The Hollywood Film Industry (Case Study)

Q1. Given the forces on the Hollywood movie industry is it likely we will see a decrease in the production of regional and U.S.-centered movies, or will small independent movie producers pick up a higher share of the domestic U.S. market? Please explain.

The global push has changed how Hollywood does business. More than ever, studios tailor marketing campaigns to other countries taste and make casting decisions with the international audience. Many industry insiders have argued that during the 1990s, and possibly even later, the U.S. market has been over-screened, that it's the total number of theater screens was disproportionately high given the size of its movie-going population, their frequency of going to the movies, and the supply of movies. Therefore, it's expected that there will be a decreased number of regional movies produced, and small independent movie producers may see it as an opportunity for them to produce US-centered movies, as they don’t have the ability to produce global-wide movies and the local market will be a good focus for them to sell their movies.

Q2. What alternatives could movie producers develop to help combat the piracy of first-run movies and follow-on DVD and Internet releases?

Hollywood loses billions of dollars a year on illegally sold copies of movies. The losses are impossible to calculate accurately, of course, since it’s unclear how many of the people who download copies over the Internet. A large portion of piracy occurs in the distribution channel that is before the film is stamped on the DVD.  Hollywood itself is the source of large quantities of the leaks of music and movies because people who have direct access to the original masters of the media make copies of them before any anti-piracy technology is even applied. Therefore, studios and theatre owners are eager to find ways of safeguarding their intellectual property. Hollywood should take extreme steps to stop their movies from being pirated by obtaining a court order that restrains thousands of websites from making available copies of their films, a move which the company should approach to reduce piracy regionally and internationally.

Q3. How would you prioritize which nations to expand distribution into if you were working for a major Hollywood movie studio?

Hollywood has to be careful. It can’t afford to reinforce old stereotypes if it wants to make money in the international marketplace. Movies have to be made as sensitively as possible and not offend any particular country.

According to recent figures from the Motion Picture Association of America almost 70 percent of the studios’ annual revenue from box office now comes from international markets. Hollywood movie's content has been shaped accordingly. They’re making films that have fairly universal ideas and themes, they’re not really culturally specific. A good example might be the released action film Fast & Furious which has already gained in almost twice as much revenue overseas as it has in the US.

Maybe It's better to expand distribution into nations like China. As China's film market is largely expanding. According to the MPAA, Chinese box office revenues grew by 36% last year to make it the world’s second-biggest movie market after the US.