Game of Thrones - Winning through Product Development and Diversification - Case Study Example

March 12, Game of Thrones: Winning through Market/Product Development and Diversification As epic fantasy stories and games increased in worldwide popularity for the past two decades due to the likes of The Lord of the Rings and The Name of the Wind, among other titles, HBO offered its own epic fantasy production, Game of Thrones, in 2011. Game of Thrones is based on the best-selling first book by George R.R. Martin from the Song of Ice and Fire saga. Game of Thrones portrays the pursuit of power among seven families for the control of Westeros. By Season 2, Robb Stark has waged a war to avenge his father’s death and is on a winning streak. However, his sisters are prisoners at King’s Landing. In Season 3, the boy-king Joffrey Baratheon defeats his Uncle Stannis, while the White Walkers are moving to enter the Wall, threatening to spread further chaos in the war-torn Seven Kingdoms and the Free Folk lands. In analyzing the present and future market performance of the show in the world, its main concentration is the United States market. It focuses on seasons 2 and 3 of Game of Thrones (GOT). The marketplace performance of GOT may impact the development of comparable shows in the future by showing how it can expand product lines because of its strong brand equity and how multi-layered stories can actually appeal to a wider non-traditional audience due to its complex plots that portray the theme of the complexity of human nature with conflicting aspirations for love and power. GOT is considered as a financial success because it exceeded initial expectations, where it attracted beyond the niche market of fantasy game players and proved that, though it did not fit the usual HBO product profile, by attracting a wide market segment that can support the brand’s market development, product development, and diversification. Target Audience The target audience of GOT focuses on adult and adolescent male fantasy media lovers. GOT originally targeted the fantasy player market, usually males below 35 years old (Grover and Richwine). It is initially designed to attract videogame players and people who engage in “role playing” games such as “Dungeons & Dragons,” according to Marty Brochstein, senior vice president for industry relations and information at the International Licensing Industry Merchandisers Association (Grover and Richwine). George Martin, the writer and co-producer of GOT (the book) and the TV show, believes that there is an “enormous audience out there for fantasy, for sophisticated adult fantasy” (Ulaby). The main attractions for the original target market are the complex fantasy characters, extraordinary settings, and political power conflicts, while gore and sexual images and acts are also believed to attract the male audience (Grover and Richwine). Though adolescents and adult males are part of the target market, GOT TV series co-creator David Benioff believes that GOT has a wider appeal because it is essentially about families and their love for each other and power: “Its about families and conflict…Its about people trying to gain power. Its about people who [are] in power trying to keep it” (Ulaby).The emphasis on families and power makes GOT comparable to The Sopranos, which explores the social issues of a mob boss Tony Soprano as he balanced his work and family life. Despite a potential massive appeal, GOT was considered a business risk before because it was expensive to produce, and yet, it did not exactly fit the HBO product profile. HBO usually produces shows that are based on real life, while GOT is high epic fantasy (Ulaby). Benioff admits that GOT is not quite similar to traditional HBO series: “Initially, I think there was a degree of skepticism and nervousness because it didnt seem like an HBO show” (Ulaby). Epic fantasies may not be HBO’s expertise, but GOT breaks down apprehensions when it became a phenomenal success. Chairman and Chief Executive Officer of Time Warner, Inc. Jeff L. Bewkes revealed in 2013 that GOT has an average of 14 million viewers or audience, based on Season 3 viewership. It reflects an increase of 20% from Season 1, which makes GOT the second most popular HBO series (Bewkes; “Time Warner Inc. Reports Second-Quarter 2013 Results”). Time Warner and HBO do not provide more specific details on numbers of viewers and revenues, however, due to non-disclosure of the information. Nevertheless, the revealed