Industry Benchmarks of Movie Theatre Chains in the US

Running head: RESEARCH
Research
Name of the Student:
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Table of Contents
Chapter 2:.........................................................................................................................................2
Introduction:....................................................................................................................................2
Industry background:.......................................................................................................................2
Ethics and Current events:...............................................................................................................4
Stock summary:...............................................................................................................................5
Sales and market share growth rate:................................................................................................6
PESTLE Analysis:...........................................................................................................................7
Porters’ Five forces:.........................................................................................................................8
Summary:.........................................................................................................................................9
Reference.......................................................................................................................................11

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Chapter 2:
Introduction:
In order to conduct an in-depth analysis on the financial performance and position of an
entity it will be important to assess the financial statements of such an entity. However, in order
to make the analysis far more effective the financial performance and position of an entity shall
be compared with the industry bench marks. In this document the industry benchmarks of movie
theatre chains in the US have been developed to assess the financial performance of leading
entities in the industry (Harvey, 2015).
Industry background:
The theatre movie chain business in the country has been going quite strong with ever
increasing opportunity for the theatres to show domestic as well as international movies. United
States of America has the biggest movie industry in the whole world and thus, there is no place
better for the theatre chain owners to do their business than the country. The industry has over
the years grown to be the biggest theatre chain industry in the world (Takahashi, 2015). Thus, the
competitors in the industry have huge opportunity to make their fortunes in the market.
In recent times the industry however has experienced stagnation with the growth in the
movie theatre attendance at 15 year low. Though the chart below shows the steady growth in the
amount of box offices revenue however, the attendance in theatres has seen significant drop in
recent years with number of other options available for entertainment purpose.

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Figure 2: Movie Theatre Attendance
(Source: Griffith, 2018)
A simple graphical presentation of the theatre business in the country and its market share
amongst the biggest competitors in the industry will help us to develop a basic understanding
about the top competitors in the market.

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Figure 1: Movie Theatre chain comparison
(Source: "America's largest movie theater chains", 2018)
As can be seen from above graphical representation that AMC Entertainment, Regal
Entertainment and Cinemark Theatres are the top three theatre chain companies in the market to
have the largest share in the industry. Taking the financial information of these companies to
create the industry benchmark will obviously be helpful to assess the financial performance of
these companies as well as the industry as a whole (Vogel, 2014).
The Standard Industrial Classification (SIC) codes are the four digit codes that are
assigned to the business establishment by the US government.This codes helps in identifying the
primary business of the establishment. This classification was helpful in classification and
presentation of data. It is useful in promoting uniformity and comparability of the statistical data.

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The SIC code for the motion pictures is the 7832. The primary business of AMC is Movie
Theater so its primary SIC code is 7832. However, in case of Cinemark Holding the primary SIC
code is 6719 because the main business type of the company is management of companies and
enterprise. In case of Regal Entertainment the primary SIC code is 7832 as the main business is
motion pictures.
The SIC code is being supplemented by the six digit NAICS (North America Industry
Classification System) code. This codes are used by the business and government for classifying
and measuring the economic activity. It should be noted that every company has a primary
NAICS code. This code indicates the primary line of business activity. It can be seen that as the
primary activity of AMC Entertainment and Regal Entertainment are similar so their primary
NAICS code is also similar 512131. On the other hand as the primary business of Cinemark
holding is different so the NAICS code is also different 551112.
In 1999 MSCI and Standard and Poor developed a taxonomy for industry so that the
global financial community can use the standard. This standard is known as the Global Industry
Classification Standard that has 11 sectors, 24 industry groups, 68 industries and 157 sub
industries. The GICS code for the movie and entertainment is 25401030.
In the industry the AMC entertainment has leading market shares in the most important
and diverse market. In the US the three biggest metropolitan market is Chicago, Los Angeles and
New York this cities contribute 19% of the total box office of the United States. In this cities
AMC has 36% of the total market share. As per the latest data of 31 December 2016 the
company has theater located in 24 places in the top 25 places in the United States. The data
provided by the Rentrak states that one third of the top ten opening movies are from AMC.