Distributing Entertainment

Modifying Channels Traditional Distribution Entertainment Distribution Manufacturer Retailer Consumer Producer Media Outlet Consumer

Before we move on… What is….. Direct Distribution Indirect Distribution Media

Distributing Entertainment Entertainment distribution focused on… Movies Television

Distribution Channels in Entertainment Entertainment is mainly distributed through media outlets Traditional Networks Cable Satellite Internet Studios Theaters At Home channels

The Evolution of Network Television and Cable In the early days of television, there were only 3 television network ABC, CBS, NBC Implementation of cable allowed consumers to choose from hundreds of channels Gained popularity in 1980’s Satellite and Digital Cable now offer wider selection on choices

Cable Mania Cable offers Premium Channels Originally very limited Has grown through… Digital cable HD is the future—eventually all channels will be HD Cable offers Premium Channels HBO, Show Time, Starz New cable programs introduced at the Western Cable Show each December in Anaheim, California This trade show helps get new shows into local cable channel packages

The Success of Cable as a Media Outlet Cable channels use specific shows to target demographic markets While a lot of people still watch network TV, cable TV has many more viewers. Cable channels can be targeted to specific markets, allowing them to get advertisers for those specific markets – Lifetime – women’s products ESPN – sports enthusiast products Food Network – Cooks

Internet Entertainment Media Internet entertainment has grown dramatically over the last decade. Types of Internet entertainment: Social Media Internet TV Hulu Movies Netflix Music, Books iTunes

Movie Distribution Trailers or Previews – Advertisements for other movies shown on-screen in movie theaters or on videos sold for home viewing utilizing internet media The movie industry is suffering from a shift in traditional distribution outlets many people aren’t going to theaters any more – they wait for the movies to come out on DVD or Blu-Ray Trends- Smaller movies just go straight to DVD Big movies available in 3D at higher price

Mega Distribution: Vertical Vertical Integration In this system there were 8 major media conglomerates (referred to a “Big Media”) that controlled most of the entertainment media and news media in America Goal: to streamline and keep profits in company The idea was for one company to own all levels from books, to TV networks, to movie production, to news outlets, to theme parks Example: Disney Broadcast Web Groups of television networks, production studios, and related entertainment firms that produce shows in-house for their group

Mega Distribution Disney owned everything and controlled everything from the books about their shows and movies Golden Books Disney Channel Disney Pictures ABC Channels Disney Theme Parks

Mega Distribution: Horizontal Two or more organizations at the same level join together for distribution/marketing purposes to capitalize on a new opportunity “Mergers”

Mega Distribution Disney Horizontal Integration

Who really controls distribution? THE BIG 6! http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6

The Down Side to Mega Distribution Integration was a popular idea in the early 2000’s, Many integrated media conglomerates failed and have now divested themselves of the various media Hard to control quality and operations

Using Retailers to Distribute Most “Home Entertainment” products are sold through retailers Brick and Mortar E-Commerce Mostly Consists of DVD’s and Blu-Ray Discs To help stimulate sales the production company often provides the retailer with a point of purchase display

DECA Role Play Groups of 3! You will work with your group members to come up with a distribution solution for the problem Get creative! Carefully follow instructions on handout The last 20 minutes of class we will present our ideas Winners get a prize!

Distributing Sports

Distributing Sports Distributing professional sports through Media Stadiums Professional Sports have a special situation…they are cartels!

Distributing the Game Individual teams within a professional league are separately operated businesses, but they are not in competition with each other as they would be in a free open market Each team is a member of a cartel A cartel is a combination of independent businesses formed to regulate production, pricing, and marketing of a product

Distributing the Game The professional leagues (NFL, NBA, MLB, NHL) are all sports cartels Pro leagues are independent sports teams grouped together and governed by a league agreement The league controls the marketing mix of the team – including distribution

Stadium as Place Regions with a large potential customer base are considered favorable for a team Owners try to get public funds to subsidize the team Distribute more than the game Entertainment Community Events

Media Outlets for Sports Traditionally distributed through network TV and cable stations The biggest profit center is television revenue TV revenue is generated through the sale of advertising time TBS & CBS have just made a deal with the NBA for rights for the next 15 years

Vertical Integration in Sports Sports teams vertically integrate by owning all levels Minor league teams Major league teams Groups own different teams- Atlanta Spirit – runs Phillips Arena Manages Hawks & Thrashers Manages Entertainment Events

Braves Role Play The new SunTrust Park in Cobb County is looking to distribute innovative entertainment events through their new facility Groups of 3! We will present our presentations at the end of class Winners get a prize! Remember: THIS IS FOR A GRADE 