estimates of viewers indicate the numbers of audience that GOT captivated. Positioning and Marketing in the Marketplace GOT is positioned as an entertaining story for people interested in families, intrigues, conflicts, and epic fantasy plots. The highlighted parts are epic multiple intriguing stories that are bound by blood and loyalties. GOT is about family issues, only at a larger inter-family (i.e. quest for preservation of or greater power among Seven Kingdoms) and intra-family scale (i.e. division inside the house such as between Tyrion and his sibling twins). A TV show’s trailer is a good way to exhibit the upcoming content of the show because it will attract audiences’ attentions, thus leveraging significant market value. Season 2’s trailer underlines the positioning strategy of GOT. It mixes fantasy and the reality of human nature, although it emphasizes human conflicts more. The main lines of the trailer are: “Wolves are Bleeding” which represents the despair of the Starks for the death of Eddard Stark and the capture of Arya and Sansa at King’s Landing; “Lions are Roaring” which stands for Cersei and her family, all leaders with insatiable hunger for blood and power; “The Wall is Watching” which depicts the fantasy creatures beyond the Wall; “The Dragons are Flying” which underscores the upcoming revenge of the Targaryens; and “War is Coming” which prepares the audience for another war. The final scene where different people are seating on the Iron Throne, including Tyrion, Catelyn, and Daenerys, increases the suspense for the next ruler and winner of the throne. GOT’s Season 3 trailer continues the civil war. It also emphasizes the various conflicts of family members trying to be united while travelling war-torn, dangerous lands. Thus, the primary positioning of GOT is argued as high in realism through intriguing human conflicts, and low in fantasy creatures and special human powers. It is highlighting to the audience that they are going to get so much more than the usual realistic dramas because more can happen for epic fantasy genre shows. Furthermore, GOT is marketed in connection to the brand of the famous book where it is based on. By being the TV version of Song of Ice and Fire, which has record sales of 8.5 million copies in print, digital, and audio formats, GOT already has an initial captivated audience (Memmott). For instance, Thomas Strickland, an information architect in Atlanta and hardcore fan of Martins books, is not an HBO subscriber (Ulaby). He considers buying an HBO subscription, with the cost shared with friends, because he does not intend to pay for the whole HBO programming only to watch GOT, which is an hour of programming every week (Ulaby). Song of Ice and Fire is a marketing platform in itself. Apart from riding on the popularity of Song of Ice and Fire, HBO has alliances that market the show further to existing and new subscribers. An example is Time Warner Cable that used a pull approach through a sweepstakes contest, freebies, The GOT Exhibition. The sweepstakes offered prizes, such as the life-size replica of the “Iron Throne,” one year of Time Warner Cable services, customer screenings in five cities, and “fast track” entrance to a GOT Exhibition in New York City (“Attention GOT Fans”). The GOT Exhibition was open to Time Warner Cable customers and the general public free of charge from March 28 until April 3, 2013 in New York City. Customers and HBO subscribers who take their current cable bill benefited from a “fast track” line for faster entry into the exhibition (“Attention GOT Fans”). The GOT Exhibition showed materials from the TV production, such as “weaponry, original costume sketches, Iron Throne photo opportunity, Battle of Blackwater Bay interactive experience, and story boards from the first two seasons in addition to a sneak peek of season three” (“Attention GOT Fans”). The New York exhibition was the exclusive U.S. mainstay of the tour, although it was also brought to South America and Europe for a global promotion of GOT (“Attention GOT Fans”). Though these marketing efforts please existing viewers, it also attracts new subscribers by making GOT more realistic to the target market. As for advertising, HBO does not spend a great deal on advertising because it relies more on partner companies to market it, as well as word-of-mouth marketing. The coverage of entertainment magazines and shows of GOT provides free advertising already (“This Weeks Cover”). These media websites