Report, Warner brothers - Case Study Example

Horn is presented with the dilemma with what strategy to adopt to produce and market movies that generate revenues and compensate for other low performing ones. On one hand, selecting the right script is guided by factors like experience, star loyalty, some specific genres of movies which are always liked by the audience or a rival spearheading a new concept which can be marketed along similar story lines. On the other hand, there are various other operational and strategic factors which shape up the selection decision and are based on more of data than intuition or gut feeling (Pisano & Wagonfeld 2009).

One of the most essential components to pay attention to and analyze is the risk taking and sharing basis. Warner Bros. typically do not share risks of producing and marketing a movie with other studios and puts in the entire capital and efforts with an optimistic view of getting the risk-return trade-off. However, with such mammoth budget big-event films which are constrained by public acceptance, rival moves and reduced opening weekend sales, risk sharing should essentially be a part of green-lighting a project.

True that if successful, the movie will garner huge revenues to the studio and provide for even low budget movies that have failed at the box office. But in case, any of the above $200 million movies did not capture the expected response or fails in the successive weekends, the entire financial statement of studio can dissipate. With risk sharing, the studio can still remain optimistic and energetic of producing and marketing the movies in pipeline, which would otherwise be thought of as sheer waste of money and efforts on account of observed failure and huge losses.

Trend of videos and DVDs is capturing fast with audiences turning to this medium more than actually visiting a theatre. Apart from traditional sources of revenue, studio revenues like theatre contracts, sale of broadcast television rights and videos and DVD sales are fast catching up, leaving behind normal box office revenues. Warner Bros. operates on the philosophy of vertical integration which provides it with increased access to downstream distribution channels. This practice can be improved with more focus on securing additional studio revenues.

This can also reduce the risks which are more frequent in box office openings. Television broadcast rights, theatre contracts and such other studio revenue streams are considered to be more immune and hence, they should be treated as risk management activities where every single film is a time and cost based project. Marketing campaigns play a significant role in the success or failure of a movie. It educates the audience about what actually is contained in the movie. Trailers are extracted from the movie run itself, which are some exceptionally excellent scenes to hit the psyche of the target audience.

With every market, trailers are customized according to the choice, language, seasonality and preference. Trailers before launching the movie are generally for box office purposes. However, what if trailers are also developed for television broadcast and theatre screenings simultaneously with box office openings! This could eliminate the fear of a disappointing opening weekend where theatre screenings and sale of videos and DVDs could counteract the losses of bad openings. Maintaining relationships with distributors, actors and directors is yet another