We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

See Pricing

What's Your Topic?

Hire a Professional Writer Now

The input space is limited by 250 symbols

What's Your Deadline?

Choose 3 Hours or More.
Back
2/4 steps

How Many Pages?

Back
3/4 steps

Sign Up and See Pricing

"You must agree to out terms of services and privacy policy"
Back
Get Offer

Macro Environment Factors on Cinema

Hire a Professional Writer Now

The input space is limited by 250 symbols

Deadline:2 days left
"You must agree to out terms of services and privacy policy"
Write my paper

Summary

This report explores how macro-environment forces can influence the strategic management of XX Organisation Holdings, a leading Singapore multiplex cinema operator.

Three key forces and their potential impact on XX’s operations over the next decade will be discussed and from future trends in technological, social, and economic developments, the key drivers of change can be identified. Lastly, the report summarises an operational synthesis of these key drivers. Statistics for cinema screens, attendance, and seating capacity are shown in the appendix.

Don't use plagiarized sources. Get Your Custom Essay on
Macro Environment Factors on Cinema
Just from $13,9/Page
Get custom paper

Introduction

With the support of several government agencies, Singapore, predominantly an import exhibition market has ambitious plans to develop its film and cinematic capabilities over the next decade (Singapore Media Fusion, accessed 21 May 2010).

The local cinema-goer has become more discerning as consumer expectations remain high. Patrons are now spoilt for choice when deciding which film to watch and where to watch it. One of the biggest attractions of a Cineplex is that it is a social experience. As such, it is important for multi-screen cinema operators like XX to be creative and resourceful in developing innovative ways to enhance the movie-going experience.

There are many macro-environment factors that can shape a company’s strategic direction. They are not easily distinguishable, neither are they mutually exclusive nor equally applicable in all situations.

However, three key forces that can exert the greatest influence on XX’s future operations are technological, social, and economical. Specifically, this report looks at the onset of digital cinema, a redefined cinematic culture of consumerism, and the domestic market scale affecting box-office success.

Discussion

Technological Influence The concept of digital cinema refers to “the distribution and exhibition of feature films to cinemas for theatrical screenings…[that is] material that was originally shot on film and subsequently transferred into digital form” (Hanson, 2007: 370).

What this offers to the patron is an improved image quality over the current 35mm film prints. However, Belton (cited in Hanson, 2007) argues that digital projection is merely something that is potentially equivalent to that found in the celluloid images. As Culkin and Randle (2003) point out, the advantages in transitioning from film to digital cinema involve more than just better image quality. Digital technology ensures that the image quality does not degrade over time since its duplication and projection processes are vastly different from those used in celluloid based media.

A digital distribution system allows individual theatres to run the movie simultaneously on additional screens on demand. Theatres could also show alternative content such as sporting events, documentaries, and other digital programming in real-time. Furthermore, if a movie is in bits and bytes, it can be compressed, and transmitted via satellite or broadband technology, thereby lowering storage and distribution costs. The costs of shipping and acquiring multiple 35mm new or old prints, by contrast, can be prohibitive.

A secure encryption and decryption system makes it less vulnerable to piracy (Culkin and Randle, 2003). While there is a lot of savings to be made distributing and exhibiting movies digitally, it is costly to convert a conventional theatre into a digital one. According to Husak (2004), the initial capital costs of such a conversion can be US$150,000 but eventually, the payback period for the investment will be reduced with improvements to the hardware. In addition, there are licensing and technical standards to consider.

These standards are based on the recommendations of the Digital Cinema Initiative (DCI), a consortium of the 7 major studios in Hollywood (Disney, Paramount, Universal, Warner Bros, MGM, Sony, and Fox). Even if the net result of the move to digital cinema is a cheaper distribution and exhibition system, the possibility of workforce restructuring poses a hurdle since theoretically less human input would be required to run it, given that systems such as film projection, ticketing, seat reservations, refreshments vending could all potentially be managed from a central control center (Culkin and Randle, 2003).

The convergence of home entertainment and professional theatre technology has brought about another hurdle for cinema operators. “While there is currently a huge gap in image quality between high-end digital projectors and home models, this may not be the case for long. As home theatre projectors improve and drop in price, digital cinemas may find it harder to pull in the crowds” (Info-communications Development Authority of Singapore, accessed 21 May 2010).

Therefore, astute cinema operators will have to differentiate themselves from the competition by leveraging or even redefining the customer’s perception of ‘going to the movies’ as a form of social activity.

Social Influence

As Hubbard (2003: 256) tells us: “Multiplexes [cineplexes] are purpose-built cinemas offering a wide choice of viewing across at least five screens. Most feature state of the art sound systems, wide screens, and a range of food and confectionery, spacious seating, air conditioning, and free/easy parking. Many also incorporate themed restaurants, cafes, shops, and amusement arcades… Although cinema culture has been studied from different perspectives, many on the relationships between the type of films and their impact on society, between patron demographics and film selection, Hubbard’s research explores cinema-going from a socio-geographical point of view, as sites of recreation, leisure and consumption. Moreover, KingSturge (cited in Ravenscroft et al. , 2001: 218) reveals that “cinema visits are intrinsically linked to other leisure pursuits, such as eating fast food, a restaurant meal or a visit to the bar”.

