Viacom Competition
Now Viewing Viacom's competition in: Motion Picture Production and Distribution
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's major customers? - Typical customers for first-run movies are theatres and independent distributors.
How does the company find new customers? - Major studios usually have distribution contracts in place prior to filming. Smaller independent producers often find distributors during the production process, or subsequently “acquire” them after screenings at film festivals like Sundance and Cannes.
What types of marketing are most effective for the company? - Major types of marketing are exhibition showings to theatre owners and independent distributors; TV, magazine, and newspaper ads; in-theatre previews (“trailers”); and a movie’s website.
How significant are license fees compared to other sources of company revenue? - License fees, the movie industry’s equivalent of product prices, typically contribute most of a production company’s revenue.
What advantage or challenges does the company have in negotiating license fees? - Production companies and distributors negotiate license fees for theatres to show movies and for other outlets, like broadcast media and retail stores. License fees also cover distribution in other formats, such as TV programs, DVDs, or computer games.
How has competition changed in recent years? - Consolidation and joint ventures have concentrated funding and distribution power in a few major companies.
Competitive Landscape
Consumer spending drives demand. The profitability of individual companies depends on creativity, marketing, and distribution. Large companies often have the advantages of long-term contracts with key actors and directors, a permanent staff of technical employees, and wide distribution networks. Small companies can compete successfully by creating marketable movies, often for niche audiences, on low budgets. Although production work is labor-intensive, the value of the product results in high average annual industry revenue of $300,000 per employee.
Full Industry Overview For Motion Picture Production and Distribution
Business Challenges
CRITICAL ISSUES
High Production Costs - The high expense of financing movies well in advance of revenue has prompted producers to find ways to spread the financial burden and lower costs. Producers may seek financing from a variety of backers, simplify production and processes, or find lower-cost locations. Foreign tax incentives lure US companies to film in other countries, in what the industry calls "runaway" productions.
High Failure Rate - Despite a large number of outlets for movies, many productions are financial failures. Illegal copies or a disappointing first-run in theatres can limit a project’s prospects for revenue from secondary releases, such as on TV and DVD. Producers and big studios spend large amounts on market research and forecasting models, but the industry has poor ability to predict public acceptance of any single production. Producers and studios constantly look for new and interesting script ideas and monitor consumer preferences and demographic and cultural trends.
Industries Where Viacom Competes
- Media
- Film & Video
- Motion Picture Production & Distribution
- Internet Content Providers
- Television
- Television Cable, Pay & Broadcast Networks
- Film & Video
