D20-21 The Big Shot

The Big Shot
Bain | Round 1 | Media/Entertainment
63
03 | CASE: THE BIG SHOT
B E H AV I O R A L
INTERVIEW
THE BIG SHOT QUESTION:
Bain | Round 1 | Media/Entertainment

1. Describe the
Prompt: best leader
Our client, Lights Camera Action Entertainment (LCA), is a major movie you've worked
production house. After a disappointing summer filled with numerous box with.
office flops, the CEO of LCA has approached us to decide which movie the
company should release next.
2 . Te l l m e a b o u t
Clarifying Information: Note: Provide this only if corresponding questions are asked. a time when you
dealt with
1. W a LCA b ? LCA is a production house in the US but release movies across major global ambiguity at
markets. They have a distribution network of domestic and international theatres and get a share of the ticket sales.
workplace.
2. What movies do they produce? They've been in the business for the past decade and have a good mix of movies
across different genres.
3. What happened over summer? The COVID-19 pandemic has wreaked havoc on the movie industry.
4. What is the financial situation of the company? Even though the company did not have a major hit over summer,
the company has ample cash reserves from investors. The board has indicated, however, that they expect a hit soon,
or else the CEO will be looking for a new job.
5. Do they have any financial target? The board is concerned about ROI after the recent flops and has classified a hit
as a movie that has an ROI > 50%.
64
UVA Darden School of Business 2019-20 case book
Framework Guidance:
Note: There are many possible alternatives to this framework. These are only provided as possible suggestions.
Financial Non-Financial
Revenues Costs Internal External
Number of theaters at Actors Sequel of prior hit Macroeconomic trends
release Sets Saturation of series Actor popularity
Price of tickets Special effects Expertise in a genre Genre reach
Fill rate at theater Advertising Exclusive deals with actors Trending theme for the season/pop culture
Merchandise licensing Editing Adaption from popular novels/books Clashes with other movie release dates
Sequel potential Sound Competition from Netflix and other
Production Design streaming media
How to Move Forward:

The candidate should recognize that this is a profitability case. Good candidates will also realize that there are other factors
that determine the success of movies.
A good understanding of the breakdown of tickets sales at a theatre level is key to moving forward the interviewer should
push candidates to get granular while calculating revenue (theaters * seats * fill rate * ticket sales).
Once you get to this point, hand the student Exhibit 1 and 2.
65
EXHIBIT 1
LCA movie options
Total Production Costs Forecasted Theatre

M Na G
(M $) A a (%)
Project Huntington Comed 50 80
Life at Ivy D ama 100 60
Case Wars Ac ion 75 75
Paws at Pav Anima ion 90 80
66
EXHIBIT 2
Global Movie Industry Statistics
Anticipated Theater Demand By Genre*
Comedy
Drama
Action
Animated
0 500 1000 1500 2000 2500

Domestic International
*Average theater run of 30 days
67
Question 1
Which of the genres is the most profitable option for the production house?
Exhibit or Question Guidance:

Hand the student Exhibits 1 and 2. The candidate should realize that they cannot do a profitability analysis without number of seats in a
theatre and price of a ticket. Provide Exhibit 3, when the candidate asks for the above information.
Provide only when asked Assume 30 days of revenue.
LCA revenue from each theatre type:
LCA No. of No. of

Theatre type Monthly earnings
revenues/ticket shows/day seats/show
International $1 5 400 $1 * 5 * 400 * 30 = $60,000
Domestic $1.5 10 200 $1.5 * 10 * 200 * 30 = $90,000
68
EXHIBIT 3
Global Theatres Statistics
T a LCA / N . / a N . a /
International $1 5 400
Domestic $1.5 10 200
69
Exhibit/Question Solution Guidance:

Total Monthly earnings
G International Domestic Total
80%*1,000*60,000 = 80%*1,500*90,000 =
Comed 48M + 108M = 156M
48,000,000 108,000,000
60%*500*60,000 = 60%*1000*90,000 =
D ama 18M + 54M = 72M
18,000,000 54,000,000
75%*1,500*60,000 = 75%*2,000*90,000 =
Ac ion 67.5M + 135M = 202.5M
67,500,000 135,000,000
80%*750*60,000 = 80%*1,000*90,000 =
Anima ion 36M + 72M = 108M
36,000,000 72,000,000
70
Exhibit or Question Guidance:

