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    Analysis5 Movie Exhibition Industry Case

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    JoAnna Monfils
    The document summarizes the business situations and strategies of the top four companies that dominate the US movie exhibition industry: Regal, AMC, Cinemark, and Carmike. It compares their market focus, facilities, pricing, revenues, costs, income, margins, and international presence. While the larger chains have advantages of scale and premium offerings, their revenue streams face constraints and high fixed costs limit margins across the industry.

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    Analysis5 Movie Exhibition Industry Case

    Uploaded by

    JoAnna Monfils
    67 views2 pages
    The document summarizes the business situations and strategies of the top four companies that dominate the US movie exhibition industry: Regal, AMC, Cinemark, and Carmike. It compares their market focus, facilities, pricing, revenues, costs, income, margins, and international presence. While the larger chains have advantages of scale and premium offerings, their revenue streams face constraints and high fixed costs limit margins across the industry.

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    The document summarizes the business situations and strategies of the top four companies that dominate the US movie exhibition industry: Regal, AMC, Cinemark, and Carmike. It compares their market focus, facilities, pricing, revenues, costs, income, margins, and international presence. While the larger chains have advantages of scale and premium offerings, their revenue streams face constraints and high fixed costs limit margins across the industry.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    67 views2 pages

    Analysis5 Movie Exhibition Industry Case

    Uploaded by

    JoAnna Monfils
    The document summarizes the business situations and strategies of the top four companies that dominate the US movie exhibition industry: Regal, AMC, Cinemark, and Carmike. It compares their market focus, facilities, pricing, revenues, costs, income, margins, and international presence. While the larger chains have advantages of scale and premium offerings, their revenue streams face constraints and high fixed costs limit margins across the industry.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    The Movie Exhibition Industry: 2015

     Perform comparative situation and strategy analyses for the four companies with
    dominant market share. What are the advantages and disadvantages for each of
    the industry’s top competitors?

    An overview of the top four competitors' business situations and approaches


    provides valuable insight for industry participants seeking to improve performance. The
    following table presents a comparison of the market focus, facilities, pricing, costs,
    revenues, income, and margins for each of the four companies which dominate the
    market. A breakdown of international presence and the advantages and disadvantages for
    each circuit are also included.

    Regal AMC Cinemark


    (w/ United Artists and (w/ Lowes and Carmike
    (w/ Century)
    Edwards) Wanda)
    Market Focus Mid-size Urban Smaller Rural
    # of Locations 574 345 335 274
    # of Screens 7,367 4,931 4,499 2,897
    Ave. Screens/Site 12.8 14.3 13.4 10.6
    Ave. Ticket Price $9.08 $9.43 $7.02 $7.23
    Attend./Screen 30,038 N/A 38,661 21,414
    Revenue/Screen $272,924 N/A $271,409 $154,900

    Regal AMC Cinemark


    continued (w/ United Artists and (w/ Lowes and Carmike
    (w/ Century)
    Edwards) Wanda)
    Admissions (as % of Rev) 67% N/A 63% 62%
    Concessions (as % of Rev) 28% N/A 32% 33%
    Exh Costs (as % Adm Rev) 52% 53% 56% 55%
    Concession Costs (as % of
    Concession Revenue)
    13% N/A 16% 12%
    Bldgs/Wages/Util/Other (as %
    of Total Revenue)
    57% N/A 46% 55%
    Op. Inc. per Admission $1.39 N/A $2.87 $0.72
    Net Profit Margin 3% N/A 7% -891%
    International Theaters 0 153 160 0
    International Screens 0 1,344 1,177 0
    Advantages  Most power to  Located in  No competition,  Highest concessions
    bargain with studios largest cities or 92% of markets as % revenue
    & other suppliers population sites  Best price point  Markets have few
    due to  Leads industry in  International entertainment options
    organizational size operation of presence  Good price point
     Quality theater multiplexes  Highest operating  Lowest debt
    setting assumed  Focus on 3D, income per
     Highest revenue IMAX, and other admissions
    per screen and premium viewing  Greatest total assets
    admissions as % experiences  Highest NP margin
    revenue  International and operating income
     Largest domestic (Asian) scope per admissions
    exhibitor through Wanda  Completely
     Lowest exhibition acquisition digitalized
    costs as % revenue  Expanding  Best utilization rate

    Movie Exhibition Industry - 1


    The Movie Exhibition Industry: 2015

    rapidly  Strong financial


    performance
     Low profit margin  Highest ticket  Capacity may  Small market size
     Highest debt prices exceed market size (pop’ns < 100,000)
    position  Greater direct  High exhibition  Facility quality may
     High bldg./wage/ and indirect costs be inferior
    Disadvantages util/other costs competition  High concession  Lowest utilization
     No international costs rate
    presence  Low revenue per
    screen
     Net loss in 2014

     Evaluate the revenue sources and major costs for movie exhibitors. Discuss how
    the income structure of their business impacts their financial results.

    A close look at the theater business model reveals that cinema managers have
    limited ability to impact revenues with existing tangible and intangible resources. In
    addition, restricted power or flexibility to control product, facility, and labor costs leaves
    operating margins near just 12% across the industry. These constraints severely limit
    financial control and profit potential for theater owners.

    Movie Exhibition Industry - 2

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