(Get Answer)

marketing case study and need support to help me learn. our topic is Transformers on lec 7 the part that I need to do is 1. What will Warner Bros do in respect of the launch date for Harry Potter and the Deathly Hallows Part 2? and u will need to read the case and lecture PPT attached here please note that the instruction and template are for the whole assignment, u only need to do one part for the PPT AND written report but still follows the instruction please Requirements: NO MORE THAN 2 pages for the written report S w 9B12A025 WARNER BROS.: THE HARRY POTTER DILEMMA1 Matt Boswick wrote this case under the supervision of Professor Neil Bendle solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-09-26 INTRODUCTION It was a chilly night in December 2010 when James Sirius walked out of the theatre, two young children in tow. They had just seen Harry Potter and the Deathly Hallows Part 1, and James hoped he could get out of the parking lot before the two boys could embarrass him further. The combination of tantrums and twirling toy wands at each other was something all parents understand, but maybe the theatre’s other patrons didn’t appreciate it. As he pulled out of the parking lot, the children began to pester him, asking when the final installment of Harry Potter would be released. Sirius knew that this was a question many had been asking during the past few weeks. As an independent Hollywood business expert, Sirius was preparing consulting advice he hoped to sell to the executives of Warner Brothers (WB). After the success of Harry Potter and the Deathly Hallows Part 1, they would surely expect another major hit. They would, however, be concerned that the crowded summer blockbuster season could hurt the performance of Harry Potter and The Deathly Hallows Part 2 (Deathly Hollows Part 2). Their main competition was Paramount’s Transformers 3: Dark of the Moon (Transformers 3), which was set to open just two weeks earlier. Sirius planned to advise WB on whether to move the date for the film, how best to promote it and what he thought Paramount might do. He sat at his desk with a bag of popcorn and got to work. HISTORY OF WARNER BROTHERS Warner Brothers (WB) was one of the oldest studios in the world. It was originally built on farmland in 1926 and had its breakout hit with the first “talkie,” The Jazz Singer, in 1928. WB had made its mark in each decade with a number of hit films and franchises. Throughout the 1930s, 1940s and 1950s, WB released both box office and critical successes and was seen as one of the premier studios in Hollywood. 1 This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives presented in this case are not necessarily those of Paramount Pictures or Warner Bros. Pictures or any of their employees. Though James Sirius is fictional, the situation reflects real events. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 2 9B12A025 The studio went through significant changes as the film industry consolidated in the second half of the twentieth century. Jack Warner sold WB to Steve Ross and the Kinney Corporation, which included DC Comics and the name changed to Warner Communications Inc. Columbia Pictures and Warner Communications jointly created the Burbank studios where many of the most famous TV shows of all time, including I Dream of Jeannie and The Partridge Family, were produced. The 1970s and 1980s were a time of great success for Warner Communications, and in 1989 it acquired Lorimar Telepictures’ library of shows. This move launched Warner Communications into a period of massive change and growth throughout the 1990s. Warner Communications and Time Inc. merged in 1990 to form Time Warner Inc. The new merged company became one of the largest communications and entertainment companies in the world. Time Warner then acquired the entire production lot and renamed it Warner Bros. Studios. In 1995, the WB Television Network launched, and the studio had further success on the small screen, bringing out such hits as E.R. and Friends. WB Pictures also released the hugely successful franchise, The Matrix, in the 1990s. Controversially, Time Warner Inc. merged with America Online Inc. in 2001 to form the largest media and communications company on the planet. Time Warner was a leading player in cable networks, cable systems, interactive services, music, publishing and film. The new millennium also saw the release of more successful franchises, such as Harry Potter and Ocean’s 11, 12 and 13. The WB Network became the CW Network, a joint venture with CBS.2 For a list of WB’s highest grossing films see Exhibit 1. THE HARRY POTTER SERIES Joanne Kathleen (J.K.) Rowling began writing the Harry Potter (HP) series in the early 1990s but would not complete the first book, Harry Potter and The Philosopher’s Stone (The Philosopher’s Stone), until 1995.3 HP became the fastest selling series of books of all time and won Rowling numerous awards and worldwide fame.4 HP as a brand was worth approximately $15 billion, and the books had been translated into 65 languages. Rowling was now the richest woman in the United Kingdom and an Officer of the British Empire.5 She was the only person to be made a billionaire from writing novels and had been awarded honourary degrees from many prestigious universities including St. Andrews, Harvard and Edinburgh.6 THE HARRY POTTER MOVIES In 1999, WB spent $2 million to purchase the rights to the first four books in the series.7 They were such hot properties that the studio bought these rights before the fourth book’s publication.8 Rowling, it was agreed, would remain heavily involved with the films to ensure the plots remained true to the novels. She 2 “History of Warner Brothers Studios,” http://www.warnerbros.com/studio/about/company-history.html, accessed January 25, 2012. 