channels of distribution pp txx

© 2016 Cengage Learning. All Rights Reserved.Sports and Entertainment Marketing, 4e

CHAPTER

7

Managing the Channels

Winning Strategies

Sports and Entertainment Marketing, 4e© 2016 Cengage Learning. All Rights Reserved.

Chapter 7 Slide 2

• Founded in 1997, Netflix offered unlimited movie rentals for one low monthly subscription rate.

• Netflix has evolved over time.• It’s available on a variety of devices.• It became the world’s leading Internet television

network.• It now offers original programming.

Netflix

Winning Strategies


Chapter 7 Slide 3

• How does Netflix compare in format, product, cost, availability, and ease of use to other similar services, such as Amazon or Hulu?

• In what ways has Netflix continued to evolve its distribution strategies since it was founded? Which strategies do you think have provided the most growth in membership?

• Think Critically


Chapter 7 Slide 4

CHANNEL MANAGEMENT

• Channels of distribution: all of the businesses through which products or services pass on the way to the consumer

• Intermediaries: the businesses, or channel members, involved in making the product or service available


Chapter 7 Slide 5

• Simple distribution channels involve only the originator – Arranging for a local singer to perform at a restaurant.

• Complex channels of distribution can have many channel members – a live boxing match produced in China, by a U.S. company.

• Each channel member has a specific role in moving the product or service from the originator to the consumer.

Establishing the Channels


Chapter 7 Slide 6

Event originator:• Produce an oversee the entire event• Manage the career of the talent or athlete• Estimate costs and revenue and set pricing• Arrange for promotion of the event• Hire security • Negotiate contracts with channel members• Schedule the media, facility special

equipment, and moreThe event facility’s role:• Provide the space• Set up some equipment such as chairs,

tables, and sound system• Provide for concessions and other

audience services

The media’s role:• Establish and manage communications

across various platforms such as satellite, cable, broadcast, the Internet, and pay-per-view

• Transmit the eventThe transportation companies role:• Deliver sound, lighting, and other

equipment• Transport the cast and crew

It would be poor channel management to organize an event that cost more to produce than the expected revenue.


Chapter 7 Slide 7

• Logistics: the process of planning, organizing, and managing the distribution of products and services

• The Internet offers an efficient way to distribute products.

• Example• Music and TV shows can be accessed on the Internet

when the consumer chooses.

Efficient Channels


Chapter 7 Slide 8

What is meant by channels of distribution?


Chapter 7 Slide 9

THE GLOBAL CHANNELS

• Only two major channels of distribution are available for sports and entertainment events.• Live• Media


Chapter 7 Slide 10

• Before advances in technology, performances could only be viewed live.

• Amphitheaters: oval-shaped outdoor theaters with tiered seating around a central staging area

• Venue: the facility where an event is held• Live events can be expensive to produce,

limited in size, and limited in revenue.

Live Events


Chapter 7 Slide 11

• Mass media: a method of distributing an event to a large volume of people• Audiences can be large or small and nearby or far

away.

• Radio is an inexpensive audio medium that is available when other options aren’t.

Media Events


Chapter 7 Slide 12

• Television is losing viewers to Internet devices.• Sports are still popular on TV.

• The Internet is a newer way to view sports and entertainment when and where the consumer chooses.

Media Events (cont.)


Chapter 7 Slide 13

• Media that requires a screen may disappear.• Future entertainment could be immersive.• Immersive entertainment: experience in which

the viewer is surrounded by a 3-D environment that will actively engage the individual

The Future


Chapter 7 Slide 14

What are two current major distribution channels for

entertainment?


Chapter 7 Slide 15

LEGAL AND ETHICAL ISSUES IN CHANNEL MANAGEMENT

• New technology gives consumers more options.• Some of the newer options are being legally

challenged by traditional services.


Chapter 7 Slide 16

• TV networks’ revenue is generated by advertising and retransmission fees.• Cable, satellite, and Internet services pay a

retransmission fee to show content owned by the network.

• Cable, satellite, and Internet service providers earn their revenue by charging a subscription fee to consumers.

Whose Content Is It?


Chapter 7 Slide 17

• Disruptive technologies: new technologies that change existing forms of communication channels

• Distributors must follow copyright laws and pay for the content they use.

Whose Content Is It? (cont.)


Chapter 7 Slide 18

• Apps for sports and entertainment are popular.• In China, pirated, illegal copies of apps are sold.• One-third of China’s iPhone users “jailbreak”

their phones, letting them use unauthorized apps.

Fighting the Pirates


Chapter 7 Slide 19

How do traditional TV broadcasters pay for the production of content?

LESSON


Chapter 7 Slide 20

Social Media and Technology Channel Management

7.2

The Essential Question


Chapter 7 Slide 21

How has technology improved the efficiency of channel management?


Chapter 7 Slide 22

MANAGING THE CHANNELS WITH TECHNOLOGY• Predictive search: App feature that reviews your

private data to provide you with answers to questions it predicts you might ask

• It can act as a distribution channel for sports and entertainment.


