Movie Industry Challenges

1. Some of the competitive forces that have challenged the movie industry include: Threats of new entrants, substitute products and services, increasing bargaining power of customers, increasing and bargaining power of suppliers. These competitive forces have created major problems for the movie industry.

Treats of new entrants: New market entrants and substitute products are the two main competitive forces challenging the movie industry. The traditional outlets for viewing movies – theatres, cable television, and movie rental businesses – are all challenged by new ways for customers to obtain products. The traditional outlets were very easy to control and ensured that the movie producers received their money from their work. The distribution system was created, not necessarily for the customer’s convenience, but to provide an orderly process for all the players to make money. With the convenience of downloadable movies, the system is changing to more of a viewer-centric process. The main problem is that movie studios and producers, outlets for selling the movies, and the myriad of people involved in the old system, have no way of controlling downloads from all the different Web sites that make them available. I contribute to this effect: I have a “movie man” that I use when I want to watch three or more new releases and pay ten dollars and own the movie rather that pay fifteen dollars to rent them. With no controls in place, the industry cannot ensure its receiving just payments and rewards for the work they produce (Prasad, 2014). Developments in online movie distribution have come at a difficult time for the movie industry. Presently, the interest reduces barriers to entry, such as the need for a sales force and access to channels. It also provides a technology for driving business processes that makes other things easier to do (Eng_Somaia, 2013).

Substitute products or services: With the development of online movie distribution, now customer...