Motion Picture Production and Distribution

Brief Excerpt from Industry Overview Chapter:

The US motion picture production and distribution industry includes about 11,000 companies with combined annual revenue of about $60 billion. Major companies include Disney, FOX, MGM, Paramount, Sony Pictures, Universal, and Warner Bros. The industry is highly concentrated: the 50 largest companies account for about 80 percent of revenue.

The top motion picture studios are generally part of larger media companies. Most companies in the industry engage in both production and distribution of motion pictures; about 500 companies are solely distributors. Production and distribution of television programs is included in the industry but discussed in a separate profile.

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. The industry is capital-intensive: average annual revenue per employee is about $300,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Licensing of rights for exhibit, broadcast, and renting of motion pictures accounts for about 35 percent of industry revenue; other products include commercials, music videos, special features, and post-production and technical services. Some companies sell merchandise or earn fees from licensing brand names to third-party manufacturers. Distribution of previously released products is through theatres; wholesalers and retailers; network, local, cable, and satellite TV; the Internet; and other distributors.

Production may...