How to Start / Open A Movie Shop Business in Kenya

Movie Shop Business Plan (Kenya)



This survey largely covers the small scale movie duplicating business. This as depicted by numerous stalls selling “Latest Movies” mostly at Ksh.50.

It is important to note that the business operates on a legal grey area since it involves infringing on the intellectual properties of others, in this case the producers of the movies.

Although the business has grown to a point of acceptance, and licenses are issued by local statutory bodies this does not discount the fact that duplicating movies without the permission of the rights owner is illegal, locally and internationally.

Still, for now the business is thriving, the legalities seem forgotten, it’s an investment opportunity and that’s how we look at it.

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Competition & Survival

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Distribution of Movie Shops in Nairobi

4 movie shops within every 50 meters

CBD ( Average )

radius, though with a bias towards the

 

streets south of Kimathi Street. The

 

highest concentration of movie shops is

 

along Tom Mboya Street.

The section of River Road in Nairobi CBD between the junction of Luthuli Avenue and Ronald Ngala Street has also a very high concentration of movie shops. However these specialize in movie collections (8 in 1, 16 in 1, 20 in 1) packaged in colorful printed covers, rather than duplicating individual movies or series on order.

Also the shops tend to focus not on ‘latest’ movies and series but instead curate collections based on genre or stars. Thus they may have the Billy Blanks Collection or Best Romantic Movies and so on.

Distribution of Movie Shops In Nairobi

1 every 50 meters radius. Of course there

Estates ( Average)

are estates with a higher and lower

 

number of movie shops.

Nakuru, Eldoret, Kisumu, Mombasa, Kiambu, the density averages 2 every 100 meters with an average of 1 every 100 meters in the estates.

In former district headquarters, some which are presently county headquarters the average distribution is 1 every 100 meters. In such locations there are more people hawking or selling movie collections than they are individuals burning customized movies and series. There are also a high number of people selling DJ movies. (See customer analysis for more on this)

No. of Movie Shops that have closed

3 in every 10 movie shops close every

 

in the last 1 year

year; this also includes shops which have

 

 

 

 

transferred ownership.

 

 

 

 

 

 

 

No. of Movie Shops that have opened

4 in every 10 shops

 

in the last 1 year

 

 

 

No. that have existed for over 1 year

2 in every 10 shops

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Reasons For Closing

Low returns – 28 %

Losses – 22%

More profitable alternatives – 19 %

Manpower Problems – 3 %

Other – 28 %

-Reasons for closing are from a sample of 42 shops of former owners who could be traced and were ready to give their reasons for closing.

Something to note:

-Every week in the Daily Nation newspapers classifieds there is an average of 5 movie shops advertised for sale. The number is 5-10 in internet classifieds. Sellers gives “relocation” and “to do something else” as the reasons for disposing their businesses. People selling businesses are unlikely to tell potential buyers they are selling because of low returns.

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-Here is an example of a movie shop advertised for sale; the text is reproduced exactly as it appeared:

-Running Movie Shop strategically placed along Moi Avenue in a very busy shopping mall

with the ability to earn you 2,000 Kshs a day.

-Duplicating machine in good working condition

-1 Pentium 4 computer in good order

-1 Westpool air fan in good working condition

-3 shop shelves already installed

-Shop display and furniture

-Advertising board

-Movie posters catalogue books

-Shop monthly rent is 13,000 Kshs only ( NO GOODWILL, NO RENT DEPOSIT)

-All the above at only Kshs 80,000

-First come first serve basis coz it's a business space in high demand.

-It's Ur choice to continue with the movies business or use the space for whatever commercial purpose U desire. Finding a business space in town will never come easily and at a give away price like this. Take advantage of this.”

Making Sense of the Competition and Survival Figures

The fact that there is almost an equal number of movie shops opening as those closing down shows that the market is getting to a point of saturation. This means that though there exists opportunities in the business there is no room for exceptional growth. Income from the business will remain average if not dip, at least in the medium term.

The barriers to entry in the business are minimal. Depending on the location Ksh.150, 000 is enough to start the business. There are movie shops in some centers that have been started with Ksh.70, 000. Also the licenses required (see index for licenses, equipment and average prices) are relatively easy to acquire. Besides, no specialized technical skills are required to run the business. Anyone with basic education can run a movie shop.

