Business of media exam 1

Motion Picture Association (MPA)

formerly the MPAA, a trade organization for the film, TV, and streaming industries. Members include: Disney, Netflix, Paramount, Prime Video & Amazon MGM studio, Sony, Universal, and Warner Bros. Discovery

Greenlight

official approval to make and finance a film

Above the line costs

High in cost and a less controllable variable in production (ex., Director, principal, cast, writer, IP story rights)

Below the line costs

More controllable variables and pretty much everything else in the production process (ex., crews, sets, equipment, etc.)

Advertising

paid placements to directly put your message out

promotion

getting other media to discuss your film ( talk shows, articles, social media)

Limited release

Released in less than 600 theaters, the movie will likely expand to a wider release and build on what markets it has already been released. This strategy also hopes to generate enough buzz by word of mouth and market-specific advertising to do well in other markets.

Wide release

600 or more theaters (typically thousands), marketed nationally and on a much larger scale

opening weekend

The biggest weekend for studios for front-loaded revenue. Wide releases expect to make most of their money in the first 1-2 weekends; limited releases aim to grow revenue after opening weekend.

studio/ theater split

Revenues are split according to the size of the overall national box office. Studio distributor receives 48-63% of box office revenue; however, we operate under the assumption that it's 50/50. Also important to note is that theaters rely heavily on concessions for profit.

Piracy

Unauthorized online distribution of films violates the studio copyrights in their films; copyright infringement. Industry claims to lose billions of dollars to piracy each year

Domestically + internationally (China is infamous for it)

anti-piracy strategies

stronger laws and enforcement, civil suits, takedowns, education campaigns, watermarking/tracking, and global cooperation.

Home entertainment

Films used to make on average X2 more from the home entertainment market than from the theatrical market. There are 2 segments: physical and digital.

_______ market is declining meanwhile the ________ market is growing

Physical, Digital

two different types of digital markets

Transactional, Subscription

transactional

buying ot renting individual movies/shows (declining)

subscription

paying a fee for a library of content (growing)

Film Franchises

A collection of related films in succession that share the same fictional universe, or are marketed as a series. Sometimes it is intended to be a franchise and fails, sometimes not intended to be a franchise but is very successful. Often produces multiple forms of media (publication, digital games etc)

reasons for franchises

- Studios chase giant, high-budget blockbusters.

- Known intellectual property is safer than brand-new ideas.

- Built-in audiences show up (fans of the book/comic/earlier films).

- Marketing is often cheaper and more efficient.

- Big upside in extras: merch, games, rides, TV spinoffs, etc.

Remakes

easier to develop, has a built-in audience, making it easier to market, and can help modernize films for a new generation.

Reboot

A new start to an existing movie series often disregards continuity to recreate its characters, plotlines, and backstory from the beginning. Can refresh the existing franchise for a new generation.

Impact of Jaws

High concept ideas, Distribution strategy shift, Advertising strategy shift, target audience shift

High concept ideas

short and instantly graspable premise, easy to pitch, trailer-friendly, and headline-ready. Typically travels well internationally and has a 4-quadrant appeal, making marketing easier and cheaper. (Ex. Jaws, Jurassic Park, Groundhog Day)

Distribution Strategy shift

moved Hollywood from slower, city-by-city rollouts to nationwide, same-day releases. Made opening weekend made-or-break for big movies and proved that summer could be a prime money season and established the modern summer blockbuster.

advertising strategy shift

Jaws pushed the norm to start heavily advertising the movie nationally before and during its opening. Unified and simple branding that has an iconic poster, tagline, or theme. Has a bigger front-loaded marketing budget that aims at maximizing the opening weekend.

Target Audience shift

focused on teens and young adults as the core summer moviegoers. Pushed movies with broad, family-friendly hooks to reach multiple demographics at once (4-quadrant movie)

recruited audience screenings

testing films with select audiences before release; gathering feedback via surveys or discussions. They use this feedback to make movie edits.

