Economic Concentration- Hollywood Movie Industry

Economic Concentration- Hollywood Movie Industry

Economic concentration can be defined as the number of business organizations within a specific economy and their shares of production. Several factors have always influenced the economic concentration in the Hollywood movie industry, and some of these factors include; competition and pricing. In the last four decades, the film industry has been growing, and it is projected that in the next five decades, the industry will have transformed to unimaginable heights (Silver, 2007). Both competition and prices have made this industry remain healthy and attractive throughout. Need help with your assignment ? Reach out to us. We offer excellent services.

Competition And Pricing

The level of competition in the Hollywood movie industry has compelled the players to work on the quality of their film products, meaning that the customers get quality films over time. When the quality of the product improves, it automatically triggers more demand since the customers want to get even more. Thus, when the demand increases, more new firms venture into the industry, causing a high economic concentration (Silver, 2007). The Hollywood movie industry has numerous firms competing with one another, creating an innovative environment that leads to the production of high-quality film products.

Prices, too, had a great impact on the economic concentration of the Hollywood movie industry. The high demand o movies due to their improved quality has attracted many new firms to venture into the industry. The high concentration of the firms in the industry affects the pricing since each firm adopts a pricing strategy that would entice the consumers (Pomerleau, 1997). In other words, the competition tends to pull the prices down even for high-quality movies. Consumers are in the position of getting high-quality content at a fair price.

Supply Chain

The main role played by the supply chain in an economy is to make sure that the products and services are efficiently delivered to the customers. Regarding the Hollywood movie industry, the supply chain has affected the economic concentration of this industry in numerous ways. First, many television programs air films and related products (Silver, 2007). Consumers can access or watch Hollywood movies through some of the television programs for various TV stations. Secondly, there are streaming options from platforms such as Netflix, Hulu, and service providers.

The streaming option utilizes the internet in that consumers can comfortably stream their favorite Hollywood movies while at home as long as they have reliable internet. Hollywood movies are also shown in movie theaters, shows, and many storage devices such as flash disks and computers (Pomerleau, 1997). Thus the availability of many means by which consumers can access Hollywood movies has improved the supply chain in the industry, and it has become a bit easier to enhance the economic concentration of the Hollywood movie industry on the market.

Factors of Production

In determining the economic concentration in the Hollywood movie industry, the four factors of production were applied, but some were more important than others. Capital as a factor of production stood out to be the most important factor in the determination of the economic concentration of this industry (Bakker, n. d). Capital is the initial money that should be available to facilitate film production. The more capital availability, the higher the quality of the films. The lower the capital, the lower the quality of the films. This implies that firms that have abundant capital in this industry have higher chances of producing high-quality movies (Bakker, n. d). In other words, the availability of numerous high-quality films in the Hollywood movie industry implies that the firms or the players in this industry have strong financial muscles.

The least important of the four factors of production was land. The movie industry does not need the element of land since it requires little space, such as theaters and offices. Therefore, the land is the least important factor of production that could determine the economic concentration of the firms in the Hollywood industry. This industry did not need large parcels of land to operate but rather needed intensive capital and operate their business.

Anticipate Changes

The film industry, especially the Hollywood movie industry, has evolved, and it is evident that the evolution process will continue in the future. This implies that the way people watch the films will be different from how people will watch and access the films in the future. One of the developments that are anticipated in the Hollywood movie industry is that there will be a decline in micro-budgeting by filmmakers (Valori, 2021). This is because the process of making a film is quite expensive, earning that firms would not be able to fund the production on their own but would be supported by outside funders.

The second prediction about the future of the Hollywood movie industry is that there will be an increase in the demand for female-based Hollywood movies. Unlike in the past, where most of the characters in the films were male, the future of the film industry would feature even more women than men. Currently, the ratio of men and women in most of the movies is half each. Thirdly, the art of filmmaking will be more IT-intensive and technologically advanced. Some of the main aspects of filmmaking include; taking videos, editing videos, animation, and storing them in the cloud (Valori, 2021). In the future, these processes will be carried out by advanced technologies that will enable real-time access to data sets from anywhere in the world.

References

Bakker, G. (n.d). The Economic History of the International Film Industry. Retrieved from https://eh.net/encyclopedia/the-economic-history-of-the-international-film-industry

Pomerleau, D. (1997). Competitive Advantage, Hollywood Style. The Academy of Management. Vol. 11, No. 1 (Feb. 1997), pp. 116-118 (3

Silver, J. (2007). Hollywood’s dominance of the movie industry: How did it arise and how has it been maintained? Thesis. Retrieved from https://core.ac.uk/download/pdf/10885386.pdf

Valori, K. (2021). The Future of Movie Theaters, And Other 2021 Streaming Media Predictions. Retrieved from https://www.forbes.com/sites/forbestechcouncil/2021/01/20/the-future-of-movie-theaters-and-other-2021-streaming-media-predicitons/?sh=

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Write a 700- to 1,050-word paper evaluating economists’ assessments of the role the 4 factors of production played in determining how the economic concentration you selected has evolved. Complete the following in your paper:

Economic Concentration- Hollywood Movie Industry

Analyze how the economic concentration in the area you chose was influenced by competition and pricing.
Analyze how the economic concentration in the area you chose influenced the supply chain.
Analyze which of the 4 factors of production were the most and least important in determining the economic concentration of the area you chose.
Predict changes you anticipate for the area of economic concentration you chose. Support your predictions.

Consider the resources provided and other academically appropriate sources. The use of charts and tables to illustrate data is highly encouraged.