Entertainment Marketing Introduction

1
Entertainment MarketingIntroduction

• Lecture One
• Dr. Melodie R. Phillips

2
The Entertainment Industry

• Mediated Entertainment
• Filmed Entertainment
• Movies
• TV
• Recorded Entertainment
• Live Performances
• Art
• Concerts
• Theatre
• Destinations or Places
• Vacation Activities
• Sports, Gambling
• Books, Magazines, Novels
• Collectibles
• Video games

3
Why Study Entertainment Marketing?

• Great of disposable income spent here
• Unique approaches to marketing these
  products/services
• Prosperous economy shows tremendous growth
  potential
• Advances in technology video games, Internet
• Increasing importance of leisure time
• Ex Europe vs. U.S. vacation time

4
Entertainment Ethics

• News
• PR coverage often involves deals
• News shows must generate ratings
• News is no longer objective
• Film Reviews
• Is the quote legitimate?
• Press Junkets and trips for critics
• Radio pay for play

5
Films and Movies Art or Commerce

• Entire industry that has only been around 100
  years or so
• It is a mixture of art and commerce
• Has a profound effect on behavior, culture,
  politics, and economics

6
Entertainment as Commerce

• Idea is to make movies that attract customers
• Goal to attract enough customers to cumulatively
  pay for costs to be recouped
• Additionally must make enough profit to satisfy
  investors

7
Movies as Product

• Extremely perishable commodity
• Value only as long as it is on peoples minds and
  is relevant to their frame of reference
• Can achieve a level of rejuvenation when enter
  international and video life cycles

8
Life Cycle of the Movie Product

• Theatrical exhibition First Tier
• Up to 90 gross to distributor (Ex The Grey)
• 40 - 60 goes from 1.50 theatres, drive ins
• 2-4 months later DVD rentals and sales Second
  Tier (Ex DRIVE)
• Share based on a of sales or purchase at for
  rent price
• Home TV Pay Stations (HBO, Showtime, etc.) (9-12
  months post b.o.) Third Tier (Ex Black Swan)
• Based on a fee of of subscriber fees
• Network Television Viewing Fourth Tier (2-3
  years post b.o.)
• Negotiated payouts triggered by each run
• Made for TV Movies can be sold to local
  affiliates or overseas markets for additional
  revenue
• Exceptions Rocky Horror and weekends

9
Comparisons to Other Industries

• Differences
• No other industry is a single product
  manufactured for tens of millions of dollars with
  no real assurance of purchase
• Public takes away with them a piece of the
  product in terms of memories
• First dollar deals stars, directors and
  producers take of every revenue dollar even if
  studio has not recovered production costs

• Similarities
• Production encompasses RD, manufacturing
• Distribution can be compared to wholesaling
• Exhibition compares to retailing

10
Measuring Celebrity Power

• Paid Attendance
• B.O. receipts, concert tickets sold, attendance
  at political fundraisers, charity giving at
  celebrity cause
• Q Score
• Measures familiarity and appeal

11
Q Score of a Performer

• Celebrity, Brand, Athlete, etc. graded by the
  public on 6 factors
• In your opinion indicate The performer is
• A) One of my favorites
• B) Very good
• C) Good
• D) Fair
• E) Poor
• Someone I have never heard of or seen
• Score (responses to A/sum(A through E)) 100
• Yields familiarity and appeal

12
Q Ratings Available

• TVQ rates broadcast television programs
• Cable Q rates cable television programs
• Performer Q rates living celebrities
• Dead Q rates the current popularity of deceased
  celebrities
• Sports Q rates sports figures
• Cartoon Q rates cartoon characters, video games,
  toys and similar products
• Brand Attachment Q rates brand and company names
• Kids Product Q rates children's responses to
  brand and company names

13
Celebrity Power Measures

• Polling Research
• Assess publics attitudes regarding
• Believability
• Compatibility with causes and products
• Overall communications skills
• Ability to change impressions or attitudes
• Ratings Services
• TV, radio
• Incidental measures such as size of fan base,
  letters written to celebrity, posters, calendars,
  videos/DVD sold, gossip column mentions, covers,
  log-ins and searches

14
First Sale Doctrine

• First Sale Doctrine - retailers have the right to
  rent any legally purchased copy of a movie. Video
  stores could go buy copies of movies with these
  extras at Wal-Mart or Best Buy and then rent them
  to consumers!
• Studios challenged video store owners over this
  doctrine in the 1980s

