Sports and Entertainment Connections What do sports and entertainment have in common? They have thrilled and entertained people for centuries—since the ancient Olympic games and Greek plays. Sports is entertainment. You will probably only pay to see what entertains you. (What you enjoy) 1

A Brief History of Leisure consumers Marketers sell participation in sports and entertainment events to consumers. consumers people who use products 2 discretionary income The growth of the sports and entertainment industries has relied on consumers with free time, discretionary income, and a desire for recreation. discretionary income money left to spend after necessary expenses are paid

A Brief History of Leisure By the late 1880s, both wealthy and working-class families could seek similar forms of entertainment, thanks to public transportation. Families now had a way to get to the event. kinetoscope a device used to view a sequence of moving pictures You could now see an event without having to be there. This was the birth of the film industry. 3 kinetoscope In the late 1890s, Thomas Edison invented the kinetoscope.

A Brief History of Leisure Other milestones in the history of leisure include: 4 Mary Pickford becomes the first international movie star in The first talking movie in 1927 (The Jazz Singer) Babe Ruth sets records in baseball that would stand for decades. The development of television

Development of Sports and Entertainment Marketing William “Bill” Veeck was a key figure in the development of sports marketing. He conceived of marketing activities and events that surround baseball games. (1940s) Ex. Fireworks, theme nights, giveaways, etc. Gave reasons to come besides the game. Adolph Zukor, founder of Paramount Pictures, was one of the first film producers to draw big box-office crowds and own a chain of theaters. Introduced dramatic stories to movies. 5

Marketing Today vendors Sports and entertainment vendors compete for a share of the money people spend on recreation. vendors sellers of products Ex. Nike and UA Paramount and WB 6 products Sports and entertainment marketing directs consumers toward sports and entertainment products. product a good or service that any for-profit industry sells to its customers Ex. Movie, video game, theme park

Similarities in Marketing Changes in Marketing promotion Communicating through promotion is more important than ever. 7 promotion any form of communication used to persuade people to buy products Ex. Advertising, free trials. Device itself: Blu-Ray player promotes HDMI, Dolby Digital, etc. New technologies have broadened the scope and reach of marketing messages, and they can be entertainment products themselves.

Marketing Similarities The marketing of sports and entertainment products differs from marketing traditional products in the following four areas: 8 endorsement approval or support of a product or idea, usually by a celebrity 1. Product –Endorsement –Core product –Ancillary product –Revenue continued core product the main product, such as sports event, movie, stage show, or book ancillary product a product related to or created from the core product Ex. Movie-Video Game revenue gross income from core and ancillary

Marketing Similarities 2. Place -Similar for all products: -Stores and e-commerce 9 piracy the unauthorized use of another’s music, movies, or copyrighted material Includes ticket scalping continued royalty a payment for material that has been copyrighted, or legally declared as belonging to the creator Ex. Song in a movie continued 3. Price –Piracy –Royalty –Copyright

Marketing Similarities 4. Promotion –Product tie-in –Cross-promotion Ex. Website setup for movie Ex. Website setup for movie Athlete goes on late night talk show Athlete goes on late night talk show 10 product tie-in use of ancillary products such as merchandise as promotional tools Ex. Action figure promotes movie cross-promotion any form of communication through which one industry relies on another industry to promote its product continued

Marketing Similarities Convergence Convergence expands the potential for profit in sports marketing and entertainment marketing. Studio using a TV ad for a movie that may one day be sold to television Web sites are used to promote, source of revenue by hosting links and online shopping 11 convergence the overlapping of product promotion synergy a combined action that occurs when products owned by one source promote the growth of related products synergy Convergence and cross- promotion help to develop synergy. Ex. Oprah- TV Show, Production Studio, Radio Show, Magazine, TV Network ( each sell each other) Disney-Movies, Parks, TV, Toys

Risks and Risk Management risks In any industry, including the entertainment industry, there are risks. 12 risks unforeseen events and obstacles that can negatively affect business Ex. Injuries, legal issues risk management a strategy to offset business risks Ex. Purchase insurance risk management Successful sports and entertainment marketers develop risk management strategies.

Different Players, Different Games Entertainment is based on creative ideas to specific target audiences and sport is based on athletic ability and competition. The differences between sports and entertainment can be found in three areas :. 13 Consumer loyalty Product Revenue stream

Differences in Consumer Loyalty consumer loyalty If sports fans feel their team is trying to win, the team can retain its consumer loyalty. 14 consumer loyalty consumers’ attitude that occurs when they are happy with a company and become repeat customers The entertainment consumer is not motivated by brand or team loyalty, but by a desire for satisfying entertainment. -Entertainment Marketer- Try to know what consumers want. CREATE that product. -Sports Marketer- Find a winning team. DELIVER that product

Differences in Product The sports product is consistent, or stable. -Team, stadium, league generally stay the same. The entertainment product is variable, or changeable. -Rely more on trends, fads. -Ex. Found footage movie (Paranormal Activity) 15

Differences in Revenue Stream The streams of revenue created by marketing products in entertainment are very diverse. Entertainment products are developed into ancillary products for additional profit and sales, royalties, and licensing products. Sporting events do not usually produce the same amount of revenue from merchandising and royalties as entertainment events. (Single Game) 16

Differences in Revenue Stream sponsorship Sports franchises earn revenue from sponsorship. 17 sponsorship something of value is exchanged for recognition Ex. Rite Aid gives money to high school, then sign with logo is put up at stadium. Sports franchises also earn revenue from: -Broadcast rights -Luxury boxes -Stadium naming rights