The Movie Industry Analysis Essay Research — страница 4

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– Much of Universal’s success can be attributed to the long time relationship between the company’s CEO & their leading director Steven Spielberg. Mr. Spielberg has started his own film studio, Dreamworks which is expected to be yet another major studio. The creation of Dreamworks caused internal discord between the Japanese parent company and U.S. subsidiaries. Sony Pictures Entertainment (Columbia-Tristar) Strengths – Sony purchased columbia – Tristar in 1989 and has doubled its price to sales ratio value as of 1994. Concentration strategy (they make movies). Weaknesses – Depressed earnings, high production costs and excessive spending. Lack of diversity. Opportunities – Availability of technology from other areas of the firm (Sony). This affords them the

advantage of remaining on the cutting edge for new technological developments in the movie industry (DVD’s, computer enhanced films). Threats – Lack of ancillary markets due to previous debt position which made the company potentially attractive for takeover. RECOMMENDATIONS: Where is this industry currently headed? The movie and entertainment industries are taking the use of information technology to an extreme. They have embraced the technology and are using it for everything from online publications to games to special effects for our favorite movies. Video releases continue to provide a great deal of profits for many of these studios. The entertainment industry has always been a leader in the use of new industry technologies. Since the arrival of the digital age, firms

that once focused on a film production are now producing interactive CD ROMS, Digital VideoDiscs and production studios are even offering WEB services. The channels of delivery have broadened significantly. Where should each of these major studios be headed? Disney has benefited from great leaders, visionaries over the years. The focus has always been quality and innovation. The Disney Brand is well known all over the world and as the organization continues to expand both with products and geographically, care must be taken to ensure the Disney name and reputation. Warner Brothers is doing a fine job of revving up of their ancillary markets. They are currently well diversified. I recommend that Warner should continue on the same path however, this rapid growth could mean trouble.

They should install contingency plans throughout their organization to mitigate the risk of rapid expansion into different ancillary markets. Paramount Pictures, touted as the “blockbuster king”, should remember that picking hits is still largely guesswork. In order to improve their position and guard against a time when they may not be the “blockbuster king”; Paramount must develop a plan to aggressively increase its film library. ***** Twentieth Century Fox relies heavily on blockbuster films and produces only a small number of films each year. They have limited themselves to cable and network television in the ancillary markets. Fox is heavily involved in many other areas, News Corp., Fox News Channel, Fox TV & Fox Family Channel. I believe they are “missing the

boat” with regard to the video market. The video market is one that continues to generate profits long after the movies are actually made. Universal Pictures can attribute much of its success to Steven Spielberg. When he left to form Dreamworks, Universal began to experience some in-fighting. Although Spielberg initially used Universal for foreign distribution, I do not expect this to continue as Dreamworks’ continues to have such successes as this summer’s “Saving Private Ryan”. Since there was so much reliance on Spielbergs’ name and films, I feel that Universal will not be able to maintain their ability to compete with the other majors. The previously mentioned in-fighting only magnifies this problem. My first recommendation is that Matsushita look for a buyer for

MCA and Universal. Preferable a company with experience in this industry, one that would take advantage of the opportunities with the ancillary markets as well as new opportunities with the amusement park operations. If this is not possible, my second recommendation is that Universal should aggressively work towards a formal review of their current business strategies and make the first order of business to resolve the in-fighting. All of management both the parent company and the U.S. executives should be “on the same page”. If this is accomplished, a plan should be developed to align themselves with some other successful directors and/or recognizable and respected industry leaders. If none of this is possible, I do not believe this company will survive. Sony