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Case Title:

'Hollywood's Lions Gate Entertainment: Defying the Big Players and Creating a Niche Market

Publication Year : 2006

Authors: Priti Krishnan & Sumit Kumar Chaudhuri

Industry: Motion Picture Production and Distribution

Region:USA

Case Code: BOS0007

Teaching Note: Not Available

Structured Assignment: Available

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Abstract:

The six major studios of Hollywood together constitute half the market share of the US film business. The traditional model of these studios to make movies requires high investment. After spending extravagantly on established movie stars and movie marketing, these studios run high risk of losses in case any of their movies fail at the box office. In contrast, Lions Gate Entertainment, an independent studio, releases successful movies like Crash at one-third the cost of the major studios. By pre-selling its international rights and through niche marketing and making thought-provoking movies, Lions Gate has increased its revenues with each of its movies and has also drawn the attention of established stars and critics in the US.

Pedagogical Objectives:

  • To understand the new business model of Lions Gate vis-a vis that of other major studios in Hollywood
  • To discuss whether independent studios like Lions Gate would be able to resist possible buyouts by the major studios and continue to release low budget hits.

Keywords : Hollywood, Niche marketing, Low cost strategy, Marketing Strategies Case Study, Business model of USA's entertainment industry, Movie marketing, Fahrenheit 9/11, Value chain of movie making, Paramount, Sony, Fox, Warner Bros, Disney, Universal, Saw II, Rise of home entertainment, Mergers and acquisitions

Contents: 
Hollywood’s Studios: Competition and Cost Scenario
Movie Studio Market Shares and Gross Box Office Collections
Revenue Share of Different Platforms
Top Star Salaries
Lions Gate Entertainment: Carving out a Niche for Itself

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