Comm 209 Final Study Guide PDF

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Paolo Sigismondi
Spring 2018...

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COMM 209 Final Exam Study Guide -also check the discussion one

 5 Guiding Questions: 1. How many firms are in a market and who owns them? 2. What is the political and regulatory environment of a particular market? 3. What economic, social and political interests are involved in the market, and through what means, and using what resources, do they try to act on their interests? 4. How did the market evolve over its history? All markets are subject to big changes, and can move from monopoly, oligopoly, and competitive through time 5. Cui Bono- who wins and who loses from the way the market is structured and works?  Questions on previous exam: ● What is meant by media literacy ● Movie industry What is syndication ● Movie industry: get lessons from history and regulation section ● Music industry: what is the great divide

 Industries: 1. Motion Picture Industry 2. Recording and Music Industry 3. Video Game Industry 4. Advertising Industry 5. Public Relations Industry  Motion Picture Industry ● History of Industry and its Evolution o Motion Picture Patents Company (MPPC) ▪ Control over the supply of materials for movies and exhibition ▪ Prohibitions against listing actors names on screens ▪ MPPC rules: ● Film stock provided only to licensed members of MPPC ● Movies no longer than 10 minutes ● No actor names on screen ▪ Immigrant-run companies prospered by breaking MPPC rules ▪ MPPC dissolved in 1917 for antitrust violations o Immigrant-run companies (“the majors”): ▪ Columbia Pictures ▪ Paramount ▪ Warner Brothers ▪ Universal ▪ Twentieth Century Fox ▪ Metro-Golden Mayer o Strategies used by the majors ▪ Vertical integration

The studio controlled moviemaking facilities, distribution and theaters in the area ▪ Studio system ● Star system—find and cultivate actors for long-term contracts ● Division into A and B movie units ● Series pictures ● Block-booking o practice of forcing a theater to buy B films as a pre-condition for getting A films ▪ Adoption of self-regulation ● 1919: Supreme Court ruled no First Amendment protection for movies ● 1922: Motion Picture Producers and Distributors of America ● 1930: the Hays Code o spelled out what was acceptable/unacceptable content for motion pictures o Changes: ▪ 1948: Paramount, Warner, MGM, and Fox split off production and distribution divisions (antitrust) ▪ involvement with TV—ideal medium for B movies ▪ changes in movie viewing patterns (movie as “event entertainment”) ▪ changes in the pattern of movie releases ▪ 1960’s: move towards the MPAA film rating system o Technological changes: ▪ Home videocassette recorder ▪ Digital video disk ▪ Cable/satellite technologies ▪ Reshaped distribution and exhibition in movie industry Motion Picture Industry: the industry that produces fils that will first be exhibited in theaters Modern Motion Picture Industry o 1.5 billion movie tickets a year in the US o $9 billion in box office receipts o 450-600 movies a year are shown on 35,000 US movie screens How the Industry Operates and its Players o Production ▪ Majors—produce less than 1/3 movies, are also distributors of choice (Hollywood Studios) ● 20th Century Fox ● Paramount ● Sony Pictures ● Universal Pictures ● Walt Disney ● Warner Bros o Market share ●

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Independents ● Risky business ● Major players: o LIONSGATE o Summit Entertainment o The Weinstein Company o NewMarket Films ▪ Making a movie ● Getting the idea o Scriptwriter—his/her plot reaches producer via agent o Treatment o Producer greenlights potentially successful film o Global markets a consideration ● Getting the stars o Only major studios can afford expensive stars o Package deal—strategy to make producers take on other actors with the main star ● Getting the money o ~60 million for major film o budget picked first, story made to fit o distribution crucial for recouping costs Distribution ▪ Find movies to distribute ● Movies created by distributor’s studio ● Movies from independent producers ● Cost-sharing with other distributors ▪ Release movies in theaters ● Release pattern o Wide release: more than 2,000 theaters o Platform release: initial release in small number of theaters to build up buzz o Exclusive release: handful of theaters ▪ Market the films ● Research o Title testing—interviews w/ filmgoers to determine number of attractive movie titles o Previewing—concept testing for newly completed films ● Creation of buzz o P&A expenses—incurred from making copies of the film and advertising (~1/2 of movie cost) o Word of mouth more powerful than traditional advertising ● Tracking studies o Used 2 weeks before film’s release in order to research the public’s awareness of, and interest in, the film ▪