3 “J.K. Rowling Biography,” http://www.biography.com/people/jk-rowling-40998, accessed February 10, 2012. 4 “Record First Day Sale for Final ‘Harry Potter’ Book,” http://www.nytimes.com/2007/07/22/books/22cnd-potter.htm,l accessed on March 5, 2012. 5“J.K. Rowling: Richer than the Queen,” http://www.people.com/people/article/0,,625989,00.html, accessed March 5, 2012. 6 “J.K. Rowling Biography.” 7 “J.K. Rowling Biography.” 8 “Warner Bros. and the Power of Franchising,” http://www.thefilmpilgrim.com/features/warner-bros-and-the-power-of-franchising/419, March 5, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 3 9B12A025 also dictated that all leading actors be from the United Kingdom (unless the characters in the book were from other countries such as France, Bulgaria, etc.). The Philosopher’s Stone was released in 2001 to impressive box office success. It finished its theatre run as the second highest grossing film of all time, making almost $1 billion worldwide. WB knew it had something special on its hands and continued to do everything it could to make the series a continuing success by adding numerous big name British actors, including John Cleese, Maggie Smith, Gary Oldman, Helena Bonham Carter, Bill Nighy and Ralph Fiennes. While not guaranteeing success, the policy of adding Oscar winners and stars with proven box office prowess was thought to be important to HP’s box office draw.9 As the series continued throughout the 2000s, some interesting patterns began to develop (see Exhibit 2). While no movie in the series so far managed to beat The Philosopher’s Stone in terms of ticket sales, some were relatively disappointing in that they failed to match the first movie’s opening weekend gross, i.e., ticket revenue in the first weekend in theatres. This was a major cause for concern as inflation and the rise in ticket prices were constantly increasing film grosses for a similar level of ticket sales.10 WB had changed the release dates for HP from summer (June and July) to winter (November) multiple times. The movies released in the summer months did particularly poorly relative to the other films in the series. In 2007 and 2009, Paramount’s hit Transformers series had been released two weeks prior to HP. Sirius felt that this competition had hurt both companies’ earnings.While The Deathly Hallows Part 1 had a big opening weekend, he was concerned that the final film in the franchise would again have a tough opening weekend due to the intense competition for summer revenue. The fact that the final installment of the Transformers series was due to open just two weeks earlier seemed worrying. Sirius knew it was not too late to change the date to the winter months. He did, however, worry that if his recommendation to move was accepted, this might be seen a sign of weakness or a lack of confidence in the movie. Sirius thought Paramount was WB’s biggest competitor (see Exhibit 3), and both studios had major releases planned for July. The summer box office, therefore, had huge implications on which studio would come out on top. Concerns over the strength of the Transformers film were warranted as it was the final chapter in an incredibly successful franchise. For a list of Paramount’s highest grossing films see Exhibit 4. HISTORY OF PARAMOUNT PICTURES Paramount was started by Adolph Zukor, who owned a nickelodeon in New York. He opened a successful film in 1912 and, after creating the Famous Players film company, invested in a distribution company named Paramount Pictures (Paramount). In 1926, after a merger with the Jesse L. Lasky Company, a new 26-acre studio lot was constructed in Hollywood. This was a significant and risky venture costing around $1 million, a huge investment at the time. The 1920s and 1930s were successful decades for Paramount. The studio won the Oscar for Best Picture for their film Wings and released a number of successful Bing Crosby and Mae West films. Things were looking up for Paramount as the United States exited the Great Depression. 9 “Harry Potter Films Home to Great British Actors,” http://popwatch.ew.com/2009/07/15/harry-potter-films-great-british-actors-refuge/, accessed January 29, 2012. 