Movie industry

Il settore cinematografico come oligopolio e le funzioni delle case di produzione indipendenti

È importante sottolineare che l'industria cinematografica è un oligopolio, in cui una parte del mercato è occupata dalle case di produzione cinematografica indipendenti che svolgono tre funzioni principali: fornire produzioni per la distribuzione; gestire film in lingua inglese in tutto il mondo; e produrre e distribuire film in lingue locali.

Il mercato americano è attualmente maturo anziché in espansione, ed è caratterizzato da importanti fattori esterni:

• La tecnologia sta aumentando i costi, a causa della maggiore necessità di spese di marketing per far risaltare i film dalla massa (dato che i film vengono lanciati in date chiave, i blockbuster finiscono per cannibalizzare il mercato sovraffollato)
• I social network e i siti dei fan garantiscono una rapida diffusione delle recensioni negative
• La tendenza principale del pubblico online è quella di noleggiare piuttosto che acquistare film dopo l'uscita cinematografica

Il modello della catena del valore e la ristrutturazione attuale

La catena del valore si riferisce al collegamento verticale tra i vari attori del settore cinematografico.

Analysis that helps understand the revenue streams with the film business refers to the vertical approach.

The changing technology and users' demand are challenging the existing windows structures; local audiences and communities are rising up, demanding specific stories that explore their own communities.

The weaker independent players have found themselves at the bottom of the V shape: the current obsession with 3D (higher ticket prices and higher production costs); declining distribution advances; a lack of bank appetite and lowering of expertise in lending and risk management; declining DVD revenues and free TV values (no clear way to monetize emerging VOD and streaming.

The value chain that connects the film producer/financier/seller/distributor exists in order to combat uncertainty: the film value chain depends on convention, where action makes sense only between certain practitioners and is enabled through the use of evaluative frameworks (such as budget, financial plans, sales estimates).

that coordinate actions. Sales agents estimate the potential high and low prices that a film will sell for to a distributor in each territory around the world. These figures allow for coordinated actions across segments of the value chain. Producers depend on these estimates, combines with pre-sales to test the commercial market appeal and pricing, alongside the reputation and track record of the sales company attached. The sales company, or international distributor, has a historical and current understanding of what combination of prices it will attract in order to service the production's ability to close its finance, and contribute effectively to its own portfolio of product and ultimately capture value and profit for its own business operations.

However, the advent of the internet questions such context of evaluative frameworks. The film value chain is a term that applies to all various stages of creation, distribution and exploitation of product across the global film business. The

The primary products of the film industry are described as a group of rights. This group of related rights that constitute a movie can be broken down into:

• The underlying rights kick-off with a pre-existing book, script, play or another source that has to be acquired. Such rights usually belong to third parties.
• Newly created copyrights refer to the right to utilize and exploit the work of writers, actors, directors, and designers and it is acquired through contracts. Then, service agreements have to enter into for the use of studio, laboratories, visual effects houses.
• Once a film has completed production and post-production, the film copyright is created.
• Exploitation rights the film copyright and related rights are then exploited through licensing, distribution, and merchandising to third parties active in film sales, distribution, exhibition, merchandising, etc.

This copyright structure suits the right owners, licensors, and creators rather than the consumer/user. With the internet, this

social networking and associated user-generated content- An increase in populist, interactive programming involving the public as lead playersand contestants- A change in payment/billing mechanisms- A rise in the public's ability to produce and distribute their own creative endeavors(music, words, photographs and video)- An increase in file sharing and an associated increase in piracy- Inter-changeability between mediums, with decreasing and less clear boundariesbetween online networks, short films, recorded music, photos, etc.

These changes are modifying the exclusivity of existing suppliers and gatekeepers people have now the power to decide what, where, when and how to pay attention to what is on offer. Such model does not place the customer value proposition in pole position. However, there are areas of potential advancement in the new business models: barriers to entry for smaller companies are lowering; production with less sunk-costs risks are possible; there is an arrival

facing a significant revolution.

Integrated film value chain:

Development Financing Production Licensing-Distribution Exploitation

The emerging film value chain

Producer Aggregator Consumer

The emerging film value chain places the aggregator (e.g. Google, Amazon) at the center of financing/distribution (they control platforms and content access). The super-independent players that are linked to aggregators are able to achieve scale and critical mass.

These international distributors will have the ability to release through third parties in appropriate theatrical territories, while concurrently exploiting their digitized libraries and new product on multiple digital outlets and platforms. In turn, the aggregators will have both a considerable impact and potential control over the industry's emerging structure. The aggregator-driven model is one that does not greatly encourage traditional film distributors.

This emerging film value chain is tightening the film value

The film industry is undergoing a transformation in the digital age, with the use of digital tools and the internet changing the traditional film value chain. This transformation allows producers to engage with their audience earlier and to a greater degree through interactive media and extended content, creating greater demand and increasing revenues. Filmmakers are also proactively pursuing disintermediation by bypassing traditional sales agents, distributors, and exhibitors. However, the success of this strategy relies on the success of the first strategy, as the removal of traditional marketing activities requires the replacement of their role and resources.

Film development is the starting point for a movie, encompassing the initial concept or story idea, the acquisition of that idea, the screenwriting process, the raising of development finance, and the initial stage of production planning.

Considerable sunk costs to bring a project to a point of potential financing, even if most film projects that start their life in active development fail to make it to the principal photography stage. Most comprehensive models that offer a fully fledge, integrated development process are generally found within the Hollywood studio system. Here, a production company is attached to a studio (hardly exist in Europe). A major studio or major film production company with direct links to distribution normally treats development as a fixed cost within its overall annual budget and longer-term business plan; such costs are allocated to all films as an above-the-line costs hit films that go on to make a profit repay the costs of unmade screenplays and projects.

At the heart of the creative development process, there is the writer. He usually develops an outline of 1-2 pages or a more fully fledged treatment of 10-15 pages before