Entertainment and the Arts Marketing - Report Example

Entertainment and the Arts Marketing Terms of Reference The primary aim of this report is to bring a clear understanding of the activities underlying the marketing strategies of Warner Bros Entertainment Inc. (WBs) in the global arts and entertainment business industry. In order to successfully meet the aim, discussion of the report tends to include the use of effective marketing models, theories and evaluate them in response to the current marketing practices. The paper also recommends appropriate strategies for the company to sustain its strong and sustainable position in this respective business industry. 2. Executive Summary The report explores the marketing strategies and practices of WBs and provides effective set of measures in response to the current business functions of the organisation. In order to meet the key aims of the report, the discussion primarily focuses on including fundamental theories and frameworks of marketing and analysing the current strategic measures of WBs in the competitive film and entertainment business industry. Moreover, the report also tends to illustrate a clear understanding about the current marketing issues faced by the organisation and provides relevant and effective marketing strategies for WBs in order to retain its competitive position in the recent film and entertainment business industry. Table of Contents 1. Terms of Reference 2 2. Executive Summary 2 3. Main Report 4 3.1 Introduction 4 3.2 Marketing Strategies and Practices of WBs 5 3.2.1 Competitive Analysis 6 3.2.2 SWOT Analysis 8 3.3 Identifying Issues Underlying Marketing Strategies 11 4. Conclusion 13 5. Recommended Strategic Measures and Practices 14 5.1 Continuing Expansion of the Television and Film Entertainment Division 14 6. References 16 3. Main Report 3.1 Introduction Founded in the year 1923, Warner Bros Entertainment Inc. (WBs.), is one of the renowned names in the global arts and entertainment business industry. Being a key subsidiary of Time Warner, WBs. is often considered as one of the leading American production house of films, music and television entertainment. In relation to the recent business structure of the company, WBs. is further observed to be expanded into various subsidiaries, including WBs Pictures, WBs Studios, WBs Television and Home Entertainment, WBs Interactive Entertainment, WBs Animation, Warner Home Video, New Line Cinema and Castle Rock Entertainment. In relation to the recent business performance, WBs enjoyed massive success and appreciation from most successful theatrical performance in the year 2013 across its each business segment across the globe (Warner Bros. Entertainment Inc., 2014). WBs can be referred as one of the biggest and recognised names in the global movie producing and entertainment business industry. Considerably higher brand value and reputation in the global entertainment business industry, WBs has been observed to achieve strong competitive advantage through its wide range of marketing strategies and practices. The company tends to continuously increase its annual investment along with valuable resources to produce quality-based movies in Hollywood and other global entertainment industries. Moreover, the strong brand value along with extensive financial capability often helps WBs to market its wide range of entertainment products without involving partners or any other external parties. Being one of the leading producers in the global entertainment business industry, WBs is also renowned for its numbers of box office hits domestically and internationally. In this regard, the other segments of its business, including promotion, ticket sales, rentals, DVD production and television have also been recognised to achieve major success in the global entertainment business industry (1Warner Bros. Entertainment Inc., 2014). Therefore, emphasising on the recent trend in the global arts and entertainment business industry, the primary aim of this report is to critically assess the current marketing strategies and practices of WBs and identify marketing problems faced by this company. In order to represent the current marketing issues, the discussion includes effective marketing frameworks and theories clearly defining the current business practices of WBs underlying marketing goals. Moreover, the report also provides an effective set of recommendations to increase the competitive position of WBs and reenergise its capability to avert different future challenges. 