Retailing Chapter 2

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Entertainment Marketing
Types of Entertainment Businesses
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Chapter Objectives

• Define entertainment marketing.
• Identify different types of entertainment media.
• Explain the economics of entertainment marketing.
• Discuss the global impact of entertainment
  marketing.
• Explain types of businesses in the entertainment
  industry.
• Identify forms of entertainment marketed to
  consumers.

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Thats Entertainment

• Throughout history and around the world, people
  have enjoyed music, sport, spectacle, art, and
  other forms of diversion.

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Thats Entertainment

• Television is one means used for entertainment
  marketing.

entertainment marketing the process of
developing, promoting, and distributing products,
or goods and services, to satisfy customers
needs and wants through entertainment, or any
diversion, amusement, or method of occupying time
Other forms of entertainment include

• Radio
• Recorded music
• Newspapers and magazines
• Video games (home or arcade)
• Films (theatrical or home)

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Thats Entertainment

• The companies that control the media influence
  how the public is entertained.

media the methods used for communicating or
transmitting messages
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The Influence of Entertainment

• The clothing we wear, hairstyles, and style in
  general are influenced by entertainment marketing.

fad a short-term popular trend, style, product,
or service
Many products or services influenced by
entertainment are fads.
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Entertainment and the Marketing Concept

• Movie and TV studios are constantly striving to
  anticipate customer wants and needs and provide
  what the public wants.
• Entertainment usually has a short shelf life.
• The marketer must cover costs and make a profit
  immediately.

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The Economics of Entertainment

• Entertainment marketing relies on meeting
  consumer demand for diversion and excitement at a
  price the customer is willing to pay.
• Shoppers can afford to buy only a limited amount
  of product before exceeding their budgets.
• The entertainment and sports businesses thrive on
  getting people to spend their discretionary
  income.

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The Economics of Entertainment

• Merchandising is a big part of the entertainment
  industry.

cross-selling the method of selling the customer
additional related products tied to one name
Businesses use cross-selling to increase profits
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International Entertainment

• Around the world, people spend money as Americans
  do when it comes to leisure time.

leisure time time free from work or duties
Entertainment products are one of Americas
strongest exports.
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1.

• What does the term media mean?
• What are fads?
• What product is one of Americas strongest
  exports?

2.
3.
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Business Structures

• Most businesses that produce entertainment for
  consumers are large corporations with many
  investors and employees.
• Most of these businesses started out as single
  proprietorships or partnerships.
• Become conglomerates- economies of scale
• History of Walt Disney

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Business Structures

• The major entertainment companies are

• The Walt Disney Company
• Sony Entertainment
• Viacom (Paramount)
• Time Warner
• Vivendi Universal
• The News Corporation (20th Century Fox)

These companies are structured using vertical
distribution.
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Movies

• Films are released by distributorsusually the
  studio or a related companyand shown by
  theaters, or exhibitors, to the public.

break even costs and expenses equal to income
revenues Average cost to produce a major studio
film- 90 million Another 40 million to market
it
Four out of ten films produced may not break
even.
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Movies

• A few large studios make up the core of the film
  business, which is considered an oligopoly.

oligopoly business situation in which a few
firms affect but do not control an industry
Independent movie companies called indies operate
on their own to make films.
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Movies

• In 2000, the breakdown of revenues for film was

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Theme Parks

• The first theme parks were called pleasure
  gardens and appeared in Europe around 1550.
• Walt Disney planned Disneyland to have exhibits
  and attractions for all ages.
• Disney signed sponsors to help pay for
  Disneyland. (Pepsi, Goodyear, Kodak)
• The idea for water parks developed in the late
  1980s.

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Television

• Television is the number one entertainment medium
  for many Americans.

affiliate an independent broadcaster that
contracts with larger national networks for
programming
The producers of shows are not necessarily
distributors.
An independent TV station may decide to become an
affiliate.
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Television

• Ratings are a type of market research that
  determines if a program stays on the television
  schedule or is dropped.

ratings the ranking of TV-show or radio-show
popularity in a certain time period
The most famous ratings company is Nielsen Media
Research.
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Television

• Advertising time can be split between national
  ads and local ads.

niche marketing a type of marketing that focuses
on a small target market of consumers who have
very similar interests
Prime time (8pm to 11pm) is the most expensive
advertising time.
Niche marketing has expanded in television
marketing with the number of cable stations.
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Radio

• Radio stations function as television stations
  doas either independent stations or part of
  national networks.
• Radio stations rely on market research to
  determine the popularity of programming.
• Each category of programming has a specific
  target market.
• For radio, prime time is the morning-drive-to-work
  period of time.

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Log On, Tune In

• Operating an e-tail business on an electronic
  channelthe Webcan be costly, due to design,
  delivery, returns, and operating expenses.
• Though Many larger dot-com companies crashed in
  the 1990s, small stores like Harris Cyclery of
  West Newton, Massachusetts, actually increase
  sales using a basic Web site. Today, a third of
  Harriss bicycle business rides in on the Web to
  get hard-to-find parts and personal service.
• Describe an e-businesss home page to your class
  after viewing one through marketingseries.glencoe.
  com.

Unlike traditional radio stations, online radio
stations offer audio as well as text, graphics,
and interactive features such as chat rooms.
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Music Industry

• The music industry is dependent on record
  companies to sign artists and produce and release
  albums.
• Record companies make large profits from
  successful artists who rely on up-front payments
  and royalties.
• The music industry has lost money as a result of
  illegal file sharing and downloading music for
  free on the Internet.
• Live performances generate income for the music
  industry.

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Performing Arts

• Performance art is a very centralized business
  today.
• Many productions are financed and produced by the
  same large entertainment companies that produce
  film and television.
• Many popular Broadway shows tour around the
  country.

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The Internet and Computers

• Shopping on the Internet has not replaced the
  brick-and-mortar store.

brick-and-mortar store a retail business with a
physical location or store site
The growth of the video and computer game
industry has been steady and expansive.
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Other Entertainment Businesses

• Other entertainment businesses include

nonprofit organization non-government
organization that focuses on providing a service
rather than a profit

• The circus
• Themed restaurants
• Opera and ballet
• nonprofit organizations

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Variety of Markets

• With so many forms of entertainment, marketing
  professionals have unlimited products to offer to
  almost any target market.

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Types of Entertainment Businesses
Movies
Theme Parks
Television
Radio
Music Industry
Performing Arts
The Internet
Print
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• What is an indie movie company?
• What is prime time for television?
• What are royalties?

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Checking Concepts
1.

• Define entertainment marketing.

Identify types of media.
2.
Name two consumer products that are influenced
by entertainment.
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Checking Concepts
Describe an oligopoly.
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• Identify types of entertainment industry
  businesses.

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Explain why many films produced do not break even.

7.
Define ratings.
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Checking Concepts
Critical Thinking

• Describe how cable TV uses niche marketing.

8.
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End of