Movie Rental Industry – PESTEL Analysis
Intellectual property rights, copyrights, patents and laws may, at times, heavily effect this industry. Though changes in such areas of the laws are infrequent, firms may often get into legal battles over rights to movies or methods of selling those movies. As e-commerce becomes the chief conduit for renting movies, internet laws and patents may become crucial. For example, in 2006, Netflix sued Blockbuster for allegedly copying its on-line movie-rental business method. The two companies reached a settlement out of court, the details of which were never released. However, Blockbuster has closed down hundreds of brick-and-mortar stores over the last few years as it continues to develop business electronically.
The WTO has declared the Internet to be a tax-free environment for delivering goods and services and declaring that no new tax policies be imposed on Internet commerce in order to develop a "uniform commercial code" for electronic commerce. This tax-free environment encourages the growth of e-commerce and was advocated by The Clinton Administration.
As the U.S. economy continues to crawl through a recession, expect consumer spending to fall. However, a downturn in the economy may not mean disaster for the movie rental industry. As movie ticket prices continue to go up, and with the convenience and affordability of renting on-line, it is possible that companies such as Net Flix could steal revenue away from the movie theatre industry.
As the U.S. and the rest of the world continue to develop technologically, e-commerce is likely to be on the rise. One could expect the movie rental industry to maintain revenue in the long haul as people continue to look to save time in how they rent and watch movies, especially for many Americans who are already stretched for time. Watching movies is, and has always been, a huge part of American culture and lifestyle. All people of...