Download Entertainment Products and Marketing

Types of Entertainment Products
Media Product Marketing
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Section 11.1 – Types of
Entertainment Products – Objectives
Identify types of
entertainment products
Define evergreen
products
Describe location-based
entertainment (LBE)
Explain the significance of
impulse spending
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Section 11.1 – Types of Entertainment
Products – Entertaining Products
Media Goods
Media Services
Recreation
Services
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• Television Shows
• Movies in
Theaters
• Concert
Performances
• Theater
Performances
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Movies on DVDs
Music on CDs
Video Games
Books
Toys
T-shirts
Concessions
Amusement parks
Zoos
Museums
Snack Bar
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Section 11.1 – Types of Entertainment
Products–Film and Music Merchandising
Media based services provided at theaters for which customers
pay and receive tickets:
– Motion pictures, plays, musical productions, concessions
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Snack-bars that sell refreshments such as popcorn, soda, and candy
– Studios also issue related or extended products of films
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Character toys, games, clothing goods
Media based goods provided by home-entertainment industry:
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Films in DVD and Blu-Ray Formats and prerecorded entertainment
software
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Section 11.1 – Types of Entertainment
Products–Film and Music Merchandising
Retailers such as Wal-Mart, Best Buy, and F.Y.E. buy billions of
dollars of entertainment products from producers
– Due to volume purchases they are able to purchase products for a lower
price than smaller stores
– Pass the lower prices down to consumers
Internet sites for large retailers and Internet only stores such as
Amazon.com or Buy.com also sell entertainment goods
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Section 11.1 – Types of Entertainment
Products–Film and Music Merchandising
DVD/Video Rentals and Sales
Film producers have two choices for DVD and Blu-ray distribution
– Rent
– Sell Through – Selling to customers (40% of DVD and Blu-ray revenue)
Studios promote first run films more then they promote DVD and
Blu-ray sales at stores
In store sales promotions and television advertising are key
methods of marketing rentals and creating sales
Evergreens are films or products that are popular year after year
– Important because new generations of viewers who may be unfamiliar
with film buy them
– Continues to generate steady revenue
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Section 11.1 – Types of Entertainment
Products–Film and Music Merchandising
DVD/Video Rentals and Sales – cont.
Movies that did not experience box-office
success and were pulled from theaters, or
movies that were made for release straight to
video rental may also line shelves of rental
store
– Will generate revenue if they are marketed
carefully
Pay-per-view and on-demand in home rentals
through cable company as well as Netflix
delivery has threatened rental-store business
– Convenience is still a major selling point for
entertainment service
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Section 11.1 – Types of Entertainment
Products–Music CD and Distribution
Worldwide sales of recorded music totaled about $16 Billion in
2009
– Music is sold in specialty stores, large retailers, and online
Marketing efforts of record clubs and rack jobbers also
contribute to sales of music
– Record Clubs are organizations in which members receive free music if
they agree to purchase additional records within a certain period of time
• Clubs focus on direct-mail, print media campaigns, and on-line
advertising to sell their products
• Ex. BMG Music Service, Columbia House
– Rack jobbers are independent vendors who distribute, price, and control
their own inventory within a store
• Work in convenience stores, small discount stores, and variety stores,
where they set up displays with limited assortments of CDs
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Section 11.1 – Types of Entertainment
Products–Electronic and Video Games
Media-based video and electronic game
entertainment made approximately $40
billion in revenue in 2009
DVD rental shops, such as Blockbuster
dedicates 40% or more of its space to video –
game rentals
Large conglomerates produces many of the
games
– Electronic Arts is the largest independent
developer of electronic games
– Has flexibility because it produces games that
can be played on all major gaming systems
– Flexibility broadens their buyer market and
increases sales
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Section 11.1 – Types of Entertainment
Products–Electronic and Video Games
Marketing Games with Music
Cross-marketing in video game
distribution is common
Popular music has a big role in
video games
Music provides a background for
the video games and is in high
demand by the game players
Video games are part of the appeal
of rock festivals
Target market for gamers is young:
– 4 of 10 players are under 18
– 40% of players between ages 18-35
Electronic Game Tie-Ins
Huge potential for tie-ins with:
– Films
– Music
– Sports
Game buyers are also the primary
market for all of these forms of
entertainment
Advergaming is the marketing
concept that drives videogame
marketing
– Advertisers see the games as a
good way to reach target markets
and they create games that are
really ads, but look like games