and companies already reinforce and promote the popularity of GOT. In addition, one of the perceived sources of word-of-mouth marketing is through being on top of the most pirated show in the world, including the U.S. At present, GOT is the most pirated show in the world, which may be seen as a form of free marketing for HBO. TorrentFreaks monitoring of traffic on BitTorrent reported in 2013 that GOT is “the most illegally downloaded TV show of the spring 2013 season” with 5.2 million downloads, when there are only 5.5 million legal TV viewers (Daly). GOT is also the most pirated show in 2012 (Daly). Time Warner CEO Bewkes, however, sees the pirating popularity as a free form of marketing since it means that the show is extremely popular. He even states that the most-pirate title of GOT is “better than an Emmy” (James). He believes that many of these people who pirate GOT online are already subscribers or plan to be subscribers. Hoffelder believes that the main reason that HBO is not concerned of piracy is that most of these people already have HBO subscriptions, so HBO does not think it is still profitable to provide digital copies of GOT. He argues that more than 5 million downloaders are not automatically more than 5 million potential frustrated consumers. Hence, even when GOT becomes the top of the most pirated film, it is enough recognition that can boost the marketing of GOT to a larger audience. Distribution Pattern/Network and Scheduling GOT is primarily distributed through HBO, a cable company, which is another facet of revolutionary changes in distribution of TV products (Lotz 122). GOT is shown once every week on HBO’s primetime. It is an HBO exclusive that aims to attract new subscribers to new, original TV shows. Dissimilar to traditional television, HBO does not depend on advertisements for revenue because it relies heavily on people who will pay for its content (Ulaby). GOT received a greenlit for the production of the whole season to ensure high quality production without getting worried of sweeps and fear of mid-season cancellation. HBO also practices syndication, or reselling the program to other local stations, cable channels, and foreign networks (Lotz 83). HBO sells to different outlets, to around 207 markets outside the United States (Grover and Richwine). For instance, GOT is available in Australia through Showcase, a network that pay TV operator FOXTEL owns (Daly). GOT is also available through FOXTEL on-demand platforms and Apple Inc.s iTunes, although iTunes in the U.S. do not offer GOT until months after the season is over (Daly). Syndication is limited however, where Australian tech blog Delimiter asserted that the terms of a content agreement between FOXTEL and HBO stated that GOT and other HBO shows would have limited downloading access after a particular season (Daly). The revolutionary change in TV distribution underscores how TV can now market to greater markets across the home market for maximizing revenues (Lotz 121). GOT is also sold through DVDs. It made an HBO record in 2012 when it sold 350,000 season one DVDs for only its first week of release, a higher rate than The Sopranos, Sex and the City, True Blood and other famous series, states HBO (Grover and Richwine). Michael Lombardo, president of HBO programming is proud of the DVD sales of GOT: “It is a much more crowded landscape today than it was for many of our past series, so for Game of Thrones to break out the way it has is pretty amazing” (Grover and Richwine). Estimated Production Costs HBO does not disclose GOT’s production costs. However, the elaborate sets and going to different nations and places to capture epic landscapes underscore its large expense. It is estimated that HBO spends around $6 million per episode (Grover and Richwine). Potential Revenue Streams One of the additional sources of potential revenue streams is through syndication and other licensing rights for GOT. Anthony Kelso, a media studies professor at Iona College in New Rochelle, N.Y., asserts that the international rights for GOT is selling rapidly (Ulaby). Fantasy fans are already buying loaded DVD packages (Ulaby). In addition, since there is a large number of illegal downloads of GOT, there is market opportunity in providing a better product than what pirating websites can offer (Daly). An example is selling unlimited online viewing for consumers, immediately after GOT is aired, for a very low price. Diversification is an interesting brand development