Transcript M-Chapter 14

Images and Merchandising
Licensing and Royalties
2
Chapter Objectives
Define the term image.
Describe the role of merchandising in
entertainment marketing.
Discuss how the United States government
controls endorsements.
Describe the role of sponsorship in
entertainment marketing.
Explain the importance of entertainment product
licensing.
Explain aspects of royalties.
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The Impact of Image
The public image of a
celebrity can make the
difference between success
and failure.
image a mental picture
or concept of something
or someone
When a celebrity or a
company is in the public
eye, there is an increase in
the opportunity to make a
profit from merchandising.
merchandising the
variety of promotional
activities and materials
that complement and
support the advertising
effort
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Endorsements
The Federal Trade commission (FTC) defines
endorsement as any type of advertising done by a
person who reflects his or her own opinions,
beliefs, findings, and experiences that are
separate from those associated with the product’s
company.
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Controversy of
Endorsements
Celebrities must use the products they endorse.
The political opinions of celebrities may have
an adverse effect on the endorsement.
The personal controversies of a celebrity may
have an adverse effect on the way the public
views the endorsed product.
Companies do not want the image of their
product damaged.
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Sponsorship
Sponsorship occurs when a company supports
an event, activity, or organization.
In return for money, the sponsor is provided
with some type of advertising at the event.
Sponsorship is a crucial aspect in sports and
entertainment.
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The Need for Sponsorship
The money from concert ticket sales does not
cover the cost of a tour.
Advertisers may ask for advertising space on
the stage, concessions, T-shirts, and event
programs.
Marketers keep track of how many times fans
see the sponsor’s name at an event and the
sales of the products being advertised.
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Why Sponsor?
Companies seek a return
on their sponsorship
dollars.
return the amount of
profit that is given back
to the sponsor for the
sponsor’s initial
investment or sponsorship
Calculating return for
sponsorships is difficult, but
should be seen as an
increase in sales.
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Sponsorship Risks
Companies want to be associated with a
popular person who has a positive public
image.
Federal laws dealing with tobacco and alcohol
sponsorship have become stricter.
The federal government regulates the practice
of wealthy companies that sponsor events that
could be inappropriate for children and teens.
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Selling the Image
Merchandising
Direct
Indirect
Tie-Ins
Endorsements
Sponsorships
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1.
What is merchandising?
2.
What is the purpose of the FTC?
3.
Give an example of what a company might
gain in return for sponsoring a musician.
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Overview
Licensing and royalties are
major aspects of both the
sports and entertainment
industry.
licensed products
goods or services that
legally use logos or
images owned by other
companies or people
Entertainment-related
companies utilize
merchandising and sell
licensed products.
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Licensing
Licensing is required when the owner of an
original image or a product gives legal permission
for a fee to another company or person to copy,
manufacture, market, and sell reproductions of
the original item.
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Licensing Music and
Royalties
Licensing applies to music, software, motion pictures,
and videos/DVDs.
A songwriter and publisher of a song may charge a
licensing fee when an artist and label want to record
that song.
Artists, writers, and publishers receive royalties, or a
percentage of record sales or fees for broadcast
performances.
There can be several agents between the artist and
the record company that deduct money from the
artist’s profits.
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Paying for Entertainment
Profits from entertainment products pay for the
expense of producing the products, with only a
portion going to the artists themselves.
When music, movies, and software are illegally
downloaded and distributed from the Internet or
products are pirated, many people are affected.
The user of a pirated product can be
prosecuted.
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Making It “Big”?
Performers can make additional income, based on
their public image, through endorsements and
sponsors.
Companies can earn income through
merchandising, licensing, and royalties.
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Music to Your Fingertips
Internet service providers such as AOL
Operating an e-tail business
oncontent
an electronic
channel—the
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agreements
with
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due tomusic
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new album:
They can download exclusive tracks, artist information, and
Describe an e-business’s home page to your class after
interviews.
viewing one through marketingseries.glencoe.com.
For more information on sports and entertainment marketing,
go to marketingseries.glencoe.com.
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1.
What are three types of entertainment
companies that use merchandising?
2.
Explain the meaning of licensing.
3.
Who are at least three participants in a
record who may share royalties?
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Checking Concepts
1. Explain how image
affects the
entertainment business.
2. Describe how
merchandising develops
from a successful image.
1. Merchandising
2.
3.
Sponsors
The
publicprovide
images
of celebrities
uses
critical
strategies
moneycan
orthat
make valuable
involve
other
the
packaging,
difference
between success
displaying,
resources
for
and
and failure.
publicity
events
and
of a
successful product,
companies
to stay
theme,
in
business.
or
personality.
3. Define sponsorship in
entertainment marketing.
continued
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Checking Concepts
4. Differentiate between
sponsorships and
endorsements.
5. Describe the returns
associated with
sponsorship.
6. Define licensing.
Licensing
endorsement
occurs when
4. An
5.
6.
Sponsors’
occurs
a celebrity
when
lends
acan
celebrity
hisbe
or
advertising
lends
her image
his ortoher
give
image
seen
byofmillions
of
to
approval
give approval
a product
of a in
viewers
product
commercials
in several/
commercials
or other
many
in the
or
advertising.
othertimes
advertising.
Sponsorship
occurs
course of the
when
a company
event,
so sponsors
supports, usually
get a definite return
financially, an event,
on theirorinvestment.
activity,
organization
in exchange for
advertising.
continued
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Checking Concepts
7. Explain why illegal
downloading may have
harmed the music
industry.
Critical Thinking
8. Discuss the importance
of licensing in the
entertainment business.
is critical to
7. Licensing
8.
Free downloads
the
entertainment
ultimately
cost the
industry in at least two
artists
and all
ways. First, selling
people
involved in
licenses provides
producing
a CD;
revenue
immediately.
Second,
everythey
time a
essentially,
licensed
is sold
reduce product
the ability
of
or used it advertises
many
people to
the original image that
make
an
was licensed.
appropriate living.
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