Media, Money, and the Future

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As we learned in our research, Americans are undoubtedly aware of the current economic struggles. And large companies aren’t oblivious to this either. The reminders pervade media forms of all kinds: newspaper headlines, popular rap song lyrics, credit card commercials, etc.

Although we focused on different American industries, we have all seen how companies of every kind are riding out the recession and applying new technologies. During these tough economic times, these new media features are especially critical tools in getting American consumers excited about spending money. Businesses in every industry – travel, food, music, sports, and movies – are aware that Americans are surfing the web, and they are more than willing to take advantage of this trend: from P2P music sharing to Burger King video contests via their official website and everywhere in between.

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We are in the digital age, and the truth is, companies and organizations need to realize this if they want to survive in this suffering economy. As technology rapidly evolves and changes, so too do trends in mass media. The shift to an increase in digital media means a shift to a digital economy. Most of us can take care of our bills and banking online – now it merely seems like numbers on a computer screen rather than your life savings. But companies are relying on this in an attempt to survive. They use digital technology to advertise how easy-to-use their products are, making them more appealing to a mass audience.

As you have read, the different industries all play a vital role in the economy. While each one is individualized, it has its own niche. This example of demassification shows the fragmentation of American society and how there are varied interests among citizens. Some are music lovers, some love to travel, and some Americans just love to eat. Even though there is demassification, there are also new conceptions of community. Our separate interests allow us to join new groups where we can interact with those who share our same values and interests. Blogs allow for followers and others to share their ideas and experiences. Music lovers can use sites to talk about the newest music releases, and food lovers can write about cheap new finds. These new communities allow for convergence of media sources. YouTube has been a huge success for advertising for all industries, along with social media sites for the younger generations.

Social Media Bandwagon

Despite the distinctive qualities that separate our industries of focus, they are all united and affected by the economy and media. No matter how creative or scientific a company might be, they can never predict just where technology and economics will lead society next.

As shown in our study of media in the American economy, all of these industries seem to be hovering toward a complete switch to digital media, be it for advertising, accepting consumer response, for convenience and accessibility, or even security. Even though we cannot predict in what direction society will go next, it is clear that most industries are banking on a digital market to bring (or keep) them out of the hole.

The Future of Entertainment: YouTube and Hulu?

imagesThe 2009-2010 economic downturn has without a doubt impacted virtually every sector of the entertainment marketplace, it has also accelerated and intensified the digital migration among both providers and consumers of content. Direct digital distribution is beginning to surface as a major way of providing movies to audiences online. According to the Houston Chronicle:

“a survey conducted by consumer electronics shopping site Retrevo, 64 percent of Americans watch at least some of their television online. Twenty-three percent of respondents under 25 said they watch most of their TV online.”

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Online video viewing is more ubiquitous than ever. Consider the results from Nielsen’s Three Screen Report:

“138 million people watching video Internet spent on average three hours, 22 minutes during the month doing so”

As prices for devices like the iPhone or the new iPad drop, as online video quality improves, and more premium content becomes available on the internet, both broadband and mobile video will continue to grow.

But what about the number of consumers who actually paid for the online video content? The convergence of the television and the computer makes sense, but will online-viewers be willing to pay for content that they originally watched for free?

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As the computer-using and wireless hand-held segment of the entertainment consuming population continues to increase, as digital cable lines, DSL, wireless, satellite, and other systems continue to converge, and as delivery technology continues to improve, one can expect that delivery of motion pictures online or wirelessly will rapidly expand over the next few years.

The digital vs. TV discourse will continue to accelerate. While the economy will have (hopefully) recovered by 2011, the broadcast networks will soon be fighting for every dollar side by side YouTube, Hulu, the digital video networks, and the rest of the video providers out there knocking on the door.

From Ray-Ban Glasses to Reese’s Pieces: Product Placement on the Big Screen

Could it be the end of the long held relationship between marketers and entertainment producers? Advertisers are shifting from television to digital media. An increasing number of marketers are using social and digital media to reach certain demographics and raise brand awareness.

“Many media and entertainment subsectors have been hurt by the fall in spending for advertising, which has been driven by advertisers’ financial distress as well as viewership declines in traditional distribution channels.” – Plus Media Solutions

The Financial Times reported that online advertising spending in the US “rose sharply in the 4th quarter of 2009” and “the strong uptick from the third to fourth quarters points to the increasing prominence of online advertising.” But this isn’t the end of the long business relationship between marketers/branders and entertainment producers.

Though social media, tighter budgets, and new technological tools have influenced the shift in advertising, one advertising trend remains the same among brands and entertainment producers: product placement.
Product placement has been an integral source of revenue and business for the entertainment industry for a long time:

  • 1982 Ray-Ban signed a contract with a product placement company for $50 thousand a year to put Ray-Ban in movies and television, a year later Tom Cruise wore a pair of Ray-Bans in Risky Business and Ray-Ban sales skyrocketed
  • 1982 Hershey agreed to spend $1 million promoting E.T. in the exchange for the right to use E.T. in it’s adds
  • 1995 BMW paid $3 million for Agent 007 to drive a BMW Z3 Roadster in Golden Eye
  • 1996 Reebok provided more than $1.5 million in merchandise, ads and promotional materials to be featured in the movie Jerry Maguire

Yet, just the other day I came across an article in the New York Times that called product placement a new shift in advertising. The reporter, Stephanie Clifford, wrote: “For the moviegoer, the shift will mean that advertising will become more integral to the movie. The change may not be obvious at first, but the devil is going to wear a lot more Prada.” I found it odd that Clifford would refer to product placement as a new shift for moviegoers, seeing as how product placement has been an advertising tactic moviegoers have dealt with for the past 28 years.