10 “Adjusting for Movie Ticket Price Inflation,” http://boxofficemojo.com/about/adjuster.htm, accessed January 30, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 4 9B12A025 By the late 1970s and early 1980s, Paramount had established itself as one of the most powerful studios in the world. Each decade brought both box office and critical success. It was in the 1980s that Paramount became one of the first studios to franchise — produce a string of sequels to — many of their films. They had great success doing this. Star Trek, Airplane!, Friday The 13th, Indiana Jones and Beverly Hills Cop were all franchises that seemed to bring near guaranteed box office success. In 1986, Paramount had a 22 per cent share of the domestic box office revenue, double its closest competitor. In 1994, Paramount merged with Viacom in a $9.9 billion deal, making it one of the largest media companies in the world, rivaling Time Warner. This new company released a number of highly successful movies such as Braveheart, Titanic and Forrest Gump in the 1990s. The beginning of the 2000s were a challenge for Paramount in terms of box office revenue and competition. The studio went from being one of the top companies in terms of market share (a metric studios paid attention to) to struggling to break into the top five. In 2007, however, Paramount reclaimed the number one spot on the back of an established franchise in Shrek and a new blockbuster directed by Michael Bay: Transformers. The future looked bright as franchises such as Mission Impossible, Iron Man, Transformers and Kung Fu Panda seemed poised to deliver box office returns.11 Sirius felt that Paramount’s long history and recent success made the studio WB’s strongest competitor. He was worried about the momentum Paramount had generated over the last few years, but now WB was probably the studio with the best chance to beat Paramount this year. Sirius wanted a strategy to ensure that Transformers would be zapped by HP. THE TRANSFORMERS SERIES Transformers were originally created by the Japanese toy company Takara. These toys featured different vehicles that transformed into fighting robots. Hasbro purchased the rights to Takara’s Diaclone and Microchanger toys and changed their names in 1984 to create the Transformers brand. Hasbro launched the toys with a cartoon show and a Marvel Comic series in the United States, Canada and the United Kingdom. The show featured two warring factions who had brought their war to earth. The peaceful Autobots, who were mostly cars and trucks, sought to defend earth from the evil Decepticons, who were mostly military vehicles including jets, helicopters and tanks. The show’s popularity, coupled with the unique nature of the toys, gave Hasbro incredible success. The Autobot and Decepticon armies grew to include robots that changed into dinosaurs, insects, boom boxes, spaceships, dragons and even entire cities.12 As the series popularity began to fade in 1987, the show was cancelled. In 1990, Hasbro ceased production of the “Generation 1” (G1) toys.13 Throughout the 1990s and 2000s, Hasbro released more toys and shows based on the original G1 series. These toys targeted a new generation of 8- to 12-year-old boys. Featuring many of the same characters from the G1 series, the shows and toy lines were successful but failed to reignite the passion and interest of both old and new fans alike.14 THE TRANSFORMERS MOVIES In 2004, Don Murphy and Tom Desanto, two successful film producers, optioned the rights to the Transformers toy line from Hasbro and began pitching a new film to Hollywood studios. Once picked up 11 “History of Paramount,” http://m.paramount.com/studio/history, accessed February 3, 2012. 12 “Transformers Collector,” http://transformerscollector.com/history-of-transformers-toys.php, accessed February 26, 2012. 13 “Transformers: Toy and TV Show History,” http://vickeyk.hubpages.com/hub/Transformers_Toys_and_TV_Show_History, accessed February 5, 2012. 14 “The History of Transformers on TV,” http://uk.tv.ign.com/articles/800/800768p2.html, accessed June 11 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 5 9B12A025 by Paramount, the project grew rapidly. Dreamworks studios got involved, and Steven Spielberg signed on as a producer. It was Spielberg who convinced Michael Bay to direct the film. Although not a critically acclaimed director, Bay had a long track record of making special effects heavy blockbusters such as Black Hawk Down, Armageddon and Bad Boys II. The writers agreed that the characters should be based on the G1 storyline and that many fan favourites, such as Megatron and Optimus Prime, would appear on the big screen for the first time.15 Transformers was released in 2007 and was highly successful in the domestic and worldwide markets (see Exhibit 5). It did well with both critics and audiences, and there was high demand for a sequel. Transformers 2: Revenge of the Fallen was released on July 1, 2009 and beat its predecessor in terms of total gross and opening weekend, although the films shared much of the same formula. Most of the major actors returned, as did Bay. With a bigger budget, Bay was able to use more computer-generated imagery (CGI) and include more robots, much to the delight of fans.16 The massive success of Transformers 2 was thought to have hurt the grosses of WB’s HP franchise. Indeed, the success of Transformers 2 led Paramount to one of the best years in the studio’s history.17 Transformers 3: Dark of the Moon (Transformers 3) again followed the formula of the first two films. With heavy CGI usage, the film was driven by special effects. To complement them, Bay enlisted such award-winning and well-known actors as Frances McDormand, John Malkovich and Patrick Dempsey. With the story and characters already established, Bay had the ability to go all-out in terms of effects with the added use of 3D. 3D FILM 3D films are created using a camera that films two slightly different images, which are then rendered side by side. 3D glasses serve to isolate the images shown to each eye, and the viewer’s brain is tricked into seeing more depth than is actually there.18 In 2010, many 3D films were seen as gimmicky since the footage was often not of very high quality. 