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Entertainment Industry


									Chapter 8 Entertainment Industry

   Lesson 8.1 Entertainment Profits
   Lesson 8.2 Distribution of Entertainment
   Lesson 8.3 Marketing and Music Theater
   Lesson 8.4 Awards and Annual Events
   Lesson 8.5 Entertainment Marketing Careers
Lesson 8.1 Entertainment Profits

   Explain profit and cost-cutting strategies in the
    motion picture industry.
   Calculate film revenue, and discuss the
    importance of foreign markets for movies
   Describe financing in auto racing
Entertainment Profits

   In the U.S. a few major corporations take home
    most of the profits from entertainment
   Independent filmmakers create their works
    without the financing and huge staff of major
    production studios. They have a hard time
    getting their movies out but are creative in
    finding ways.
Major movie studios
   The history of the movie industry starts with the growth of the
    large studios and their control of the industry.
   Studios seek out partners to help produce, promote, and
    distribute films.
   The large studios take on the role of financial manager in an
    effort to spread the economic risk of making a movie.
   Studios today usually have no long-term contracts with
    movie stars and no longer have huge facilities used for
   A movie studio can have record attendance and still not make
    money on a film if they have spent too much money to
    produce or distribute the film.
Recent Successes
   Titanic was the first movie to earn $601 million in North
    America. Other high grossing movies are Star Wars $461
    million, E.T. $400 million, and Jurassic Park $357 million.
   The Blair Witch Project was an independent film made in just
    five days for less than $50,000 that brought in as much as
    $500 million in domestic and foreign ticket sales and video
   Toy Story was the first purely computer generated feature
    length film to earn $200 million at the box office.
   The Lion King was the first animated film to reach the $200
    million level.
Cost-Cutting Strategies
   Distribution of movies is a major cost that until recently
    meant film had to be printed and transported to each movie
   To control distribution costs and improve revenues from
    movies, major studios have cut the number of wide release
   A wide release is a movie released in more than 2,000
    theaters at one time.
   Low-budget movies have little money for advertising so their
    creators capitalize on the promotional budget of major
    multimillion movies by using a similar theme in their title.
   The studios recruit talented unknowns to star or direct to
    save money.
   Studios cooperate with other companies to promote and
    distribute the movie.
Profit and Opportunity
   A film’s profit is the money that’s left after all the bills have
    been paid. The profit from an American film depends largely
    on the popularity of that film overseas.
   To figure profits, movie makers look at the ratio of tickets
    sold to the cost of production. They also look at income from
    merchandising, soundtracks, relationships to theme parks,
    global releases, U.S. ticket sales and global ticket sales.
   The movie distribution system differs in other countries.
    Foreign governments might have restrictions that would keep
    American films from being released in their countries. Ex.
    India no longer shows dubbed versions of English-language
    films to prevent corruption of Indian taste. Ex. China’s
    government must approve the content, filming location, and
    distribution of any films released in China. The China Film
    Co-production Corp. is seeking ways to co-produce movies
Stock Car racing is financed similar
to movies
   The difference between entertainment and sports is
    determined by the viewer. Movies are entertainment. Some
    people consider stock car racing to be entertainment.
   Stock car racing is one of the fastest growing forms of
   Stock car racers face the same financing problems that film
    producers do.
   Racing groups have come up with two primary ways of
    securing the financing for their expensive form of
Stock Car Racing as Entertainment

   A mutual fund was created called StockCar Stocks Index
    Fund that is made up of stocks in firms that sponsor
    NASCAR drivers to help in financing. (National Association
    for Stock Car Auto Racing).
   In NASCAR, one sponsor works with one individual racer and
    pays for that racer’s car and its upkeep. Fans are very loyal to
    NASCAR sponsors and exhibit a high degree of brand loyalty
    for products from the stockcar sponsors.
   If the sponsor cancels, the driver is in effect stalled until
    another sponsor comes along.
   Tobacco companies have been major sponsors of racing for
    more than two decades but their recent ban is going to call
    for more non-tobacco sponsors to replace their huge
    financial contribution.
Lesson 8.2 Distribution of

 Understand the different kinds of entertainment
 Discuss Promotional strategies for motion
   Many methods of entertainment distribution today.
     – Traditional television network broadcasting
     – Cable television networks
     – Satellite television
     – Theater Movies
     – Rental Movies
     – Internet online video
   Use of the distribution system to maximize promotion
    of an entertainment event is necessary to the success
    of the entertainment.
   The evolution and continued change of the distribution
    system presents new challenges to the industry.
Cable Television
   Cable technology continues to improve. The quality of
    transmission as well as the number of channels available
    continues to expand.
   Cable channels are becoming more specialized as niche
    channels by targeting specific demographic markets.
   Cable programmers promote their newest shows at the
    Western Cable Show in Anaheim, CA each year to cable
   Cable viewing has surpassed traditional network viewing.
   HDTV offers better resolution than a regular analog TV.

