case analysis

In a demographic aspect, the average age of people visiting the theaters affects the

amount of revenue as well as the interest in theaters. According to the case, movies target 12-24

year olds, more than 50% of moviegoers are comprised of 60+ year olds. Regarding their

economic stance, Revenues have decreased in theaters. Theaters tend to lose during the

purchasing of a film, however they break even in tickets and earn in concessions. Sociocultural

aspects also affect theaters. Because some days movies aren’t enough to build a revenue for the

day, theaters offer extra content. This allows viewers to have options as to why attend the

theater. Technologically speaking, theater exhibitors have been able to switch from film to

digital display. Theaters have also been able to offer 3D movies experiences as well as 4D. The

switch allowed theaters to cut costs and have a faster and easier distribution. Also because there

is no physical film, with digital display, images are sharper and of higher quality. Globally

Theaters such as AMC and Cinemark have been able to have locations internationally. 71% of

movie revenues come from abroad and it forces studios to internationalize their films making

them attractive to international viewers.

Threat of New Entrants- Med

Power of Suppliers- High

Power of Buyers- high

Threat of Substitutes - medium

Rivalry Relationship- low

New theaters cannot compete with the high amount of existing theaters all over the country. International thaters do pose a threat.

Studios relying less in domestic exhibitors due to international success. Potential disintermediation can lower major revenues for theaters.

Customers might not be willing to pay the ticket price anymore. The less people the less concessions sold, the less revenue.

Digital distribution, people can buy a digital version of the movie and see it at home. Most tv sets and audio can substitute the quality of theaters, Yet people still go for the experience.

Differences between major theaters are only based on convenience of location. What each theater offers is almost the same.