Blog Post #3

Warner Brothers is an enormous company built on decades of hard work and success. Since 1923 Warner Brother’s has established a first-mover advantage that has allowed them to lead the industry in a plethora of entertainment segments. Their differential advantages include the accumulation of industry knowledge and experience over nearly a decade of business, their access to large amounts of financial capital due to long lasting profitability, and the innovative technology and development of advanced operators thoroughly trained to perfect their craft within Warner Brother’s facilities.

The financial strength of Warner  Brothers Entertainment creates the opportunities of differential advantage, which are in part responsible for the corporation's continued success. According to Time Warner’s Annual Report to Shareholders, year ending December 31st 2015, the subsidiary, Warner Brothers Inc. generated Revenues totaling $12.992 billion with Operating Income of $1.416 billion. With this enormous amount of in-house funding, Warner Brothers Inc.  is capable of generating vast amounts of leverage for acquiring top of the line technologies, actors/actresses and distribution methods.

With the monstrous size of Warner Brothers, they are able to recruit the most qualified candidates  to work for them and provide top-tier training upon employment. According to the Warner Brother’s Company Overview, “Warner Bros. Entertainment’s employee population ranges from 5,000to 10,000 on any given day in North America (depending on the level of television and movie production) and some 2,000 employees overseas.”

Warner Brothers has lead the entertainment industry for years and has not shown any signs of slowing up. As previously mentioned, industry knowledge, financial success, and a massive careers platform has given Warner Brothers differential advantage in a very competitive multi-billion dollar industry. In conclusion, Warner Brothers has a long record of sustainable growth and a solid foothold in their industry that is not likely to waver.

#2: Competition, Collaborators, Company, Context

      Warner Brothers covers many aspects in the Entertainment Industry, primarily movies, television, and video games. Because there are so many different categories within the company, there are many competitors and collaborators as well as strengths and weaknesses within the company. All of these divisions rely on the context of the company.

      As far as competitors go, Warner Brothers is competing with well known firms such as Dreamworks, EA Games, and Netflix. Warner Brothers competes with Dreamworks in coming out with featured films, and Electronic Arts (EA), who puts out countless video games each year. They revise a game that has existed for decades each year and the targeted customers cannot wait to get their hands on the new (but very similar to previous game) edition. Warner Brothers has to compete with them by providing games related to movies that they have come out with, such as Batman, Legos, and Mad Max. 

      Netflix has recently been releasing Netflix Original Movies and Television shows. As Warner Brothers has a large share in the market, competition can become heated. Warner Brothers products tend to be featured on Netflix as well, making it an overlapping issue between being a competitor and collaborator. 

      Once Warner Brothers releases a new film, it is then passed along to movie theaters to be featured in making Movie Theaters a collaborator. Once WB products are released, retail stores such as Best Buy, Target, and Wal-Mart then distribute the products to the public, making it easily accessible to purchase a hard copy of the product. Television shows do come in DVD packages that can be found in retail stores, but the majority of TV viewings come from TV Networks themselves.

      Within the company itself, there are several strengths and weakness. Warner Brothers is a well established brand that has been around for decades. With the experience and success that they have had, they have the capital and brand establishment to keep producing high end material that can keep up and compete with the other firms in the industry. Because Warner Bros has been located mainly in the US for so long they have a large portion of their revenue tied up in the US economy, it can affect their ability to borrow money to create feature films and hurt their profits eventually. 

      As far as context goes, Warner Brothers is heavily advantaged by their ability to produce roughly 12 billion dollars in revenue every year. This allows for a strong capital backing to fund the best technological equipment as well as stay current if not ahead in special effects technology. In addition, financial advantage allows Warner Brothers to recruit top talent which has proven to solidify the firm's position within the entertainment industry. 

#1: Customer Segmentation

      In this blog we will be observing and dissecting the entertainment powerhouse that is Warner Brothers Entertainment, but before we delve into the many facets of this corporation we must take a look at who they are. Where did it all begin, who pioneered this industry leader, and what does this company stand for?

     Warner Bros was officially incorporated in April of 1923, although the company claims its original founding was in 1905. The name comes, simply enough, from four brothers (Harry, Albert, Jack, and Sam Warner) who immigrated to the United State and started producing films and started a journey that would start with their first theater, then to their first studio in Hollywood, and would grow over the course of a century into a multi-billion dollar company who currently has 15 consecutive years of over one billion dollars in both domestic and foreign box offices, over 7,400 feature films in the studio’s library, and over 70 television series’ in 2015-2016. Warner Bros Entertainment Inc. is a subsidiary of Time Warner, who also own HBO, Turner Broadcasting System, among other high profile assets.

    

 The customer segmentation of Warner Bros is driven by psychographics of interest to the customers in entertainment which broadly include film, television, video games and merchandise. 

     

     In all of these segments the customers value quality entertainment or an escape from the real world. In TV, customers can benefit from shorter forms of entertainment over a longer period of time whereas in film customers can have longer forms of entertainment while adding more value of experience (being able to go to an actual movie theater). Customers who are interested in home entertainment have the benefit of a more interactive experience and easy accessibility. Customers interested in merchandise benefit from consumer products such as clothing, toys, games, etc. 

     

All of the segments learn about their market through advertisements on television, social media and word of mouth. However, with Netflix and Hulu people are less exposed to advertisements in the entertainment industry. In merchandise, many of the products are marketed in newspapers and magazine advertisements often showing sales or discounts. In film and television, there are trailers and previews that are shown in commercials. In addition, they are advertised through social media (facebook, twitter, instagram), promotion by celebrities in social media and word of mouth.