Warner Brother’s Pictures: Growing Business Overseas

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Warner Brother’s Pictures (WBP) interest in overseas markets has increased during the past five years. The company clearly sees opportunity in markets across the globe. The marketing tactics that are being used from Europe to Asia to Australia are proving to be effective. More importantly though is the source of the tactics and strategies that are being used. Much of WBP’s success in foreign markets may be attributed to the company’s experienced leadership.

The company’s success in the overseas markets has grown substantially during the past five years. In 2013, WBP saw its most successful year ever and one of the best performances in the history of the film industry. “Warner Bros. Pictures enjoyed the most successful theatrical year in company history, grossing an industry-leading $5.038 billion in global box office” (warnerbros.com). This recent success has come off the heels of a record five-year run. “The Pictures Group exceeded $4 billion globally for the fifth consecutive year, both milestones no other studio has ever achieved” (warnerbros.com). If the layers of this success are peeled back it is evident that the company’s growing foreign market share is driving the business. The majority of 2013’s $5.038 billion in global box office is in foreign market share: $3.1 billion (Stewart). Drilling down further reveals that one film in the international markets contributed more than any other. “Internationally, “Smaug” (The Hobbit: The Desolation of Smaug) has eclipsed $340 million in 57 markets, led by strong U.K. grosses” (McNary). Warner Brother’s Pictures International (WBPI) is the division of WBP responsible for this international success. In her role as President, Sue Kroll leads WBPI and Worldwide Marketing and International Distribution for WBP (warnerbros.com).

Sue Kroll’s experience appears to be a significant contributing factor in the recent success of WBPI’s efforts in overseas markets. The development of Kroll’s international marketing expertise can be traced back in her career (prior to joining WBP in 1994). As Senior Vice President and Managing Director of both Turner Network Television (TNT) and Cartoon Network Europe, Kroll was responsible for creating “the company’s first-ever overseas entertainment operations when she took the two networks to Europe… She built and launched these networks from the ground up, developing and overseeing all operations for the networks’ eventual growth throughout the European marketplace” (warnerbros.com). The knowledge and experience gained in this work made her an excellent candidate to join the WBP team in heading Programming & Operations for Warner Bros. International Channels (warnerbros.com). In this role, Kroll “devised the strategy and launch of the Studio’s venture into the international branded cable channels business, which was developed to expand the company’s global television presence” (warnerbros.com). This wealth of top-level experience gained from growing brands in foreign markets has given Kroll a perspective that has been built with concrete know-how of what tactics actually work in a given setting. Her knowledge of what tactics work and what do not has helped position WBP as the leader in foreign market share for the film industry.

WBPI’s marketing tactics have been in development since at least 1999. “WBPI was an early adopter of day-and-date “event” releases (seeing huge success with key franchises, including The Matrix starting in 1999” (warnerbros.com). Day-and-date release marketing assumes that three underlying components (1) strong seasonality in demand, (2) a short product life cycle, and (3) the absence of any price competition make the release date one of the most important strategic decisions taken by movies’ distributors (Einav 1). Familiarity with a given culture can contribute greatly to the success of a day-and-date release strategy. Kroll’s experience with international markets has provided the insight that WBP needed to make this a successful marketing tactic. “The timing game is formulated as a sequential game with private information, with distributors choosing among a small set of release weekends” (Einav 21). The importance of understanding different cultural holidays and seasons is critical in maximizing the impact of the release day-and-date. WBPI has done this well. Following The Matrix WBPI carried out more successful international day-and-date efforts based on the culture of the market. “Harry Potter launched in 2001 and The Dark Knight rolled out in 2005 with strategic rollouts structured around consumer behaviors in each key territory, as well as regionally nuanced campaigns” (warnerbros.com). An intelligent approach to international release dates has proven to be successful. This tactic alone is not enough to drive WBP’s box office numbers. Other tactics are being used in tandem.

As anyone who has travelled internationally knows, the English language is well known but not known well virtually everywhere. With this in mind, WBPI has developed a significant multi-lingual platform from which it can market its films and ensure that their content is clearly understood. This level of understanding may make a viewer more inclined to buy tickets to see future sequels. “Additionally, as part of Warner Bros.’ initiative to support and nurture local-language film production worldwide, the Studio is deeply involved in production, acquisition and distribution of local-language films for their countries of origin, releasing over 400 such films to date in a number of countries, including the U.K., Germany, France, Italy, Japan, Brazil, Spain, Netherlands, Turkey, Mexico and India” (warnerbros.com). This sensitivity to language and culture may be creating another interesting set of circumstances that are contributing to WBPI as the leader in international market share for the film industry.

Consider WBP’s top six films of 2013 and their directors. Only one of the top six films has an American director.

The Great Gatsby, Baz Luhrmann, Australia

The Hobbit: The Desolation of Smaug, Peter Jackson, New Zealand

Pacific Rim, Guillermo del Toro, Mexico

The Conjuring, James Wan, Australia

Gravity, Alfonso Cuarón, Mexico

Man of Steel, Zack Snyder, USA

The local film development effort that WBPI has made globally may be enhanced by their use of foreign directors. This potential synergy could spark interest in WBP films even before they are released. Essentially, WBPI has created a respected legacy of filmmakers for aspiring international hopefuls. WBPI is cultivating its next group of directors and building brand loyalty at the same time. WBP’s focus on international markets is a significant investment. However, WBP cannot lose focus on the domestic market.

WBP’s has shown opportunity in utilizing the “teaser” as a marketing tactic domestically. Marich defines this tactic: “teaser campaigns use artistic iconography as a means to draw attention” (25). WBP’s “use of “blood splattered” logo for Harry Potter 7 mirrored Ghostbusters’ 1984 use of the ghost symbol as a means to create mystique surrounding the movie without showing the movie title” (Marich 25). WBP has shown that they know the tactic but don’t always choose to leverage it fully. “The most significant movie teaser opportunity is advertisement during the super bowl” (Marich 25). Of the films promoted in the super bowl 2013 none were WBP films. If Marich is correct, then WBP could have added more revenue to its record setting year.

Works Cited

Einav, Liran. “Not All Rivals Look Alike: Estimating an Equilibrium Model of The Release Date Timing Game.” Diss. Stanford University, 2003.

Marich, Robert. Marketing to Moviegoers: A Handbook of Strategies and Tactics. Carbondale, Illinois: Southern Illinois University Press: 2009.

McNary, Dave. “Strong international performance mirrors 'An Unexpected Journey'.” http://variety.com. Variety December 27, 2013.

Stewart, Andrew. “Despite financial flops, Universal grew its worldwide box office last year.” http://variety.com. Variety. December 31, 2013. Warnerbros.com. Time Warner Inc.