Movies - A Barbell Industry

One of the most interesting trends we've tracking for last few years is emergence of barbell industrial structures. 

The barbell exists when an industry consists of a small number of giant corporations, a narrow middle of relatively few mid-sized companies, and a large and growing number of small and personal (one person) businesses.

We've looked at dozens of industries and almost all either already have this industrial structure or are moving towards it.  Examples include the beer, carpet, computer software, shipping, financial service, chicken processing, beverage, fast food and others.   

Because of our research in this area, I was fascinated by the New York Times article Huge Film, Small Film: Big Stakes.  It covers the barbellization of movies.  The article starts with the trend towards mega-movies like the hugely expensive Avatar:

The pattern thrown into relief even before the coming of “Avatar” involves the concentration of more and more revenue in a small number of hugely remunerative releases. Which is to say, the big movies keep getting bigger.  

Covered next is what this means for mid-sized movies:

This consolidation of resources has already begun to affect the supply of medium-budget movies...

The article then discusses the rise of small budget movies and points to the success of this year's best picture winner, The Hurt Locker, as an example.  The article positions this a David versus Goliath battle where only one can win.   

We disagree.  Our research indicates that in many industries both big and small companies can thrive at the same time.  Giant corporations need large markets.  Small firms can thrive in niches too small for the giants.  The giants are also outsourcing more work to third parties, which can benefit small businesses. 

Corporate giants are also increasingly partnering with small businesses to serve niche markets.  Proctor and Gamble, Kraft Foods, IBM, Amazon, Apple and many, many more large corporations have partnership programs focused on working with small businesses.   

The Intuit Future of Small Business report The New Artisan Economy covers the barbell in more detail.

Comments

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David versus Goliath battle where only one can win. Excelent

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This article positions a David versus Goliath battle where only one can win.