15
Impact of John Carter, Tarzan and Edgar Rice
Burroughs

• The major player in building and shaping the
  genre of Science Fiction
• 30 million copies of his novels in 58 languages
• 21 Tarzan movies
• 364 radio programs
• 212 newspapers with Tarzan comics
• 15M circulation

16
What to do? This used to be the profit base!

• Strategies to improve sales? Rentals too easy
  and cheap! Profits in sales (not rentals)
• Cut out bonus features from rentals, offer 2
  discs with BluRay
• Grow BluRay market cut prices add features
• tangible sales fell 5.8 but spending increased
  10
• Digital Sales climbing to offset tangible DVD
  and rentals up 19 and a 30 market sharre
• Physical rentals from brick and mortar stores
  fell 24 in 2012 to 1.2B
• Kiosk rentals up 15.9 to 1.9B

17
John Carter Early Press

• Movie Meter
• John Carter
• 986th
• Hunger Games
• 17th
• Avengers
• 26th

18
Budget Concerns

• John Carter 250-275M
• Hunger Games 80M
• The Avengers
• 220M

19
John Carter vs. Sci Fi films

• Superman is like John Carter in reverse
• Krypton much larger and denser
• Has John Carter like skills on Earth
• Differs in that he protects his anonymity and was
  not a warrior

20
Flash Gordon

• After failing to reach an agreement to syndicate
  John Carters adventures on Mars in 1933-1934,
  King Features releases Flash Gordon.
• Flash Gordon Sunday page debuted three days after
  a delayed response to ERB.
• The first 46 Raymond strips indicate Flash
  Gordon's debt to ERB's John Carter adventures.
• many of the plot lines are lifted from ERB's Mars
  and Venus novels
• Flash is described as being a superb swordsman
  with powerful earth-man muscles which allow him
  to make giant leaps.

21
Star Wars and Avatar Owe ERB!Common Themes

• Interstellar Romance
• Space Western
• Man into Superman
• Strange Creatures
• Woola/Chewbacca
• Culture Shock
• Fighting for Aliens
• The Princess and the Rebellion

22
How Could John Carter be Strip Mined?

• Business of ERB was not well attended to and
  became part of the public domain prematurely

23
Edgar Rice Burroughs - NED

• Dejah Thoris Martian Princess
• By Normal Bean
• Used a pseudonym because concerned about
  reception of story

24
Trend or Changes in the Industry

• Originally product developed just for theatrical
  release
• Later embraced television, airplane and college
  viewings
• Now the single most lucrative market is video
• Year to date spending on DVD purchases is 10.2B
  flat as compared to last year rentals up 1

25
2x2 Marketing Analysis of a Film Product
Product Cast Dark Shadows Special Effects Avatar Soundtrack Saturday Night Fever, The Matrix, O Bro Where art Thou? Plot Sixth Sense, Fight Club, Donnie Darko, Planet of the Apes Cinematography Inception, Hugo, The Aviator Price Cost of Production Avengers 220M) b.o. 1.52B Napoleon Dynamite (400k) Marketing Expenses Independence Day Box Office to Date Avatar (2.78B) Napoleon Dynamite (44.5M)
Place Timing of release Scorpion King, The Avengers Battleship Wide (Dark Knight Rises) vs. Tiered Release (Silver Linings Playbook) Rating of the Film Beverly Hills Cop Poor South Park (R), Dinosaur(PG) Promotion PR Beautiful Mind Event marketing Days of Thunder Promotions Finding Nemo, Star Wars Ads and Trailers Independence Day, The Dark Knight Merchandising Lion King
26
2x2 AnalysisQuiz 1 - Takehome


Product Cast Special Effects Soundtrack Plot Cinematography Price Cost of Production Marketing Expenses Box Office to Date
Place Timing of release Wide vs. Tiered Release Rating of the Film Promotion PR Event marketing Promotions Ads and Trailers Merchandising
27
Additional Outlets and Profit Arenas

• Movie Companies are now into
• Satellite. Laser, Pay per View licensing any
  venue to get the movies exposed to the consumer
• Movie theatres, book publishing, theme parks,
  music, merchandising and real estate

28
History - Vertical Integration

• In the late 40s U.S. Justice Department forced
  some divestment of vertically integrated firms
  lost exhibition
• Legal environment changed and now see
  syndication, home video, music and merchandising
  in the family of companies

29
History of the Movie Business

• Through 1960s
• Pictures released locally and advertised with a
  mix of newspapers and local TV
• Distribution company named Sunn Classics began
  experimenting with network TV and this has had a
  major impact on cost increases!
• As studios recognized the cost efficiency of
  national ads they had to release nationally so
  print runs increased fro 500 to 1000 to 2000 or
  more to maximize audience access.

