This document discusses a proposed strategy by KSR Entertainment Management to expand Warner Bros. Entertainment's target audience and distribution methods by making new release movies available online for streaming or download within 6-18 months of their theatrical debut. The strategy aims to address opportunities in Warner Bros.' changing external environment and expanding markets while managing risks from competitors like Disney. Financial analysis suggests the online distribution could significantly boost profits at minimal cost compared to Warner Bros.' overall revenues. The proposal outlines implementation steps and issues to address regarding legal, ethical and audience considerations.

1. KSR Entertainment
Management
Kody Helm
Steven Lavendier
Randy Davis
!
6/17/2014
Creating accessibility and peace of mind... One piece at a time.

2. Who are we?
Entertainment Management Company,
currently working for Warner Bros.
Entertainment Inc.
We strive to create an ease of accessibility for a
variety of entertainment consumers. We
intertwine our organizational strengths with other
companies in order to reinvent entertainment as it
pertains to their target consumers.

3. Environmental Scanning
Overview
Warner Bros. Entertainment Inc. is an American production company that produces a
variety of items in film, television and music entertainment. It is the “global leader in
the creation, production, distribution, licensing and marketing of all forms of
entertainment and their related businesses” (2014, Warner Bros.)
The company thrives on four main core values, which surround its profound business
ethics and community outreach. These core values consist of, creativity, community,
sustainability and workplace.

4. Opportunities...
Customers
Target market ranges greatly as it
pertains to age.
Primarily families with young-teenage
children.
Upper-middle class of all geographic
markets.
Opportunities in forms of marketing
(i.e. online, social-media,
advertisements, commercials.)
Expanding target market in general.
Collaborators
Distributes films totally financed and
produced by third parties.
Including name on upcoming, large-
budget movies (i.e. The LEGO
Movie, Edge of Tomorrow, Horrible
Bosses 2 etc.)
Opportunities in expanding
collaborator reach and monetizing its
distribution and marketing
operations.

5. External...
Climate
Climate well, big ticket superhero
movies increasing in popularity.
Change for expansion through
streaming films & TV Shows, due to
recent theatre ticket price increase.
Technologically, blu-ray, 3D, IMAX
becoming increasingly popular.
Socially & Culturally, consumers
looking for next ‘big’ blockbuster.
Competitors
Disney/Marvel Entertainment (one
of the largest competitors.)
Marvel: Billion dollar franchise, built
large expanded cinematic universe.
Many large-grossing movies, some
sequels more successful than
predecessors.
Warner Bros.: No cinematic universe
(yet) that can compete with
magnitude of Disney/Marvel.

6. Strategy Formulation
Effects of Solution
Internal job opportunities and position
openings.
Determination of profitable share
between Warner Bros. and theaters.
Production & Distribution altered to
enable online viewing capabilities.
Distributing to multiple different online
databases.
Research & Development to address new,
expanded target market/audiences.
Results
Assign existing employees to new internal
positions to avoid new hire/training fees.
Reducing distribution costs by not
producing and distributing to big-name,
large market theaters.
Less risk of box office failure.
Monthly fee increases revenue on non
large budget films, thus increasing
revenue.

7. Consumer Communication...
Ads on social media websites or applications on smartphones would need to be
implicated. Warner Bros. could market on Facebook, Instagram, Pinterest, and
applications such as Pandora, Vimeo, Spotify, and many other applications.
The age group of our target market could in turn be geared toward the younger, more
technologically advanced, generation. We will communicate these changes primarily
through social media and applications, in addition but not limited to; commercials on
TV, YouTube, Facebook page, WarnerBros.com and pop up ads on various sites.
Proposed solution will be called, Warner Bros. Goes: Online.

8. Implicating Responsibility
Legal
Intellectual property concerns, pirating, and copyright issues.
Primary issues due to the fact that pirating or copyright infringement
is almost inevitable in today’s society and it occurs so often it is almost
impossible to stop.
Limiting this infringement: Warner Bros. Entertainment will have a
brief statement in the beginning of the film stating its illegal to copy,
distribute to display this film in any other manner or medium.
Warner Bros. owns each and every copyright and trademark to the
films it produces. Any attempt to copy, or infringe upon these works
will result in serious criminal action, maximum charges will be pressed
against offenders, penalties which coincide with penal codes will be
implemented at maximum punishment.
Warner Bros. Entertainment operates under the Copyright law of the
Unites States of America, Contained in Title 17 of the Unites States
Code. Any and all chapters under this code will provide the provisions
and outlines of all legal proceedings and processes as it pertains to
copyright infringement, pirating, intellectual property considerations
and fraudulent reproduction, distribution, display or any matter in
relation to films streamed online.
!
Ethical
Cyber crime, and intellectual property theft.
Third party issues as it pertains to the manners listed above
can be serious ethical as well as legal issues.
Actions will be determined after a trial period of the
proposed solution to underline its success rate and
profitability.
Coincide with SEC’s mission: to protect investors; maintain
fair orderly and efficient markets; and facilitate capital
formation.
We are hoping the proposed solution is extremely successful
and will create greater recognition for Warner Bros.
Entertainment, while benefitting shareholders by opening up
new, and expanding current stock options.
We are attempting to protect and benefit all shareholders and
operate in an ethical manner as it pertains to Warner Bros.
code of conduct and legalities underlined in the SEC’s codes
of conduct as well.

