There are 5.2 million Netflix users in Canada (Zadikian, 2018). This has taken away significantly from businesses in the entertainment industry. Because of easy access to movies at home, Cineplex Inc. has suffered losses in revenue (Annual Report, 2018). Netflix allows users to access movies and shows for a cheaper price from the comfort of their own homes. Cineplex, which holds 80% of the market share for movie theaters in Canada, is a leading form of entertainment for all target audiences (Afxentious, 2018). They have created a significant presence as a physical facility, but they have struggles within the e-tail section (Annual Report, 2018). Netflix, which is their main competitor, has been established as a comfortable, convenient, and cheap alternative which is why they have a large population of customers.
Target Market Section:
Cineplex is dependent on movies for drawing audiences. Each movie will target a different a different psychographic and behavioral demographic as a result of its content. However, Cineplex theaters only exist in areas with larger populations. Cineplex’s primary buyer group is anyone living in a large town or city looking for entertainment with some amount of disposable income (Cineplex Company Profile, 2018). People struggling with finances will not see a movie ticket as a worthy investment of their time.
Cineplex has taken steps to appeal to groups which will spend the most in Cineplex. This can be broken down into people who have more disposable income, free time or are simply looking for a good deal. Each buyer type is described in more detail within Appendix A.
The entertainment industry is absolutely huge, with a wide variety of entertainment groups. The competitors of Cineplex include Netflix, AMC Entertainment Holdings, Inc., and Empire Company Limited. Cineplex Inc. competes online and as theaters with physical facilities as well. The competition is fierce and relentless in their approach to gain loyal customers, Netflix for example, has adjusted their prices multiple times to gain the right amount of praise from their customers as well as maximum profit (Annual Report, 2018). In a retail versus e-tail perspective the online audience is steadily increasing and reaching older and younger audiences causing us to believe that e-tail is a more popular form of entertainment (Afxentious, 2018). In Canada, the general economy health is currently at a decline and Cineplex is doing fairly well despite this setback (Cineplex Company Profile, 2018). We can look under Porter’s Six Forces to see the establishing threats. Threats of new entrants and substitutes will lead to much damage to the company as a whole, unless they start to undertake a wider role online. New entrants have a sense of what people are looking for in regards to video streaming and access, they can easily create sites that can attract audiences. Threats of substitutes includes any form of entertainment that can be done instead of going to the movies. This would include Netflix, Hulu or other streaming services. Substitutes would also entail places like Vimeo or YouTube. Substitutes such as YouTube have been adding newer features and options that have made watching movies and shows easier, also they have YouTube Red which has videos that can legally only appear on YouTube and not anywhere else.
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