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Exhibition ▪ 60% of theatrical exhibition is controlled by 3% of movie chains ▪ Major chains: ● Regal ● AMC ● Cinemark Theaters ● Carmike Cinemas Inc. ● Cineplex Entertainment ● National Amusements ▪ Financial agreements between distributor and theater chain: ● Percentage of ticket sales ● Percentage-above-the-nut ▪ Digital exhibition ● Possible solutions to reducing distribution costs ● High cost of conversion of theaters (~$100,000)—delays ▪ Characteristics of Entertainment products: ● •Experience goods ● •Non-rival, public goods ● •Non-excludable ● •Expensive to produce, cheap to reproduce – High first copy costs ● •High levels of uncertainty and risk associated with the demand and production of entertainment ● •Single and continuous creation products  “Windows” ▪ different distribution opportunities for a film ▪ how the movie industry operates: windows of exhibition: ● movie theaters ● home entertainment ● video on demand/pay per view ● pay TV ● broadcast TV ● 2nd TV run ● Basic cable—syndication ● Ancillary revenues ▪ Subsequent windows of exhibition ● Pay TV—second window o 60 months after initial theatrical release, lasting 12 months ● Basic cable o 72 months after initial theatrical release, lasting 60 months ● Syndication o 132 months after theatrical release, lasting 60 months ▪ Ancillary revenues ● Non theatrical

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o Airlines, army bases, schools, etc. ● Merchandising and licensing (consumer products) ● Soundtrack and music publishing ● Sequel and remake rights ● TV series rights ● Video Games ● Theme park rides ● Novelizations ● Comic book rights ● Animated series rights ▪ Revenue Streams ● The properties generate multiple revenue streams through the “windows” of exhibition ● Single or multiple views ● Experience goods ● Non-rival, public goods ● Non-excludable Industry Challenges o Piracy ▪ Threat of illegal download ▪ Lawsuits against individuals ▪ Damages for copyright infringement-- $30,000 to $150,000/work + up to 5 years in jail Media Literacy o Cultural colonialism  .S. movies dominate box- offices worldwide ▪ U ▪ U.S. movies reproduce commercialism, immediate gratification, lack of environmental sensitivity o Counter-arguments ▪ Many countries support local filmmakers ▪ US movies preferred b/c high quality ▪ Foreign audiences interpret US movies using local cultural codes

 The Recording and Music Industry ● History: o Early sources of music ▪ Minstrel shows ▪ Vaudeville shows ▪ Home piano, wind-up music boxes o Early attempts to reproduce music ▪ The phonograph ▪ The graphophone ▪ The gramophone o Competition with the radio industry—record music companies tried to retain control of the music market: ▪ Victor Talking Machine merged with RCA ▪ Columbia Phonograph Company—financed CBS o Radio industry in the 1920s

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▪ Played mostly “live” music ▪ Didn’t play certain kinds of music (jazz, blues, hillbilly, ethnic) ▪ Opportunities for record producers o Radio industry in the 1930s ▪ Radio regarded as platform for promoting sales of records ▪ Collection of royalties by ASCAP and BMI o Radio industry in 1950s-1980s ▪ The role of TV and baby boom generation: ● Development of radio formats ● New technologies for the record industry ▪ Radio technologies: ● High fidelity/stereophonic record players—increased sales ● Shellac replaced with unbreakable vinyl ● Long-playing records—new music ideas ● Tape recording ● Transistor radio, tape player—changed listening habits o Radio industry 1980s-1990s ▪ 1980s: emergence of cable TV—MTV, other music channels ▪ 1983: CDs—improved sale of records ▪ late 1990s: internet, music download Modern recording industry o Characteristics: ▪ International ownership ● “the big three (four)” o Universal Music Group (Vivendi/France) o Sony Music Entertainment (Sony Corp./Japan) o Warner Music Group (US) o EMI (UK) (Sold to Universal/Sony in Nov. 2011) ▪ Highly fragmented production ● Thousands of companies produce records ● Independents—not owned by big three (four) ▪ Concentrated distribution ● The big three are also the preferred distributors b/c they have immense marketing power and access to exhibition points o US sales—1/3 of all recording sales o Singles vs. albums o Physical vs. digital media formats o Production ▪ Label ● Division of a recording firm that releases certain types of music ● Artist and repertoire (A&R) person—responsible for screening new acts ● Manager—hired by the artist, paid 10-25% of artist’s revenue ● Artist may need to join royalty-collection association (ASCAP, BMI)