Chapter 7 Slide 23

• Fewer consumers subscribe to cable and satellite TV providers.

• TV networks, cable, and Internet providers compete for viewers.

• Broadband: high-speed Internet service• Internet viewers need to have broadband.• Older viewers are using broadband to watch

streaming TV.

Cutting the Cable: Streaming Media


Chapter 7 Slide 24

• Podcasts: a way of distributing multimedia files over the Internet for later playback• Podcasts are primarily audio.• They are downloaded from the Internet for

offline listening.

• An iTunes app is a distribution channel for many podcasts.

Audio Revival


Chapter 7 Slide 25

How has technology changed the distribution of TV shows and talk radio?


Chapter 7 Slide 26

TECHNOLOGY EFFICIENCY

• Social media can be used to engage consumers.• Dale Earnhardt Jr., a NASCAR driver,

contacts fans via social media.

• Online multiplayer games are becoming more popular than console-based games.

• Music can be distributed in different ways on the Internet.


Chapter 7 Slide 27

Give an example of how technology has made distribution more efficient.

LESSON


Chapter 7 Slide 28

Entertainment Distribution

7.3



Chapter 7 Slide 29

How can channel management strategies and costs be managed?


Chapter 7 Slide 30

IT’S ENTERTAINMENT

• In-concert movie: a movie that contains film of actual concert performances

• Live theatrical performances can betelevised.

• Platforms will continue to change over time.• Platforms: types of delivery systems


Chapter 7 Slide 31

Why do you think people prefer live events instead of recorded events?


Chapter 7 Slide 32

WHICH CHANNEL?

• Advertising, production, and distribution costs are major expenses for movie studios.

• Cut costs by regulating the release ofmovies.• Wide release: distributing a movie nationally to a

thousand or more theaters at the same time• Art-house movies: independent films outside the

commercial mainstream of blockbuster films


Chapter 7 Slide 33

What happens when distribution costs exceed what is reasonable to pay?

LESSON


Chapter 7 Slide 34

Sports Distribution

7.4



Chapter 7 Slide 35

What strategies are used for sports distribution?


Chapter 7 Slide 36

AMATEUR SPORTS AND RECREATION• Health, leisure time, and money drive the

recreation industry.• Recreational marketing should motivate people

to actively participate in sports and activities.• Sports facilities should be available where they

are needed.


Chapter 7 Slide 37

What factors affect the development of recreational sports facilities?


Chapter 7 Slide 38

COLLEGIATE SPORTS

• A winning college team makes revenue for the school and geographic area.

• Nonrevenue sports: sports funded by schools that do not provide a return on investment


Chapter 7 Slide 39

• College games were broadcast only by ESPN, but they are now shared with other networks.

• ESPNU is an ESPN channel focused on college sports.• ESPNU is in the Disney cable bundle.

• Cable bundle: a group of TV channels sold as a package for one monthly price by TV subscription services

Football Rules


Chapter 7 Slide 40

• Preseason rankings influence several things.• Games shown on television• Advertisers• Sponsors

College Team Rankings


Chapter 7 Slide 41

How do contracts with TV networks affect the distribution of college

games?


Chapter 7 Slide 42

PROFESSIONAL SPORTS

• ESPN dominates live athletic event distribution.• As viewers move away from cable,

ESPN seeks new ways to connect with fans.


Chapter 7 Slide 43

• ESPN began advertising the 2014 FIFA World Cup six months before it started.

• Soccer is the most popular sport worldwide.• U.S. football is ranked 13th in popularity.• Hosting the Super Bowl is an accomplishment

for a U.S. city.

Worldwide Coverage


Chapter 7 Slide 44

• More cities want professional sports teams.• Each team is a member of a cartel.• Cartel: an organization of independent

businesses formed to control production, pricing, and marketing of a product

Distributing the Game


Chapter 7 Slide 45

• League agreement: an agreement that controls the marketing mix and governs the distribution of professional sports games, including the locations of the teams and the number of teams allowed in the league

• Networks bid on the right to televise games.

Distributing the Game (cont.)


Chapter 7 Slide 46

• NFL fans can get information about the sport 24/7 through NFL Network via• Cable• Satellite• Phone companies

• Multichannel video programming distributor: a cable or satellite distributor

Nonstop Distribution


Chapter 7 Slide 47

• Why would a TV network, such as ESPN, use multiple distribution channels for coverage of a single game?

• Do you think people will tire of using social media? Will it become a thing of the past? What might take its place? Describe what you see as the future of global distribution channels for sports an entertainment.

• You are an electronics retailer who wants to target both boys and girls ages 10 to 13. You sell video games, movie videos, and other forms of entertainment technology. You are considering using the internet for product distribution. Develop a plan for starting your business online.

Group Assignment


Chapter 7 Slide 48

1. Research the history of the internet, how and why did it start?

2. When did it become available to consumers?3. In your opinion, what types of sports and entertainment

are best suited for this mode of distribution?4. What trends to you expect in the future?

Hybrid Assignment

channels of distribution pp txx

Education