Do you see the opportunity? Nicholas Diji Tony Godfrey Jeremie Gougeon MBA8820 – Pamela Barr

 Leading movie industry in the world.  Slowing growth – In 2007 Box office grew 5.4% domestically and 4.9% worldwide.  Low barriers of entry  Powerful suppliers  Buyer power is high  There is availability of substitutes  High rivalry due to low brand equity, a periodic overabundance of products in the market and high exit barriers

 Control of expenses, fewer releases per year  Decline in DVD sales, Blu-Ray not catching yet  Home Entertainment revenues account for up to 60%  Increasing competition from substitutes  websites such as Facebook, video games  Piracy: illegal download threatens profitability  Power conflicts between labor and studios  2008: Writers Guild of America strike

 Losing Control  Cost ▪ Star status no longer conferred by studios ▪ Collective bargaining  Pricing ▪ Declining video sales during format transition  Distribution ▪ Who has time for movies? ▪ Why buy when you can…

 The industry leader  Reputation for innovation  Benefits a huge video library  Capitalizing on well-known characters  Batman: from DC Comics to “The Dark Knight”, #4 best-selling movie  Acquired all licensing rights for Harry Potter, #1 highest grossing series  Building a strong international network  Present in 30 countries, distribution in 120  Already involved in the (co)production of 230 local-language movies

 One of the “Big Six” – 15.5% of box office spending in 2007  Distributed the two most successful movies of 2007 “transformers” and “Shrek the third”  One of the company’s strengths lay in its huge library  Expansion through acquisition  Joint ventures with other industry leaders  Content distribution through digital means

 Distributed decision-making for responsiveness  Alliance & Acquisition Agreements  DreamWorks, iTunes  Resources  Parks & Resorts  Studios  Consumer Products  Media Networks

 Originally not one of the “Big Five” studios  MCA acquisition (1952): talents + TV  Matsushita (1991) and Seagram (1995) takeovers: no synergies  Vivendi Universal (2000): the ambition of a global 21 st century media group  Low synergies but a focus on international operations and new media  NBC Universal (2002): a winning duo  Estimated $450 million a year in synergies (extra revenues + joint operations)

 Conglomeration  Globalization  Digitization

 Conglomeration  Globalization  Digitization