do you see the opportunity? nicholas diji tony godfrey jeremie gougeon mba8820 – pamela barr

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