30
History 1960s 1980s

• Massive releases of 2000 leaves little room for
  independent distributors
• Strategy of the independent is to carve out
  limited release patterns and then ride a wave of
  positive WOM and profits (i.e., Blair Witch).
• Breakout independents can be hugely profitable
  because their costs are generally a small
  percentage of studio products.

31
Star Wars The Economic Impact

• Rewrote the economics of the movie business
• Released in 1977 broke upper limits of
  traditional grossing
• 798M WW
• Redefined worldwide income in books, records and
  other media

32
Star Wars Saga Economic Impact

• Star Wars Episode IV - A New Hope 1977
• Budget 13M US Gross 461M WW Gross 798M
  
• Star Wars Episode V - The Empire Strikes Back
  1980
• Budget 18M US Gross 290M WW 534M
• Star Wars Episode VI - Return of the Jedi 1983
  
• Budget 32.5M US Gross 309M WW Gross 573M
  
• Star Wars Episode I - The Phantom Menace 1999
  
• Budget 115M US Gross 431M WW Gross
  922M
• Rerelease in February 2012 yielded another 40M
• Star Wars Episode II - Attack of the Clones
  2002
• Budget 115M US Gross 311M WW Gross
  648M
• Star Wars Episode III - Revenge of the Sith
  2005
• Budget 113M US Gross 380M WW Gross 848M
  
• Total Budget 406M US Gross 2.18B WW Gross
  4.32B

33
Ancillary Revenues from Star Wars

• Soundtrack netted 2 top ten radio play hits, the
  original theme and the Cantina Band song.
• Both the Star Wars and The Phantom Menace
  soundtracks have been certified platinum by the
  RIAA.
• Attack of the Clones and Empire Strikes Back are
  certified gold by the RIAA.
• Over 100 video games spurred from both film
  material and the Expanded Universe
• Games released for almost all platforms including
  Sega, PS3, Xbox 360, Nintendo, Wii

34
Star Wars the Bottom Line

• Initially released on May 25, 1977
• Re-released on 7/21/78, 8/15/79, 4/10/81, 8/13/82
  and 1/31/97
• Ad budget of 4 million
• Gross receipts of 798M worldwide
• Rental 270.92M
• DVD Box set - 100M first day
• Blue Ray release of Star Wars The Complete Saga
  set Blueray record 84M week 1 (140 set).
• 515,000 copies in North America
• U.S. TV rights - 11M Spike TV 2008-13
• Series has grossed over 1.8B (6 films) vs. James
  Bond (21 films) 1,272B and Harry Potter 1,119.0B
  (4 films)

35
Star Wars Attack of the Toys!

• In 1977 movie licensing was hardly a business
• No tie-in toys
• No fast food promotions
• Star Wars series generated 10.5B in merchandise
  sales
• 400 licensing agreements worldwide granted for
  Revenge of the Sith alone
• Merchandise sales to date are 3X box office
  receipts of the movie franchise
• Studios generally make 10-12 on licensing Lucas
  negotiates even better s

36
Soundtrack

• Composed by John Williams (former maestro of the
  Boston Pops)
• Composed all 6 Star Wars films
• Nominated for 45 Oscars 5 have won including
  Star Wars A New Hope
• Revived grand symphonic scores in late 1970s
• Used technique called leitmotif in which a
  melodic cell signifies a character, place or mood

37
Soundtrack

• Research shows that consumers that of those
  willing purchase soundtracks, 50 do so within 1
  week of seeing the film
• Main theme only used for title crawl in
  subsequent Star Wars movies
• Walt Disney is the only individual to have more
  academy award nominations than John Williams

38
Future Revenue Plans

• Video games
• TV programming
• Book publishing
• 3-D release of the original films (Phantom Menace
  opened this month in 3D)
• Hasbro has toy licensing deal through 2018 and is
  re-releasing empty boxes with certificates for
  the original four action figures from 1977

39
Fan Involvement

• Multiple Star Wars fan sites
• www.rebelscum.com
• News on Star Wars collectibles
• www.theforce.net

40
Revenues

• First 5 films 5.7 billion
• 10.5 billion in toys and merchandise
• 4.3B in DVDs, VHS and video games (video games
  ongoing as are releases in 3D and Blueray)
• TOTAL REVENUE 20 billion