3.2 Marketing Strategies and Practices of WBs The global arts, entertainment and motion picture industry has long been recognised to grasp the major attention of the scholars from marketing along with other disciplines. The emergence of modern arts and entertainment industry has also been recognised as a major subject area for the researchers due to its unabated transformation in terms of economic performance (Eliashberg & et. al., 2005). With due regards to the massive growth of the global arts and media business industry, marketing has long been witnessed to play an essential role for the organisations to gain their postulated commercial objectives. In the context of WBs, the organisation is a board-based as well as fully integrated leading organisation not only in creation and production of arts, but also in distribution along with licensing and marketing regarding all forms of entertainment business. In relation to the current business structure of the company WBs. Picture Group tends to involve production, marketing along with distribution of all operations of the WBs Studio motion pictures. The group, WBs includes WBs Pictures International and WBs Pictures that are accountable to streamline the film production functions of the WBs Studios and are responsible to align their activities in accordance with the Warner Bros.’ television and home entertainment operations (1Warner Bros. Entertainment Inc., 2014). In this regard, it can be stated that the strategies that are performed by the company include a wide range of its divisions along with their activities. The strategic measures along with practices underlying the marketing functions of WBs have been critically assessed in the following section with the help of few key marketing models and theories. 3.2.1 Competitive Analysis Porter’s Five Forces Analysis Fig: Porter’s Five Forces Analysis Framework Source: (Kotler, 2011) In relation to the marketing approaches, Porter’s Five Forces Analysis has been identified to be quite effective in terms of identifying and investigating the current strategy formulation processes of the organisations. The execution of the framework with five different factors determines to critically assess the competitiveness of the firm in a particular business industry (Kotler, 2011). The Porter’s Five Forces Analysis for WBs can be critically determined through the following discussion. Power of Buyers (High): The power of buyers in the arts and entertainment business industry is immense due to the no switching costs for the buyers of WBs. Moreover, the bargaining power of the buyers in this respective business industry has substantially influenced the abundance of entertainment offerings by the film production organisations (Gentili, 2013). Power of Suppliers (High): Corresponding to the power of buyers, the bargaining power of the suppliers is also respectively high in the global film and entertainment business industry. In this context, extensively increasing number of famous casts along with directors and other groups of performers in different categories of the films and other entertainment divisions have been witnessed as key groups of suppliers for WBs (Gentili, 2013). Threats of New Entrants (Moderate-High): The potential threats from the new competitors can be attributed to a moderate level for WBs. The higher level of cost barriers in television, film and music entertainment industry has been considerably observed to keep moderate levels of threats for WBs regarding the new entrants into the industry. However, the company has also been recognised to have an increasing threat from the rapid transformation in information and technology sector. In this regard, the evolution of internet can be referred as one of the major threats for WBs in the present film and entertainment business industry (Katkin, 2013). Threats from Substitutes (High and Low, Respectively): In relation to the current business structure of WBs, the organisation entails a wide range of subsidiaries in the film and entertainment business industry. Therefore, the threats from its substitutes can be identified to have both higher and lower level of threat to the organisation. In addition, substitution for WBs includes wide range of media and other entertainment instruments, including social media sites, and video games among others that have a lower level of threats to the company (Gentili, 2013; Katkin, 2013). Competitive Rivalry (High): According to the current scenario, in the global film and entertainment industry, the rivalry among the existing players is significantly high. In the context of recent business phenomenon, the business performance of The Walt Disney Studios, Paramount Pictures Corporation along with Sony Pictures Entertainment Inc. and Marvel Productions Ltd. can be dully considered to have major influence on the business performance of WBs. 3.2.2 SWOT Analysis Fig: SWOT Analysis of WBs Source: (Gentili, 2013) Strengths: In the context of strengths the top-of-the-line brands along with franchises and industry-leading scale can be referred as a major set of strengths prevailed by WBs. The existence of these factors helps WBs to attract the best talent and further enables the company to offer wide range of film and entertainment services to the customers. In addition, diversified business operations within an integrated business module helps WBs to satisfy expectations of the customers from multitude of entertainment sectors can also be considered as a key strength of the company. Furthermore, the continuous growth in financial performance can also be regarded as one of the major and most advantageous factors for WBs to accumulate competitive position than the other existing rivals in the industry. According to the recent financial results of the company, it has been identified that the WBs Pictures grossed $5.038 billion ($1.893 billion domestic, $3.145 international) in its global box office collection. In this regard, the financial