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Section 11.1 – Types of Entertainment
Products–Print Books and Magazines
Print media – books, magazines, comics, newspapers – is one of the oldest
sources of entertainment
Customers are now buying more books and magazines than ever
Book Categories
Trade Books are published for general
bookstore sales and public library
circulation
– Examples: Fiction, humor, poetry, arts,
music, how-to, self-help
– Fiction category best know for escapefrom-reality entertainment value
• Examples: romance, science fiction,
mystery, fantasy, horror, western
– Many fiction titles are adapted and
tied in to films and vice versa
Magazines
Offer a good opportunity to marketers
who are looking for ready-made target
markets
20,000 magazine titles on the market
appealing to different groups
– 160 of those titles earn 85% of total
magazine revenue
Magazines like Time, National
Geographic, and Life are considered
evergreens
Many major media corporations also
have web versions of their magazines
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Section 11.1 – Types of Entertainment
Products–Theme Parks and Water Parks
Theme and Water parks not only provide recreation-based
entertainment services, but they also sell tangible goods
Location-based entertainment (LBE) is the industry term for
entertainment that includes amusement, theme, animal, and water
parks
– Can have local, regional, and national attractions
– Six Flags promotes the fact that it has a park within eight hours from the
homes of 98 % of the American Population
In the 1990s, major park operators began promoting theme parks as
destination and resorts, trying to get tourists to stay for more than one
day at the parks and thus spending more money
Customers’ frequently impulse spend while in parks
– Buying without prior planning
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Section 11.1 – Types of Entertainment
Products–Theme Parks and Water Parks
Theme-Park Tie-Ins
LBE venues are usually owned by major entertainment conglomerates
– They use their own themes, characters, stories, and other intellectual
property to sell property
– Intellectual Property is an idea, concept, or written or created work that
is unique and is protected by copyright laws
The ability of LBE owners to cross-sell products in their parks has made them
very popular with marketing managers
Theme-park owners have forgone new roller coasters for water-parks on or
near their property
Water parks are one of the fastest growing entertainment services in the LBE
area
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Section 11.1 – Types of Entertainment
Products–Edutainment
Related destinations that provide recreation-based entertainment services
are linked to education
Art Museums, natural history museums, zoos, and historic sites educate
customers and provide entertainment
Museums
Experienced worldwide expansion
in the 1990s with greater public
interest in cultural and education
activities
Two main goals:
– Attract more visitors
– Generate more income to support
their operations
Zoos
Have enjoyed increased popularity
and increased awareness of
marketing strategies
Over 134 million people visit zoos
and aquariums each year
Theaters
Offer special events that tie into
commercial films shown in theater
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Section 11.2 – Media Product
Marketing – Objectives
Explain why marketing is
involved in entertainment
product development
Discuss the difference
between primary and
secondary markets
Explain the importance of
programming
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Section 11.2–Media Product Marketing–
Media Marketing Channels
Major media includes:
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Film
TV
Radio
Print Publishing
Internet
Channels for marketing entertainment products as well as
sources of entertainment
Media controls what gets through to the viewer or listener, and
the media shapes opinions and consumer wants and needs
Marketing teams are usually involved in the development of
most entertainment products, or goods and services
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Section 11.2–Media Product Marketing–
Marketing Film and Distribution
Goal of studio or independent film developers is to produce a film that
will be seen by as many paying customers as possible
Large part of planning a film involves marketing and merchandising
A movie is a product that has many product extensions associated with
it
– Can greatly increase profit potential
Film Studios plan to cross-market the following with a film release:
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Movie soundtracks
DVD
Video distribution to cable and international markets
Video game release
Planning for marketing begins before filming begins
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Section 11.2–Media Product Marketing–
Marketing Film and Distribution
Primary and Secondary Markets
Film market is divided into Primary and Secondary markets
– Primary market in film distribution is the target audience, which is the
theaters that show films in first release
– Secondary market is the target audience after a film has been in first run
theaters, and it includes foreign theaters, television, discount theaters,
home rental and sales, cable TV, and airlines
Steps in a basic film distribution system:
1. Studio or independent production company creates the film
2. Film is shopped to exhibitors, theaters that sell tickets and show films to
an audience (the primary market)
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Section 11.2–Media Product Marketing–
Marketing Film and Distribution
Primary and Secondary Markets – cont.