strategy. HBO can offer new epic fantasy shows in the future that are produced alongside or before book publications. This can lead to sustained market coverage and sales. Diversification can leverage on the present popularity of GOT, which means that HBO is already a trusted producer of these epic fantasy stories. GOT can pursue diversification also through selling video games, or online games. Product development can come from “loyal” customers, while it diversify and reach new audiences too. Critical Reception GOT has received positive critical reception. It has already been nominated in the Emmy’s as an Outstanding Drama Series in 2013. In 2012, HBO’s programming gained critical acclaim by receiving 81 Primetime Emmy nominations, the most number for any network for the twelfth year in succession (“Time Warner Inc. Reports Second-Quarter 2012 Results”). Marketplace Performance of GOT and Comparable Future Shows The marketplace performance of GOT may impact the development of comparable shows in the future by showing how it can expand product lines because of its strong brand equity. Brand equity is measured through the success of GOT through number of viewers, as well as its brand’s market development, product development, and diversification success. Market penetration is already a given because of its millions of viewers which are increasing every season. Market development is perceived in how the increase in viewers may also be due to the expanding target market of GOT. It is possible that not only male epic-fantasy-lovers are the audience, but also older and middle-age women, single and married, who are interested in family settings where heroines are intelligent and independent-minded. The fact that GOT has multi-layered stories can actually appeal to a wider non-traditional audience due to its complex plots that portray the theme of the complexity of human nature with conflicting aspirations for love and power. GOT is considered as a financial success because it exceeded initial expectations, where it attracted beyond the niche market of fantasy game players and proved that though it did not fit the usual HBO product profile, by attracting a wide market segment that can support its expanding brand equity. At present, GOT already has product development through selling HBO’s selling of GOT merchandise and other sales. HBOs online store offers 436 GOT items, counting flasks, dragon logo rings and soundtracks (Grover and Richwine). For $300, fans can purchase an infantry shield that the fictional Stark family uses, while "King of the North" Robb Starks sword is sold at $230 (Grover and Richwine). GOT even licenses a beer to Brewery Ommegang in a Cooperstown, New York, called GOT brew, or “Take the Black Stout” (Grover and Richwine). The brew is said to be “inspired by the Nights Watch and the men who stand it” (Grover and Richwine). Works Cited “Attention Game of Thrones Fans! Time Warner Cable Is Teaming Up With HBO to Celebrate the Season Premiere of the Popular Series.” Time Warner Cable 18 Mar. 2013. Web. 13 Mar. 2014 Bewkes, Jeff L. “Game of Thrones.” Time Warner Cable 18 Mar. 2013. Web. 13 Mar. 2014 Daly, Kyle. “Online Video Spotlight: A Pirates Playground.” SNL Sagan 26 June 2013. Web. 11 Mar. 2014. “Game of Thrones Season 2 Trailer HD.” YouTube 9 Feb. 2012. Web. 13 Mar. 2014. “Game Of Thrones Season 3: Trailer - Extended Version.” YouTube 2 Mar. 2013. Web. 13 Mar. 2014. Grover, Ronald, and Lisa Richwine. “With Swords and Suds, Game of Thrones Spurs Sales for HBO.” Reuters.com 20 Feb. 2013. Web. 11 Mar. 2014. Hoffelder, Nate. “Maybe HBO Does Get it: Game of Thrones Again the Most Torrented Show.” The Digital Reader 2 Jan. 2014. Web. 11 Mar. 2014. James, Sarah Barry. “Time Warner CEO Says Buzz of Having Most Pirated Show is Better than an Emmy. SNL Sagan 2013. Web. 11 Mar. 2014. Lotz, Amanda L. The Television will be Revolutionized. New York: New York University, 2007. Print. Memmott, Carol. “Record Sales for George R.R. Martins A Dance With Dragons.’” USA Today 14 July 2011. Web. 13 Mar. 2014. “This Weeks Cover: Game of Thrones, The Battle To Make Season 2 Epic.” Entertainment Weekly 14 Mar. 2012. Web. 11 Mar. 2014. “Time Warner Inc. Reports Second-Quarter 2013 Results.” Business Wire 7 Aug. 2013. Web. 13 Mar. 2014. “Time Warner Inc. Reports Second-Quarter 2012 Results.” Business Wire 1 Aug. 2012. Web. 13 Mar. 2014. Ulaby, Neda. “HBO Lures Fantasy Fans with Game Of Thrones.” NPR.org 14 Apr. 2011. Web. 11 Mar. 2014. Read More