The Movie Industry Analysis

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which include fees paid to exhibitors, distributions fees, overheads, interset and expenses ( paid usually to studios distributors). These combined costs greatly reduce the revenue sream flowing to the producer and net profit participants. In addition, certain management decisions made in the beginning, whether or not to hire "star" talent as opposed to an unknown can be quite costly, although this sort of decision may guarentee box office success of the movie.

Diversification & Integration-
The ability to exploit a movie in many markets diminishes investment risk and increases earning potential. Diversification and integration into ancillary markets can turn a movie that has lost money theatrically into a video market winner. Unfortunately, if the studio is a small independent it may cost prohibitive to diversify. If the studio is a "major" that is not already diversified, the competition and cost to do so would be significant factor.

Barriers to entry for independents-
The ...

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no longer just ancillary markets to the basic theatrical market but have become basic markets in themselves.

The latest technological frontier for motion picture companies was in direct-access TV through telephone lines.

With the advent of the new computer-based technologies, "cable" markets and direct digital-delivery of motion pictures via satellite and the Internet are expected to increase dramatically over the next five years, creating an accelerated demand for original and re-run motion pictures.

DATA ANALYSIS

What is the competitive environment?
There are thousands of screenplays in development at any given time, however each year only 450 to 500 of these are produced ...

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