Entertainment Marketing

 Explain financial strategies in the motion picture industry  Calculate film revenue, and discuss the importance of foreign markets for movies  Describe financing for auto racing.  Essential Question – In what ways do movies make money?

 The Global Entertainment Industry is expected to reach $1.4 TRILLION by  In 2011, the gross box office sales (movies at the theater) was $10.1 BILLION in the United States!  In 2011, the global box offices sales reached $32.6 BILLION!  The entertainment industry is considered the second largest export (after agriculture) in the US!  Entertainment industry has the largest payroll of any business in this country!

 The Profit makers  For the last ten years, movie ticket sales have increased in the US  Only 50% of movies actually make a profit!  Studios average cost of film production and marketing is $89.4 million per year!  Selling of DVDs and international box-office sales are sometimes larger sources of income than the actual ticket sales

 Titanic was the first movie to earn more than $600 million in North America  International box office sales were over $1.2 billion  Titanic was still being shown in movie theaters three days before the DVD was released!  What are the top 10 highest grossing movies?

 Wide release – is a movie released in more than 2,000 theaters at one time  Preview – is the release of a movie the evening before its official opening.  Usually held between 6-10pm.  Matinees – or pre-evening shows, generally have less audience and lower-priced tickets  Low-budget movies – generally those costing less than $250,000 to produce and have low advertising budgets.

 Profit – the money left after all bills have been paid.  Profit from an American film depends largely on its popularity overseas Generating Film Revenue – - To figure profits, moviemakers look at several elements of the film process:  Ratio of tickets sold:cost of production  Income from licensed merchandise, soundtracks, relationships to theme parks, global releases and domestic/foreign ticket sales  Blair Witch Project – cost $50,000, grossed $36 million during first three weeks!

 Worldwide distribution revenue is critical for movie profits  Income from an international release of a movie can increase box office take by % over domestic ticket sales Domestic vs International sales for Harry Potter movies Harry Potter and the Sorcerer’s stone HP and the Chamber of Secrets Domestic$317m$262m International$658m$604m

 Not always profitable -  Theater owners and movie distributors in India said they would no longer show dubbed versions of English-language films  Want to prevent corruption of Indian taste  1.3 BILLION people in China = great market for movies, but, unfortunately:  Pirated movies are abundant  Chinese government must approve the content, film location and distribution of films  “Django Unchained” pulledDjango Unchained (on wiki)

 Difference between entertainment and sports is determined by the viewer  Car racing – sport or entertainment?  Racers have the same problem film producers have –

 Where do race groups get money to finance their form of entertainment?  Mutual fund  Sponsors  Mutual fund – investments from stocks  Sponsors – they pay for the car and upkeep. Can have numerous sponsors, but usually one big one

Chapter 8.2

Objectives  Understand the different kinds of entertainment distribution  Discuss promotional strategies for motion pictures.  Essential Question – how are movies distributed?

Distribution of Home Entertainment  In the early days it was just… How they made cartoons in the 1930’s

Distribution of Home Entertainment Now we have….

Cable Mania  In the late 1990’s, the number of cable TV networks, esp those with digital channels, increased greatly.  Original cable space was limited, but digital cable allowed more channels  Cable TV programs are sent through the air, picked up by a master antenna and delivered to homes via cables

Cable Mania (cont’d)  Books’ guess 29 million households in US would have an HDTV by 2008  Actual = 35 million in US in 2008  Now = 53% of all homes have HDTV  Approximately 125 million homes in the US  Means approx 63 million households have a HDTV  Wow!  MOU – (memorandum of understanding) written agreement that contains voluntary technical standards. Source: Cable & Telecommunications Association for Marketing

Satellite Television  Satellite TV competes with cable  But blows cable out of the water when it comes to rural areas

Internet Entertainment  Ignore the book, lets talk

Mega-Distribution  Broadcast webs – (not the WWW) are groups of TV networks, production studios, and related entertainment firms that produce shows inhouse for their groups.  Vertical integration – one company controls several different areas of the same industry  Example - Disney

Vertical Integration Example Universal Pictures Universal Theme Parks USA Network Music & publishing business USA Interactive (Subsidiary) HSN.com Ticketmaster.com Hotel Reservations Network Expedia.com

Movie Marketing  Trailers – Movies shown in theaters and on video include advertisements for other movies/related music/merchandise Transformers 3 Avatar Paranormal Activity 3 Step Brothers  The Blair Witch Project – developed a web page that made the story look like a real news article. Trailer Trailer

See it at home  For a HakimBuck- what does DVD stand for?  Digital video discs  No longer need to travel to first and second run theaters to see films  DVD’s/Blue ray  Point-of-purchase (POP) displays – set up next to the checkout area and are an effective promotional tool  Examples…

POP displays

DVDs – how do we get them?  Walk in stores  Redbox/Blockbuster Express  Netflix  Online Streaming

Extra Credit  In your travels, if you see a POP display, take a picture! Picture can be either on a phone or camera  Show me the picture, tell me where the POP display is and the extra credit is yours!

Homework  You need to survey 15 people, that live in different addresses and see if they have either: cable, satellite, digital air, or none. The people surveyed CAN NOT be from our class!!  Your survey results, and the student’s name you asked, needs to be inputted in either Microsoft Excel or Word in a logical manner I can understand, with your name in it and submitted into the Usershares (I:) folder  In Word/Excel Create a graph or chart of your choice using your survey data  Results will be tallied and your document graded for:  Completion  How well I can understand it  Due:  Three days from today’s class

 Understand the distribution of music  Discuss the legalities of music distribution  Explain two kinds of theater promotion  Essential Question – What is theater promotion?

 Listening to music of your choice is a popular form of entertainment for all ages  The music industry is constantly changing to keep up with new technology  How CDs are made How CDs are made

 Digital music is delivered to TVs through both cable and satellite providers  Listened to by as many as 75% of subscribers, daily  Where do you listen to digital music?

 Concerts – › A major source of revenue for musical artists › Traditionally, fans stood in line to buy tickets – but not anymore › The internet offers a fast and convenient alternative for purchasing tickets › Pre sales- take place at web sites affiliated with the concert artist, such as fan club web sites › Bieber Fever! Bieber Fever!

 MP3- what’s it stand for? › Mpeg Layer 3 › Tougher for musicians to “sell” their music now because people are downloading it for free  RIAA – (Recording Industry Association of America) uses software to track computer users online to see who is illegally downloading MP3s

 Many musicians are bypassing record companies to market directly to their fans through the Internet.  Benefits › Don’t have to pay high costs › Can release one song at a time instead of a whole CD

 Word-of-mouth is a major source of promotion for Broadway shows  Still use typical distribution channels (posters, TV ads, and newspaper ads)

 The Oscars – 6,000 members determine each Academy Award, or Oscar. › They vote on motion pictures, directors, studios and actors › Second highest TV viewership after the Super Bowl  The Grammys – Awards for music artists and music producers

 The Emmys – awards for television shows  The Tony Awards – awards for theatrical (theater) shows