Producing record with label: ● Producer—responsible for staying on budget (2-4% royalty) ● Studios—cost deducted from artist royalties ● $50,000 on recording – 500,000 sales to break even ▪ Production without label: ● Affordable digital technologies for producing own CD ● Social media as a venue to publicize own music o Distribution ▪ Power of the Big Three (Four)—promote artist so that retailers will carry record ▪ Promotion ● Radio-based promotion o Recording and radio industry depend on each other o 1950s—“payola” scandals ● TV, internet, movies ● Concert tours o Exhibition ▪ Avenues for exhibition ● Digital downloads ● Record stores ● Other retail stores ● Internet downloads ● Record clubs ● Direct sales Media Literacy o Controversies ▪ Concerns over lyrics (violent/sexual): ● Large retailers refuse to stock albums w/ controversial lyrics ● Concerns over gangsta rap lyrics ▪ Concerns over music piracy ● Industry claims big money loss from piracy ● 21,000 suits between 2003-2007 against illegal downloaders ● DRM restrictions Musical property management o Composing, publishing, managing a musical property o Multiple revenue streams o Similar to property development and exploitation in movies o Bargaining power is key element o Fewer people and less capital is necessary The music scene o Musicians (composers, performers) o Publishers o Record companies o Music groups o Live music o RIAA ▪

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Revenue streams o Record company ▪ Sales ▪ Foreign licensees ▪ Record clubs, etc o Music publisher ▪ Sheet sales ▪ Foreign licensees ▪ Movies, TV, advertising, etc o The great divide Impact of Digital Technology o Unprecedented impact on almost every aspect of the industry o Music downloads (legal vs illegal) o Music stores (virtual vs record stores) o Singles market return vs 12 song concept albums o Artist’s power

  The Video Game Industry ● History o Pinball machine – precursor of modern video game ▪ Pinball machines part of entertainment arcades o 1950s – student-created computer games, e.g. Spacewar!   o 1972—Atari, first successful US company to create video arcade games o 1970s-1980s—home video consoles o 1980’—games for personal computers o 1990s—online multiplayer games o Transformation of the Industry: ▪ Go Figure ESA, 2010 ▪ 1,000,000—the number of units sold of the video game console Telstar, the first produced by Coleco, a toy manufacturing company in 1976 ▪ $199—the cost of the Nintendo 64 video game console released in 1996 ▪ 67% of American households that play computer or video games ▪ 20% of people playing some type of video game in March 2010 who did at least some of their gaming on a social networking site like Facebook o Evolution of Platforms: ▪ Video game platforms: ● Consoles ● Computers ● Handhelds ● Internet o Modern Video Game Industry ▪ Video game industry

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● Hardware (platforms) ● Software Production ● Hardware o Gaming consoles ▪ Playstation (Sony) ▪ Xbox (Microsoft) ▪ Wii (Nintendo) o Standalone computers o Online games o Portable gaming platforms (DS) o iTV (cable satellite) ● Software genres o Action games o Adventure games o Casual games o Simulation games o Sports games o Edutainment Distribution and Exhibition ● Stream games by subscription ● Disks and cartridges for PCs and consoles sold in stores ● Downloadable games Industry facts ● US computer and video game software sales generated $10.5 billion in 2009 ● 67% of American households play computer or video games ● average game player is 34 years old and has been playing games for 12 years ● average age of the most frequent game purchaser 40 years old ● 40% of all game players are women ● 26% of Americans over the age 50 play video games (an increase from 9% in 1999) (2010) ● 42% of heads of households play video games on a wireless device, such as a cell phone or PDA (up 20% in 2002) ● 82% of all games sold in 2009 were rated E for Everyone, T for Teen, or E10+ for Everyone 10+ ● parents who have children under 18 with a gaming console in the home are present when games are purchased or rented 93% of the time ● 64% of parents believe video games are a positive part of their children’s lives Game Rating Controversies ● Criticism:

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Ratings do not inform parents of the true level of sex/violence Game retailers ignore ratings Mislabeled games

 Media literacy ● Digital convergence—raises questions about how we study media ● Power of conglomerates online ● Web filtering—increasingly pervasive online censorship ● Online privacy o Controversies over transactional databases o Available opt-in/opt-out mechanisms o Privacy protection for children

 The Advertising Industry ● History o History of advertising: ▪ Advertising as old as selling ▪ Criers in Roman Empire ▪ Print ads on papyrus in ancient Egypt ▪ Criers and shop signs in medieval England o Industrial Revolution ▪ Creation of brands ▪ Changes in the functions of an ad agency ▪ Reason-why and image ads ▪ 1914: Audit Bureau of Circulation—verified claims about a periodical’s audience o 1920s ▪ radio advertising ● birth of the audience rating business ● new advertising strategies for the new medium ● advertising clients actually owned programs o 1940s ▪ TV advertising ● Dramatic shift of ad revenue, from radio to TV ● Advertisers bough ½ blocks of time from TV or sponsored entire shows o 1960s ▪ networks decide to develop own programs—changes: ● ads throughout entire flow of programs ● time on TV expensive ● length of commercial decreased o 1960-1990s ▪ rise of research industry aimed at indentifying effect of commercials on purchase decision ▪ motivational research ▪ subliminal persuasion