Profit for one month:
Genre Revenue ($) Costs ($) Profit ($)
Comedy 156,000,000 50,000,000 106,000,000
Drama 72,000,000 100,000,000 -28,000,000
Action 202,500,000 75,000,000 127,500,000
Animation 108,000,000 90,000,000 18,000,000
Exhibit Analysis:
ROI for each genre:
Good candidates should not calculate the profitability for all the 4 movies. From
Genre ROI (Millions $) he E hibi 1, i i clea ha Life a I ill be he lea cce f l and can be
disregarded.
Comedy 106/50 = 2.12
From Exhibit 2, a great candida e ho ld di ega d Pa a Pa a i i
Drama -28/100 = -0.28 screened at fewer theatres.
Action 127.5/75 = 1.7 After calculations:
Animation 18/90 = 0.2 2 movies stand out however, even though the comedy movie makes less profits,
it has a greater ROI which is what LCA needs.
71
BRAINSTORMING
Other than the profitability analysis, what are the other strategic decisions that LCA should consider
for the success of their next movie?
Brainstorming Guidance:
Note: This is just one possible set of categories and answers. Many more are possible, and interviewers should assess both the volume and relevance of answers.
Release Timing: Monetization: Content/Marketing:

Strategic release dates to coincide with Merchandise sales from these movie category, Using the marketing budget to drive
holidays/popular events, such as romcom during e.g.: water tumblers, limited edition gadgets, t- awareness and buzz for the movie using
Valen ine eekend, Holida film o e Ch i ma shirts etc. appropriate channels
Avoiding clashes with other popular movies or large Potential for movie sequels based on popularity Casting the right actors, production and
sporting events during the release direction, sound crew
Releasing the movie on other platforms such as
Netflix, Hulu, and obtaining television streaming Theme/story of the movie to align with
rights. ongoing social and pop culture, macro-
economic trends
Impact of initial reviews on the theatre fill rates
for subsequent weeks.
72
CONCLUSION
To conclude, the interviewee should provide the following:
Recommendation:
Recommend P ojec H n ing on
Analysis to support the recommendation walk through the math, and recognize the lower cost to produce and higher
ROI
Risks:
Any concerns with the plan, example:
The impact of the critics and popular reviews on the theatre fill rates for subsequent periods.
Audience preferences might change, and theatres might change their genre preferences
Next Steps:
Investing in releasing the movie from the category selected, choosing an appropriate release date and launching an ad
campaign.
Analyzing the scope of the future revenues from sequels or partners for sale of merchandise.
73
INTERVIEWER FEEDBACK FORM Case Name _________________________ Interviewer ___________________________
Case Book ____________________ Case Type ____________ Difficulty ____________
Case Execution:
Clarifying Questions + Framework
Good Questions
Feedback:
1 2 3 4 5
Structured
MECE
Creativity
Exhibits + Quantitative Ability
Accuracy Feedback:
Speed 1 2 3 4 5
Insights Presented
Errors / Guidance Needed
Brainstorm + Conclusion
Creative & Structured 1 2 3 4 5 Feedback:
Good Business Judgment
Recommendation Strength
Presence & Non-Verbal

Confidence
Poise / Posture
Feedback:
1 2 3 4 5
Clear & Concise
Body Language
Coachability
Total: _____ / 20
74
03 | CASE: THE BIG SHOT - APPENDIX
EXHIBIT 1
LCA movie options
Total Production Costs Forecasted Theatre

M Na G
(M $) A a (%)
Project Huntington Comed 50 80
Life at Ivy D ama 100 60
Case Wars Ac ion 75 75
Paws at Pav Anima ion 90 80
75
EXHIBIT 2
Global Movie Industry Statistics
Anticipated Theater Demand By Genre*
Comedy
Drama
Action
Animated
0 500 1000 1500 2000 2500

Domestic International
*Average theater run of 30 days
76
EXHIBIT 3
Global Theatres Statistics
T a LCA / N . / a N . a /
International $1 5 400
Domestic $1.5 10 200
77

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The Big Shot

Bain | Round 1 | Media/Entertainment

Bain | Round 1 | Media/Entertainment

How to Move Forward:

Total Production Costs Forecasted Theatre

Project Huntington Comed 50 80

Life at Ivy D ama 100 60

Case Wars Ac ion 75 75

Paws at Pav Anima ion 90 80

Anticipated Theater Demand By Genre*

0 500 1000 1500 2000 2500

Exhibit or Question Guidance:

LCA No. of No. of

International $1 5 400 $1 * 5 * 400 * 30 = $60,000

Domestic $1.5 10 200 $1.5 * 10 * 200 * 30 = $90,000

Exhibit/Question Solution Guidance:

G International Domestic Total

Exhibit or Question Guidance:

Action 127.5/75 = 1.7 After calculations:

Release Timing: Monetization: Content/Marketing:

Case Book ____________________ Case Type ____________ Difficulty ____________

Presence & Non-Verbal

Total Production Costs Forecasted Theatre

Project Huntington Comed 50 80

Life at Ivy D ama 100 60

Case Wars Ac ion 75 75

Paws at Pav Anima ion 90 80

Anticipated Theater Demand By Genre*

0 500 1000 1500 2000 2500

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Case Book ________ Case Type Difficulty