Motion Picture,TV & Video Production
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 14,700 motion picture, TV, and video producers in the US produce a variety of video content, including movies, videos, TV programming, and commercials. Major revenue categories include domestic licensing rights; sales of copies of audio/visual works, international licensing rights; contract production services; and merchandise licensing. Movie and video production companies may specialize in a particular category, such as animation, commercials, films, music videos, or TV programming.
Delayed, Uneven Cash Flow
Productions incur the majority of expenses months to even years before realizing a single dollar of revenue.
Piracy
Video piracy is a growing problem, particularly internationally, where copyright protection is lax and illegal activity is more likely to go unnoticed.
Industry size & Structure
The average motion picture and video production company operates out of a single location, employs 11-12 workers, and generates $5 million annually.
- The motion picture and video production industry consists of about 14,700 firms that employ about 171,200 workers and generate about $75 billion annually.
- The industry is highly concentrated; the top 50 firms account for 75% of industry sales.
- Large firms with production operations include the Walt Disney Company and Twenty-First Century Fox, Lions Gate Entertainment, and Comcast (Universal Pictures). The major studios produce and distribute the majority of movies released in the US.
- Large firms may be vertically-integrated. For example, some companies are involved in production, distribution, and broadcasting of content.
Industry Forecast
Motion Picture,TV & Video Production Industry Growth
Recent Developments
Mar 10, 2023 - Ad-Supported Streaming Service Use Increases, Ad Tolerance Decreases
- About 63.5% of people surveyed for TiVo’s Q4 2022 video report said that they now watch one or more ad-supported video-on-demand (AVOD) or free, ad-supported streaming (FAST) services, up from 60.4% in Q4 2021. While 74% of those surveyed remain at least ad-tolerant (13.6% describing themselves as “in favor” of ads, 60.3% as “ad-tolerant”), that’s down 4% from Q4 2021 — suggesting, in TiVo’s words, that “despite cost advantages, the more people watch ads, the less they like them.” About 31.5% of all respondents reported that they typically only stick with these free or cheap services for three months — up from 24.3% saying the same a year earlier.
- On-location filming in Los Angeles decreased 2.4% in 2022 compared to the prior year, according to FilmLA, the city and county film permit office. Feature film and television shoot days decreased 9.6%, TV pilots decreased 71.9%, and commercial shoot days decreased 22.6%. “The return of pre-pandemic filming levels places us roughly where we were in 2019, which was itself a year of significant production decline,” said FilmLA president Paul Audley. The only bright spots were for TV reality shows, which increased 5.2%, and the category of “Other,” which increased 22.9%. If not for the shoot-day increase in the “Other” category, which accounts for over a third of all on-location shoot days on such things as still photography, student films, documentaries, music and industrial videos, and miscellaneous permitted events – and which employ far fewer workers than do film and TV productions – the year-over-year decline would have been much steeper.
- Media buying company Magna Global is predicting a 22.9% decrease in local TV advertising in 2023 while national TV networks will see a 6.3% decrease. The local TV declines come after a year when political advertising hit record levels in 2022. Television advertising “will suffer from continued erosion in linear viewing” but that the declines will be “mitigated by resilient pricing,” a report from the company said.
- Movie and TV production companies have begun setting sustainability goals. Netflix has set a goal to reduce internal emissions by 45% below 2019 levels by the end of 2023, NBCUniversal has a plan that will make them carbon neutral by 2035 and Sony is working to have no environmental footprint throughout the life cycle of their products and activities by 2050. Production companies are also taking steps to cut back on travel by using virtual reality to create production studios and sound stages. They use LED walls and green screens to bring different locations to a set and help replace physical props.
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