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Movie Theatres
First Research, Oct 2009, Pages: 10
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Executive Summary
Brief Excerpt from Industry Overview Chapter:
The US movie theatre industry includes about 2,000 companies that operate about 5,000 indoor theatres and 300 drive-ins with combined annual revenue of about $11 billion. Major companies include Regal Entertainment, AMC Entertainment, and Cinemark. The industry is highly concentrated: the 50 largest companies generate about 85 percent of industry revenue.
COMPETITIVE LANDSCAPE
Personal income and leisure time drive demand. The profitability of individual companies depends on securing access to popular movies and sales of high-margin food and beverages. Large companies have advantages in negotiating with movie distributors; marketing; and economies of scale in purchasing. Small companies can compete effectively by specializing in movie type or audience, or providing better service and amenities. Average annual revenue per worker is $80,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are sales of tickets, food, and beverages. Ticket admissions account for almost 70 percent of industry revenue; food and beverage for more than 25 percent; and on-screen advertisements, over 1 percent. Other services include facility and concession rental during non-peak hours, amusement machine use, and merchandise sales. Drive-ins have fewer services than indoor theatres and on average earn 80 percent of revenue from admission sales, 15 percent from food and beverages, and less than 5 percent from facility rental.
Movie theatre operations center on licensing and showing (“exhibiting”) films to consumers, and obtaining and selling concession items. Theatres acquire from distributors the right to use (license) a movie ...
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