41
Related Effects of Star Wars

• Solidified the publishing offshoot proving that
  orchestral movie scores could hit the top of the
  charts and pop scores would soon top the day
• Examples Saturday Night Fever, Ghost, Batman

42
Film Genre

• Horror
• Sci-Fi
• Drama
• Romance
• Crime
• Animation
• Fantasy
• Musical
• Childrens

• Thrillers
• Mystery
• Film Noir
• Comedy
• Action
• Documentary
• Adventure
• Western
• War

43
Emergence of Home Video

• There was once a time that you were not only
  prohibited from owning a movie but you couldnt
  even see it on TV at your convenience
• Today every studio has a home video division
  all because of the VCR!
• Now the customer dilemma if whether or not to
  leave home to view a film

44
The Eighties and the Cost Spirals

• Dual increases in production budgets and
  marketing costs
• Production increases
• rationalized as needed for special effects and
  complicated physical production
• Higher salaries and gross points vs. net
• Home Video
• Marketing
• Further benefiting markets after the theatrical
  release

45
Eighties Cost Spirals

• Picture Budgets rose by 185 and marketing rose
  by 169
• Home Video/DVD growth has slowed as entered
  mature stage and now appears to be dropping into
  decline

46
Movie Production The Players

• The Creators
• The Producer
• The Director
• The Writer
• Independent Filmmaker
• The Property
• The Screenwriter
• The Literary agent
• Story Editor
• Exploiting Book-Publishing Rights

• The Deal
• The Entertainment Lawyer
• Business Affairs
• Talent Agent
• The Selling
• Distribution and Exhibition
• Motion Picture Marketing
• The Audience!

47
The Creators

• The producer has one absolutely crucial week on
  a movie it may even come down to three days
  the Wednesday, Thursday and Friday of the second
  week of shooting David Puttnam
• Must option the material to be used options may
  go as long as three years to see through to
  filming
• Many producers conceive of the stories used or
  find them in the newspaper then hire
  scriptwriters to fit the material

48
The Producers Role

• Primary Goal to make the project as risk averse
  as possible
• This may mean taking a strategy of bringing in
  bargain pictures under budget
• American system bring in a good movie in a
  timely responsible manner and it bombs, you are
  not regarded as a failure are under European
  system

49
The Producer

• Do you ever walk away
• Cant be made on studio project
• Too complex for skills
• Once given the green light
• Avoid fixed release date
• Building around one important cast members name
• Budget pressure before locations are scouted
• Dont fudge budget to get the ok

50
The Producer

• Insist that certain budget areas never be cut
• Medical, security and fire
• Keep aside sequences not necessary to the film
  and place them at the end of the schedule if
  need to cut out can! Also a valuable tool for a
  tired director
• Plan action sequences after crew has had a chance
  to meet and get accustomed to one another

51
Three Essential Creative Contributions

• Tier One
• Director
• Writer
• Composer
• Tier Two
• Production designer
• Editor
• cameraman

52
The Producer and the Director

• The pivotal relationship in the filming process
• One of trust about financing, timing, etc.
• Communication important
• Producer should limit appearances to end,
  beginning of day or lunchtime
• Producer must reserve wrap control!
• SWAT Team
• Production manager
• First AD
• Production accountant

53
The Producer Going Over Budget

• Recognize the patterns early delays
• Confer frequently with the director to correct
• If truly need the extra week cut from below the
  line items
• Travel times to locations
• Currency buy up front no fluctuation
• Do not impose ridiculous work hours

• Editors work begins during shooting and the
  editor must be truthful with the director
• Composer should be brought in early

54
Producer Importance of Previews

• Two types of Preview
• Production
• Allows to identify strengths and weaknesses of
  film and make changes
• Distribution
• Addresses marketing issues and positioning
• Already a finished product
• Marketing Head
• Cut trailers
• Print ads
• Release Patterns and theatre dates

55
Producer Role After Opening

• Not much control now!
• Opens stronger than anticipated chase with
  resources to maximize
• If opens poorly in broad release not much to do
• If opens poorly in platform release can salvage
  if
• Critics and exit polls strong

56
The Director

• Everytime the director says Lets try it this
  way, and not Lets do it this way, money is
  being spent at enormous rates. Sydney Pollack

57
The Director

• May identify source material like the producer
• Role of Director in Writers task
• May not want a lot of input and just present
  completed script GAMBLE!!!

58
The Director and the Writer

• Several meetings best prior to beginning the
  script
• Present in 50-60 page increments enables changes
  to be easier
• Or the director and writer may work locked up
  together on the script

59
2012 Finally