   Major cable industry companies such as Time
    Warner and Cox Communications reached a
    mutual Memorandum of Understanding (MOU)
    with major consumer electronics manufacturers.
   An MOU is a written agreement that contains
    voluntary technical standards for high definition
    programming that is compatible with any cable
   The MOU encourages the production and
    distribution of high quality digital content.
Satellite Television

   Satellite TV competes with cable in areas
    where cable is available, but it is the only way
    for people in rural areas to receive tv.
   One drawback of satellite TV is that the dishes
    often cannot pick up transmissions from local
   Consumers who want satellite access must
    buy a dish and then subscribe to a monthly
Internet Entertainment

   Selling through the Internet is called e-
   The Internet is becoming the most valuable
    place to advertise.
   Many web sites blend entertainment, shopping,
    and news. They offer incentives to
    members/guests in an effort to entice them
    back. Data are collected about each visitor.

   Broadcast webs are groups called affiliations of
    television networks, production studios, and
    related entertainment firms that produce shows
    inhouse for their group.
   This kind of business structure in which one
    company controls several different areas of the
    same industry is known as vertical integration.
    Disney affiliates are an example of a vertically
    integrated broadcast web.
Vertical Integration
   Vivendi Universal SA is a model for vertically integrated
    media companies in the 21st century. It is a
    conglomerate of entertainment firms which includes
    Universal Pictures, USA Network,,,, and Hotel
    Reservations Network and other music and publishing
   Vivendi has the ability to market both advertising and
    entertainment to the world through movie theaters,
    television, telephone, and the Internet. This media giant
    can advertise online and the Internet provider can
    advertise on the television network.
Movie Marketing
   Movies shown in theaters and movies rented from the video
    store include advertisements for other movies. These ads are
    called trailers or previews. Trailers are critical to attracting
    an audience.
   When a movie is promoted on TV, on the Internet, on pay-per-
    view, in retail stores at a point-of-purchase display, and in
    movie trailers, it helps attract viewers to all the distribution
    channels including home movie rental.
   A trend in the “kidvid” promotion is to bypass releasing
    movies in theaters and go directly to rental and sales of
   Point-of-purchase (POP) displays are set up by the checkout
    area and are an effective promotional tool.
Lesson 8.3 Marketing Music and

 Understand the promotion of rap music.
 Explain two kinds of theater promotion.
 Discuss the legalities of music distribution.
Today’s Top Music

   Rap and hip-hop are now the top-selling music
    in the U.S. Today’s hip-hop culture has
    expanded from its African-American
    beginnings and now appeals to white, Latino
    and Asian youth.
   Rap’s use of sampling as a form of promotion
    has helped it become a huge commercial
    success. Sampling is the inclusion on a CD of
    excerpts from the music of other artists.
Mainstream Rap
   Madison Avenue in New York is the home of American
    advertising. Madison Avenue marketing firms like the
    revenue-oriented spirit of rap and have financed rap’s move
    into mainstream America. Rap artists want mass appeal to
    lead to larger pay-offs.
   The original content of the lyrics of rap was rebellious and
    anti-establishment with sarcastic or political messages. As
    rap artists focus more on messages that bigger record labels
    can accept such as entrepreneurship and social activism,
    they are increasingly touching the hearts and wallets of more
    consumers. This change in lyrical content has helped hip-hop
    become more popular.
Promoting Theater
   The principal theater district in Manhattan is located on
    Broadway, between 42nd Street and 59th Street and is
    considered the premier sites for theatrical production in the
   The top five longest running shows on Broadway are Cats, A
    Chorus Line, Oh! Calcutta!, Les Miserables, The Phantom of
    the Opera.
   Traditional promotional strategies for Broadway theater
    include advertising on billboards, radio, television, in upscale
    or theater magazines, word of mouth, posters, university arts
    appreciation classes.
Distributing Music

   Technology has brought change to music distribution.
   Concert bookings as well as distribution channels for
    music are in a state of change.
   Music promoter, Robert F.X. Sillerman’s company,
    SFX, now produces almost 98 percent of the major
    concerts in this country.
   Music is distributed by concerts, MP3s, CDs,
    cassettes, CD singles, cassette singles, TV concerts,
   A free software program called MP3 (Mpeg Layer 3) can copy
    music from the Internet.
   The copyright laws that apply to records, tapes, and CDs
    apply equally to MP3. Before downloading an MP3 file to
    listen to it, make sure the owner of the copyright has given
    permission for listeners to download MP3 versions of the
   Many musicians are bypassing record companies to market
    directly to their fans through the Internet.
   The practice has been for musicians to release CDs every
    year or so with a group of songs. On the Internet, musicians
    can release one song at a time. Musicians are setting up a
    new relationship with fans. Making money using this new
    marketing technique will be the challenge.
Lesson 8.4 Awards and Annual