3D was used for documentary films shown in IMAX theatres, but when it was used in feature-length films, it was typically used only for action sequences. Many times these sequences had been converted to 3D from 2D cameras, a process that could result in unpleasantly blurry images. When Avatar debuted using the new Fusion Camera System in 2009, audiences were blown away not only by the quality but by the depth of the 3D images. Avatar was filmed entirely in 3D and shown in IMAX as well, resulting in an incredible movie-going experience. Its success both critically and at the box office left studios scrambling to convert or film in 3D to try to ride the wave of this trend.19 Many of the 3D films released after Avatar did well at the box office.20 Since theatres could charge more for a 3D ticket, the box office revenue numbers were often inflated relative to ticket sales. Indeed, the margins on a 3D ticket were far higher. For this reason, studios would invest in 3D technology even after filming the movie, i.e., during post-production. This retrofitting often resulted in a poorer quality image, but studios could justify charging 3D prices for their movies, thus gaining potential for greater profit. 15 “Transformers: The Cast, The History, The Movie,” http://enewsi.com/news.php?catid=190&itemid=11212, accessed January 20, 2012. 16 “Why Just 2 Seconds of Transformers 2 Took 3 Months To Complete,” http://gizmodo.com/5305809/why-just-2-seconds-of-transformers-2-took-3-months-to-complete, accessed February 5, 2012. 17 “Paramount Studios: Yearly Comparisons,” http://boxofficemojo.com/studio/chart/?view2=ytd&view=company&studio= pardw.htm, accessed February 27, 2012. 18 “How 3D Film Technology Works,” http://visual.ly/how-3d-film-technology-works, accessed February 26, 2012. 19 “The Success of Avatar is Milestone for 3D,” http://www.itbusinessedge.com/cm/blogs/weinschenk/the-success-of-avatar-is-milestone-for-3d/?cs=38475, accessed March 10, 2012. 20 “3D Film Grosses,” http://boxofficemojo.com/genres/chart/?id=3d.htm, accessed February 5, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 6 9B12A025 There was concern in the industry about “3D fatigue.” Some observers suggested that audiences were becoming tired of watching 3D that sometimes ruined action scenes with blurry, unfinished images. They were also tired of paying an inflated price for only 20 minutes of 3D. In addition, it was claimed that audiences could tell the difference between “good” 3D movies such as Avatar and “bad” 3D movies such as G-Force. If audiences were to remain willing to spend an extra $3.00 a ticket for 3D effects, the studios had to ensure their 3D was of premium quality good enough to impress even the most skeptical of viewers.21 3D IN HARRY POTTER AND TRANSFORMERS WB had released Harry Potter: Order of the Phoenix (Order of the Phoenix) in converted 3D. This conversion had garnered mixed reviews. It was not universally thought to be superior to the 2D version, and very few scenes actually included any kind of distinct 3D footage. There had also been a conflict in many U.S. IMAX and 3D theatres. The theatres that could show the 3D version had signed a four-week contract to show Transformers 2: Revenge of the Fallen. This meant the 3D release of Order of the Phoenix came two weeks after the 2D release of the same movie. These factors led to poor attendance at the 3D version. Furthermore, those who did see the movie in 3D were not always totally satisfied with spending the extra money for what some regarded as a sub-par experience. After this, WB was unwilling to convert Deathly Hallows Part 1 into 3D. The studio, however, had spent a large amount of time and money on converting Deathly Hallows Part 2 into 3D using the best conversion technology available, hoping that the extra revenue from a 3D picture would mean greater success. To recoup the investment in 3D, promoting the special effects aspect of this film would be vital. On the other hand, many of the criticisms about the 3D in the Order of the Phoenix could occur again. On the other hand, Transformers 3 didn’t need to be converted as it was filmed in 3D using the Fusion Camera. Paramount was promoting the movie as the best 3D film since Avatar. Critics wondered if it was even worth WB trying to promote the 3D aspect of the HP movie as it could receive a negative backlash. While most of the money had already been sunk into the conversion process, it could still be cancelled and some savings realized. However, if WB moved the date of the movie, it would most likely not go head-to-head with another 3D film. The studio had a lot