Consequently with the barriers to entry being this low competition will continue to increase. The individual movie shop market share will continue to shrink, and revenue will stagnate in the long term. However marketing and distribution

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innovations can help overcome such constraints and turn a considerable profit, at least in the medium term.

There is not much product differentiation or room for having a different product. Rush Hour is the same movie wherever it’s sold in the world.

Variety thus becomes the initial point of competition. Shop A has 200 movies as compared to 100 movies in Shop B. Or Shop B has all the ‘latest’ movies as compared to the less updated of shop A.

Nonetheless the nature of the business means that such a ‘variety’ lead can be easily eroded. Barring capital limitations all one needs to do is go the competitor and purchase the missing collection or better still download from the internet.

On the other hand even though such a lead can be quickly eroded, for the short period it exists the head start helps gain market share and keep a customer

coming back.

In a field as crowded and fluid, where it’s easy for a consumer to move from one vendor to another the first experience really matters. If a customer walks to a movie shop and finds all the movies she wants then she will likely be back. If she does not find what she wanted, then she promptly moves to the next shop, and forms a ‘negative’ impression of the first shop.

A major determinant of survival in this highly completive market is the ability to acquire and maintain a customer. It’s a sort of ‘privilege ‘that a customer has walked into your shop. Vendors who are able to satisfy the customer the first time, and make her a repeat customer are able to survive longer and record higher revenues.

Again in a highly competitive and little differentiated market as this Location of the business matters in determining survival and revenue. Initial purchase decisions are based on convenience and visibility. A movie shop opens next to a consumer’s house, and that’s where she will likely pop in first for her next flick.

Alternatively someone on her way home from the town center and decides to pop in the most convenient shop enroot to her house.

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A good location has also the advantage of ensuring a stream of new and impulsive customers who though may not become repeat customers generate enough revenue to ensure basic survival of the business, for instance by generating sales enough to cover rent and manpower expenses.

A good location can be described as one which is easily noticeable and accessible. One which hits the consumer on the face as she carries on with her activities. A broader definition has to do with operating in a location without competition. The latter locations are in some estates and peri urban areas.

However location on its own can’t ensure survival of the business. An unsatisfactory experience in a good location will chase the customer away.

The nature of movies means that customers are sometimes very particular of what they want. For instance after watching and enjoying Suits Season 1 a customer will seek Suits Season 2, if the conveniently located movie shop doesn’t have the series then she will sacrifice the benefits of purchasing at the suitably situated shop and move to the ‘inconveniently ‘ located shops until she gets Suits Season 2. In future she might often sacrifice the convenience for satisfaction.

Making the best of a good location in terms of satisfying customers is what increases revenue and ensures growth long term survival. For instance there are shops that are located at the mouth of a mall but which perform poorly as compared to those deep inside a mall. The latter having built a happy loyal customer base over time as compared to the former.

The cost of a good location has however to be tampered with possible revenue from the business. Though there is no revenue ceiling per se, the increasing competition in the market means that the chances of exceptional revenue growth are not as high as before: In the long run and sometimes in the short run it might not be possible to maintain the cost of rent in a prime location. This cost is of course dependent on the area the business is operating.

For instance about 4 years ago in Nairobi CBD when the movie replicating business started in earnest it was common to see movie shops located at the front of exhibition halls where rent could go as high as Ksh.30, 000. Presently it is rare

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to see movie shops in such prime locations, many preferring to locate a little further inside a mall where rent is cheaper. These though have to work extra hard to win and maintain customers.

In some towns where the market is not saturated it may still be viable to operate from a relatively expensive prime location. The rent in ‘prime’ locations in such towns and estates is actually low say Ksh. 4,000.

In a couple of estates in Nairobi there are owners who started running from a prime location but when competition increased and revenue decreased they moved to cheaper locations . If the success of such a movie shop depended on customer loyalty rather than location per se then the business didn’t suffer any losses even after shifting since the customers would be willing to migrate with the proprietor to the new location. However if success was largely tied to location then such a move would lead to a revenue loss. (See more on loyalty below)

Customer service is another point of competition. This involves the basics such as how a movie attendant talks to customers ,to the experience during purchase: A stool to sit on while waiting, speed of service, consistency of opening and closing hours, a return policy and such.

