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 more
The 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 event
The 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 be
televised.
• 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 of
movies.
• 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

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