An in depth analysis of the U.S. movie theater industry and what needs to be done by theater exhibitors to increase theater revenue.

2. 1 Movie Theater
st
Nickelodeon in Pittsburg, Pennsylvania

3. Industry Info.
• Estimated number of theaters in the US:
38,605
• Revenue is up, attendance levels are down.
• In 1946, the average person would attend 28
films every year. Today, that number is 6.

4. Movie Theater Brands

5. Objective
The movie theater industry is currently experiencing a
significant drop in attendance. What can be done to
increase the amount of overall admissions?

6.  General Environmental Analysis
 Industry Analysis
 Competitor Analysis
 Internal Analysis

7. General Environmental Analysis
Technology Demographics
• The digital age • U.S. & Canada
– 65% currently • Gender
– 83% by 2015 – Even split
• 3-D equipped • Race/ethnicity
– 12, 620 screens = 50% – 63% Caucasian
– $580 million in additional – 19% Hispanic
revenue – 12% African American
• The IMAX • Age
– Different kind of experience – 25-39 (23%)
– 244 in the U.S. – 40-49 (15%)
– 583 globally – 2-11 (15%)

8. General Environmental Analysis
Economic Political/Legal
• Increasing ticket prices • Online piracy
– Currently $8.00 - NATO – Bit Torrent
• Cheaper for families – 63.7% entertainment media
– Theme parks $$ • Minor domestic impact
– Sporting events $$$$ • International impact
• Sale of concessions – Lack of movie theaters
– Largest source of profit – Theatrical release windows
– Attendance is key • Anti-trust lawsuits
• Home viewing equipment – “circuit dealing”
– $3 billion by 2013

9. General Environmental Analysis
Socio-cultural Global
• Consumer health Latin America
– 1 large popcorn = 3 Big Macs
• Increased labeling
– Prepared foods
– Movie theaters were exempt

10. Economic Impact
• “People can now expect a home cinema experience from
their TV. Technology that was once associated with the rich
and famous is now accessible to homes around the country”
– Mark Gabriel, Sharp Corporation
• Content availability

11. New Entrants
- Low threat
- Established markets
- High Entry Cost
Intensity of Rivalry Bargaining Power of Suppliers
- Medium to High - Medium to High
- 4 main competing firms - Suppliers = Movie Studios
- Same ticket prices Movie Theater Industry - Can charge basically whatever
- Same products/services they want for new movies
Threat of Substitute Products Bargaining Power of Buyers
- Medium to high - Low
- Can be hard to re-create the - Mainly consumers (12-24)
“experience”. - Multiple options (AMC, Regal,
- Growth of home theater etc)
systems - Low switching costs
- DVD's, Movies on TV, Internet

12. Regal Entertainment Group
• They have 6,598 screens and 525 Theaters in
37 States
• They are the #1 Chain of Theaters
• Customers can Join The Regal Crown Club
• 224 Million Annual attendees
• Current Stock Price is $13.59

13. Cinemark
• The third largest in the US
• They have 3,878 screens
and 297 theaters in 39
States
• They also have theaters
throughout Latin America
• Ranked #1 and #2 in box
office revenues in 24 of
their 30 markets
• Their current stock price
is $21.05

14. AMC Theaters
• Second largest Theater chain in the US
• Strong use of Inbound Marketing - Movies
News Page
• They Sell advertisement
space and offer theater rentals
• Planning on returning to the
Stock Market with $450 Million
IPO

15. All Three
• All three’s ticket and concession prices range
in the same area
• Locations have similar price variations
• All three have 3D and IMAX capabilities
• The main advantage appears to be having
more screens and theaters
• They have all adopted the usefulness of
inbound marketing, however AMC is utilizing
it best

16. Value Chain Analysis

17. Internal Analysis

18.  Strengths
 Weaknesses
 Opportunities
 Threats

19. SWOT Analysis
Strengths Weaknesses
• Entertainment is always in • Profit Structure
demand – Less $ to theaters as
• Even demand during compared to studios
recession • Advertising + concessions
• A cheaper option for • Run by conglomerates
families – Forcing small theaters to
close
• U.S.’s second largest export
– Digital film + new
technologies = $$$

20. SWOT Analysis
Opportunities Threats
• International expansion • No longer a need to go to the
– Latin America movies?
• Different programming – Redbox
– Sports, plays, musicals – Netflix
– Online
• Niche markets
– Classic films, independent • Other forms of entertainment
films, film festivals – Where will consumers spend
their discretionary income?

21.  Strategic alternatives
 Alternative evaluation
 Alternative choice

22. Alternatives & Evaluation

23. Alternative Choice
• Creative advertising
• Develop brand loyalty
• Make it an event
• Transnational strategy