Entertainment and Media Industry Trends From Plunkett Research Online distribution of content/interactive TV Wireless access/Internet appliances Online retailing Other advanced communication technologies Globalization of the entertainment market The superstore/the mega-theater Mergers and consolidation Digitization and other new media technologies Integration of entertainment, telecommunications, and computing The spread of entertainment into new areas of day-to-day life Deregulation Copyright and copying protection for digital content Get details on these trends and much more from Plunkett's Entertainment & Media Industry Almanac 2002-2003. Learn more about Plunkett Research.

The movie business has changed dramatically since it was run by studios headed by moguls like Jack Warner at Warner Bros. and Louis B. Mayer at Metro-Goldwyn-Mayer (MGM). Studios controlled every aspect of moviemaking, from the film's production to its exhibition in theaters. After the Supreme Court's anti-trust Paramount Decree of 1948, the studios were out of the theater business, and decades later the studio system collapsed as more control found its way into the hands of the artists.

Facing rising costs from the independent talent and left only with the means of production and distribution of movies, the studios got an influx of cash and a corporate face-lift, starting with News Corp.'s acquisition of 20th Century Fox in 1985 (Fox Entertainment Group). Others soon followed: Sony bought Columbia Pictures in 1989 (Sony Pictures Entertainment), Time bought Warner Bros. in 1990 (Time Warner Entertainment), Viacom bought Paramount Pictures in 1994, and Seagram, itself now part of Vivendi Universal, bought Universal Studios in 1995. The only studio not to go the media conglomerate route was MGM, while Walt Disney bucked the trend by building itself into a media titan instead of being acquired by one.

As movies have gotten bigger and louder (thanks in part to Mr. Lucas and Lucasfilm), moviegoers have expected the same treatment at their local theaters. Believing bigger and better screens would bring greater demand for movies, exhibitors began a costly building frenzy of state-of-the-art multiplex theaters. To some extent the demand did grow but the new multiplexes tended to cannibalize sales from the exhibitors' older theaters. Nearly 14,000 new screens have been built since 1990. Consequently, many chains have gone in and out of bankruptcy in recent years, such as Edwards Theatres, General Cinemas, Carmike Cinemas, and United Artists Theatres. Carmike Cinemas has been able to emerge from Chapter 11, but other troubled chains found themselves becoming acquisition targets. Industry leader Regal Cinemas) was taken over by Philip Anschutz after it emerged from bankruptcy protection in 2002 (he combined it with Edwards and United Artists to form Regal Entertainment Group). General Cinemas (also known as GC Companies) was bought by AMC Entertainment the same year.

Next on the horizon for the movie business is digital cinema, which threatens to render film extinct. Cheaper in virtually every way, it is the future of 21st century moviemaking (George Lucas shot Star Wars: Attack of the Clones digitally). Yet, there are still few theaters with the necessary digital projectors because many of the major exhibitors have little or no capital for new investments.

The major studios have begun pioneering new digital distribution channels. Metro-Goldwyn-Mayer, Sony Pictures Entertainment, Paramount Pictures, Universal Studios, and Warner Bros. have announced a joint venture between the five studios to deliver video-on-demand over the Internet. Disney and Fox have countered with a similar joint venture offering video-on-demand via the Web as well as over digital cable systems.

In the music business, digital distribution is already at hand. Outside of collectors shops and other specialty stores, the days of vinyl, 8-tracks, and cassettes are long over thanks to the CD, but the days of the CD may be numbered as well. Thanks to MP3.com, Napster, and the like, downloading music over the Internet is much easier than getting those plastic wrappers off CD cases. Piracy poses such a threat to the big music corporations that most major companies are trying to lure consumers to their own digital distribution channels. BMG Entertainment, EMI, and Warner Music Group have banded together with RealNetworks to form MusicNet; while Sony Music Entertainment and Universal Music Group are working to create pressplay. MP3.com and Napster were both sued for copyright infringement, but both seem to have joined the music industry party (BMG partnered with Napster, sinking millions of dollars into it, and Universal Music Group purchased MP3.com after settling its lawsuit against the company).