Porter’s Five Forces Analysis of Entertainment Industry 

The entertainment industry is the part of the economy that focuses on entertaining people and earning revenue and income through the process. It also goes by the name of the showbiz industry. Today, we’ll discuss Porter’s five forces analysis of entertainment industry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Types of Entertainment Industry

• Electronic Entertainment
• Digital Entertainment
• Mass Media Entertainment Industry
• Live Entertainment
• Exhibition Entertainment

Entertainers in the Entertainment Industry

• Sportsmen
• Musicians
• Actors
• Theater Directors
• Wrestlers
• Film score composers
• TV and film directors
• Comedians
• Clowns
• Circus owners

Top Companies in Entertainment Industry

• The Walt Disney Co
• Netflix Inc
• Paramount Global
• Nintendo Co. Ltd
• Fox Corp
• Universal Music Group NV
• Comcast Corp
• Warner Bros. Discovery Inc
• Live Nation Entertainment Inc
• NetEase Inc

Porter’s five forces analysis of entertainment industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s the entertainment industry Porter’s five forces analysis of showbiz industry as follows;

Porter’s Five Forces Analysis of Entertainment Industry 

Let’s discuss Porter’s five forces analysis of entertainment industry as competitive forces in strategic management; they’re as follows;

Bargaining Power of Suppliers in Entertainment Industry

The bargaining of suppliers is higher in the showbiz and Entertainment Industry as competitive forces in strategic management. The main suppliers in the showbiz and Entertainment Industry are as follows;

• Media channels
• Advertising publishers
• Marketers
• Digital and social media platforms
• Producers

 Some of the main factors impacting the bargaining power of suppliers in the entertainment Industry Porter’s five forces analysis of showbiz industry are as follows;

I-Limited Suppliers

If you analyze the entertainment industry, then you will find very limited media channels, content producers, and investors. It gives them significant bargaining power in the market and industry. They would promote and sponsor the content and person based on their personal likeness and dislikeness. They won’t run the type of content that is contrary to their beliefs, vision, and values; no matter if it is right or wrong.

II-Capital Resources

The other reason for the high bargaining power of suppliers is that they have access to a lot of capital resources, tech expertise, media tools, and equipment. An ordinary person or content creator doesn’t have access to such resources just like they have.

Bargaining Power of Buyers in Entertainment Industry

The bargaining of Buyers is moderately high in the showbiz and Entertainment Industry as competitive forces in strategic management. Some of the main factors impacting the bargaining power of buyers in the Entertainment Industry five forces analysis of showbiz industry are as follows;

I-Multiple Entertainment Options

When it comes to watching or choosing an entertainment channel, then buyers and users have multiple media options. They would select and choose the entertainment based on their personal likeness without thinking twice; or keep scrolling up their smartphone.

II-No Switching Cost

Users could easily switch from one media channel and source of entertainment to another without incurring any cost. That’s why many media channels keep in mind the likeness and preferences of their viewers and they run the content whatever their viewers like. The objective of media channels is to keep their rating up and increase the user engagement level.

Threat of New Entrants in Entertainment Industry

The threat of new entrants is Lower in the showbiz and Entertainment Industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Entertainment Industry five forces analysis of Showbiz Industry are as follows;

I-Legal & Licensing Cost

When it comes to starting any type of media channel, it requires a lot of capital investment to pay for the legal and licensing costs. It is not just a one-time cost, media channels have to pay the license fee and cost annually. For instance, if their channel fails to attract a significant number of viewership and reach the breakeven point, then it would be a great loss.

II-Marketing & Distribution Expense

Along with the licensing fee of media channels, content producers also incur a lot of marketing and distribution expenses in order to make a deal with top media channels. If they don’t invest in marketing and distribution, their content won’t reach the target audience on time.

Threat of Substitutes in Entertainment Industry

The threat of substitute products and brands is moderate and high in the showbiz and Entertainment Industry as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the Entertainment Industry five forces analysis of Showbiz Industry are as follows;

I-Social Media

Social media platforms are a great substitute for the traditional media channels and platforms. Nowadays, people consume a lot of time on social media channels, instead of watching TV, drama, and films. That’s why many media channels have opened up their channel pages to connect with their target customer market.

II-E-Sports & Video Gaming

Along social media platforms, e-sports and video gaming are the other substitute entertainment options for traditional media and social media platforms. When people are busy playing video games, they won’t have time to scroll up on social media or watch the news, TV drama, or films.

Competitive Rivalry in the Entertainment Industry

The competitive rivalry among showbiz companies is higher in the Entertainment Industry as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the showbiz industry’s five forces analysis of the Entertainment Industry are as follows;

I-Tough Competition

The media channels are in fierce competition with one another in the entertainment industry. They invest a significant amount of capital resources in research and development to come up with unique and innovative ideas to gain a competitive edge over competitors.

Conclusion: Entertainment Industry Porter’s Five Forces Analysis |Five Forces Analysis of Showbiz Industry 

After an in-depth study of Porter’s five forces of entertainment industry; we have realized that entertainment holds great growth potential. If you are learning about the entertainment industry five forces analysis of showbiz industry; then you should keep in mind the bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.