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Pick 'n' Mix and Popcorn : A Study of the Product Life Cycle for the Film Industry.

Fannin, Ian (1999) Pick 'n' Mix and Popcorn : A Study of the Product Life Cycle for the Film Industry. Undergraduate thesis, Dublin, National College of Ireland.

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Abstract

Cinema is a global giant, but how exactly does this industry's financial mechanism work? And how will it develop in the face of changes within the technical cost structure of production, distribution and exhibition.

More films are being produced than ever before. More people are going to the cinema than ever before and as a result of this growth, the entire cinema industry's turnover is higher than ever before.

But simultaneously the average return on investment for a film is 3% and it is now common for films not to make any net profit at all. Why is there such a low return on investment?

Firstly, over the last 10 years the cost of producing a film has increased by 165% on average and the costs of marketing a film has increased by 200% on average. Secondly, too many films are being produced and as a result the potential ticket sales in cinema box offices are being divided up into smaller and smaller pieces. Thirdly, Hollywood creative accounting procedures try to ensure there is no net profit so revenue will not be shared with net participants and the least amount possible will be paid in tax.

Today media companies have become more vertically integrated, this includes the ownership of cinemas. But this market is now nearly saturated. This has led cinema marketers to invest in brand management in an effort to gain brand differentiation and customer loyalty.

The length of time a film will run for and what share of the ticket sales are earned by the producer is decided upon within the exhibition agreement. The distributor negotiates the exhibition agreement with the exhibitor.

The future for cinema lies with digital technology. Digital cameras and projectors will cut costs in production, allow film distribution by satellite and give superior quality in theatrical exhibition.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > HD Industries. Land use. Labor > Specific Industries > Retail Industry
H Social Sciences > HD Industries. Land use. Labor > Specific Industries > Film Industry
Divisions: School of Business > BA (Honours) in European Business and Languages
Depositing User: Tim Lawless
Date Deposited: 03 Jun 2010 14:25
Last Modified: 21 Oct 2014 18:07
URI: http://trap.ncirl.ie/id/eprint/243

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