It will be interesting to see how product placement companies react to brands’ growing interests in the new opportunities and low-cost options provided by digital media. As Randall Rothenberg, president of the Interacting Advertising Bureau (IAB.) explained: “Today, faced with myriad new opportunities, cheap tools, a global distribution medium with lowcost scale…marketers find themselves forced to find new processes or organization constructs to help.”  Using digital media seems to be a lot more financially feasible than paying over $1.5 million to be in a movie (whose box office success can never be certain) considering the current economy.

But with all that said and even though low-cost financial incentives make the internet a safe-haven for marketers during the negative economy, I think product placement will continue to be a powerful marketing tool for a long time….I mean did anyone else notice all the VitaminWater cups, towels, and logos during the March Madness Tournament?

Is Buying a 3-D TV Worth the Dent in Your Wallet?

3-D TV is back! And electronic manufacturers are pumping millions into marketing the new technology.

The New York Times reported:

“Samsung is spending about $100 million this year on marketing and advertising its 3-D products. That included promoting its 3-D line with a Black Eyed Peas concert in Times Square on March 10.”

I guess Samsung and other television manufacturers think the more money they spend on advertising the 3-d technology, the more consumers will be willing to spend on the three dimensional television sets.

You don’t need 3-D glasses to see the zeros on the price tags for the new 3-D TVs. Initially, at least, going 3-D will cost a U.S. household $3,000 or more, and thats not including the $150 glasses and the estimated $400 blue ray dvd player to play 3-D DVDs.

3-D Television Manufacturers

  • Samsung
  • Sony
  • Vizio
  • Panasonic
  • LG
  • Toshiba

Research Alert reported that consumer spending on technology slumped in 2009…. which leads me to one question: Have television manufacturers forgotten we are in a recession?

If consumers are slow to pull out their wallets for groceries and other necessities, why would Samsung think they are going to spring to the closest Best Buy and invest their cash in a television that shows images in three dimensions? It seems like states are having enough problems trying to implement the digital tv transition!

I’ll leave you with a clip from Samsung’s first commercial advertising the new 3-D TV: [kml_flashembed movie="http://www.youtube.com/v/JwI_8WPerWM" width="425" height="350" wmode="transparent" /]

Will 3D Films Continue to Top the Box Office Charts?

James Cameron “So much has already been written about how Avatar was made–how it took nearly five years and a reported $300 million to complete, how Cameron shot nearly the whole thing in a barren airplane hangar he nicknamed the Volume, how he invented his own ‘performance capture’ cameras that could seamlessly sew human actors into a CGI world in real time” Benjamin Svetkey, Entertainment Weekly

An appreciation of these breakthrough technological techniques described by Svetkey in the quotation above is a large reason why 3D movies like Avatar and Alice and Wonderland have been such hits at the box office. But during a recession, is an appreciation of the art form of making 3D films (film literacy) going to keep attracting so many people to the movie theaters? In otherwords, will film literacy continue to result in box office success for the rest of the 3D films coming out in 2010?

film literacy: the ability to appreciate movie making as an art form with unique-to-the-medium techniques that add impact or facilitate the telling of a story

There is a lot that can be said about the impact Avatar’s chart topping success will have on the rest of the entertainment industry. But it is going to be very interesting to see how consumers respond to the other twenty-something movies set to be released in 3D in 2010. With the price of movie tickets going up, will 3D movies continue to top the box office charts during the recession? Or will Americans start looking for escape and leisure outside the third dimension of film?

Rediscovering Going to the Movies

“From box office records to digital expansion to growing success in the fight against movie theft, theatrical exhibition is thriving.” John Fithian, president and CEO of NATO

In an economy weighed down by sagging sales, struggling markets, and a growing unemployment rate, movie theaters all across America seem to be doing just fine. USA Today reports that movie theaters raked in $10.6 billion in box office sales in 2009. In fact, to say movie theaters are “doing just fine” is probably a huge understatement on my part. Unlike in many previous years, the increase is not being driven by rising ticket prices alone. “Attendance is up 4.5% over 2008,” reports Hollywood.com.

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In an article in the  L.A. Times,  Ben Fritz examines whether booming box office and increased attendance are economically-driven or if something fundamental is underway in the way people want to watch the movies.

The box-office boom has not only surprised many in Hollywood, but provided a much-needed source of revenue growth as DVD sales have plunged more than 13% so far this year. And it has proved that despite a digital revolution in the ways audiences consume content, one of the oldest methods has not lost its appeal. “When the economy is down, people start cutting back, but after a while they want to go out and be entertained,” said Ed Mintz, the president of market research firm CinemaScore. “Even at $10, or $15 for IMAX or 3-D, going to the movies is still a cheaper night out than almost anything else.”

The economy is clearly part of the equation, but perhaps something else is happening. I’ll leave Sony’s Jeff Blake with the final word:

There was a feeling that the business was recession-proof, but this is more than that,’ said Jeff Blake, vice chairman of Sony Pictures Entertainment. This is people rediscovering going to the movies.

This is a great 5 minute video clip I found on YouTube that describes the current transition to 3D in movie theaters and the new interactive seating exhibitionists are installing in their theaters. Beyond the transition to 3D and an interactive seat that moves with the movie, the video clip points to numerous other new amenities offered by movie theaters. The video clip makes it clear that, only are people rediscovering going to the movies, exhibitionists are giving them a reason to keep coming back for more.


[kml_flashembed movie=”http://www.youtube.com/v/dDkJ2H7bOTk” width=”425″ height=”350″ wmode=”transparent” /]