Motion Picture Industry

A motion picture is also known as a movie or a film that has a series of images that are either still or in motion. These images are made by use of cameras where photographic images are recorded, visual effects or creation through animation techniques. The concept of filmmaking has grown into a form of art and hence an industry. This industry is composed of three main stages: studio production, distribution and exhibition. Studio production- This is where content is created and is seen to be the lifeblood of the industry. Studios have increasingly become a part of larger corporation, which are managed as any other profit center whose profitability swings wildly. As investments are large and their success formula is elusive, management in this industry comes as a challenge. One-third of the production costs are typically the marketing expenses. Distribution- this is seen as the broker intermediaries between studios and exhibitors. 

Activities involved in the distribution of the film in artistic completion include logistics, administration and marketing. Distribution involves a selection of films, marketing them to exhibitors and seeking to maximize potential consumers. They are seen to coordinate the manufacture and distribution of the film. They are also involved in the auditing of attendees, handling of collections and other administrative functions. Exhibition- it involves full vertical integration by way of theater ownership which allows greater control over the audiences and the capturing of exhibition profits. They use the ownership to reduce competition by exclusion of showing images produced by rivals. There are three main sources of revenue for exhibition, they are concessions, box office receipts and advertising (Blanchard, 2009).

Summary of macro environment analysis

The analysis is usually conducted with two key aims. One is attempting to identify the main trends that tends to influence how the industry is operating. The second one helps in  identifying whether these key trends can be classified as opportunities or as threats to the industry. Economic factor brings the expectation of a future growth in the industry. The rate at  which the industry is growing is generally seen as impressive. With the rampant growth of  income from the industry  is bound to help many individuals in the improvement of their living standards thus leading to improved economy.  Political factor has been seen to work closely with the film industry. This is mainly seen through its ability to transmit images and ideas which can have positive effects on political relationship with power. This relationship brings about a striking resemblance to what is commonly defined as a multinational enterprise. This involvement will lead to a great expansion of the industry as it gives an opportunity to further developments. There are threats that will affect the industry such as political unrest, however, this are almost not greatly considered in comparison to the opportunities that are availed.

The social-cultural factor is expected to have a very positive effect on growth of the industry. The most important aspect is the fact that various social classes in the society are becoming more involved in the film industry to either highlight their plight or to try to justify their kind of living. Cultural differences and traits of various cultures have become a major trend in the filming industry, where they are made known to all people for a better understanding of the society. Unfortunately, concerns over racism will be mildly experienced thus affecting future growth in the industry as people become more aware of their social-cultural differences. Environmental factor should have a positive effect on filming in the industry. There is much concern about the ever changing climate and weather pattern in the world today. This makes filming very essential in that it helps meet the needs of people in keeping track of the changing weather and making prediction and future expectations which would be necessary in their day to day operations. Here, the need  for communication may cause rise to growth in the industry (Tino, 2005)  Technological factor is the one factor that should bring a vast positive effect on the motion Picture industry. With the improving and growing technology, filming is very much favoured  and its growth cannot just be ignored. There is much innovation and more and more     equipments for filming are developed which improves productivity as well as quality. Technology as a whole has also madethings easier making the people embrace it and look forward to further innovation which favours filming, however, with people knowing much about technology, the need for filming goes down as many can get the much needed information on their own. Overall, with trends falling to positive, balanced and negative, it Becomes clear that the industry has its operations affected by a continuous Changing macro-environment. Despite global economic threats, there is definitely an opportunity for reasonable growth in the industry.

Summary of industry environment analysis

This involves those factors within the industry that affect profitability. The analysis examines all these factors and how they will influence future profitability of the industry. Profitability will be rated as high if all these factors are low. The bargaining power of suppliers are considered in this analysis. If the suppliers of materials, equipment and labor are considerate, there is expectation of growth in the industry. Change of suppliers due to their high bargaining power leads to additional costs of finding new suppliers. Similarly increased bargaining power for labor would cause a negative change in employees level which will mean more additional cost in training new workers. Threats of new entrants who can easily replicate the strategies of existing competitors. These new entrants thus have lower cost compared to the existing. This will make their cost of production lower hence their prices which will attract people unlike for the existing. Intensity of industry rivalry becomes high and so do competition. There may be some reasonable growth for low film firms in future but overall growth is expected to stagnate at a certain level of the lifecycle of the industry (Shirley, 2011).

Other critical factors for the motion picture industry

The fact that theaters have ability to provide audiences with what they cannot get at home is slowly diminishing. A visit to the local cinema place can be a good eye-opener especially for those inside the industry. The viewing area of sets has doubled in inches. Home television has since seen improved audio system that are high definition and inexpensive. Consumers are opting to buy larger sets to achieve better viewing experience. Technology that was greatly associated with the rich and famous is now accessible to homes countrywide.

Future directions and recommendation

High Definition is gaining popularity at a very a alarming rate. HD has enhanced enhances the viewing experience offered by televisions. Cable television and satellite providers have engaged in one-upmanship to provide greatest HD content to subscribers. As the time period between theatrical and DVD release has declined, movie fans do not have to wait long for blockbuster to appear on DVD. Generally, experience of visual and audio at homes have rapidly converged with what is in the theaters. Due to declining profitability, it is unlikely that new film companies will be attracted into the industry. Characterized by many competitors and low profitability, there is a need for existing competitor to consider options of mergers which will help in enhancing industry profitability in the medium term (Shirley, 2011).

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Industry Environment Analysis