Film Industry Analysis by SIC Code:783201 Jade Starr T00524215 BADM 230 Section 04 Rodney W. Reynolds

Brief History The movie and film industry has been one of the most dominating industries since the industrial revolution. It began in 1890 as very short, soundless, black and white clips up until around 1927. During the soundless period, 1890-1927, the first film studio was built in 1897, the first animations were introduced in 1899, the first successful theatre, “The Nickelodeon”, was built in Pittsburg in 1905, and the introduction of film stars were created in 1910 with the introduction of film credits. By 1910, America had one of the largest shares and booming industries aside from the French.

A Growing Industry Liberation, innovation, and money hungry business owners all contributed to the success and rise of the film industry. With the deregulation of the entertainments industries, companies were able to do what they wanted, when they wanted. They were no longer confined to the laws and restrictions meaning theatres began to pop up on every corner and booking offices were centralized. With the help of the Second Industrial revolution, people now had rising disposable incomes allowing families to see an average of at least 28 films per year, which a pretty large average considering it was a fairly new industry. The Nickelodeon became the first cinema charging people only 5₵ for a film viewing. People had a new sense of self-expression with the changing of times and the new movie era allowed them to express it.

Government Regulations With every person with the funds to create films and the deregulation act on the industry being passed, America had to step in and redefine boundaries for the movie and film industry. The Motion Pictures Producers and Distributors Association was founded in 1992 to improve the image of the American film and later, the Production Code Administration was created in 1994.

Leading Business in Market Shares Fox 18.8% Walt Disney 15.7% Time Warner 15.1% Sony 12.5% Comcast 11.8 Paramount 10.1%

Industry Fun Facts Seasonal: The film industry is a year round one. Movies are being put out every month with the summer months being the booming periods. Sensitive to economic fluctuations: YES. The industry is based on the disposable income of the consumers. If the economy is doing badly, the workers are doing badly therefore they do not have extra funds to enjoy such luxuries as a trip to the movie theatre.

Marketing Strategies The film industry marketing strategies are always glimpses, quick showcases, and commercials either by radio or televised. Televised commercials is the most predominant and well-known way to air a new film. In an effort to combat the decline of theatre sales, companies have allowed their releases to be streamed online through sites such as Netflix and Hulu at the convenience of the consumer. Also companies have allowed their movies to be placed in Redbox which allows consumers to make a quick trip to a local store and rent the movie for a day.

Most Visited Theatres Alamo Draft House at the Ritz, Austin, TX The Castro, San Francisco, CA The Senator, Baltimore, MD

Top Three Cinemas Regal founded 1989 Cinemark founded 1984 Stock Price: $13.59 Cinemark founded 1984 Stock Price: $21.05 AMC founded 1920 Stock Market: $450 Million

Estimated Size for Theatres There is an estimated number of 38,605 movie theatres in the US. The number has been at a gradual increase up until the beginning of the 21st century with the introduction of online streaming and pirating and bootlegging. At the beginning of the booming industry, the average person visited a theatre at least 28 times per year. That number has now dropped to an average of 6.

Estimated Size $ Filmed entertainment revenue worldwide Entertainment is big business in the United States. It is expected, that the sector as a whole will have generated 564 billion U.S. dollars in revenue by the end of 2014. Forecasts predict that the entertainment industry will grow to over 679 billion US dollars in value over the next four years, proving its worth in domestic markets and as a major U.S. export. The film industry is one of the biggest, if not the biggest, player in the broader entertainment sector; it is considered a cornerstone of the industry. Filmed entertainment revenue worldwide $88.3 Billion

Consumer Market Race: 12% Black Age: 15% Toddlers-11 years 19% Hispanic 23% 25-39 years 63% White 15% 40-49 years

Trend in Sales As the country continues to expand and engage in international affairs, the cost of living begins to increase causing a domino effect in industry. As inflation increases, so does the cost of the movie tickets, the cost of the concessions sold, and the overall price of entertainment which decreases the number of people attending the theatres. The cost of a movie ticket went from 5₵ to an average $8.00 between the years of 1938-2008, and the price continues to grow. The cost of production also plays a significant impact on the cost of the industry seeming as production companies must make a profit still after paying for the fees included in making the films and also the box offices.

A Not So Booming Industry As the country continues to expand and engage in international affairs, the cost of living begins to increase causing a domino effect in industry. As inflation increases, so does the cost of the movie tickets, the cost of the concessions sold, and the overall price of entertainment which decreases the number of people attending the theatres. The cost of a movie ticket went from 5₵ to an average $8.00 between the years of 1938-2008, and the price continues to grow. The cost of production also plays a significant impact on the cost of the industry seeming as production companies must make a profit still after paying for the fees included in making the films and also the box offices.

Sources http://www.the-numbers.com/market/ http://www.uis.unesco.org/culture/Pages/movie-statistics.aspx http://travel.cnn.com/explorations/escape/worlds-10-coolest-movie- theaters-355218 http://historycooperative.org/the-history-of-the-hollywood-movie- industry/ http://www.statista.com/topics/964/film/ http://www.referenceforbusiness.com/industries/Service/Motion-Picture- Theaters-Except-Drive.html

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