of decisions to make, and the next few months would yield even more surprises. TICKET SALES AND MAKING MONEY IN MOVIES Sirius wanted to establish metrics to forecast the ticket sales for Deathly Hallows Part 2. The film industry had a fairly simple method of assigning revenues. Theatres took 10 per cent of ticket sales in the first weekend and increased this take by 10 per cent each week after the release. For this reason, the opening weekend was vital for the studios’ profits and became their key success metric. In addition to sharing in the revenue, each theatre typically charged a rental fee of around $10,000. Based on previous releases, Sirius estimated that Deathly Hallows Part 2 would open in around 4,200 theatres in the United States, a little more than the 4,000 expected for Transformers 3.22 21 “Hollywood’s 3D Honeymoon Over,” http://www.telegraph.co.uk/culture/film/film-news/8621220/Hollywoods-3D-honeymoon-over-as-audiences-stay-away.html, accessed February 5, 2012. 22 “Transformers: Dark of the Moon, Domestic Gross,” http://www.boxofficemojo.com/movies/?page=daily&id= transformers3.htm, accessed January 25, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 7 9B12A025 Studios had a goal of making enough profit in the United States to cover production and marketing costs. When this goal was achieved, all international earnings became pure profit. The production cost for Deathly Hallows Part 2 was estimated at $250 million with around $100 million budgeted for marketing expenses. (As a point of comparison, the production cost for Transformers 3 was estimated at $195 million with around $100 million budgeted for marketing expenses.) Sirius wanted to project how many tickets the film would need to sell to meet these costs. The average ticket price for Deathly Hallows Part 2 would probably be higher than the national average of $7.89 (based mostly on 2D movies) since he hoped a higher percentage (as high as 50 per cent) of tickets would be IMAX or 3D, which would inflate the price of each ticket between $2 and $4. Sirius was concerned that with “3D fatigue” the percentage of 3D and IMAX sales could be as low as 20 per cent and that he should project both best and worst case scenarios.23 The comparable best and worst case 3D percentages for Transformers 3 were probably around 75 per cent and 35 per cent respectively. THE DECISION As he prepared to give his consulting advice, Sirius was confident that Deathly Hallows Part 2 could be one of the biggest worldwide successes to ever grace the silver screen. The concern was not whether the film would recoup its budget but that its upside potential for success at the box office could be seriously threatened by Transformers 3. This concern was especially high if Paramount’s movie was very successful. If moviegoers were still flocking to Transformers 3 in huge numbers when Deathly Hallows Part 2 launched, this would be bad news for the young wizard’s grosses. (WB had released two HP films two weekends after Transformers in both 2007 and 2009.) When two similar movies are released too close together, both generally are not as successful as hoped. One potential reason is that this forces theatres (when allocating screens) and audiences (when deciding what to see) to choose between the films. That said, Sirius also knew that the July 1 weekend was likely the best release weekend of the year since it was the Independence Day long weekend. Why shouldn’t WB try and move to this weekend and force theatres to choose which film to screen on their 3D and IMAX screens? Sirius was also concerned that Paramount would move the date of their release even closer to that of Deathly Hallows Part 2 to hurt WB’s box office take and make a statement of intent. He felt that since Transformers 3 was the final installment of a blockbuster franchise to be shot in 3D, Paramount might try to entice theatres to show their film over the HP film. The key would be to capture the 3D and IMAX screens as well as their share of the 2D screens. Sirius’s concerns grew as he looked at the summer schedule (see Exhibit 6). When else could WB move its release date? He knew that WB would not want to compete directly with another release from its own stable as this would possibly hurt both films’ grosses. As an independent consultant, Sirius knew that for the studio to listen to him, he would have to provide some strong insight they did not have in-house. What should he recommend? 