Guzzo Cinemas Marketing Project
Cineplex Entertainment LP
Current Situation
Cineplex Entertainment LP
With the amalgamation of Famous Players and the former Cineplex in October 2005, Cineplex Entertainment Limited Partnership (LP) gained a dominant leadership position (65.1% of box office revenues) as the largest motion picture theatre exhibitor in Canada. The Toronto-based partnership serves approximately 60 million customers under the following five brands: Cineplex Odeon, Galaxy, Famous Players (including Coliseum, Colossus, and SilverCity), Cinema City, and Scotiabank Theatres. This portfolio utilizes multi-branding to target a wide scope of quality seeking segments without damaging its premium end brands.
Critical Success Factors in the Movie Theatre Industry
The core service of exhibition theaters is its ‘full motion picture’, which is crucial to the success of the business as it accounts for 57% of the earned revenue. While the ‘digital pre-show’, which includes trivia and advertisements, has climbed in importance to 26% since its introduction with digital projection technology in early 2005[i], attracting advertisement contracts is reliant on patronship and the quality of the core business. ‘In-lobby entertainment options’ continue to be popular differentiation strategies in the theatre business, but comprise less than 3% of revenues and contribute questionably to the pull of patrons to one specific theatre. Factors such as location, and a desirable movie portfolio have proven to be much more important to attracting customers.
External Analysis: Opportunities to Improve the Core Business
Industry and Competition
The movie theatre industry’s core service business has increasingly come under threat from more relevant new competitors. In their heyday, Cineplex and Famous Players were easily able to exercise their sheer size to invest more heavily in state of the art equipment and theatre ambiance, as bargaining power to negotiate for exclusive showing rights.[ii]
Current Situation
Cineplex Entertainment LP
With the amalgamation of Famous Players and the former Cineplex in October 2005, Cineplex Entertainment Limited Partnership (LP) gained a dominant leadership position (65.1% of box office revenues) as the largest motion picture theatre exhibitor in Canada. The Toronto-based partnership serves approximately 60 million customers under the following five brands: Cineplex Odeon, Galaxy, Famous Players (including Coliseum, Colossus, and SilverCity), Cinema City, and Scotiabank Theatres. This portfolio utilizes multi-branding to target a wide scope of quality seeking segments without damaging its premium end brands.
Critical Success Factors in the Movie Theatre Industry
The core service of exhibition theaters is its ‘full motion picture’, which is crucial to the success of the business as it accounts for 57% of the earned revenue. While the ‘digital pre-show’, which includes trivia and advertisements, has climbed in importance to 26% since its introduction with digital projection technology in early 2005[i], attracting advertisement contracts is reliant on patronship and the quality of the core business. ‘In-lobby entertainment options’ continue to be popular differentiation strategies in the theatre business, but comprise less than 3% of revenues and contribute questionably to the pull of patrons to one specific theatre. Factors such as location, and a desirable movie portfolio have proven to be much more important to attracting customers.
External Analysis: Opportunities to Improve the Core Business
Industry and Competition
The movie theatre industry’s core service business has increasingly come under threat from more relevant new competitors. In their heyday, Cineplex and Famous Players were easily able to exercise their sheer size to invest more heavily in state of the art equipment and theatre ambiance, as bargaining power to negotiate for exclusive showing rights.[ii]
References: Ideaca (2006). Cineplex Entertainment rolls out Microsoft Dynamics CRM from Ideaca Knowledge Services [Electronic Version]. Retrieved November 19, 2007, from http://www.ideaca.com/news/archive_news/nov_27_06.aspx Olivia Yu or Tina Gladstone (2005) Cineplex Entertainment LP (2007). [Electronic Version] Retrieved November 20, 2007, from www.cineplex.com Cineplex Galaxy Cinemas (2007) Disclosure Plus Investor Relations Cineplex Galaxy Income fund; Initial Annual Information Form (2006) Investor Relations [Electronic Version, PDF] retrieved November 23, 2007, from http://dplus.cineplexgalaxy.com/content/objects/AIF%203%2027%202007%20FINAL.pdf . p 3-18, 55-58. Summerfield, P. (2005). Cineplex Galaxy- Famous Players merger creates one-stop shop for cinema ad buys. Retrieved November 23, 20077, from Media In Canada Web site: http://www.mediaincanada.com/articles/mic/20050616/cineplex.html Cinema Guzzo (1998) Intel Viiv and AMD Live. (2007). Intel and AMD Jump on the Set-Top Console Market. Retrieved November 24, 2007 from Home Theatre Focus Web site: http://www.hometheaterfocus.com/components/intel-viiv.aspx Mello Jr, J.P November 24, 2007, from E-Commerce Times Web site: http://www.ecommercetimes.com/story/56127.html Burger, A.K November 24, 2007, from Tech News World Web site: http://www.technewsworld.com/story/57489.html Burger, A.K November 24, 2007, from Tech News World Web site: http://www.technewsworld.com/story/57557.html Wikipedia November 20, 2007, from Access IT Web site: http://www.accessitx.com/ McNulty, M