For the perennial time-scarce consumer, multiplexes with great facilities and a wide spectrum of lifestyle products and services in a single location look especially inviting. Consumers also tend to frequent places where they feel comfortable, as Hannigan (cited in Hubbard, 2003: 267) notes that there is the “ever-increasing tendency for people to seek leisure that offers escape from everyday routines while providing recurrence of reassurance”. The development of the cinematic experience in Singapore, while seen to serve whole communities, is understood to be common with shopping malls being developed at physically accessible locations. Hence, “cinema development in the mall could thus not be further removed from the suburban picture house that it has replaced” (Ravenscroft et al. , 2001: 228). Ravenscroft et al then further argue that because the process of selecting a movie to watch resembles closely other purchase decisions, the design and operation of a cinema must be “avowedly consumerist”.

Ravenscroft et al conclude that the practice of movie-going in Singapore must consequently be viewed in terms of this link to consumerism for while many of the traditional consumers – predominantly older people – have given up movie-going in favor of watching television and video at home, the cinema remains a key leisure attraction for young people. Against this, Hubbard (2003) suggests that “multiplexes are more likely to be frequented by those who currently have children or may have children in the near future than by post-family or non-family households… whereas after 6 pm over 90% of trips to multiplexes involved a couple or group of adults”. Cinema operators, in collaborating with property developers, should thus consider creating an environment conducive to family values and the silver generation.

Economical Influence

In a 2008 interview with The Times, John Fithian, president of the National Association of Theatre Owners in America, reported that box-office revenues from cinema admissions have climbed even during recession years in the US (The Times Online, accessed 27 May 2010).

In that same article, ten leading industry stalwarts from production studios to film councils were interviewed who shared their insights on whether bad economic conditions per se affect movie production and cinema operators. As Clare Binns, Director of Programming, City Screen (largest boutique cinema chain in the UK) states, “The global downturn has already had an effect on movie-going… People don’t just want to see feel-good films, they want to see quality; they want to get out and be with other people and have a common experience with them.

When times are bad you want to be out there, and, as long as we continue to offer the films, I’m not worried about the downturn at all”. John Woodward, Chief Executive, UK Film Council, sums it aptly: “The mood in the industry is not one of panic, mainly because film production is something that works on a relatively long time scale… With the big inward investors, the Harry Potters, and the James Bonds, who are financed by US studios but come in and drop a lot of money into the economy, all the signals from the studios are that investment will continue at the same rate… ”.

Therefore, the consensus appears to indicate that while bad economic times do not necessarily sound the death knell for the majority of filmmakers and exhibitors, it is crucial to remain optimistic and allow the creative juices to flow so that good content will continue to be developed, spurring demand. And where there is good content, there will be opportunities for funding which directly affects a film’s production budget. Closer to home, nevertheless, general business expectations for the services sector in Singapore have been on an upward trend since the second half of 2009.

In particular, a net weighted balance in percentage terms for the amusement and recreation sector is forecasted at +69% in operating receipts and +34% in employment numbers for the second quarter of 2010 (Singapore Department of Statistics, accessed 21 May 2010). With the gradual emergence of the global economy from the recent credit crisis, we can expect this positive business sentiment to gain momentum in Singapore. As PricewaterhouseCoopers’ Global Entertainment and Media Outlook 2008-2012 (cited in Singapore Media Fusion Blueprint, 2009: 18) reports, “media spending in the Asia Pacific is expected to average 8. % annual growth, increasing from US$333. 1 billion in 2007 to US$508. 3 billion in 2012… [with] media and entertainment markets [in the Asia Pacific region] set to perform even better with China and India leading the boom”. As much of this media spending will be on Asian-made content, Singapore media companies will be the first choice as partners for sizeable newly confident, affluent Asian countries, as they bring their stories to the world, fusing tradition and modernity.

What this means for the Singapore cinema or film exhibition market is greater content offerings of a Chinese, Indian, Korean, Japanese, Thai, Indonesian, or Malaysian flavor alongside the more established Hollywood and European media. It would be reasonable to argue that movies produced for and by large markets benefit from higher production budgets. A research study by Fu and Lee (2008) on the Singapore cinema market has shown that “regardless of the size of the domestic market, greater domestic success, among films from a certain country, portends greater success in the export market”.

This suggests that strong films, for example, a blockbuster, will attract large audiences wherever they are exhibited. It would be logical for local exhibitors to base their film selections and screen allocations on movies’ home sales records since more screens and more frequent showings lead to more sold tickets.