23 “Movie Ticket Prices Reach New High,” http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/01/movie-ticket-prices-reach-new-milestone.html, accessed March 5, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 8 9B12A025 Exhibit 1 WARNER BROS. HIGHEST GROSSING FILMS Movie Title Domestic Gross (Unadjusted) (Million $s) Year Released Dark Knight 533 2008 HP: Philosopher’s Stone 317 2001 HP: Half Blood Prince 301 2009 HP: Deathly Hallows Part 1 295 (estimated) 2010 Inception 292 2010 HP: Order of the Phoenix 292 2007 HP: Goblet of Fire 290 2005 The Matrix: Reloaded 281 2003 The Hangover 277 2009 Domestic Gross (unadjusted) is defined as total revenues from ticket sales taken at the theatres. Source: Box Office Mojo, http://boxofficemojo.com/studio/chart/?view2=allmovies&view=company&studio=wb-newline.htm, accessed June 11, 2012. Exhibit 2 THE HARRY POTTER MOVIE SERIES Title Date Unadjusted Opening Weekend Gross(000s) Philosopher’s Stone November 16, 2001 $90,000 Chamber of Secrets November 15, 2002 $88,000 Prisoner of Azkaban June 4, 2004 $93,000 Goblet of Fire November 18, 2005 $102,000 Order of the Phoenix July 11, 2007 $77,000 Half Blood Prince July 15, 2009 $78,000 Deathly Hallows Part 1 November 19, 2010 $125,000 Deathly Hallows Part 2 July 15, 2011 ??????? Total Domestic Gross for series Total Worldwide Gross Harry Potter Series $2,009,065 $6,378,000 Total gross includes the entire run, not just the opening weekend. Source: Box Office Mojo, http://boxofficemojo.com/franchises/chart/?id=harrypotter.htm, accessed June 11, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 9 9B12A025 Exhibit 3 MARKET SHARES OF WARNER BROS. AND PARAMOUNT 2000-2010 Year WB Market Share (Gross) WB Gross ($billion) Paramount Market Share (Gross) Paramount Gross ($billion) Top Studio In Year 2000 11.9% .9 10.4% .791 Buena Vista 2001 15.1% 1.2 11% .892 WB 2002 11.7% 1 7.4% .673 Sony 2003 12.8% 1.2 7.1% .654 Buena Vista 2004 12.9% 1.4 6.7% .628 Sony 2005 15.6% 1 9.4% .832 WB 2006 11.6% 1.4 10.3% .947 Sony 2007 14.7% 1.8 15.5% 1.5 Paramount 2008 18.4% 2.1 16.4% 1.6 WB 2009 19.8% 1.9 13.9% 1.5 WB 2010 18.2% 1.8 16.2% 1.7 WB Source: Box Office Mojo http://boxofficemojo.com/studio/?view=company&view2=yearly&yr=2010&p=.htm, accessed June 11, 2012. Exhibit 4 PARAMOUNT PICTURES HIGHEST GROSSING FILMS Movie Title Domestic Gross (Unadjusted) (Millions $m) Year Released Titanic 600 1997 Transformers 2: Revenge of the Fallen 400 2009 Forrest Gump 330 1994 Shrek 3 322 2007 Transformers 320 2007 Ironman 318 2008 Indiana Jones and the Crystal Skull 317 2008 Ironman 2 312 2010 Star Trek 257 2009 Domestic Gross (unadjusted) is defined as total revenues from ticket sales taken at the theatres. Source: Box Office Mojo. http://boxofficemojo.com/studio/chart/?yr=2012&view=company&studio=pardw.htm, accessed December 1, 2011. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Page 10 9B12A025 Exhibit 5 THE TRANSFORMERS MOVIE SERIES Title Opening Date Unadjusted Opening Weekend Gross ($000s) Transformers July 3, 2007 $70,500 Transformers 2: Revenge of the Fallen June 24, 2009 $108,000 Transformers 3: Dark of the Moon July 1, 2011(tentative) ???? Total Domestic Gross for series Total Worldwide Gross Transformers Series $721,000 $1,546,000 Source: Box Office Mojo. http://boxofficemojo.com/franchises/chart/?id=transformers.htm, accessed June 11, 2012. Exhibit 6 2011 BLOCKBUSTER MOVIES RELEASE SCHEDULE Date Title Distributor Budget $Millions May 6 Thor Paramount $150 May 13 Priest Sony/Screen Gems $60 May 20 Pirates of the Caribbean: On Stranger Tides Buena Vista (Disney) $250 May 27 Kung Fu Panda 2 Paramount (DreamWorks) $150 June 3 X-Men: First Class* Fox $160 June 10 Super 8* Paramount $50 June 17 Green Lantern Warner Bros. $200 June 24 Cars 2 Buena Vista (Disney) $200 July 1 (June 29 early release) Transformers 3: Dark of the Moon Paramount (DreamWorks) $195 July 15 Harry Potter and the Deathly Hallows Part 2 Warner Bros. approximately $250 July 22 Captain America: The First Avenger Paramount $140 July 29 Cowboys and Aliens* Universal $163 August 5 Rise of the Planet of the Apes* Universal $93 August 12 Final Destination 5 Warner Bros. (New Line) $40 August 19 Conan the Barbarian Lionsgate $90 *Indicates a 2D movie. Source: Box Office Mojo http://boxofficemojo.com/yearly/chart/?yr=2011&p=.htm, Accessed June 11 2012 and Movie Insider http://www.movieinsider.com/movies/-/2011/, accessed June 11, 2012. Authorized for use only by yu Wang in MKTG 6321 X Winter 2023 Course Kit at York University from 12/13/2022 to 4/22/2023.Use outside these parameters is a copyright violation. Entertainment MarketingMKTG 6321 AR GamingClass 6Steve Pulver Agenda•Questions from last week•Individual video discussion•Pokemon Go group presentation•Pokemon Go gaming facts•Interim review Individual Video Discussion•Overall the assignment was handled skillfully•The written part of the assignment was excellent•The presentation part was really inconsistent•The Average was 8.14•Average of written part was 4.9•Average of presentation was 3.24What are the implications of this finding for students in our class? Individual Video Discussion•Your analytical skills are highly developed and are in a word, excellent!•Your presentation skills lag your analytical skills•Why•Less experienced at it, though you write a fine presentation deck•It’s scary•You need to practice it repeatedly Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game History Video Game HistoryOver 60 million shipped as of June 2020 Video Game History Video Game History Polls•How many people play video games every day?•How many people play video games on their phone every day?•How many people play videogames everyday on a device beside their phone?•How many people have a gaming console?