Though props such a flat screen TV, fancy DVD holders, comfy seats matter, a large portion of the customer service is tied to the individual: The warmth or manipulative nature of the attendant.

Important too is a beyond rhetoric understanding of movies by the attendant. An individual who has watched a variety of movies, if not so at least knows they exist and what they are about. Also an assistant who is able to infer customers tastes and recommends an appropriate movie. It always leaves a bad taste in a customer’s mouth when an attendant recommends a movie and then it ends up being ‘boring’. The customer feels she has been tricked by the attendant for the purpose of making an immediate sale. There are attendants who will only give rhetoric “yes” when asked if a particular movie is good.

Waiting time is also growing as a point of competition. It is common to keep customers waiting as the movie is copied to DVD. Some shops see nothing wrong

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in this and have consciously or unconsciously taken customers’ time for granted. Eventually a customer’s patience threshold reduces and she starts seeking speedy service. The way to overcome this is by having popular movies and series ready packaged, having more or superior machines that can duplicate faster and encouraging customers to preorder through phone or email. The latter may not always work because consumers are not often sure what to watch and have to peruse through lists or ask for the attendant’s recommendation.

Again in a market as slightly differentiated as the movie shop is creative marketing and innovative distribution can help overcome the challenges of competition and a poor location.

Distribution has to do with methods used to get to the customers rather than waiting for them to walk in. The goal is to ‘hijack’ the customer before she decides to purchase from a competitor.

The most common methods have been to create a way for customers to order movies and have them delivered to their door steps whether in homes or offices. The very basic of this strategy is to give customers a telephone number which they can call and order, and then the movie is delivered within a given time. To make the venture viable some of the shops limit delivery only within a certain radius and for a certain minimum. For example if you order 5 movies we will deliver to your home in Buru Buru. Others advertise their numbers in neighborhoods bulletins, walls, or whatever spaces available.

A slightly more advanced distribution method is to use the internet. The most basic of this is through Facebook groups, pages and free classifieds. The slightly advanced method is to have a simple website through which customers can view movie blurbs and order. Delivery could be within a certain radius free of charge or with a small delivery charge.

Presently the success of selling movies through the internet is varied. For instance in Nairobi unlike 3 or 4 years ago when individuals could set up and successfully operate a virtual movie shop the appeal among consumers is not as big as it used to be. This largely because there are movie shops at every corner opening at least 14 hours a day, and the direct physical interaction with the vendor is

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preferred by the consumers. Still a Facebook page or website could be used to create a sense of community among present and prospective customers, as a channel of interaction and communication. And when done strategically a web presence can rope in new customers.

Still there seems to be a gap in niche movie shops. These are shops which could try brand themselves as specialists in certain genres of movies, especially the kind of which tend to have a sort of faithful cult like followers. For instance Horror Movies, Art movies ( these may not be so popular but in Nairobi for instance there is an affluent group who search religiously for art movies), old classics ( with the largest percentage of shops specializing in latest there is quite a gap in serving customers look for great classic movies which are not among the ‘latest’ ) .

Family movies are also another big gap. These are movies considered morally safe to watch as a family with children. Though there are at least 2 shops successfully selling these kind of movies mostly online opportunities and demand are still present. There is opportunity to create a local supply and possibly demand in estates. One of the businesses doing this online with quite a measure of success though using a rental business model is Famiflix (www. http://rentalservice.famiflix.net/). The challenge is the sourcing and curetting of such movies.

Competition and Survival in the movie shop business thus depends on:

-Building customer loyalty which can be done through great personalized service , variety and short waiting time

-Location

-Innovative marketing and distribution so as to draw customers to your shop or

‘hijack’ customers from or before they chose the competition

-Defining and focusing on a niche market especially by genre

-Branding is not important as location in this kind of business. Still branding by niche / specialty movies will work and lead to higher revenues

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-There are locations especially outside Nairobi and major towns which are relatively underserved.

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Revenue

Average Daily Revenue

Ksh. 1350

Highest Revenue Recorded

Ksh.16, 550

Lowest Revenue Recorded

Ksh.100

Highest Revenue recorded was in Nairobi CBD

Lowest Revenue recorded in Nairobi CBD was Ksh.250

Revenue here means total sales and not actual profit.

