Question

What are the trends in the general environment that affect the movie exhibition business, and establish whether their effects are helpful or harmful to theater owners.

Answer 1

Movie exhibition businesses are changing very rapidly and because of improvement in the technology. Some forces are beyond controls which are affecting the movie exhibition business. Majority of the forces are hurting the business and few of them have positive impact for same.

In the recession of 2007, movies were the last thing in the mind of the people. For instance, if there is a 5 member in a family and they are living paycheck to paycheck the they would not consider paying $7 for a ticket and concession costs. Although going for a movie was a fun time for family but it is a want not a need. Want means the alternatives to choose from and need means; it has to be get at any cost for survival. Movie watching is not a survival mean, it is a want. On the other side if economy is getting improved then the patrons will have the capacity to spend their money on leisure things like watching movie in theatre. Ultimately we can say movies demand is very elastic and it is directly proportional to the performance of economy and purchasing power of people. There are other alternatives which are cutting the exhibition Business negatively. Millennial are preferring moving streaming applications like HBO, Netflix, Amazon prime videos and other services. Although these websites and providers do not allow the viewers to watch the latest movies but with the lower subscription cost they are giving various movies options to choose from. So dollar spent on per movie is way lower than watching movie in a theatre.