•How many people have a portable gaming devideother than their phone? Gaming Facts•2.7 Billion gamers in the world •$159 Billion in revenue forecast in 2020•Expected to increase to $200 billion by end 2023•Mobile gaming just under 50% of 2020 revenue•Low barrier to consumer entry•Internet cafes closed due to Covid-19•Less likely to suffer disruption in dev. due to Covid-19source:newzoo.com/global gaming report Gaming Facts•70% of Americans play a video game every day •Millennials (age 24-39) largest segment of gamers•Nostalgia appears to be a big driver•Nintendo Switch (modeled after 80’s Nintendo) was fastest selling gaming device in history •Over 60 million shipped as of June 2020•70% of respondents (only 265 in sample) said that they had tapped on an in game ad Gaming Facts•Gaming makes up 26 percent of all media consumptionhours.•Teenagers don’t think games are as important, but play anyway.•Those in the "marriage and kids" stage rate gaming as mostimp. Gaming Facts AR Gaming Facts•Smartphones have already surpassed PCs and consoles as primary gaming devices, but consumers are aware of technical limitations•While home PC gaming rates shrink, the idea of AR gaming at home could entice even non-gamers into trying new technology•The top location outside the home for gaming is on the way to work, and unobtrusive AR glasses are the most anticipated next step to empower public gaming AR Gaming Facts•Virtual reality doesn’t look like the future as of now•Today, gamers can play video games in an immersive 360-degree experience through a wide range of VR devices.•But so far, VR gaming has hardly made a dent in the overall gaming ecosystem.•A lack of affordable, high-quality VR headsets and good VR games are reasons.•2 in 10 have bought a VR headset. Half of them don’t use it anymore. AR Gaming Facts•Pokémon Go was the first video game to really bring AR to the masses in 2016.•Still the world’s second highest grossing smartphone game, it increased its revenue in 2018 compared to 2017 by 35 percent.•Overall mobile AR software is estimated to generate more revenue than VR by 2021.•The main driver for AR gaming is relaxation and escapism. Unsurprisingly, immersive gaming also scores high, as does social gaming. AR Gaming Facts•35 percent of non-gamers express interest in AR gaming.•This is significant, given that 23 percent of the population are non-gamers.•All in all, 66 percent of consumers are interested in AR gaming Pokémon GoGaming Factssource: https://www.businessofapps.com/data/pokemon-go-statistics/#4•A world wide phenomenon•Had a drink named after it at Starbucks•Highest mobile game revenue in its first month at $207 million (US)•Peaked at 45 million users in July of 2016•Down as low as 5 million by end of 2016CumulativePokémon GOdownloadsSeptember 2016500 millionFebruary 2017650 millionJuly 2017750 millionMay 2018800 millionMarch 20191 billion Pokémon GoGaming Facts•A world wide phenomenon•Had a drink named after it at Starbucks•Highest mobile game revenue in its first month at $207 million (US)•Peaked at 45 million users in July of 2016•Down as low as 5 million by end of 2016Pokémon GO2019 event statsEvent detailsDateAttendeesKm walkedPokémon caughtPokémon GO Fest, Chicago, USJune 201960,000290,00015 millionPokémon GO Fest Dortmund, GermanyJuly 201985,000400,00028 millionPokémon GO Fest Yokohama, JapanAugust 2019150,000/24 millionSafari Zone Montreal, CanadaSeptember 201939,000166,0007 millionSafari Zone New Taipei City, TaiwanOctober 2019327,0004.5 million50 million Pokémon GoGaming Facts•User Spending by Year (US$ millions)2016832201758920188162019894 Pokémon GoGaming Facts•Cumulative Revenue (US$ millions)Sept 2016500Jan 20171,000Sept 20182,000April 20192,500Oct 20193,000 Pokémon GoGaming FactsPokémon GOweekly revenue 2020, USD millionsw/c 6 Jan10 w/c 13 Jan13.1w/c 20 Jan14.8w/c 27 Jan15.2w/c 3 Feb17w/c 10 Feb15.5w/c 17 Feb13.4w/c 24 Feb14.2w/c 2 March13.3w/c 9 March13.8w/c 16 March23 Pokémon GoGaming Facts Pokémon GoGaming Facts Pokémon GoGaming Facts•Hanke said, building Pokémon Go, the Ninanticteam working towards 3 goals.•Exercise-there are many fitness apps but only make you feel like "a failed Olympic athlete".PokémonGo is designed to make you stand up by promising Pokémon outside the street, instead of putting pressure on users.•Looking at the world with new eyes-the game aims to bring players some new and interesting things about their surrounding areas by turning famous historical places into Gyms or Pokéstops-where people play fighting. Hanke said: "By encouraging discovery, Pokémon Go can make your life better in some way."•Connect friends-around the world, people organize meetings, go together to catch Pokémon or attack Gyms.That'swhat Hanke describes, Pokémon Go is an "icebreaker" (the word for the activity of strangers' familiarity) and gives people a reason to spend time together. Pokémon Go Case•Summarize the situation•2016 and Neantic, a spinoff from Google, partnered with Nintendo to bring the popular Pokemonfranchise to the mobile gaming space•Used AR technology that merged artificial reality with the real world•It was a fresh approach to Nintendo’s proven successful gaming formula•Key issues were focused on how to move forward to sustain the PokemonGo business Pokémon GoGaming Facts•How does PokemonGo make money•In app purchases•Sponsored Pokémon Go Case•What was the consumer response to PokemonGo in the first few weeks of launch? Why? What was the response later? Why?