1. Review trends in the general environment that affect the movie exhibition business, and establish whether their effects are helpful or harmful to theater owners.

2. Assess the five competitive forces at work in the industry environment. Identify the forces that threaten the profitability of prevailing movie circuits, and prescribe the level of competition that can be anticipated amongst industry rivals.

3. Perform comparative situation and strategy analyses for the four companies with dominant market share. What are the advantages and disadvantages for each of the industry’s top competitors?

4. Evaluate the revenue sources and major costs for movie exhibitors. Discuss how the income structure of their business impacts their financial results.

5. Summarize your findings and the current situation for exhibitor circuits. Based on your analysis, what strategic actions do you propose for theater operators to increase the appeal of the theater setting to attract the audiences needed for improved performance under existing industry conditions?

This case is an in-depth study of the motion picture exhibition industry which exposes the tenuous and uncertain outlook for movie theater owners. Changing value chain dynamics and operating variables that affect the profitability of exhibitors are discussed, with comparisons provided for the four major exhibitor circuits in the U.S. The impact of evolving digital technology, trends which influence consumer decisions (most notably, consumer viewing practices in the age of portable devices), and constraints within the studio-dominated business model are also reviewed in detail. The case then closes with a discussion of some of the initiatives taken by exhibitors to confront existing environmental challenges.