THE MOVIE INDUSTRY

The Movie Industry is one of most exciting and informative businesses in the world, a business where the revenue of a single feature film (such as Titanic), can approach or exceed $1 billion. In 2001, worldwide gross revenues generated by motion pictures in all territories and media (including music and ancillaries) amounted to over $40 billion. Over 70% of the population rents or goes to movies regularly, thus accounting for over 1.5 billion movie attendances each year in the U.S. Prior to 1985, feature motion pictures had one major source of revenue in the United States and abroad: the movie theater. Today much of the world is undergoing a mass communications revolution; hence, new movie markets (such as home video, cable and pay-per-view) have been growing so rapidly that they are no longer just ancillary markets to the basic theatrical market but have become basic markets in themselves.
Industry statistics reveal that the past ten years have marked an overall increase of at least 30% in many "ancilliary markets" and, over 200%, as in the case of home video. The ability to exploit a movie in many markets diminishes investment risk and increases earning potential. In many instances, low budget movies have lost money theatrically and still earned profits overall from ancillary sales.
With the advent of the new computer-based technologies, "cable" markets and direct digital-delivery of motion pictures via satellite and the Internet are expected to increase dramatically over the next five years, creating an accelerated demand for original and re-run motion pictures. The worldwide market for the sale and exploitation of feature motion pictures is divided into "territories" and "media." The territories are divided into two major regions known as "foreign territories" and "domestic territories." The broad foreign territories are Europe, "AustralAsia," Latin America, Eastern Europe and Others (that include Israel, the Middle East, South Africa and Turkey). The United States and Canada are usually grouped together and referred to as the "domestic territory," from the point of view of the United States.
The current "media" by which feature motion pictures are delivered to the territories includes movie theaters, home video cassettes, cable TV (monthly subscription and pay-per-view), direct broadcast satellite TV, free broadcast TV (Network and Syndication), and ancillaries (such as airlines and libraries). According to a study conducted by Monitor Co., the movie and television industries contributed over $16 billion to the State of California's economy, directly employing 164,000 and indirectly employing another 184,000. The study also found that the vast majority of feature films and television programs are produced by independent producers. Independent production is becomming more prevalent in other areas of the United States, especially Nevada, North Carolina and the Tri-State Area (of New York, New Jersey and Pennsylvania).