•Initial response very positive•Nostalgia for Pokemon•Millennials accounted for 90% of early downloads Pokémon Go Case•What was the consumer response to PokemonGo in the first few weeks of launch? Why? What was the response later? Why?•User base deteriorated very quickly•Took a long time to get good at it•It was repetitive which led to rapid wear out•Neanticbanned cheating sites and that took away elements some users loved Pokémon Go Case•Why did PokemonGo grow so rapidly?•It was the extension of a successful franchise•Tapped into a large already existing market•Good to talk about on social media•Snapchat, Facebook •It was a new social gaming experience Pokémon Go Case•What is your assessment of the business model Niantic is using for PokemonGo?•Led to rapid adoption (no barrier)•Opportunity to add for purchase features Pokémon Go Case•Should Niantic continue as it is doing now?, to evolve PokemonGo by using teams and live events or should it create an entirely new gaming experience?•User generated content helps companies scale products, identify bugs and understand consumers better than doing it in house•Niantic disagreed and discouraged crowdsourcing even though fans developed add-ons and modifications that players enjoyed Pokémon Go Case•What other entertainment marketing opportunities do you see for PokemonGo and why will they be profitable for the company?•Licensing (toys, books, clothing, movies)•Festivals•Competitions•Broadcast Next 3 WeeksFeb 23 No ClassMarch 2 on lineMarch 9 on line•Class 7-The Movie Business•Case:Transformers and Harry Potter•In this class we will have two groups’ present…a battle of the entertainment brands so to speak •Harry Potter (James Sirius WB) Questions•What will Paramount do in respect of the launch date for Transformers 3:Dark of the•Moon?•What is special about movie competition? What other business decisions are similar?•What is the impact of 3D technology on this decision?•What considerations must you make about when to release your movie?•How many tickets does Warner Bros. have to sell to b.e. on the movie in week 1?•What other marketing actions would you recommend? •If you owned the rights to Harry Potter, how would you value the rights? Next Week•Transformers (Judy WitwickyParamount) Questions•What will Warner Bros do in respect of the launch date for Harry Potter and the Deathly Hallows Part 2?•What is special about movie competition? What other business decisions are similar? What is the impact of 3D technology on this decision?•What considerations must you make about when to release your movie?•How many tickets does Paramount have to sell to b.e.on the movie in week 1?•What other marketing actions would you recommend? •If you owned the rights to Transformers, how would you value the rights? This is your second group assignment and as mentioned previously, you will be working with the same group you worked with for the Innovation Assignment. Each group will be assigned and must submit a written case analysis and will present that case analysis during a scheduled week as detailed on the next page. Your paper will be graded on 3 dimensions as follows: 1. An Executive Summary of the answers to the questions which are to follow. The Executive Summary should show your ability to use one of the 2 formats for analysis we discussed in class. This is worth (5%) As a reminder they are: The Case Analysis Format P&G Persuasive Selling Format 2. Your ability to answer the specific questions asked about the case in the course outline by integrating learning from the lectures and discussions and readings and cases we have studied through the week you submit your paper and do your presentation. I am looking for a comprehensive approach to this integrative thinking assignment. For perspective, to earn 10 out of 10 here, I am looking for a minimum of 10 references with examples from the lectures and discussions and readings and cases This is worth (10%) 3. Your writing style, grammar and punctuation This is worth (5%) The total case analysis is worth (20%) Group Cases & Presentations To-Do Date: Mar 2 at 7:00pm Class Session Creative and integrated marketing campaigns are the key to success in this highly competitive entertainment focused economy.  Additionally, it appears that the sequel business might be the keys to success in Hollywood. In this segment of the course we cover these topics by looking at two blockbuster movie series…Transformers and Harry Potter Cases: Harry Potter and Transformers (course kit) -In this class we will have two groups’ present…a battle of the entertainment brands so to speak               Transformers (Judy Witwicky Paramount) Questions What will Warner Bros do in respect of the launch date for Harry Potter and the Deathly Hallows Part 2? What is special about movie competition? What other business decisions are similar?  What is the impact of 3D technology on this decision? What considerations must you make about when to release your movie? How many tickets does Paramount have to sell to break even on the movie in week 1? What other marketing actions would you recommend? If you owned the rights to Transformers, how would you value the rights?