It is important to note there is a wide disparity in revenue among different movie shops, with some having revenue on the extreme high while others are on the low. Still the mode revenue or the revenue range of most of the shops is between Ksh.1800 and Ksh.4, 400.

What to Make of the Figures

The price of a Movie in a DVD has stagnated at Ksh. 50 for the last 3 years or so.

As more players come into the market the price is unlikely to increase rather vendors in urban areas are going to feel price pressure as a result of competitors lowering the price below Ksh.50. Though not common, price points of Ksh.40

and Ksh.30 have appeared.

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Of the retail price the direct cost is that of a blank DVD. The price depends on the source and quantity of purchase. The range is Ksh.13 to Ksh.20, with most vendors purchasing a blank DVD at an average price of Ksh.16. The price depends on source, quantity, make and quality of the DVD. Most shops use DVD of standard quality.

For a movie selling at Ksh.50 and a blank acquired at Ksh.16 then the gross profit per item is Ksh.34.

Margins differ slightly across the industry depending directly on the cost of sourcing the blank DVDS. The cost is less for those who purchase in bulk and from the ‘right’ source.

The cost of acquiring a ‘master’ movie from which the rest are duplicated is considered to be fixed because once you purchase it you can replicate it countless times. In most urban areas vendors form an ecosystem through which they exchange or duplicate master copies free of charge. There are also movie shops which specialize in supplying master copies to new shops at a discounted price.

There is also an emerging trend where movies are transferred directly transferred to flash and hard disks and also external drives. The price for this is between Ksh. 20 and Ksh. 30 per movie. This is especially popular among customers with external hard disks who buy movies in bulk for their own viewing or reselling.

The indirect costs include rent, wear and tear, electricity and manpower.

A price below Ksh.50 does not have any significant impact on revenue.

The price of Ksh.50 having persisted for long, consumers are now less focused on price and more on satisfaction. A consumer is unlikely to purchase an inappropriate movie just because the price is low.

The lower price points are especially used by vendors in a competitive locale so as to differentiate and attract customers. However price itself is not enticing enough to make customers defect from a fulfilling Ksh.50 vendor in the same location.

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Shops selling movies at Ksh.40 records the same average sales by revenue as those selling at Ksh.50. But there are also cases where the lower price shops record below average sales. Meaning there are no big advantages in competing on price in this business.

A price below Ksh.40 for movies burnt into DVDs negatively affects revenues. Shops initially selling at say Ksh.30 quickly revert to a higher price point.

Some shops use a price below Ksh.40 to penetrate the market, and gain the initial batch of customers. However after the ‘introductory offer’ the transition from the lower price to the higher loses them customers.

A more common pricing option is to offer a quantity discount. The most common being to give one free movie for every five bought. (Get one free movie with every 5 you purchase) Shops which offered this recorded about 9 % higher revenue. For shops which make the offer after start of operations it contributed little to the acquisition of new customers but encouraged the active customers to purchase more. Another model is to offer a price discount for those purchasing more than 5 movies. “Purchase 5 movies @ Ksh.40 each”

Industry wide revenue has increased but the share of individual movie shops has not increased proportionally. This is because of increased competition which fragments the revenue. However this does not mean there are no shops which have recorded a decline in revenue or even above average growths.

Demand for movies is set to increase driven by lifestyle changes, access to more information, and search for great but affordable entertainment. Movies compete with other forms of entertainment like going out and football.

The share of revenue by individual shops will continue reducing as the overall industry revenue increases until a point where the market will correct itself and there will be only the right number of shops balancing supply and demand. This in the long run.

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The average purchase per customer is 2 movies. The average rises to 3 movies towards weekends, month ends and public holidays.

A charismatic attendant is able to manipulate the customer so as to increase the number they purchase at a go. A realistic, non rhetoric hyping of a movie is always a place to start.

Revenue is higher and more consistent among shops which tend to have a high loyalty. Loyalty in the business, as mentioned above, was tied to the attendant. A charming attendant who is polite and respectful, and knowledgeable without being patronizing to customers is preferable.

Speed of burning the movie to have it ready for the customer also matters also affects revenue. Though burn on order maybe the preferred and norm method of selling movies and customers have somehow accepted this, sometimes the waiting time ends up being exceedingly long. This ‘chases’ away some customers who find a queue and also may discourage some first time and regular customers from coming back.

