SIC 7829 Services Allied to Motion Picture Distribution

 
FREE EXCERPT

SIC 7829

This classification includes establishments primarily engaged in performing auxiliary services to motion picture distribution, such as film delivery service, film purchasing and booking agencies, and film libraries.

NAICS CODE(S)

512199

Other Motion Picture and Video Industries

512120

Motion Picture and Video Distribution

INDUSTRY SNAPSHOT

Businesses in this industry are allied to the process of film distribution, instead of directly providing services to film distribution companies. In other words, these firms contract with companies in the film exhibition industry, including theater houses, rather than with the distributors. Industry players tend to specialize in their particular market segments, which include film booking and purchasing agencies, film libraries, and film delivery services. Companies in this industry tend to be small; many serve only regional areas. All but four of the 525 establishments in this industry employed fewer than 50 people in 2006; the average employment was four. Combined, revenues were $290 million that year.

Services allied to motion picture distribution faced challenges on a number of fronts. Shifting patterns in the theater market threatened to undercut film booking and purchasing agencies, with huge megaplexes replacing smaller multiplexes. Major motion picture distribution companies were quickly encroaching on the traditional film-library market. The emerging use of digital technologies forced film carriers to rethink their operating strategies to accommodate trends.

ORGANIZATION AND STRUCTURE

Film Booking and Purchasing

Film booking and purchasing agencies were contracted by movie theaters to act on their behalf in the process of acquiring and negotiating the terms to rent feature films from motion picture distribution companies. The terms "purchasing" and "buying" did not mean the actual sale of films, but referred to a form of rental. Traditionally, the term "booking" referred to agreeing which films to play, while "buying" referred to negotiating the payment for the film and its length of run. Both activities, however, were performed by the same agencies. Accordingly, booking and purchasing agencies were synonymous designations. Agencies also helped theaters select films by screening them first when possible. Booking agencies occasionally offered additional business services to theaters, such as market research, consulting, accounting, and bookkeeping. Booking agencies were hired by a majority of independently-owned theaters, whereas larger chains of theaters tended to perform their own booking.

Booking agencies tended to be very small companies, many serving only a handful of theater clients operating a total of 20 to 30 cinema screens. While most booking agencies employed few workers, some were self-employed agents. Larger agencies occasionally operated branch offices and served theaters in different parts of the country but rarely employed more than a dozen workers.

Especially with the move toward megaplexes, which are movie houses with at least 14 screens that can offer multiple screenings of a film simultaneously, film booking agencies are likely to play a diminishing role in the U.S. film industry. The number of movie screens grew dramatically during the 1990s, when more than 15,000 new screens opened. As a result, many large film exhibitors filed for bankruptcy between 1999 and 2001. By 2003 the industry had stabilized, with a handful of companies dominating growth in megaplexes. Regal Entertainment Group, AMC Entertainment Inc., and Loews Cineplex Entertainment Corp. were among the nation's largest movie theater companies. Leading theater operators typically...

To continue reading

FREE SIGN UP