Entertainment Marketing Types of Entertainment Businesses 2

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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That’s Entertainment

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

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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

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Other forms of entertainment include:

Radio

Recorded music

Newspapers and magazines

Video games (home or arcade)

Films (theatrical or home)

That’s 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

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Many products or services influenced by entertainment are fads.

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

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Businesses use cross-selling to increase profits

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

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Entertainment products are one of America’s strongest exports.

What does the term media mean?

What are fads?

What product is one of America’s strongest exports?

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2.

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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.

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Business Structures

The major entertainment companies are:

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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.

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

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Four out of ten films produced may not break even.

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

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Independent movie companies called indies operate on their own to make films.

Movies

In 2000, the breakdown of revenues for film was:

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26 PercentTheatrical Receipts

28 PercentTelevision Sales

46 PercentVideo/DVDSales andRentals

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.

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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

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The producers of shows are not necessarily distributors.

An independent TV station may decide to become an affiliate.

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

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The most famous ratings company is Nielsen Media Research.

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

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Prime time is the most expensive advertising time.

Niche marketing has expanded in television marketing with the number of cable stations.

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.

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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.

Log On, Tune In

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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.

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

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.

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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

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The growth of the video and computer game industry has been steady and expansive.

Other Entertainment Businesses

Other entertainment businesses include:

nonprofit organization

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

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The circus

Themed restaurants

Opera and ballet– nonprofit organizations

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

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Movies

ThemeParks

Television

Radio

MusicIndustry

PerformingArts

The Internet

Seek Out Target Markets

Print

What is an indie movie company?

What is prime time for television?

What are royalties?

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2.

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3.

Define entertainment marketing.

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Identify types of media.

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. Types of media include film, television, radio, recorded music, print media such as newspapers and books, the Internet, and more.

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Name two consumer products that are influenced by entertainment.

Answers may vary but may include fashion clothing and cars.

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Checking Concepts

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continued

It is a business situation in which a few firms affect but do not control an industry.

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Identify types of entertainment industry businesses.

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Types of entertainment industry businesses include film, TV, radio, music, theme park, Internet, computer-game, and performing arts businesses. Other answers are possible.

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Define ratings.

The cost of producing films is so high that sometimes expenses are greater than income.

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Checking Concepts

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Describe an oligopoly.4.

Explain why many films produced do not break even.

Ratings are the ranking of a TV-show or radio-show popularity in a certain time period.

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Cable channels often target their programs to small target markets of consumers with similar interests.

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Describe how cable TV uses niche marketing.

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Critical Thinking

Checking Concepts

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