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Motion Picture & Video Production

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Lauren Sarles

on 29 March 2013

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Transcript of Motion Picture & Video Production

Shane Dempsey, Leah Kramer, Lauren Sarles, Louis Shikowsky, and Reign Victorian Motion Picture & Video Production Industry Environmental Scan Motion Picture & Video Production History 5 Forces Pricing similar across the industry
tickets, DVDs similarly priced

Rely on differentiation
Subsidiaries and their specialties
Specific franchises
Batman, Avatar, Star Wars Competitive Positions How profitable a company becomes is dependent upon:

1. The value that customers place on the company's products.

2. The price of the product that the company charges

3. The cost of making the product Competitive Advantage Related Industries Degree of Rivalry Supplier Power Buyer Power Threat of New Entrants Threat of Substitution Walt Disney Sony Corporation Time Warner NBC Universal The Walt Disney Company NBCUniversal Time Warner First to strike deals with

Realize new forms of revenue

Independent film News Corporation Gain share over Pixar
Ice Age, Robots, Rio, etc.

Online streaming Viacom Inc. "connecting kids and families through movies"

"taking the M in MTV and extending it to movies"

"an authentic, unapologetic viewpoint of the black experience" Films that fall between commercial Columbia Pictures and Sony Picture classics
Horror, thriller, action, and urban

CG animation Viacom Inc. News Corporation Questions? Disney helps funds DreamWorks pictures and in return are aware of the release dates
The annual growth rate for the past five years is 3.2% due to their acquisition of other firms, and investments they have made. Owned by Comcast Company (51%) and General Electric (49%).

NBCU was created in 2004 by combining NBC with Universal.

In the past five years, NBCU’s growth rate has been 13% due to their merger with Comcast and successful films.

Revenues increased substantially after the merger with Comcast in 2011 along with some of their successful movies like Bridesmaids, and Fast Five Time Warner begun co-financing arrangements with other production companies

Time Warner distributes film in over than 125 countries

Revenues have been decreasing until 2012 at an annual rate of 2%. However with the releases of The Dark Knight Rises, and Blind Side boosted revenue by 1.2%.

TWX is now making deals with Netflix, and Redbox to regain market share, and increase profits. Begins marketing films 3-6 months before movie releases

NWS releases roughly 20 movies a year.

They also use in-house distribution and marketing to cut costs.

For the past five years, News Corp has experienced an annual growth rate of 6.5%.

Much of their profits come from Avatar Paramount Pictures is a film production subsidiary of Viacom.

The branches include DreamWorks, Paramount Vantage (foreign languages/documentary titles), and Paramount Classics (independent films). The 2012 Revenue is expected to reach $3.6 billion dollars which is a 10.6% decrease from 2011. The decrease is largely due to the production of unpopular films; Madagascar 3, and The Dictator. In 2005, Sony became a co-owner of MGM with Comcast and other affiliates for $5 billion.

In 2007, they had to sell their shares due to company losses. In the past five years there has been an annual increase of 2.1%

Sony focused on distribution on films, not quality. Released 29 movies in 2011.

Sony recently just had to layoff 200 employees Telecommunications Equipment Manufacturing Industry Agents and Managers Music Production and Distribution
(Shane) Book Publishers 51113 The Beginning of
“The Golden Age” 1910’s & 1920's  The Studio System The “BIG 8” Studio’s of
the Golden Age: Motion Picture Production Code
& Screen Actors Guild End of the Studio System (Post WWII 1945+) Emergence of TV Post WWII (1945) End of the Golden Age Change in Power & Culture
Technological Improvements
TV: News & Politics
Cable/ Satellite TV Post Golden Age Major publishers: Pearson, Reed Elsvier, Thomson Reuters, Wolters Kluwer, and Hachette Livre

The risk of entry is very high within this industry. The few existing companies are very established, and have loyal customers.