performance of the company helps it take lead in domestic and international box office (Gentili, 2013; Katkin, 2013). Weaknesses: In the context of weaknesses, the publishing unit both digital and print entertainment segments of WBs have been facing significant decline over the years. In this context, it has been observed from past few years that DC Comics published by one of the major subsidiaries DC Entertainment has been identified to radically decline its overall business performance in the global market. In addition, the rapid drop of sale in DVD or Blue-Ray along with lower growth of the global video game industry has also weakened the competitive position of the company in publishing business industry (Katkin, 2013). Opportunities: In relation to the recent competitive pace in the global film and entertainment industry, organisations are likely to expand their business units across different locations to achieve long-term sustainability. Although, WBs has obtained sustainable position from its inception, the organisation should also need to expand its numbers of subsidiaries to build new segment of consumers in the global entertainment business. In this context, the organisation should also need to focus on different emerging entertainment sectors deriving by the changing trends and preferences of the customers. In this context, the strategy of developing video-sharing media websites or online streaming service (YouTube) would be an effective way for WBs to build its new segment of customers with different tastes and preferences. In addition, the marketing and promotional operations of WBs should also need to take the advantage of current transformative social media networks. The strategy would substantially increase the efficiency of its marketing and advertising functions of and help WBs to achieve its long-term financial goals (Gentili, 2013; Katkin, 2013). Threats: The transformative evolution of internet-based entertainment service providers can be duly considered as a major threat for WBs. In this context, the extensive growth of the online streaming service can be referred as a major threat for the company to increase performance of its each subsidiary in the entertainment industry. Currently, the robust performance of the organisations from online streaming industry such as Netflix and Amazon.com among others can impose major threat to WBs to remain as the leading organisations in the global entertainment business industry. In addition, the increasing piracy related issues has long been witnessed in the box office production business that can substantially lower the competitive position of WBs. In this context, the annual subscription of the users to acquire different WBs’ services and their password sharing practices can substantially lower the competitive position of the organisation. The process of sharing password can negatively impact WBs to accumulate its predetermined financial objectives and lower its long-term competitiveness in the global film and entertainment business industry (Gentili, 2013; Katkin, 2013). 3.3 Identifying Issues Underlying Marketing Strategies With reference to the above said discussion, it has been observed that the current marketing strategies and practices have been performing a major role for WBs to remain in its long term competitiveness. The distribution of operations of WBs Studio motion pictures along with promotion of its wide range of brands have been identified as a major set of practices behind the continuous success of WBs. Moreover, it has also been identified that the strategy of differentiating key subsidiaries into a separate set of units operated by the integrated business model of WBs is one of the most effective measures undertaken by the organisation (Warner Bros. Entertainment Inc., 2010). Although, the differentiation of different business units have improved performance of each segment, but in various scenarios few of the key divisions of WBs have lower their competitive position in their respective of business operations. In this regard, WBs Television and Home Entertainment, and WBs Interactive Entertainment divisions of the organisation have been significantly facing major threats due to the ineffective marketing strategies of WBs. The key issues faced by the organisation in its marketing activities are inadequate advertising along with ineffective promotion and public relation related concerns (Gentili, 2013; Warner Bros. Entertainment Inc., 2010). In the context of current advertising strategy of WBs, the organisation extensively focuses on its few key segments, including WBs Pictures, WBs Studios, and WBs Interactive Entertainment divisions that have substantially reduced WBs Television and Home Entertainment department of the organisation. In order to avert the potential devastation of this particular division, it is highly essential for the organisation to broaden its advertising and promotional strategies. In addition, developing effective strategies of public relation would also substantially enable WBs to reenergise the performance of its home entertainment operations (Gentili, 2013; Warner Bros. Entertainment Inc., 2010). 