Entertainment Marketing Types of Entertainment Businesses 2

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. 3

That’s Entertainment Throughout history and around the world, people have enjoyed music, sport, spectacle, art, and other forms of diversion. 4

That’s 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) 5

That’s Entertainment The companies that control the media influence how the public is entertained. media the methods used for communicating or transmitting messages 6

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. 7

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. 8

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. 9

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 10

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 America’s strongest exports. 11

What does the term media mean? What are fads? 1. What does the term media mean? What are fads? What product is one of America’s strongest exports? 2. Quick Check Answers Media are the methods used for communicating or transmitting messages. short-term popular trends, styles, products, or services entertainment 3. 12

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. 13

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. 14

Movies Films are released by distributors—usually the studio or a related company—and shown by theaters, or exhibitors, to the public. break even costs and expenses equal to income revenues Four out of ten films produced may not break even. 15

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. 16

Movies In 2000, the breakdown of revenues for film was: 26 Percent Theatrical Receipts 46 Percent Video/DVD Sales and Rentals 28 Percent Television Sales 17

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. The idea for water parks developed in the late 1980s. 18

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. 19

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. 20

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 is the most expensive advertising time. Niche marketing has expanded in television marketing with the number of cable stations. 21

Radio Radio stations function as television stations do—as 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. 22

Log On, Tune In Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. Describe an e-business’s 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. Many traditional radio stations, including syndicated station NPR (National Public Radio), also broadcast via the Internet. It take a large amount of bandwidth to support this kind of continuous, or streaming, media—and bandwidth can be expensive. Some companies offer their powerful Internet servers for a fee so you can operate your own station—and broadcast your message to listeners anywhere in the world. For more information on sports and entertainment marketing, go to marketingseries.glencoe.com. 23

Music Industry The music industry is dependent on record companies to sign artists and produce and release CDs. 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. 24

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. 25

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. 26

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 27

Variety of Markets With so many forms of entertainment, marketing professionals have unlimited products to offer to almost any target market. 28

Types of Entertainment Businesses Movies Theme Parks Television Radio Music Industry Performing Arts The Internet Print Seek Out Target Markets 29

What is an indie movie company? What is prime time for television? 1. What is an indie movie company? What is prime time for television? What are royalties? 2. Quick Check Answers Independent producers who form film companies that are not affiliated with major studios. Prime time is 8 p.m. to 11 p.m., the most expensive advertising time because that is when the majority of people watch television. money paid to labels and/or performers for use of their products 3. 30

Checking Concepts Define entertainment marketing. 1. 2. Types of media include film, television, radio, recorded music, print media such as newspapers and books, the Internet, and more. 2. Answers may vary but may include fashion clothing and cars. 3. It is 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 methods occupying time. 1. 2. Identify types of media. 3. Name two consumer products that are influenced by entertainment. Checking Concepts Answers It is 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 methods occupying time. Types of media include film, television, radio, recorded music, print media such as newspapers and books, the Internet, and more. Answers may vary but may include fashion clothing and cars. continued 31

Checking Concepts Describe an oligopoly. 4. 5. The cost of producing films is so high that sometimes expenses are greater than income. 6. Types of entertainment industry businesses include film, TV, radio, music, theme park, Internet, computer-game, and performing arts businesses. Other answers are possible. 5. Ratings are the ranking of a TV-show or radio-show popularity in a certain time period. 7. It is a business situation in which a few firms affect but do not control an industry. 4. 5. Identify types of entertainment industry businesses. 6. Explain why many films produced do not break even. Checking Concepts Answers It is a business situation in which a few firms affect but do not control an industry. Types of entertainment industry businesses include film, TV, radio, music, theme park, Internet, computer-game, and performing arts businesses. Other answers are possible. The cost of producing films is so high that sometimes expenses are greater than income. Ratings are the ranking of a TV-show or radio-show popularity in a certain time period. Define ratings. 7. continued 32

Checking Concepts Critical Thinking 8. Cable channels often target their programs to small target markets of consumers with similar interests. 8. 8. Describe how cable TV uses niche marketing. Checking Concepts Answers 8. Cable channels often target their programs to small target markets of consumers with similar interests. 33

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