The waiting time can be significantly reduced by improving efficiency. Like having some of the most popular movies ready, also having a powerful computer/ duplicator which is able to burn the movies fast. Having a stock of blank DVDs so that you don’t have to go purchase when the customer makes an order.

A stock of a wide variety of movie does helps since you don’t have to go look for a particular movie, leaving the customer waiting. A customer can only have as much patience.

Keeping all factors almost ‘ideal’ revenue tends to be high in good locations. In the movie shop business the definition of a good location has to do with high traffic, visibility and accessibility.

As noted a prime location can guarantee sales but not customer loyalty. In a market with so much choice, and so many businesses in prime locations customer loyalty is what determines the long term survival of the business.

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The biggest advantage of a good location is the ease at which it aids in capturing new customers. However if such customers are not retained the advantages of such a location diminish. Some movie shops have thrived even in not so good locations through ensuring every customer who walks comes again. Such shops though took longer to break even and sometimes spent much more to acquire customers.

The break even point (point where the costs of running the business equals the revenue without necessary turning a profit) averages 4 months. Factors such as location, competition and number of repeat customers determine the break even point.

Although Advertising comes at an extra cost it has a positive impact on revenue.

In parts of a few towns there existed economies of location such that consumers already identified a building or section of the town as a movie area and hence there is no need for much advertising.

In other cases such as Nairobi CBD where if there is more than one movie shop say in an exhibition the first shop may advertise at the entrance while the others either for lack of space or mere opportunism refuse to advertise and ride on the first shop’s ad . Still there is need to draw particular attention to your shop.

Movie shops advertising tends to be similar, uncreative and of the there is a movie shop here kind. A lot of emphasis is laid on ‘latest’ (latest movies stall no 2) while forgetting to stress other unique factors that matter to customers.

By default consumers have come to expect that movie shops should have the latest movies, so latest is not exactly a selling point. Hence the decision to buy could be tipped by that extra thing like Speed (No waiting time, very little waiting time) Stressing the specifics in variety …like greatest collection of horror movies.

Many of the boards, Led or otherwise, advertising movies tend to be crowded with information and graphics in such a way that a customer cant glee much beyond “ @50 “and “latest”.

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Since as stated the market is not much differentiated advertising can be used to create an edge by emphasizing attributes that matter to the customer but which are usually not highlighted when trying to win them.

The few shops who did this in a clear way recorded higher revenue.

Many movie shops have resulted into the use of text messages to keep in touch with customers. Yet many of the shops only give a list of the latest movies without stressing other attributes that may give an edge say for instance service. Also few make a call to action. For instance at the end of a text with a list of the latest movies having a question such as “Which one do we prepare for you?”

In the short and medium term the movie business will continue being a sustainable business model, keeping all factors constant. There will be no exponential growth in revenue as competition increases and margins become squeezed by possible taxes.

In the long run the survival of the movie business will depend on a number of factors. Since the movie business presently operates on a legal grey area if tougher legislation is passed or some of the present copyright / intellectual property laws are enforced then it may lead to the wholesale collapse of the industry. That is a big IF but it’s important to note there is a worldwide push by studios and other content providers for tougher copyright legislation.

Access to high speed internet will affect the business. As broadband becomes easily available so will more people be able to quickly download movies from torrent sites or be able to stream movies directly online. Netflix the US movie rental and streaming giant is already making forays into this market and so is Microsoft. Again this tied to mass and cost effective access to broadband.

The country’s switch to digital broadcasting signals means more content will be available to consumers since digital signals will make it easy for small independent broadcasters to offer content without extremely high costs in acquisition of frequencies and maintenance of frequency masts. This coupled with more competition and affordable packages in the pay TV market space means there will

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be a larger variety and more content available to consumers which to an extent will keep them from purchasing movies.

Still despite all of this, the movie business will continue to offer a cheaper alternative and customized option to consumers. There are also more consumers joining the movie bandwagon driven by age, income and lifestyle.

Thus in the short and medium term the movie shop business will remain sustainable though without much room for growth unless with radical innovation in terms of distribution or lifestyle .In the long run the future of the business remains a little unstable.

