The major strength of the studios is that they are now being managed by large corporations and manage as profit center to increase their incomes and retained earnings. Weaknesses The main weakness of the Studio production is the cost of bringing films into the market. The average cost of releasing a film is more than $100 million. This cost in producing and releasing the films into the market has dramatically gone up the last five years around 25%.
Exhibition Cinemas Strengths: During the global financial crisis in 2008, when the gas prices was going up, stock market decline, and there were significant layoffs, there wasn’t any more one could for $10 or for families under $30. Park amusements cost was an average of $141, and pro-football $261. There was so much going on during that time that the theater was an escape of reality and a form of entertainment relaxation. When in crisis scenarios and people feel they want to come out of their houses one of their first options is going to be the cinemas.
Weaknesses: The number of theaters decreased more than 15 percent between 2000 and 2007. The competition between theaters often comes down to the total distance away from home, convenience of parking, and if the location is close to restaurants. Logistics is a weakness, because many of the customers will decide between one or the other base on just their logistics, since now a days most of the theaters show the same movies, and show them at a variety of times.
Another weakness in competing in the theater industry is that no one really can be innovative because the competition will adopt your methods and even match ticket prices. The prices in concession stands are very high compare to the real cost of the in other stores. The prices in the concessions are not high and made up by the managers but rather by market researchers using profit maximization. Some of the weaknesses that people complain about is the long and boring advertisements they show before the start of the film, people talking on cell phones, and the services provided y workers is relatively bad.
Opportunities: Although the number of theaters decreased, the number of screens increased. The number of megaplexes increased at a nearly 10 percent, which means that theaters now consist of having more than 16 screens per theater. By having an increase of screen, the customers now have more variety of movie films to pick and choose a more convenient time of attending. New technologies such as 3D movies have increased the desire of consumers to experience their favorite films in a whole different way.
This new type of technology innovation has captured the attention of audiences, making the theater an exciting experience that they are not able to get at their home or elsewhere. . Some of the opportunities the theaters offer are; their giant theater screen, the opportunity to be out of the house, not having to wait to see a particular movie on home video, the experience of watching the movie in a theatrical sound system, and using the theater as an option for dating. Threats:
Many analysts are arguing that the industry has overbuilt in theaters facilities carrying too many screens in order to make the business profitable. Another of the threats of the industry is the ownership of theaters; there are now four dominant exhibitors around the US controlling 42% of the total screens. Some of the threats the theaters industry face is the prices of large television have drastically drop over in the last few years, creating high definition experience available for everyone. With the release of the Blu-ray DVD people at some point may prefer to watch a movie from the comfort at home.
Cable and satellite television now offers many of their channels in High Definition reducing the probability of wanting to go to the theater to watch a movie. One of the biggest innovative threats that has just released over the last years, is Netflix. Netflix has over 100,000 titles influencing and reducing the probability of deciding on going to the movies. DVD releases after being release in the theater now only take a record braking 23 weeks to be able to come out for the public in DVD form.
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