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Teaching activity

Industry Analysis - How to succeed in Hollywood

Michael Albanese

20th May 2017

When it comes to films, I consider myself a cinephile (my wife prefers “geek”), and so when I found some articles about the financial successes and failures of various films, and how Amazon and Netflix are now “disrupting” the film industry, I felt I had to share!

Attached is a PowerPoint including articles, tables and graphs that can be used as an independent or group task. It gives students a range of business strategies that are having various levels of success when it comes to film-making, and then a range of questions that develop their skills in using the graphs and tables (an important part of Papers 2 and 3).

If, like Mrs Albanese, cinema isn’t your thing, I’ve listed some of the main Business points below:

  1. For the average $150m film, a further $120m is spent on Marketing

  2. Netflix avoid many of these costs as they can market directly to their 98m customers

  3. This is just of one of the benefits backwards vertical integration

  4. On average, only 30% of $100m movies make a profit

  5. Because Netflix are able to keep costs lower, that can take a higher risk approach with the decision-making

  6. Amazon is trying to replicate Netflix’s success by spending $4.5bn on their video streaming

  7. Blumhouse productions (creators of Paranormal Activity, Whiplash and Get Out) are succeed by keeping budgets below $5m

  8. Their biggest hit, Paranormal Activity, made a 13,333% return on investment

  9. Whereas big-budget King Arthur is set to lose $150m…

  10. and it even stars David Beckham!

Michael Albanese

Assistant Curriculum Lead for Business and Law at Solihull Sixth Form College

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