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Modern Advertising Industry o Trends ▪ Shift toward global presence ▪ Agency holding companies ● Ad agencies ● Specialty agencies ● Direct-marketing firms ● Research companies ● Public relations agencies o Advertising holding company ▪ Idea: offer clients range of services beyond advertising ▪ Big companies: ● Omnicom ● Interpublic ● WPP ● Dentsu ● Havas o Types of advertising agencies: ▪ Business-to-bussiness vs. consumer ▪ General vs. specialty ▪ Traditional vs. direct marketing ▪ Agency networks vs stand-alone firms o 3 functions of ad work: ▪ creative persuasion ▪ market research ▪ media planning and buying o “The creation of brands is one of the most important activities” o Brands: creating a specific image of a product that makes it stand out in the marketplace o Production ▪ Steps in creating a brand ● 1. Interaction between ad agency personnel and client ● 2. Actual creation of the targeted message that portrays the brand in its social environment ▪ Creating portraits: ● 1. Sales pitch ● 2. Produce ad/collection of ads illustrating the sales pitch ● 3. Positioning ● 4. Testing o Distribution ▪ Media planners ● Responsible for determining where to place campaign ads ● Rely on demographic, psychographic, lifestyle data ▪ Factors in media planning decisions: ● Media outlet’s reach ● Media outlet’s efficiency in reaching target audience o CPM = cost per thousand ▪ Other factors

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Content environment surrounding the ad Ads relative visibility

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Exhibition ▪ Media conglomerates—advantages: ● Cross-platform deals: deal between cross-media conglomerate and advertiser ● Agreements with one part of many conglomerate across many media brands ▪ Tracking consumers ● Location-based advertisement—use of mobile phones to serve ads based on the location of consumer ▪ 3 strategies to grab attention: ● increase relevance of ad to specific audiences ● make deleting/skipping ads impossible ● disguise the ad (product placement, viral marketing, buzz marketing, environmental marketing) Media Literacy o Criticism of ▪ Impact of commercialism on social life ● Teaches that society is just marketplace ● Ties identity formation to the buying of products ● Exploits children ● Exploits the environment ▪ Impact of advertising on democracy ● Advertising industry’s power over media prevents people from learning about social groups not attractive to advertisers ▪ Power of conglomerates ● Consolidation increases advertising power over media content ● Ad clutter ● Media clutter

 The Public Relations Industry  ● Public relations: information, activities and policies by which organizations seek to create attitudes favorable to themselves and their work, and to counter adverse attitudes ● Advertising vs. PR o Advertising ▪ One type of activity ▪ Pay for space/time ▪ Announce its presence ▪ Predictable o PR ▪ More than one type of activity ▪ Don’t pay for space/time ▪ Doesn’t announce presence

▪ Unpredictable Similarities: ▪ Both spend money to achieve goals ▪ Both have profound influence on media content ▪ Advertising and PR used in concert  History o 1920s ▪ one-way model of PR ● Ivy Lee ● Focused on sending persuasive facts about a client to press ● PR counselor as in-house journalist ▪ Two-way model of PR ● Edward Bernays ● Drew upon social science to shape audience’s responses ● PR counselor: lead the public to see world from clients perspective o WWII- 1950s ▪ Government used PR to encourage support for the war ▪ After WWII—2 types of PR practitioners: ● Short/long term PR counselors ● Full-time PR specialists o 1960s ▪ two-way “symmetrical” relationship w/ the public ● PR practitioners as mediators between clients and public ● Research-informed positioning of organizations message o Modern PR Industry ▪ 2 ways to perform PR activities: ● Corporate communication ● Hiring PR agency ▪ 3 functions of corporate communication departments: ● external relations ● internal relations ● media relations ▪ 1980s—trend towards rapid conglomeration ▪ agency holding company—owns ● large ad agency networks ● PR firms ● Branding firms ● Market research firms ● Market communication firms ▪ The Big Three/Four agency holding companies ● WPP ● Omnicom ● Interpublic ● Publicis Groupe ▪ 4 ways to help clients: o

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understand challenges formulate objectives to meet challenges develop strategies to meet objectives carry out tactics to implem...