Conclusion

To meet the challenges of a demanding media and entertainment environment, the key drivers of change in the immediate future for XX Organization Holdings:

  • a. The advent of technology, specifically Digital Cinema, will change the way movies are distributed. By switching to a digital distribution model, XX will benefit in the long run from significant cost savings in equipment, maintenance, labor, and increased levels of security in the digital delivery of content. The growth of Digital Cinema will also help to generate more downstream demand for digital intermediate services that provide additional flexibility and revenue streams for XX to manage the storage, hosting, and delivery functions in the film exhibition. Ultimately, cinemas are certainly poised to gain revenue from technology, some of which streamlines operations or command premium prices, typically a few dollars per ticket. However, relying heavily on technology to boost box-office revenue should not be the main catalyst of XX’s strategy. Despite the movie industry’s focus on technology, moviegoers still pay for the story.
  • b. Cineplexes are successful because they have transplanted the one-stop-shopping concept into the cinema domain. Going to the movies might have previously been thought of as an institutional extension of society at leisure. Ravenscroft et al. , (2001: 217) argue that movie-going is now just an “institution of capital… consumed not for its social distinctiveness per se, but rather for the consumption possibilities that it seemingly offers”. Movie-goers are “characterized by a distinctive set of embodied practices” (Hubbard, 2003) – from ‘family values’ themed entertainment to older patrons who may not have been to a cinema in years to catch the movie of the year, to discerning movie buffs who may want more privacy and superior service. Cinema operators that can differentiate itself from the competition either through a concierge-style service, or by catering to a more diverse and non-mainstream audience, or by effectively linking the desires of ‘family’ life to a specific (and sanitized) leisure space will appeal to a wider variety of groups, including senior citizens with spending power.
  • c. Fu and Lee (2008) confirm that economic factors and cultural dynamics significantly shape the responses of audiences to international films. It is shown that the domestic movie market base and cultural distance from Singapore affect the theatrical performance of foreign motion pictures in Singapore, whether measured in terms of the aggregate performance of films from different source countries or in terms of the performances of individual films. “Domestic market scale and cultural linkages indeed contribute to the demand for imported movies in Singapore, predominantly an import exhibition market” (Fu and Lee, 2008: 24). Therefore, films from countries with larger domestic markets and from countries culturally more similar to Singapore experience greater box-office success. Cinema exhibitors like XX must thus exercise due diligence in the way content offerings are selected.

Bibliography

  1. Culkin, Nigel, and Randle, Keith (2003). ‘Digital Cinema: Opportunities and Challenges’. Convergence: The International Journal of Research into New Media Technologies, Volume 9, Number 4, Pages 79-98.
  2. Fu, W. Wayne, and Lee, Tracy K (2008). ‘Economic and Cultural Influences on the Theatrical Consumption of Foreign Films in Singapore’. Journal of Media Economics, Volume 21, Number 1, Pages 1-27.
  3. Hanson, Stuart (2007). Celluloid or Silicon? Digital Cinema and the Future of Specialised Film Exhibition’. Journal of British Cinema and Television, Volume 4, Number 2, Pages 370-383.
  4. Hubbard, Phil (2003). ‘A good night out? Multiplex cinemas as sites of embodied leisure’. Leisure Studies, Volume 22, Issue 3, Pages 255-272.
  5. Husak, Walt (2004). ‘Economic and other considerations for Digital Cinema’. Signal Processing: Image Communication, Volume 19, Issue 9, Pages 921-936.
  6. Info-communications Development Authority of Singapore. ‘Digital Cinema’. Online. Available at: http://www.ida.gov.g/Infocomm%20Industry/20060614174354.aspx (accessed 21 May 2010).
  7. Ravenscroft, Neil, Chua, Steven, and Wee, Lynda Keng Neo (2001). ‘Going to the movies: cinema development in Singapore’. Leisure Studies, Volume 20, Issue 3, Pages 215-232.
  8. Singapore Department of Statistics. ‘Business Expectations Survey, Service Sector’. Online. Available at: http://www.singstat.gov.sg/news/news/bes2q2010.pdf (accessed 21 May 2010).
  9. Singapore Media Fusion. ‘Singapore Media Fusion Plan’. Online. Available at: http://www.smf.sg/smfp/SMFP_Blueprint.pdf (accessed 21 May 2010).
  10. Singapore Media Fusion. ‘Cinema Attendance Since 1990’. Online. Available at: http://www.smf.sg/SFC/Documents/Cinema%20Attendance%20since%201990.pdf (accessed 21 May 2010).
  11. Singapore Media Fusion. ‘No. of Cinema Screens and Capacity’. Online. Available at: http://www.smf.sg/SFC/Documents/No.%20of%20Cinema%20Screens%20and%20Capacity.pdf (accessed 21 May 2010).
  12. The Times Online. ‘How Will The Recession Affect Film? ’. Online. Available at: http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/film/article4949804.ece (accessed 27 May 2010).

Cite this Macro Environment Factors on Cinema

Macro Environment Factors on Cinema. (2018, Apr 21). Retrieved from https://graduateway.com/macro-environment-factors-on-cinema-essay/

Show less
  • Use multiple resourses when assembling your essay
  • Get help form professional writers when not sure you can do it yourself
  • Use Plagiarism Checker to double check your essay
  • Do not copy and paste free to download essays
Get plagiarism free essay

Search for essay samples now

Haven't found the Essay You Want?

Get my paper now

For Only $13.90/page