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Consumer Behavior

At the very basic the consumer wants to get the movie she is interested in. And if she is not sure what to pick she appreciates great suggestions informed by the vendor understanding of her tastes.

Thus availability and variety are key considerations.

Customer service as depicted by the vendor’s people skills (politeness, empathy etc) and also by such things as return policy (if DVD is faulty), packaging (envelope, paper etc) and waiting time are crucial too. The latter as mentioned above can keep the customers coming or drive them away.

Customers are ready to wait for a reasonable time and if the wait is made comfortable by simple things such a stool to sit on, interesting conversation, previews and the like.

Customers want to the vendor to interact with them but not in a patronizing manner. (Oh you have never watched this? You are really out of touch!” Oh you watch these kinds of shady movies”)

Consistency in opening and closing times matters. Customers want some level of predictability as to when they can walk in and get a movie.

Though a high end sound system or television may give a hip feel and initially entice customers, beyond the immediate excitement these rank low when making purchasing decisions.

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Consumers in peri urban areas.

In big and small towns say 60 kilometers from Nairobi there tends to be 3 or so kinds of clients. The first is the rural client, who could be of average or above average education but with a not very ‘sophisticated’ taste. This group of customers tends to prefer a certain kind of movies: a bit direct fast and less complicated. They won’t buy series rather they prefer collections mostly of action movies. A sub section of these prefer DJ movies; the kind of movies where there is a narrator explaining the action in a fast thrilling manner in Swahili. The two dominating DJs are DJ Afro and DJ Smith. Such movies can be purchased in wholesale for between Ksh.50 and Ksh.70 at Simba center in Nairobi’s River road.

The second is the exposed and wannabe customer who tend to think they have a taste but they are still not very sure and what exactly they prefer. They want to believe their taste is superior but in actual sense are looking for guidance in which movies are cool and can be easily included in conversations with peers. Such will go for the latest in movies and series.

Lastly there is the ‘movie’ knowledgeable exposed kind of customer who has been watching movies for a long time and is very sure of her tastes. The two latter groups of customers are not very comfortable shopping for movies in the same place as the first group. So it may be advisable to differentiate the market as thus.

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Manpower

Average No of Employees

1

Highest No of Employees

6

Lowest No of Employees

Self Employed

Average Salary

Ksh. 8000

Lowest Salary Recorded

Ksh.4000

Highest Salary Recorded

Ksh. 16,000

Average Commission

20 %

The performance of the movie store is to a very large extent tied to the manpower.

When hiring an assistant it is important to get someone conversant with movies, or who can learn and adapt first. This will be someone not surprised by every movie a customer mentions or only makes rhetoric recommendations.

The assistant also needs to be street smart in such a way he or she is able to develop mutually beneficial relationships with other vendors (competition). Such relationships help in understanding what the competition is doing and ‘borrow’ movies that one hasn’t stocked but customers need.

The assistant should also have the skills to interact and mange customers.

The reward system in the movie shop business is either based on a monthly salary, or a salary and commission depending based on the day’s sales. The trick is always to know how many movies the assistant has sold in a day. There is no fool proof method to do this.

One crude method is to count the number of blank DVDs at the start of the day, and again at the end then the difference is the sales. But then all this depends on trust. What if the assistant just restocks the blanks after selling and pocketing the money? Though some of the DVD burning software can show how many DVDs

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have been duplicated within a certain period the nature of the business means there are so many leakages; DVD spoil all the time, and in some areas inter shop duplicating is not charged.

Other proprietors will ask the assistant to give a certain amount of cash from sales everyday say Ksh.1000 and anything above that is the pay. However this method is not very popular both among owners and employees. Whatever the case it’s good to give the assistant some goals, and perhaps tie part of the reward to the achievement of these goals.

Licenses:

The very basic licenses required to run a movie shop are:

1. Trade License

This is issued by the local authority presently is the county government. The cost varies from county to county but averages Ksh.10, 000

2. Public Performance License

This is issued by the Music Copyright Society of Kenya if playing music, selling movies or related activities. The amount varies but averages Ksh.2, 500. MCSK tend to have agents in most county head quarters.