 Explain the promotional value of entertainment
 Discuss ways in which entertainment is
Awards Influence Sales
   Awards ceremonies are a promotional tool for entertainment and a
    way of recognizing achievement in the profession.
   In the entertainment industry, recognition also brings money,
    current acclaim, and increased potential for future success.
   Annual entertainment award shows on television complete for the
    attention of the viewers. The Academy Awards was moved to
    Sunday which is the biggest TV-watching night of the week.
   The big four are the Grammys for music, the Tonys for Broadway
    shows, the Emmys for TV, and the Oscars for movies.
   Other award shows include: The MTV Video Music Awards, VH1
    Music Awards, Rock and Roll Hall of Fame inductions, Screen
    Actors Guild Awards, and the Country Music Association Awards,
    BET Awards, and CableACE Awards.
   The number of award ceremonies continues to increase because
    fans continue to watch, sponsors continue to buy ads, they generate
    lots of publicity and add a level of status to the entertainment
    receiving the nomination or winning the award.
The Oscars
   The most famous and prestigious of the entertainment
    awards are the Oscars given by the Academy of Motion
    Picture Arts and Sciences.
   An Oscar nomination is a promotional bonanza for a motion
    picture, director, studio and star. No more than five
    nominations are made for each category of award each year.
   Both winning an award and getting a nomination have
    promotional value that money cannot buy.
   The Oscars have the second-highest TV viewership after the
    Super Bowl. The pre-show includes shots of stars arriving
    and spot interviews.
   A movie that wins Best Picture is likely to bring in an extra
    $100Million in ticket sales plus prestigious publicity.
The Grammys

   The National Academy of Recording Arts and
    Sciences (NARAS) is an association of more
    than 13,000 musicians, producers, and other
    recording professionals. Nominated by a
    committee, the Grammy winners are selected
    by a vote of the membership in 92 categories.
   As with the Oscar, the accompanying publicity
    that comes with winning a Grammy cannot hurt
    the marketability of the winner.
The Emmys
   The Academy of Television Arts and Sciences presents
    the Primetime Emmy or excellence in nighttime
    television, and the National Academy of Television Arts
    and Sciences presents award for daytime television.
   Emmy Awards bring significant attention to television
    shows and the viewing audience can be expected to
    increase for shows that win or that have winning stars.
    Ex. Camryn Manhiem won an award for The Practice
    and dedicated it to “all the fat girls” and picked up new
    viewers in that category.
The Tonys

   The Tony Awards are named after Antoinette
    Perry who served as the head of the Board of
    the American Theatre Wing. The awards are
    given to professionals in theater for
    distinguished achievement and not for best in
    any category. The Tonys are more of a
    special-interest award because of the travel
    and expense involved in getting audiences to
    the Broadway plays in New York.
Trade Events
   Getting potential customers together in one location so they can
    hear and see promotional information about products is the
    purpose of trade shows.
   Trade shows focus on businesses that are related.
   Seasonal or theme events are centered in geographic areas and
    they market directly to the people who will attend them.
   The Fringe Festival in Edinburgh, Scotland is a combination
    trade show and seasonal event. Producers, agents, directors,
    and critics attend to see the new artists and productions that
    shape the direction of international theater for the coming year.
    As they shop for acts, they plan new products to promote. The
    actors and playwrights are selling their products. The Fringe
    has grown into one of the most significant annual promotional
    events for the world theater stage.
Lesson 8.5 Entertainment
Marketing Careers

 Discuss the preparation needed for a career in
  the entertainment marketing field.
 Comprehend the skills needed for specific jobs
  in entertainment marketing.
Marketing Jobs

   According to the Occupational Outlook
    Handbook, a publication of the Bureau of Labor
    Statistics, opportunities for marketers,
    advertisers, and public relations specialists will
    be among the fastest growing in the nation
    through the year 2006.
   To prepare for a job, gather information about
    the job, take appropriate courses in school,
    and market yourself.
Public Relations Specialists

   Public relations specialists build and maintain
    positive relationships between their employer and
    the public. They look out for the best interests of
   Their responsibilities include keeping the media
    and consumers aware of the company or person
    they represent.
   In the entertainment business, a specialists might
    include actors’ agents, or studio press agents.
Marketing and Advertising

   Marketing Managers are people who develop
    products, sales strategies, and pricing for
   The potential to earn high salaries exists, but
    long hours, weekends and evenings are
    common as is the need for substantial travel.
   Responsibilities include market research,
    strategic planning, sales, advertising, pricing,
    and product development.
Skill Requirements
   Marketing demands people who are able to handle multiple tasks at
    once. Gaining experience in related areas, internships, and
    volunteering with community groups can lead to job opportunities.
   The three skills most desired are math, communications, and
    interpersonal skills. Ability to communicate persuasively, both orally
    and in writing is vital and the ability to work as part of a team is
   Other skills needed in marketing are: creativity, initiative, good
    judgment, problem-solving/research skills, outgoing personality/self
    confidence, understanding of human psychology, enthusiasm for
    motivating people, maturity, resistance to stress, flexibility, and

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