Business Practices in the Film Industry, Essay Example

The value chain of the motion picture (film) industry is different from other industries’. According to Eliashberg et al. (2014), the main practices that contribute towards the end production (business practices) are production, distribution, and exhibition. All these activities and practices lead to customer consumption, resulting in revenues.

Production is based on a sequence of creative decisions that develops a motion picture (end product) that is ready for viewers. However, there are different stages of production, and these will be examined in detail below.

Pitch (the idea) creation is the first step to be completed, and it is hard to determine whether or not the idea will be popular in the audience.  Execution of the final production will determine what the pitch develops into. Pitch can be a story concept, however, in some cases, a written book is ready to be adapted for screen. In this case, the pitch is more detailed, and it is easier to predict the outcome.

Once the pitch is accepted, the producer will need to secure finance for producing the end product (film). Signing a studio contract, financing logistics operation, recruitment, contributor remuneration will call for careful planning. A budget is created, and applications for loans or sponsor funding are completed. Once the total proposed expenditure of the production is secured, the production can start.

Another new, advanced, and extremely useful business process is also mentioned by Eliashberg et al. (2014): early-stage box office forecasting. This method is designed to predict how popular the theme, imagery, and storyline is likely to be among target audiences. This prediction method can prevent movies from producing financial loss for companies, and utilizing market research tools in this process can be beneficial.

Works Cited

Eliashberg, J., Elberse, A, and Leenders, M. The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions. Working Papers. 2006. Web. <http://hbswk.hbs.edu/item/5431.html>