Rivalry among competitors is very high 70's & 80's 90's and Today From 1975 through 1984, as majors focused on developing the next big blockbuster, their collective yearly release average fell to 81 films during Industry Linkages Columbia Pictures:
Independent 1918-1982 as CBC Film Sales
Purchased by Coca-Cola 1982-1987
Independent as Columbia Tri-Star 1987-89
Purchased by Sony 1980-present Major Players:
Schubert Organization -- 6.3%
Concentration in industry is low

Overall, the industry is in decline

TV, movies, sports
Available leisure time

Disposable income increasing BIG 5
Warner Bros
Fox Film Corp
Little 3
Universal Studios
Columbia Pictures
United Artists Standardized the way
movies were produced Pioneers of Movie Production Universal
Fox Film Corp.
MGM Industry moral censorship guidelines that governed the production of most United States motion pictures released by major studios from 1930 to 1968 Not enforced until 1934 Sexual innuendo, profanity, illegal drug use, promiscuity, prostitution, infidelity, abortion, intense violence and homosexuality were previously allowed in films. 1948 Supreme Court Decision Block Booking

Blind-Buying Competition from Television ABC
NBC Major Broadcasting
Networks Movie attendance hit an all-time low in 1971.
Saturation Booking
Fall of United Artists, Rise of Walt Disney
Change in Major Studios The six primary studio subsidiaries alone put out a total of 124 films during 2006. Screen Actors Guild introduced in 1933 Warner Bros.
Independent 1923-29
Independent as Warner Bros. First National 1929-1967
Warner Bros. Seven Arts, 1967-1969 merged with Seven Arts
Kinney National Company, 1969-1972 purchased by Kinney
Warner Communications, 1972-1989 Kinney changes name
Time Warner, 1989-present merged with Time Inc. AOL Time Warner Paramount Pictures
Independent as Famous Players-Lasky, 1916-1921
Independent, 1922-1966 changed name to Paramount
Gulf+Western Industries, 1966-1989 purchased by Gulf+Western
Paramount Communications, 1989-1994 (name change)
Viacom, 1994-2005 (Viacom purchases
National Amusements/Viacom, 2006-present 20th Century-Fox
Independent 1935-85
Purchased by News Corporation 1985- present NAICS: 3342 Major companies include Apple, Cisco Systems, Motorola Solutions, and QUALCOMM
As well as Ericsson (Sweden), Huawei (China), Nokia (Finland), and Samsung (South Korea)
The industry is highly concentrated: the 50 largest companies generate about 80 percent of revenue.
Global spending on telecommunications equipment is about $340 billion
Key growth drivers are technology innovation and spending by businesses and consumers. Composition of Revenue by Film Categories Live Performance Theater Sold
Refocus away from independent movies

Acquired: Sony Corporation Broadcasting
NBC News

Foreign Films
Cult Classics

Gaming channel - Determined by the number and capability of your competitors
- The more competitors that offer equally attractive products and services, the less power you possess in your industry.
- Suppliers and buyers look for the best and most cost efficient deal.
- If you provide a unique service and no-one else can do what you do, then you possess strength and provide direction in the market. - Assessing how easy it is for suppliers to drive up prices
- Driven by the number of suppliers, uniqueness product or service, their strength and control over you and switching costs
- The fewer suppliers, the more dependent you are on suppliers, the more powerful your suppliers become - How easy it is for buyers to drive prices down
- Driven by the number of buyers, importance of each buyer to your business, switching costs
- Few and powerful buyers often dictate the terms
- The bargaining power of buyers is high in the service and entertainment industry - The ability of people to enter your market
- Low costs in time or money
- Few economies of scale in place
- Low protection for your key technologies
- New competitors can quickly enter your market and weaken your position.
- Strong barriers to entry preserve a favorable position - Affected by the ability of your customers to find a different way of doing what you do
- People may substitute by doing the service manually or by outsourcing
- If substitution is easy and substitution is viable, then this weakens your power. - Comprised of establishments primarily engaged in representing and managing creative and performing artists, sports figures, entertainers, and other public figures
- The most successful had national, if not international, name recognition
- Casting for a motion picture is usually the result of interaction between the casting director and casting consultants or services
- Late 1990s, the key player in the casting service business was the Casting Society of America
- A development unpopular among actors was a noted improvement of digital technology which had reached a point where the implementation of virtual actors in major motion pictures was possible (at least for bystanders) Major players
Market Share
Shifts in Consumption
Opportunities Major players
Market Share
Shifts in Consumption
Full transcript