Do you see the opportunity?
Nicholas DijiTony 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 21st 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