Intro to Marketing
Mr. Bernstein
Distribution and the
Movie Industry
December 3-4, 2014
Intro to Marketing
Mr. Bernstein
Distribution Channels
Consumer Product Channel Types (Glencoe p 450)
Producer directly to Consumer
Producer to Retailer to Consumer
Producer to Wholesaler to Retailer to Consumer
Producer to Agents to Wholesaler to Retailer to
Consumer
Producer to Agents to Retailer to Consumer
Q: Provide examples of each Distribution Channel
Industrial Product Channel Types – see p 451
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Intro to Marketing
Mr. Bernstein
Distribution Intensity
Exclusive distribution
Selective distribution
Intensive distribution
Based on control of selling, costs, brand image,
accessibility, locations
Q: Provide examples of levels of Intensity
Legal and Ethical Issues in Distribution
Clayton Act of 1914 prevents exclusivity which lessens
competition
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Intro to Marketing
Mr. Bernstein
The Distribution Environment
Managing distribution is a strategic decision. Example: ST
Microelectronics. Read
http://electronicspurchasingstrategies.com/2013/08/20/staims-for-higher-distribution-sales/
Life in the distribution channel: In all industries, distributors
face pressure from both customers and vendors
Relationships with partners in the channel can be critical
Understand the entire channel from producer to consumer
Understand who has the leverage – who is adding most
value? Are there competitive alternatives?
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Intro to Marketing
Mr. Bernstein
Movie Studio Profits
It is generally believed that as few as 2 of the 7 major
Hollywood studios is “profitable”
See Wikipedia (“Hollywood Accounting) for review
of legal cases where those who contracted to be
paid a % of profits received a surprisingly small
payout:
Forrest Gump
Spider Man
Lord of the Rings
Harry Potter
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Intro to Marketing
Mr. Bernstein
Movie Studio Profits: Why so Low?
Production and distribution costs are high
Predicting moviegoer preferences is difficult
A major contribution to revenues are licensing of
the intellectual properties – cable TV, DVDs, video
games, theme parks, etc.
Sequels and prequels reduce risk
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Intro to Marketing
Mr. Bernstein
Distribution of Entertainment
Which have you used recently?
Cable
Satellite TV
Internet
On Demand
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Intro to Marketing
Mr. Bernstein
Distribution of Entertainment: questions
What companies are in the value chain between
the film producer and the paying customer?
(See How Movie Distribution Works, Introduction
only)
What value does each add, in terms of the 4 P’s?
Complete reading How Movie Distribution Works
Who has leverage in the distribution channel?
Explain.
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