Images and Merchandising

1. Images and Merchandising Licensing and Royalties 1

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. 2

3. The Impact of Image The public image of a celebrity can make the difference between success and failure. image 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 3

4. Endorsements The ________________________ (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. 4

5. Controversy of Endorsements • ________must use the products they endorse. • The _______ ________ of celebrities may have an adverse effect on the endorsement. • The _________ controversies of a celebrity may have an adverse effect on the way the public views the endorsed product. • _________ do not want the image of their product damaged. 5

6. Sponsorship • ____________ occurs when a company supports an ______, _______, or __________. • In return for money, the sponsor is provided with some type of ____________ at the event. • _____________ is a crucial aspect in sports and entertainment. 6

7. The Need for Sponsorship • The ________ from concert ticket sales does not cover the cost of a tour. • Advertisers may ask for advertising space on the _____, __________, _______, and ______ _________. • Marketers keep track of how many times fans see the sponsor’s name at an event and the sales of the products being ___________. 7

8. Why Sponsor? Companies seek a return on their sponsorship dollars. return Calculating return for sponsorships is difficult, but should be seen as an increase in sales. 8

9. Sponsorship Risks • __________ want to be associated with a popular person who has a positive public image. • __________ _______ dealing with tobacco and alcohol sponsorship have become stricter. • The ____________ __________ regulates the practice of wealthy companies that sponsor events that could be inappropriate for _______ and ______. 9

10. Direct Indirect Selling the Image Create Your Own Merchandising Tie-Ins Endorsements Sponsorships 10

11. Answer the following ?’s: What is merchandising? What is the purpose of the FTC? Give an example of what a company might gain in return for sponsoring a musician. 1. 2. 3. 11

12. Overview licensed products Licensing and royalties are major aspects of both the sports and entertainment industry. Entertainment-related companies utilize merchandising and sell licensed products. 12

13. 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, __________, _____, and ______ ____________ of the original item. 13

14. Licensing Music and Royalties • Licensing applies to music, software, motion pictures, and videos/DVDs. • A __________ and publisher of a song may charge a ________ ____ when an artist and label want to record that song. • _______, _______, and __________ receive _______, or a percentage of record sales or fees for broadcast performances. • There can be several agents between the artist and the record company that ______ ________ from the artist’s profits. 14

15. Paying for Entertainment • _________ from entertainment products pay for the expense of producing the products, with only a portion going to the artists themselves. • When _____, ________, and ________ are illegally downloaded and distributed from the Internet or products are _______, many people are affected. • The user of a ________ product can be __________. 15

16. Making It “Big”? Performers can make additional income, based on their public image, through endorsements and sponsors. Your Example: Companies can earn income through merchandising, licensing, and royalties. 16

17. Answer the Following ?’s: What are three types of entertainment companies that use merchandising? Explain the meaning of licensing. Who are at least three participants in a record who may share royalties? 1. 2. 3. 17

18. 1. 2. 3. The public images of celebrities can make the difference between success and failure. Merchandising uses strategies that involve packaging, displaying, and publicity of a successful product, theme, or personality. Checking Concepts 1. Explain how image affects the entertainment business. 2. Describe how merchandising develops from a successful image. Define sponsorship in entertainment marketing. 3. continued 18

19. 4. 5. 6. An endorsement occurs when a celebrity lends his or her image to give approval of a product in commercials or other advertising. Sponsorship occurs when a company supports, usually financially, an event, activity, or organization in exchange for advertising. Sponsors’ advertising can be seen by millions of viewers several/many times in the course of the event, so sponsors get a definite return on their investment. Checking Concepts Describe the returns associated with sponsorship. 4. Differentiate between sponsorships and endorsements. 5. Define licensing. 6. continued 19

20. 7. 8. Free downloads ultimately cost the artists and all people involved in producing a CD; essentially, they reduce the ability of many people to make an appropriate living. Checking Concepts Discuss the importance of licensing in the entertainment business. 7. Explain why illegal downloading may have harmed the music industry. Critical Thinking 8. 20