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Movie Theatre Industry

The movie theatre industry is a highly competitive and concentrated market. With the top four companies controlling 48 percent market share national wide, theatres are using a wide range of products to outsmart their competitors. Key factors which account for profitability include innovation in technology, national-wide distribution strategy, multiple screen theatres, ticket distribution channels, and the ability to maintain low operating cost. In addition, other facilities such as arcade rooms, pubs, cafes, kid sitting and patron monitoring devices are being installed to attract audience.

In some cases, decisions made by other industries may affect profitability of theatre industry and this call for innovation if a firm wants to stay ahead of competition. Nation wide distribution enables a firm to cover wide metropolitan regions and have a larger customer base. Ticket distribution is crucial since it accounts for close to 70 percent of the total revenue and online purchasing enhances efficiency and convenience. Moreover, technological advancement such as digital, 3-D, IMAX cameras and sound systems creates a powerful audio and visual experience.

Multi-screens increase the number of movies showing and cut on operation costs. Strengths of the draft submission The draft has conclusively addressed the major factors that enhance profitability of a theater

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company. Royal Entrainment Group, the most successful company among the top four theatres in the country has utilized the four fundamental factors. It has the widest distribution, with 6,768 screens in 548 theatres over 39 states, compared to Carmike which only has 2,268 screens in 244 theatres. The issue of competition has also been addressed in the draft.

Mid-sized companies such Carmike have opted to concentrate their marketing efforts in mid-sized communities away from large cities where there is stiff competition among the top companies. Expertise in management is essential since a firm will be able to cut operation cost. Innovative technogy has been emphasized strongly since it’s a basic deciding factor in the modern era. Areas for improvement Companies must continually improve their services and be adaptive to change since change is absolute in a modernizing world.

One issue that has not been thoroughly addressed is public relations and customer orientation. Attracting and retaining audiences is a challenging factor in a competitive environment. Firms must come up with products and services which are convenient and efficient to the public such as online sales and suitable airing hours. Seasonal tickets which are affordable will enhance customer loyalty. Being one of the most successful industries in the economy, innovation is fundamental in retaining this status.

Innovation comes with cost and to ensure that short-term and long-term expenses do not severely eat on the revenues of a company, prudent management decisions are of utmost necessity. Despite the fact that multiple screens in a theatre contribute largely on the profitability of a company, it’s not a surety that each screen will attract enough viewers. The management must devise ways of splitting these costs to ensure that all their facilities are utilized to the maximum.

This can be through lowering prices for less popular movies, discounts on tickets sales, promotions and free tickets for a specific number of purchase and redeemable points for customers. In spite of stiff competition from large companies with an already established customer base, mid-sized companies can adapt strategies that will work in their favor. Apart from capitalizing on small towns and less populated areas, these firms can offer the same services in urban areas but at a lower ticket price. This will attract different types of customers such as students and low income earners. References Movie Theatre industry Paper

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