Ambersons came close to one million dollars. Pared down to more details in its final form just before shooting, the film looked as if it would still cost in excess of $850,000. Permission to proceed with production was eventually granted, but with strict rules to Welles to bring the cost down to under the $750,000 figure (Higham 214).
The majority of Disney films are rated U in the United Kingdom (G under MPAA ratings), Disney also tries to aim for the older audiences, with movie like Pirates
I love rated-R movies because they are actually interesting and keep me in the edge of my seat. If this movie wasn't as blunt as it is I probably wouldn’t like it. Usually I would recommend R movies to 10 and up, but I saw it before when I was younger. I had no idea what was going on, and I didn’t understand the message it was sending. So I would probably recommend it to 14 and up, for some children won’t see the message. MPAA rated Training Day rated-R, for it’s brutal violence, pervasive language, drug content, and brief nudity. Overall this is a entertaining movie that doesn’t disappoint. 9/11 would watch
They both made $363 million for one film. At first, Twenty Century Fox used to keep 60% of the earnings. The world was impacted deeply because of Georges movies.
As the average summer blockbuster budgets at two hundred and
*10 Cloverfield Lane’’ is another milestone in her career. Made on a budget of US$ 15 million, the movie has grossed US$ 110.2 million.
risen 20% -- an average of 2% a year -- over the past 10 years.
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 movies are both low budget because not much money was spent to make the movie average price was $30,000 - $40,000. The movies were filmed with handheld cameras or using a tripod. There was also just the actors just in the movie with no extras and it was the actors filming the movie has it happened and there was not much editing needed.
The movies are so expensive because there are so many costs that go in to a budget for a film. Typically, the highest costs in films are for the cast and the industry has gotten creative to finding ways to assist instead of paying a fee for an actor or producer upfront, to include it in the contract as a percentage of the profits goes to them. Some examples of the costs of a movie are: Story, director, producer, cinematography, cast and etc. The studio system will use a general manager to assist with budget, while the independent system uses a producer. The marketing and distribution are a very important stage in the post-production phase.
Movies Data 1::Toy Story (1995)::Animation|Children's|Comedy 2::Jumanji (1995)::Adventure|Children's|Fantasy 3::Grumpier Old Men (1995)::Comedy|Romance User Data 1::F::1::10::48067 2::M::56::16::70072 3::M::25::15::55117 Ratings Data 1::1193::5::978300760 1::661::3::978302109 1::914::3::978301968 2::1357::5::978298709 2::3068::4::978299000 2::1537::4::978299620 3::3421::4::978298147 3::1641::2::978298430 3::648::3::978297867 Figure 6. Sample Data [14] The data [14] is taken from University of Minnesota.
I like the point that Whitney made when it comes to men and women and the budgets for their films. Hollywood studios, at this point, have made it their goal to see who can chuck out the biggest blockbuster movies or who can have the best movie franchiases to date. The bigger the budget, the better the film seems to be the mindset of studios. Having these larger than life budgets are only that way to appease its audiences with the use of CGI and special effects have now caught the attention of its audience members who can determine if the movies will be a box office success. Now movies such as Bridesmaid, The Help, and The Heat were movies that were successful at the box office, but did not have any of the distractions of CGI
A defining characteristic of a Steven Spielberg movie is the elaborate costs of making movies, huge box office returns, and many award nominations. For example, Jurassic Park was a special effects-laden adaptation of Michael Crichton dinosaur disaster novel of the same game that cost $70 million to
In order to establish a group that censors televisions and movies, the Motion Picture Producers Association (MPAA) was created. Each rating category has a description of the appropriate age at which to view the film and whether or not a parent’s accompaniment is necessary. The Motion Picture Producers Association assesses a film and gives it a rating of G (general audiences), PG (parental guidance suggested), PG-13 (parents strongly cautioned), R (restricted), or NC-17 (no one under seventeen admitted). As the film industry has been changing over time, so have the ratings. More and more parents are having issues with the ratings that some films are issued. “The man behind the ratings, Jack Valenti, president of the Motion Picture Association of America (MPAA), says the system works just fine. ‘Parents use it and trust it, and that's why it's lasted for almost 35 years,’ Valenti says. ‘It warns parents in advance about what's in a particular movie, but ultimately, parents are responsible for the behavior and conduct of their children — not the ratings system’ (Hansen 273).”