chapter 8 – entertainment industry lesson 8.1
DESCRIPTION
Chapter 8 – Entertainment Industry Lesson 8.1. Entertainment Marketing. Objectives. 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. - PowerPoint PPT PresentationTRANSCRIPT
Entertainment Marketing
Objectives 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 2015.
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 makersFor the last ten years, movie ticket sales
have increased in the USOnly 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 grossingmovies?
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 50-100% 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” pulled
(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 fundSponsors
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 3Avatar Paranormal Activity 3Step Brothers
The Blair Witch Project – developed a web page that made the story look like a real news article. 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
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!
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