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The nationwide headquarters are:

Mau Close off Parklands Road, West lands, P.O.Box 14806-00800, Nairobi

3.Film/ Video Regulatory License

This is issued by the Kenya Film Censorship Board and the purpose is to regulate exhibition of films in Cinema theaters. The annual fee is Ksh.10, 000.

Contacts: Kenya Film censorship Board 15th floor Uchumi House, Aga Khan Walk Nairobi. Video inspection unit

Other Licenses

4. KAMP-PRISK License

This is issued Performers Rights Society of Kenya (PRISK) / Kenya Association of Music Producers (KAMP)

The fee averages Ksh.2000

Contact:

Dry Associates House, Suite 5, Brookside Grove, West lands P.O. Box 100838- 00101, Nairobi, Kenya Cell: +254 710-309695, Email: [email protected]

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Set Up Examples

To operate a movie shop basically what is needed is a computer than can burn DVDs, a stock of master copies of movies, a table, some stools, and licenses. Yet like any other business there are different levels of sophistication based on capital, necessity and what the proprietor thinks will add value to the business.

Here are the 2 actual set ups:

Shop 1:

Located in Umoja, an estate in Nairobi. Very skeletal and basic movie shop which operates with the following:

a)Computer – A computer that can comfortably handle a DVD writer ( 80gb, I GHz, 2GB RAM)

b)A coffee table on which the computer is placed. The shop has no counter or extra fittings.

c)Three plastic stools - One is used by the owner, while the rest are used by waiting customers.

d)Slightly over 500 master copy movies, CD wallets, 3 Display books and a printed list of available movies.

e)A simple led sign advertising the movie shop.

f)Spindle of Blanks DVDs

g)Rent – Ksh.6,000

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Sales on 28th June 2013 – 43 movies and series for a total of Ksh. 2150

Shop 2

Located in Nairobi CBD, Mfangano Street

This is a slightly more advanced movie shop with the following items: (The figures next to the item are what it cost the owner to acquire them, and is almost exact to the average market prices)

a)32 inch Toshiba Led Screen – Ksh. 34, 500

b)1 Sony DVD Player – Ksh. 4,000

c)Internet Access for self downloading of Movies- Ksh. 3000 / month (Orange unlimited)

d)2 duplicating machines with 8 drives – Ksh.46, 000

e)1 Dell computer (4GB ram 160 GB HDD 3.2GHZ) - Ksh.26, 000

f)1Terabyte external hard disk – Ksh. 7,000

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g)3 Plastic Stools – Ksh. 1,500 each

h)2000 master copies and 6 display books, and movie covers. – The master copies were purchased in soft copy at Ksh.30 a piece, while the movie poster covers were printed at between Ksh.10 and Ksh.20.

i)A small counter and a shelf on one wall subdivided into small postman’s boxes where ready movies are placed alphabetically. – Ksh.10, 500

j)3 Spindles of Princo Blank DVDs – Ksh.680 per Spindle with 50 DVDs

k)Led Advertising board – Ksh.6, 000

l)Rent – Ksh. 14,000

Sales on 14th August 2013 – 56 movies and series for a total of Ksh. 2800

Implementation

a)Identify Location (A good location balances cost, visibility and accessibility and consumer convenience. A good location does not necessary guarantee success rather it makes it easier to succeed. )

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b)Acquire Licenses ( The licenses can be acquired in just a few days)

c)Set up shop for movie business ( A shelf, counter if necessary, posters etc)

d)Purchase equipment ( Computer with necessary software, Duplicator, external hard disk)

e)Purchase master copies (Depending on the capital you can start with the movies/ series that are popular and increase variety over time. But it’s an advantage to start with as wide variety as possible. The choice is between downloading directly from the internet or purchasing from other movie shops)

f)Advertise and Launch – ( A crisp advertisement which differentiates from competition should be a good point of starting)

Basic Growth Strategy

Like any other business a movie shop will grow if the sales continually increase to cover business costs and a turn a profit. Because of the competition in the movie shop business a basic growth strategy is to strive to keep each and every customer who walks in to your shop, and to steal customers from competition.

Customers will come back if they are satisfied with the service (in ways mentioned under consumer behavior) and if it is convenient to do so. Innovative distribution can help win consumers from rivals. This is also strategy employed by some movie shops not operating from not so good locations.

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Download The Movie Shop Business Plan (Guide) - Kenya PDF➥

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