9. Warner Bros. Vs The World
While Warner Bros in not the overall “biggest” earner
comparatively, they are still prominent in earnings.
(Yahoo Finance, 2014)

10. Here we see over the years the increase in
stock value of Time Warner/Warner Bros.
There’s a significant increase from 2012 to 2013, and
it increases in value into 2014, which indicates that it
will continue to increase substantially.
(Yahoo Finance, 2014)

11. On this chart, we are able to see the
increase in dividends, with an average
of a .03 increase each year.
(Yahoo Finance, 2014)
Dividends

12. Cost Of Goods sold Forecasts
Here is shown various percentages until 2018
and what the costs could be in a few years of
goods/services.
(Yahoo Finance, 2014)

13. Revenues
• This chart shows revenue at
$30,000,000,000 (billion).
!
• Partnering with a streaming
service, such as LiveStream.com
would cost $12,000 (thousand) a
year.
!
• With revenue at $30 billion, the
streaming service would cost less
than .0001% of Warner Bros
overall revenue each year
(30,000,000,000 x .000001) .
!
• Something like Netflix can also
increase revenue, though it may
significantly increase the cost.
(Yahoo Finance, 2014)

14. Even at 3% average
growth each year is still
a significant amount of
profit growth (though
gross), that’s still a
difference of a billion
dollars more or less.
!
Gross profit is at about
half of the $30 billion
revenue at almost $14
billion for 2013.
(Yahoo Finance, 2014)

15. Operating expenses
showcase over $6 billion
in operating expenses.
!
Streaming services would
only cost .0001% of
Warner Bros (Time
Warner)’s yearly
operating expenses, but
can greatly increase
revenue if enough people
pay for their services.
!
More money, less risk.
(Yahoo Finance, 2014)

16. Challenges
Not making as many
movies as their
competitors
Not well known actors in
movies
Needs to market their
movies better

17. Solution
New Release theatre
movies to go online !
Be on the companies
website !
For a price !
Benefit everyone!!!

18. How you say?
Available on mobile devices: laptop, tablets,
smartphone, etc.!
A lower price!
Percentage of the profits would go to the local
theatre!
People that does not want to or cannot get out

19. Movies Now
3D/IMAX quality!
Cinematic Universe!
6 months to a year in a
half!
depends on the
complexity

20. Audiences
It speaks today’s society!
does not have time to
go!
Bad weather, traffic,
different obligations,
etc.

21. Strategy Evaluation
Our company will evaluate the success of the
timeline milestones !
Company will decide corrective action need be if
benchmarks are not met!
Delegate projects from the timeline to workers

22. Glavinich,Thomas(2013).”Know Your Audience” Retrieved from http://www.ecmag.com/section/your-business/know-
your-audience!
Insightonthenews (N.D.).” 8MM-Movie-Film-O” Retrieved from http://www.insightonthenews.net/?attachment_id=358 !
Miniwatts Marketing Group(2014). “Internet World Stats” Retrieved from http://www.internetworldstats.com/stats.htm !
NodAccess(2012). “About You” Retrieved from http://www.nodaccess.com/Solutions_HID_Fargo_AWID_Suprema_C-
TPAT?lng=en !
Under30CEO(2014). “Business Challenges” Retrieved from http://under30ceo.com/9-challenges-of-partnering-with-a-
bigger-company/business-challenges/ !
Yahoo Finance. (2014, June) Time Warner Inc. Retrieved from http://finance.yahoo.com/q?s=TWX !
Yahoo Finance. (2014, June) The Walt Disney Company. Retrieved from http://finance.yahoo.com/
q;_ylt=As0G7DRk.W9vAwAMCYjRt78nv7gF;_ylc=X1MDMjE0MjQ3ODk0OARfcgMyBGZyA3VoM19maW5hbmNl
X3dlYl9ncwRmcjIDc2EtZ3AEZ3ByaWQDBG5fZ3BzAzEwBG9yaWdpbgNmaW5hbmNlLnlhaG9vLmNvbQRwb3MD
MQRwcXN0cgMEcXVlcnkDRElTLARzYWMDMQRzYW8DMQ--?p=http%3A%2F%2Ffinance.yahoo.com%2Fq
%3Fs%3DDIS%26ql%3D0&type=2button&uhb=uhb2&fr=uh3_finance_vert_gs&s=DIS !
Yahoo Finance. (2014, June) Twenty-First Century Fox. Retrieved from http://finance.yahoo.com/
q;_ylt=As0G7DRk.W9vAwAMCYjRt78nv7gF;_ylc=X1MDMjE0MjQ3ODk0OARfcgMyBGZyA3VoM19maW5hbmNl
X3dlYl9ncwRmcjIDc2EtZ3AEZ3ByaWQDBG5fZ3BzAzEwBG9yaWdpbgNmaW5hbmNlLnlhaG9vLmNvbQRwb3MD
MgRwcXN0cgMEcXVlcnkDRk9YQSwEc2FjAzEEc2FvAzE-?p=http%3A%2F%2Ffinance.yahoo.com%2Fq%3Fs
%3DFOXA%26ql%3D0&type=2button&uhb=uhb2&fr=uh3_finance_vert_gs&s=FOXA
References