Positioning Studies

Identify the most marketable film elements and optimal marketing angles and quadrants

Box office tracking studies

Conducted around a month pre-release to measure public awareness and intent to see the film; this influences the marketing strategy

trailer track studies

measure recall and persuasive effect of trailers with theatergoers

creative advertising testing

Evaluate the effectiveness of trailers, posters, etc. with target audiences

Theatrical window

exclusive cinema period before available for at-home streaming/rental

Historical trend of release windows

used to be months to a year between theatrical window and at-home streaming, but over time, this window has shortened.

Typical order of release

Theatrical → TVOD/EST (rent/buy) → Pay/streaming (premium) → Basic cable/broadcast → Free/FAST

Pre-pandemic window

around 90 days after theatrical release. Theaters favored exclusivity to protect attendance. Studios argued that revenue was front-loaded and wanted shorter windows to capitalize on buzz.

Why did studios want shorter windows?

- to capture momentum

- reduce marketing duplication

- speed to digital/streaming revenue

release window post-pandemic

around 45 days after theatrical release, varies by title/performance. Some studios experimented with 17-31 day windows.

types of streaming TV

- pay per title rentals or purchases

- digital rental/ digital purchase

- internet "cable replacement" bundles

- Live scheduled streaming channels that are free with ads

- on demand streaming

- subscription services without ads

- free, ad-supported on demand services

- subscrption services with or without ads

- old shows reused as streaming channels

- owned library

- borrowed rights library

SVOD

Subscription-based video on demand; pay for unlimited content access

AVOD

Ad-supported video on demand; watch for free with ads

Hybrid Model

Streaming services with both ads and subscription fees

TVOD

transactional video on demand; pay per title for a rental or purchase

DTR

Digital Transactional Rental: temporary rental of a title

EST

Electronic Sell-Through: buying permanent digital access to content

Cord Cutters

People who cancel traditional cable TV in favor of streaming options

Linear TV

Scheduled programming, similar to traditional TV channels

FAST

Free Ad-supported Streaming Television

owned library

the company's own back catalog it can use anytime

Borrowed rights

shows/movies licensed from another company for a limited period

Churn

When a subscriber cancels their subscription to a streaming service because of price hikes, finishes the one show they wanted, not enough new hits, or seasonal viewing

How do services respond to churn

- release big titles year-round

- bundle with other apps, discount annual plans

- add cheaper ad plans

- improve the app and recommendations

- strengthen the catalog.

DTC

Direct-to-consumer services: Instead of only using theaters or cable, studios run their own streaming apps.

Advantages

- they keep the subscription money

- get viewing data, market straight to fans

- and control when/where titles appear

repurposed streaming content

Apps take older or back-catalog programs and run them as always-on channels so viewers can just tune in

Existing IP for original content

Building originals from familiar books, games, comics, or past hits makes marketing easier and draws in existing fans

characteristics of broadcast TV

- Free over-the-air

- ad-supported, linear schedules

- mass-audience targeting; historically limited choices

- live appointment viewing

Broadcast networks

Big three: CBS, NBC, ABC. FOX joins later, CW is an honorable mention

TV station ownership limit

Networks are only allowed to own enough stations to reach 39% of the population

O&O

a station that is owned and operated by the network

Affiliates

An independently owned station that airs network programming

primetime

22 hours of primetime per week (Only the big 3 programs, all 22 hours)

8-11 pm eastern time + pacific time (7-11 on sundays)

7-10 central + mountain time zones (6-10 on Sundays)

FOX primetime

15 hours on 7 nights a week

CW primetime

10-12 hours on 5-6 nights in recent years

TV season timing

Traditional U.S. TV season runs September-May; summers are historically filled with reruns. Fall. It's when networks launch new shows and new episodes/ seasons of returning series.

Premiere week

Historically a single, heavily promoted week when most new/ returning shows premiered. Now it's spread across October-November but is still treated as a launch moment.

Importance of fall TV season

- Viewers return from summer and settle into regular routines, boosting prime-time consistency.

- Fall premieres become events, building buzz and word-of-mouth.

- Strong fall performance sets ad prices and network momentum for the season.