4. Conclusion According to the continuous pace of globalisation, the entertainment industry has been observed to achieve major success than any other sectors across the world. From the last few decades, the film production and entertainment industry has provided major support to the global economy by performing extensive growth of its annual financial returns. Organisations underlying this particular business domain have been recognised to achieve their sustainable position by delivering quality based products along with services in accordance with the changing trends of the customers. In this regard, WBs is one of the leading giants, which has long been identified to play a decisive role by offering all forms of entertainment in line with the changing customers’ demands and their trends as well. The strategic measures and practices of WBs have considerably met the expectation level of the organisation. In this context, the marketing strategies and associated practices have been recognised to provide major support to the organisation in terms of establishing its long-term sustainable position. However, few of the key divisions of the organisation have also undergone major challenges due to the ineffective measures associated with the underlying marketing activities of WBs. In order to sustain the long-term competitive position, the marketing strategy of WBs should highly focus on the above said recommendations that can substantially lower different potential risks associated with the recent entertainment business industry. 5. Recommended Strategic Measures and Practices 5.1 Continuing Expansion of the Television and Film Entertainment Division As per the primary goal of the WBs, continuing global expansion of its key divisions including Television and film entertainment sector would be a major decision for WBs to sustain its long term leading position in the respective industry. Throughout the past few years, the key network revenue producers of the organisation have been playing an essential role for WBs to achieve major success in the film and entertainment business industry. However, to achieve a long-term competitive position, the marketing strategies of the organisation should involve few effective measures to avert the rising threats from the existing rivals. In this regard, following key strategies can help WBs to retain its long-term competitiveness in the respective business industry (Gentili, 2013). Partnering and Acquisition: In order to retain the leading position of the organisation, the strategy of building partnership or acquisition of different cable networks across the emerging markets would be an effective strategy for WBs. According to the current emerging scenario of the cable networks in Latin America, the organisation only has a single subsidiary, which tends to encompass the overall market across the continent. In this context, the scenario might not be sufficient for WBs to retain its leading position. In order to maintain its dominant position, WBs should highly focus on acquiring or building strong partnership with the cable networks in this particular segment to substantially lower the risk of future threats. In addition, the company should also focus on the emerging demand of film and entertainment offerings in the developing markets such as China, Asia and other nations. The establishment of own networks in this specific regions would substantially increase the capability of WBs to retain its long-term sustainability (Gentili, 2013). 6. Establishing Stream Contents by Incorporating Social Networking Sites: According to the present scenario, the stream content service has been recently observed to achieve transformative growth across the developed and developing nations. Therefore, an immediate response to grasp the rising opportunity in the global stream content service industry would be an effective decision for WBs. In this regard, the strategy would facilitate the organisation to earn a large amount of financial return as a form of licensing new segment of customers (Gentili, 2013). 6. References Eliashberg, J. & et. al., 2005. The Motion Picture Industry: Critical Issues In Practice, Current Research & New Research Directions. Harvard Business School. [Online] Available at: http://www.hbs.edu/faculty/publication%20files/05-059.pdf [Accessed October 20, 2014]. Gentili, N., 2013. Time Warner Inc. Strategy Report. Competitive Analysis. [Online] Available at: http://economics-files.pomona.edu/jlikens/SeniorSeminars/Likens2013/reports/timewarner.pdf [Accessed October 20, 2014]. Katkin, M., 2013. External Analysis of Time Warner Inc. in the Entertainment and Film Industry. Time Warner, pp. 2-11. Kotler, P., 2011. Principles of Marketing. Pearson Education. 1Warner Bros. Entertainment Inc., 2014. Company Overview. About the Studio. [Online] Available at: http://www.warnerbros.com/studio/about/company-overview [Accessed October 21, 2014]. Warner Bros. Entertainment Inc., 2014. Warner Bros. Entertainment Inc. Divisions. [Online] Available at: http://www.warnerbros.com/studio/divisions/warner-bros-entertainment-inc [Accessed October 21, 2014]. Warner Bros. Entertainment Inc., 2010. Time Warner. Annual Report 2010. [Online] Available at: http://media.corporate-ir.net/media_files/irol/70/70972/Request-AR2010.pdf [Accessed October 21, 2014]. Read More