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  • Threat of New Entrants

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    Chitralekh Barve
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    The threat of new entrants into the movie industry remains low due to the high costs of film stars, payroll, production, and other expenses. While the film industry appears lucrative, there are significant risks involving large capital investments and uncertain returns. Movies have low shelf lives and studios must continuously release new content to grow their audience. Many new production houses have failed and shut down because of ongoing losses and difficulty covering variable costs. The threat of substitution from online streaming services like Netflix, Amazon Prime, and Hotstar has increased as well. These platforms offer more diverse and affordable content than purchasing movie tickets, posing a threat to traditional cinemas. Viewers now prefer the quality and variety provided by streaming platforms.

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    The threat of new entrants into the movie industry remains low due to the high costs of film stars, payroll, production, and other expenses. While the film industry appears lucrative, there are significant risks involving large capital investments and uncertain returns. Movies have low shelf lives and studios must continuously release new content to grow their audience. Many new production houses have failed and shut down because of ongoing losses and difficulty covering variable costs. The threat of substitution from online streaming services like Netflix, Amazon Prime, and Hotstar has increased as well. These platforms offer more diverse and affordable content than purchasing movie tickets, posing a threat to traditional cinemas. Viewers now prefer the quality and variety provided by streaming platforms.

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    16 views3 pages

    Threat of New Entrants

    Uploaded by

    Chitralekh Barve
    The threat of new entrants into the movie industry remains low due to the high costs of film stars, payroll, production, and other expenses. While the film industry appears lucrative, there are significant risks involving large capital investments and uncertain returns. Movies have low shelf lives and studios must continuously release new content to grow their audience. Many new production houses have failed and shut down because of ongoing losses and difficulty covering variable costs. The threat of substitution from online streaming services like Netflix, Amazon Prime, and Hotstar has increased as well. These platforms offer more diverse and affordable content than purchasing movie tickets, posing a threat to traditional cinemas. Viewers now prefer the quality and variety provided by streaming platforms.

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    of 3

    Threat of new entrants

    Threat of new entrants in the movie industry is still on a


    lower level considering factors like cost of film stars, payroll
    ,production costs and other miscellaneous expenses. The film
    industry might look a lucrative avenue from outside but it has
    many risks when you put your hands in it. The capital
    investment is huge and ROI is not assured. The products are
    highly perishable and have a low shelf life. You need to come
    up with something new every time if you need to grow in this
    industry otherwise public will discard you off in no time
    Many production houses have started with promise but had
    to shut down due to continuing losses and difficult to cover
    variable costs.

    Threat of substitution
    With advent of online streaming service providers like Netflix,
    amazon prime,hotstar etc the quality and diversity of content
    has increased by a considerable amount and so has the
    threat of substitution . Moreover the cost of subscription for
    any of their monthly/ annual packages is quite affordable if
    you compare it with purchasing a movie ticket in a multiplex
    theatre in a metropolitan city
    Suppose you go to purchase a bollywood movie ticket for a A
    listed star in Delhi PVR cinema it would cost you roughly
    500-600 bucks and in the same amount you can purchase a
    yearly subscription of hotstar or prime
    The viewers have also become more aware and smart and
    they prefer quality with variety which is being provided by
    these online streaming platforms

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