Upfronts

Spring presentations, where networks unveil fall schedules to advertisers and aim to sell most ad inventory in advance of the fall

Make-goods

If ratings underperform what was promised for the upfronts, networks owe advertisers free replacement ad time or other compensation

Scatter Market

In-season ad marketplace, strong fall ratings let networks charge higher prices here to boost profitability. (takes place after upfronts)

event viewing

networks promote fall as a cultural moment ( big premiere week, series debut, series premieres, plus sports and other specials) often influences things like water cooler talk and becomes something that people discuss casually.

Lead-ins

The scheduling tactic is to place a new or weaker show after a string of established shows to capture the carry-over audience from the strong program.

overnights

Next morning ratings estimated for last night's TV episodes collected by companies like Nielsen. With the growth of streaming and on-demand viewing, this evaluation unfolds over days/weeks, so networks show more patience before cancelling shows

Why network ownership matters:

Networks keep more revenue across later windows (syndication, streaming, international) when they own the show. Owned shows are more likely to be renewed and promoted across the company's platforms.

"Netflix bump":

When seasons hit Netflix (or another big streamer), visibility surges and later seasons rate higher on the original network (e.g., Breaking Bad, Schitt's Creek).

Why networks license less to Netflix now:

They keep hits for their own streaming apps (next-day on Peacock/Paramount+/Hulu, etc.) to grow subscribers and control their best content.

Vertical integration (TV): Network + in-house studio + owned streamer under one corporate umbrella.

Network + in-house studio + owned streamer under one corporate umbrella.Lets them develop, air, market, and later stream/sell the same show across their ecosystem.

Development:

From thousands of pitches, a network funds select ideas to refine (treatments → scripts). Only a small fraction move on to pilot or series.

Pilots:

A single test episode to evaluate cast, tone, and potential before ordering a season.Traditional "pilot season" in spring; heavy competition for talent.

Program license contracts (typical):

Networks license shows for up to ~5 seasons but can cancel anytime. New series often start with small episode orders; successful shows renegotiate after ~five years.

Spinoffs:

New series built from characters/world of an existing show (e.g., Better Call Saul from Breaking Bad).

Reboots:

Fresh start of an older title with new cast/continuity aimed at new audiences.

Revivals:

Bring back the original characters later in life to continue the story (e.g., Fuller House).

Franchise programming:

Multiple related series in the same universe/brand (e.g., city-to-city crime procedurals).

Straight-to-series orders:

Network/streamer skips the pilot and orders a full season upfront.

pros to Straight-to-series orders:

Pros: faster to market, cohesive creative plan.

Cons to Straight-to-series orders:

riskier and pricier if it flops—especially for longer broadcast seasons (streamers often order shorter 6-12 ep runs).

Network Programming

primetime shows supplied by ABC/FOX/NBC/CBS to local stations

Local programming

Mainly local news; also community shows/specials

Syndicated Programming

shows stations license directly (talk/game/court shows, reruns)

Paid programming

Imfomercials in low-viewed slots (not primetime)

specials/sports

NFL, World Series, award shows etc

market-by-market deals

A station buys exclusive rights in its local market (usually multi-year)

Flexible scheduling

stations choose time slots; the same show may air at different times in different cities

2 common payment models

cash license fee and/or barter (station gives ad minutes to the syndicator)

use cases

fills daytime/early evening "strips" strengthens lead-ins to primetime

What is off-network syndication?

reruns of shows that first aired on a broadcast network in primetime (ex. Friends, Big Bang Theory, etc.)

When does off-network syndication happen

It can start while the originals still produce new episodes or after a series ends, typically includes around 100 episodes (that's the benchmark)

Why is off-network syndication important

big profits for studios and producers

Lower isks for stations + audiences already know the show

cable/streaming often uses these to build audiences before backing more originals

Deficit financing (network programming)

The network pays a license fee per episode, which is below the show's production cost. The studio/producer covers the deficit and hopes to make up the money through syndication, streaming, or international reruns

stripping

scheduling the same shows at the same time 5 days a week (Mon-Fri)

builds habitual viewing and is great for talk/game/court shows and off-network sitcoms

Cable Syndication

selling reruns to cable networks

can be exclusive or non-exclusive and may run alongside local station deals

This adds another revenue stream and broad national exposure