Chapter 8

Entertainment Industry

Chapter Overview

Lesson 8.1 Entertainment ProfitsLesson 8.2 Distribution of EntertainmentLesson 8.3 Marketing Music and TheaterLesson 8.4 Awards and Annual EventsLesson 8.5 Entertainment Marketing Careers

Lesson 8.1

Entertainment Profits

The Profit MakersOnly 2 of 7 major Hollywood studios turned profits in 1998, despite record audiences.Paramount Pictures (Viacom, Inc.) and 20th Century Fox Film Corporation were successful thanks to Titanic ($1.8B tickets)Others suffered b/c of high cost of the production and distribution

Cost Cutting StrategiesCut the # of Wide Release Movies Released in more than

2,000 theaters at 1 time

Low budget movies capitalize on the promotional budget of major movies by using similar themes in the title

Profit and OpportunityProfit depends largely on the popularity of the film overseas

Generating film revenue: Ratio of tickets sold

to the cost of production process

Income from:Merchandising SoundtracksRelationships to

theme parksGlobal releasesTicket sales in the

U.S. and abroad

Cultural Profit Opportunities

Worldwide distribution revenue is critical

Fox sold nearly $2 B in movie ticket sales outside the U.S. 1998

International release can increase receipts by 50 to 100%

Most films generate less than 25% of their final income from domestic ticket sales alone

The 1.3 B people in China is a promising new potential audience

Fast MoneyThe difference between entertainment and sports is determined by the viewer.Stock Car racing is one of the fastest growing forms of entertainment.Created a mutual fund to secure financing

for their expensive form of entertainment Investment stocks from 50 sponsor

companies are included Individual drivers have 1 sponsor who pays

for the car and the upkeep.

Lesson 8.2

Distribution of Entertainment

Ways to DistributeTraditional T.V. networks

Cable

Satellite

Internet

Cable Mania# of cable channels has increased

Programs are picked up by a master antenna and delivered to homes throughout the country

1 time cost to install

Monthly fee

New cable channels target specific demographic markets

80% of American homes had cable hook-up

Satellite TelevisionAllows rural areas to receive stations

Must buy a dish ($130)

Subscribe to monthly service

Offering more than 200 channels

40 M homes by 2007

Internet EntertainmentWeb based companies that markets sports info, interactive games, tournaments, chat rooms and sports-related merchandise onlineE-commerce: selling merchandise on the InternetInternet is becoming most valuable place to advertise

Movie MarketingTrailers or previews – advertisements for other moviesWell-coordinated promotional plan can wring out the last drop of consumer interestPay-per-view ads can also increase video rentals.Use suggestive selling

Effective Examples

Blair Witch ProjectDeveloped web

page that made it look like a real news story

Added short, intriguing trailers

Per-screen revenue was over $56,000

The Lion King IIBypassed theater

releaseSold directly o

rental and sales of video ($10 mil.)

See It At HomeVideos sold at mass market retailers Wal-Mart

Stimulate sales in music and video specialty stores through Point-of-Purchase (POP) displaysMovies on DVD may replace videotapes

Lesson 8.3

Marketing Music and Theater

Today’s Top MusicHip-hop sales inc.

Marketing Rap Sampling – inclusion

on a CD of excerpts

Many music label executives use intuition to decide what is marketable

Mainstream Rap Madison Ave in NY is

home Singers and dancers

featured in TV ads. Changing to more

acceptable messages

Promoting TheaterBroadway uses: billboards, radio, upscale theater magazines, and other publicationsWord-of-mouth is major source of promotionFascination with the lights and the people

Rosie O’Donnell is credited with increasing sales

Metropolitan Opera of New York (The Met) Duke University course Gain knowledge and

appreciation for the arts

Distributing MusicConcerts Agent, promoter, and

artists manager “Wildcat” tours cut out

the agent Robert F.X. Sillerman

bought out most regional promoters. Now runs 98% of the concerts

MP3 Mpeg Layer 3 – pirating

of music for free, illegally from the Internet

Free software program Still changing by finding

ways to bypass record company

Lesson 8.4

Awards and Annual Events

The OscarsMost famous and prestigious awardGiven by: Academy of Motion Picture Arts and Sciences5,000 members determine each awardNomination is a promotional bonanza for those involvedNo more than 5 nominations are made for each categoryWinners featured on magazine covers, newspapersWinning an award and getting a nomination have promotional value money cannot buyHave 2nd highest viewership after the Super BowlSunday night on ABC through 2008In 1998 ABC charged $915,000 per ad minute

The GrammysNational Academy of Recording Arts and Sciences (NARS)

92 Categories

Winners selected by vote of the committee members

Brings a lot of attention

Does not guarantee success or sales

New artist categories are sometimes never heard from again Examples????

The Emmys

8K member organization

Academy of Television Arts and SciencesPresents Primetime and

Daytime

Winning shows or stars can increase the viewing audience

The TonysNamed after Antoinette Perry Served as head of the

Board of the American Theatre Wing

Given to professionals in theater for distinguished achievement

Ratings up when Rosie O’Donnell was host

Lesson 8.5

Entertainment Marketing Careers

Getting There From Here

Marketing You You are the major

product Know what you want to

do and what it takes to get the job

Gather info on the job to make a decision

Know what is required

How to Prepare Conduct research Sources of info

Internet People you know Company reports Business directories College placement

offices Recent news articles

Marketing JobsOpportunities for marketers, advertisers, and public relations specialists will be among the fastest growing in the nation through 2006

# of consumers rises – the # of artists, performers, and staged performances will increase

General background in these fields can urn into a focus on entertainment

Marketing Relations Specialist

Build and maintain positive relationships between their employer and the public

Looks out for the best interests of another

Keep the media and consumers aware of the company or person they represent

More opportunities in larger cities

College degree preferred combined with experience (Internship)

Marketing/Advertising MgrsIntense competitionPotential to earn high salariesLong hoursJobs dictated by consumer interest at the time (flexible)Responsibilities Strategic planning, sales,

advertising, pricing, product development

Skill RequirementsMath, communication, interpersonal skills

Ability to communicate persuasively orally and in writing

Ability to work on a team

Creativity

Initiative

Self-confidence

Maturity

Flexibility