Film Distrubution

Pathway –

• Someone starts off with creating an idea
• Create an overview in order to start promoting interest
• An investor makes decision whether they want to purchase rights into it
• People(actors, producers, editors) all brought together
• Settings all decided with permissions
• Shooting takes place
• Final editing and music are created on the filmed movie
• Licensing agreement is organised with a distribution company
• Distribution company then organises, advertising and prints
• Then sell to theatres and cinemas
• Buyers negotiate with lease agreement
• Theatres receive movie prints before the day of opening
• Movie is shown for a specified amount of weeks
• Consumers buy ticket and watch film
• End of engagement – theatre makes payment on the lease.

Studio System in 1930s/1940s – people stopped going to the cinemas due to the growth of TV’s in the 1950’s which caused the studio system to break up. Each film then became their own product to sell rather than one big company in charge.

Studios became the distribution companies in order to own rights of the film and earn the most profit from them. Ancillary markets were markets that sold separate products such as TV, Cable, and DVD. 

Horizontal Integration - when competitors merge together within the same section of industry. It ensures ownership and control to sell a product in many companies. Also companies could increase the percentage share in the market.

Advantages:

·         increase amount of companies round the country

·         share more resources, becomes cheaper

·         more market power

·         reduction in cost for consumers and traders

Disadvantages

• increase in size may lead to ‘anti-trust’
• sometimes clear strategies are not represented

Example

• Car manufacturer merging with a sports utility manufacturer

Vertical Integration - when companies merge to control production, distribution and exhibition. It also ensures that both companies become stronger and perhaps become a monopoly. They integrate each of their products together to create one to satisfy a common need for a consumer. 

Advantages

• Increase in supply of products
• More opportunities
• Invest more in highly specialised products

Disadvantages

• Capacity may become any issue
• Higher costs due to less suppliers
• Less variety of products