The Movie Exhibition Industry’s History and Trends


The Movie Exhibition Industry case study gives information about the three stages of the motion picture value chain. As mentioned in the case, the stages include studio production, distribution, and exhibition. The study presents that the structures of the three steps in the Movie Exhibition Industry have remained unchanged since the 1920s. However, the emerging trends that influence customers’ behaviors, decisions, and constraints are today modifying the industry’s value chain dynamics and other operating variables. This study aims to identify strategic measures and alternatives by assessing the trends in the general market that confront the movie exhibition business.

Situation Analysis

Over the recent year, the Movie Exhibition Industry has registered low movie sales and theaters turnouts. Several external factors have negatively impacted the movie picture value chain starting from studio to exhibitions. As stated in the case study, the three stages have been adamant about changing. However, the current trends in technology and other sectors affect customers’ behavior, and the movie exhibition has been forced to change with it or die (Weinberg et al., 2020). The first factor that affects the Movie Exhibition Industry is the cost of production. In the 1990s, the cost of producing a film barely passed $102 million. Today, having $100 million only caters to half the cost of significant productions. This is a challenge since the high cost of production means less profit margin unless the companies raise the movie prices (Weinberg et al., 2020). The Movie Exhibition Industry’s primary targets are persons between 12 to 39. The records obtained in 2014 indicates that these individuals were actively involved in ticket purchase (Brühl & Eigler, 2020). This is because many children and youths usually spend their leisure time watching movies.

Distribution has also posed a significant problem to the Movie Exhibition Industry. The distributors are the middlemen between the producing studios and the actual exhibitors. Therefore, the distributors either negotiate or buy the rights to a film and pocket the profit directly over the producing studios. Moreover, the go-betweens are making the prices of release print of a film expensive for exhibitors (Abel, 2021). As such, the high prices are reflected in the price of movie tickets. According to the case study, two-thirds of exhibition revenue comes from tickets sales (Weinberg et al., 2020). Out of the two-thirds, the rental fees form a significant part leaving exhibitors with peanuts. Movie exhibitors sometimes raise the price per ticket, discouraging moviegoers. Concession is also another source of profit for exhibitors to supplement their revenues. Due to low gain, the exhibitors overcharge the movie viewer by selling soda and popcorn at reasonably high prices, scaring customers away.

Challenges for Exhibitors

Although there are many anticipated benefits to moving from film to digitalized shows, the cost of transformation is expensive. Moreover, the change demands several computers and other necessary equipment such as projectors and screens. Therefore, installing the required components for complete transition is unaffordable for exhibitors. Theaters are nowadays losing relevance in society compared to in the early 1990s (Brühl & Eigler, 2020). Current technologies have made it possible for several people to buy substantial high-definition screens and prefer watching moving while in their homes. Rapid improvement and drastic cost reduction in-home viewing technologies have made home viewing a perfect replacement for theaters. Modern TVs have the exact high-definition resolution as those used in movie theaters (Afthanorhan et al., 2019). Therefore, many people find it convenient to stay home watching their favorite movies.

Solution and Recommendations

Movie exhibitors are aware of the root causes of a reduced number of moviegoers in theaters. The increased modernized viewing of motion pictures has significantly confronted the movie exhibition industry. The exhibitors are trying to lay down initiatives to invite more moviegoers to theaters. The recent exhibitors are adopting new technologies to improve customers’ experience while in movie theaters. They install air conditioners, advanced projections systems, including giant screens and sound systems (Hallinan & Reynolds, 2019). Moreover, several strategic initiatives have been implemented to entice customers back to movie theaters. Projection innovation is one initiative that exhibitors are currently employing. These innovations include image quality, 3D technologies, and larger screens.

The exhibitors have also opted to diversify the movie content to catch a larger population. Theaters today hold live concerts, standup comedy, sporting events, and even season finales. Exhibitors are launching 4D and beyond in their theaters to improve customers’ experience and activeness (Manolika & Baltzis, 2020). Furthermore, the exhibitors are providing several concessions services in their theaters, making a variety of foodstuffs available for most moviegoers. Dynamic pricing is also another initiative that is being put in place to get more movie viewers in theaters. This incorporates demand into pricing models where low attended shows are given low price tickets.


Since theater attendance rates have declined since 2014, the exhibitors and movie theater owners are developing initiatives and other strategies to entice more movie lovers into their halls. As such, several solutions and recommendations have been put forward to restore the maximum number of movie viewers registered before. The proposed initiatives, plans, and strategies are necessary because lately, movie theaters are losing relevance in the society. Therefore, the reasons below support the recommendations discussed above.

  • Customers’ satisfaction is critical as a business is concerned. Meeting customers’ expectations is a good culture that promote the business. Adopting new technologies such as air conditioning and advanced projections in movie theaters improves customers’ experience. Cool temperatures and larger screens make customers comfortable and invite their colleagues. Many customers would opt for movie theaters following the comfortability assured. Therefore, maintaining a customer-friendly environment in movie theaters is crucial.
  • Investing in projection innovation is also crucial as watching movies in the theater is concerned. Quality products and shows at affordable prices in movie theaters keep and attract more customers. Most customers prefer high-quality images, 3D views, and larger screens. Therefore, improving the quality of motion pictures is a good move by exhibitors because, in the long run, it would earn them back their customers.
  • Providing more comprehensive content is also an initiative that exhibitors can use to win customers back to theaters. However, there is vast movie content, including comedy, TV series, actions, animation, and wrestling. People have different tastes as watching movies is concerned. Providing a wide range of content in movie theaters is a wise idea. Hence diversifying the content would probably help exhibitors to catch many customers.
  • Finally, it is undeniable that concession initiative also plays a vital role in maintaining customers and enticing others. For example, providing a variety of meals in movie theaters provides freedom of food for movie viewers. As such many would prefer to get what they want when they want it. Moreover, selling soda, snacks, and other available food items at a relatively reduced price benefits the theater’s owners because they earn more customers.


Today, the movie exhibition industry faces many challenges in its operations as it has been adversely affected by external factors. For this reason, many movie theaters are registering low movie and customers turnout. Technological advancement is at the forefront of the factors that have impacted the movie exhibition. Theater owners are also adopting other initiatives to increase sales and movie viewer turnout. Price dynamics, concession, projection innovation, and adopting new technologies are initiatives intended to rejuvenate the dying industry.


Abel, R. (2021). The middleman of the movies: US Film Exchanges, 1915-1919. Historical Journal of Film, Radio and Television, 41(4), 641-664. Web.

Afthanorhan, A., Awang, Z., Rashid, N., Foziah, H., & Ghazali, P. (2019). Assessing the effects of service quality on customer satisfaction. Management Science Letters, (1), 13-24. Web.

Brühl, J., & Eigler, J. (2020). Optimization approaches and challenges of personnel deployment for movie exhibitors. Journal of Media Business Studies, 18(1), 59-78. Web.

Hallinan, B., & Reynolds, C. (2019). New media goes to the movies: Digitizing the theatrical audience. Television & New Media, 22(4), 379-399. Web.

Manolika, M., & Baltzis, A. (2020). Concert Hall, Museum, Cinema, and Theater Attendance: What difference do audience motivations and demographics make?. Empirical Studies of The Arts, 40(1), 37-56. Web.

Weinberg, C., Otten, C., Orbach, B., McKenzie, J., Gil, R., Chisholm, D., & Basuroy, S. (2020). Technological change and managerial challenges in the movie theater industry. Journal of Cultural Economics, 45(2), 239-262. Web.

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