Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 10 pages
Data source: Published sources
Abstract
The six major studios of Hollywood together constitute half the market share of the US film business. The traditional model of these studios to make movies requires high investment. After spending extravagantly on established movie stars and movie marketing, these studios run a high risk of losses if any of their movies fail at the box office. In contrast, Lions Gate Entertainment, an independent studio, releases successful movies like Crash at one-third the cost of the major studios. By pre-selling its international rights and through niche marketing, and making thought-provoking movies, Lions Gate has increased its revenues with each of its movies and has also drawn the attention of established stars and critics in the US.
About
Abstract
The six major studios of Hollywood together constitute half the market share of the US film business. The traditional model of these studios to make movies requires high investment. After spending extravagantly on established movie stars and movie marketing, these studios run a high risk of losses if any of their movies fail at the box office. In contrast, Lions Gate Entertainment, an independent studio, releases successful movies like Crash at one-third the cost of the major studios. By pre-selling its international rights and through niche marketing, and making thought-provoking movies, Lions Gate has increased its revenues with each of its movies and has also drawn the attention of established stars and critics in the US.