Events such as ShoWest and ShowEast provide studios with an
opportunity to show exhibitors their new offerings
– Many films in local theaters are booked and scheduled as a result of these
conventions
Limited Release (Platforming) places a film in only a few theaters in
the whole country to showcase them and create public interest
– If successful they are placed in wide release
Wide Released films are booked in thousands of theaters nationwide
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Section 11.2–Media Product Marketing–
Marketing Film and Distribution
Film Exhibitors
Primarily made up of large theater
chains
– Eight major chains control 20,000
theaters and 65% of the screens in
the United States
– Bring in 8 out of ever 10 dollar
earned at movie theaters
– Examples: Regal Entertainment,
Loews Cineplex, AMC
Exhibitor’s Gross Revenue is the
total income from sales before cost,
expenses, and taxes are deducted
– Broken down in two areas: 70%
from ticket sales; 30% from
concession sales
Ticket price and concession price
decided by exhibitor
Home entertainment has not
caused a reduction in ticket sales
60% of theater audience is in 14-29
year old age group
Studios and independents promote
film ideas to exhibitors before
filming begins
Studios need exhibitors to play
movies and exhibitors need studios
to produce movies to sell tickets
and put people in seats
Studios and exhibitors use trailers
to create interest in new release 21
Section 11.2–Media Product Marketing–
Marketing Television
Entertainment producers are
constantly trying to develop
programming that will:
– Result in high ratings
– Attract advertisers
Reruns, previously aired shows,
are great source of revenue for
studios and network
– The basic cost of production are
already paid
– The show can be televised in
different markets over and
over, continually generating
profits
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Section 11.2–Media Product Marketing–
Marketing Television
Syndication is selling television programs to individual stations, not
networks
– Many actors make more money when show is rerun in syndication
– Residuals are payments made to actors each time show is aired
Marketing Television differs from for reality shows
– Little cost of production
– Strong advertising revenue
– Limited earning potential due to limited rerun value
Television target audiences are specialized by programming
– Schedule, or time, for broadcasting shows on television
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Section 11.2–Media Product Marketing–
Marketing Radio
Radio is one of the best ways to target your advertising message to an
audience
Advertisers buy time and pay for radio programming by sponsoring
shows
In 2008 there were 13, 977 commercial radio stations in the United
States
Each station has a primary style of music or entertainment appealing
to a specific market segment
Radio programming is determined by style of music and type of
programming (or playlist) on the station
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Section 11.2–Media Product Marketing–
Marketing the Music
Music industry earned $40
billion worldwide in 2004
Music industry includes:
– Recorded and live music on CDs
– Live music in concert halls or
small clubs
– Free concerts in the park
Music marketed by labels
such as EMI, Sony, and
Warner are distributed to
retail stores or Internet
retailers
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Section 11.2–Media Product Marketing–
Marketing the Music
Cost of producing a commercial album can be from $125,000 to
$225,000 or more
Costs may include:
– Studio time
– Professional musicians’ fees
Costs do not include:
– Marketing and promotion costs (may be five times the production costs)
90% of the 8,000 albums released each year do not make a profit
For a label to stay in business, a few successful albums must make
enough money to cover losses from unsuccessful releases
Top performers can receive up to the top royalty rate of 15% of the
retail price of each album sold
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Section 11.2–Media Product Marketing–
Marketing the Music
Getting on Air
Airtime, time on the radio, is very important to a record company
– If music doesn’t get Airtime it will not sell
Radio is still the primary means of:
– Introducing new artists
– Introducing new music by established artists
– Promote upcoming concerts and acts in the local area
To get the Airtime needed to create a successful album, studios used to
provide Payola to the radio station DJ
– Payola is an illegal payment by record companies, or labels, to radio
stations to persuade them to play the label’s records
• Declared commercial bribery and illegal by federal government in the 1960s
– Record companies now hire independent agents to promote records to
stations and provide gifts to station personnel to encourage them to play
the music on the radio
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Section 11.2–Media Product Marketing–
Marketing the Music
Music Promotion Strategies
Record labels develop focused marketing strategies to create hits
Promotion is concentrated on radio play in major markets
– Areas with largest listening audience for a specific target market
– Only about 300 stations
Promotion can also focus on specific stations with specific formats to
reach a particular target market
– Certain styles of music
Promotion can also tie in, internet advertising, MTV, VH1, and
magazines, such as Spin and Rolling Stone
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Section 11.2–Media Product Marketing–
Marketing the Music
Performers as Marketers
Popular music is integrated with other media
A jingle accompanies television, radio, or Internet advertising
– Catchy tune or song that promotes a product
Cross marketing music and merchandising helps sell both
Ad agencies create Ad campaigns connecting music with merchandise
– A promotional plan that combines selling, advertising, public relations,
and the use of different media to reach target market
Ways performers can market their music:
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Internet websites
Television appearances
Radio interviews
Record signings at music stores
Participation in charitable events
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