"Lost"-nomics

I gave up on the complexities and time commitment of keeping up with the TV show "Lost" at some point toward the end of its second season. However, I have a couple of roommates that have kept up the "Lost" fanaticism all the way through to the sixth and final season. I can't lie, curiosity will get the best of me and I will probably join them in gathering around the television to watch the show's series finale on May 23.

Advertisers are apparently betting that people like me are common if the price of a 30-second commercial spot is any indication. AdAge reports that available advertising slots during the "Lost" finale are going for a whopping $900,000. The price is well above the current going price of a "Lost" ad of just over $200,000.

The huge increase in price shows how advertisers expect huge numbers of returning viewers who want to find out the end of the mystery, which will make the finale a cultural event. Cultural events are becoming more important to advertisers in our Tivo-DVR-just-watch-it-online viewing attitude. The climactic "Lost" finale will be a rare show many viewers watch in real time, including commercials.

"Lost" viewership is best characterized as rabid and loyal. Many companies and advertisers would love to tap into such a passionate customer base. It's the type of show people talk about and advertisers hope those viewers will carry the conversation over into discussing the commercials.

Comparable Series Finale Prices:

"M.A.S.H." (1983) -- $450,000

"Seinfeld" (1998) -- $1.4 million - $1.8 million

"Friends" (2004) -- $1.5 million - $2.3 million

"Everybody Loves Raymond" (2005) -- $1.3 million

--Michelle Hirschfeld

Girl Talk: Future of the Music Industry?

[Note: Originally published February 14 on Sakai (well, attempted to publish)]

<-------(Girl Talk is the shirtless guy in the middle)

This weekend I joined many Washington and Lee students at the Girl Talk concert. The day after dancing the night away, I realized what makes Girl Talk so much fun in concert also makes him a disaster for his label. Girl Talk makes his music through sampling, which is grabbing snippets of other songs. What makes Girl Talk a controversial artist in the music industry has to do with the industry's business model, whereby it makes money by owning the rights to music use. Any time a person uses a piece of music in a commercial way -- like in a television commercial, in a movie, or by releasing a CD -- he or she is expected to pay whoever whoever owns the music.

So, every time Girl Talk -- whose actual name is Gregg Michael Gillis -- uses clips of other artists, he runs the risk of a lawsuit. Girl Talk does not pay for samples when he makes a mash-ups. He cites the fair-use doctrine, which is a law that allows for the unpaid use of music as long as it does not make up a significant part of a song.

However, when I listen to a Girl Talk CD, ("Night Ripper" is my personal favorite), it is hard to believe that some of the songs are not significant portions of the mix. Luckily, Girl Talk’s music has not been challenged in court, but it is probably only a matter of time. As sampling and other artists like Girl Talk become more popular, the outcome of any Girl Talk lawsuit would be vital to the future of the music industry and the millions of dollars it generates each year.

--Michelle Hirschfeld

"Avatar" the Country?

Unless you've been living under a rock for the past five months, you probably have heard of the latest blockbuster film, "Avatar." Directed by the infamous James Cameron, "Avatar" was a pioneer in the technology and film techniques that were used in filming the movie. Cameron is no stranger to groundbreaking films, as his previous film is the all-time highest grossing movie, "Titanic." However, after waiting more than five years for technology to develop to a level he was content with, Cameron released "Avatar" to more hype and success than could ever be imagined.

"Avatar," which was released in 2D, 3D, and IMAX, has quickly become the all-time highest grossing film, both domestically and internationally. "Avatar" has grossed more than $740 million in United States sales, and another $1.94 billion in international revenue. The film is still in some theaters around the country, although most 3D and IMAX presentations have been pulled due to "Alice in Wonderland." Even with the smaller theater selection, "Avatar" is still bringing guests to the seats, and rumor has it some current showings are featuring more than 40 minutes of additional footage to entice people to come back to the theater.

To put this in perspective, "Avatar" has grossed nearly $2.7 billion in revenue. If the film was a country, this would rank it above 30 other countries. The small countries of Samoa, Liberia, and Sierra Leone would all rank below "Avatar" in GDP. And this is only with "Avatar" being in theatres for less than 5 months. If we were to imagine the total money garnered by this film, it would be unbelievable.

For example, if we assume that the average price of a ticket for "Avatar" is $10, that means about 270 million tickets were sold for the film. Now assume that of those 270 million, half bought popcorn and sodas, which cost about $10 at a typical movie theater. And maybe of all those ticketbuyers, a third of them car-pooled together on the way to the movies. So that's 90 million paying $4 for a gallon or two of gas for the trip to the movies and back. So in addition to the $2.7 billion the movie made by selling tickets alone, it also helped generate this much revenue:

Movie: $2.7 billion

Food: $2.7 billion

Gas: $360 million

Total: $5.76 billion

This is absolutely absurd for one movie to help an economy. And that doesn't take into account the public transportation, the wages for employees, the bar drinks, the candy, and everything else that the movie helped generate. (This also does not include DVD sales, just imagine!) With a GDP of $5.7 billion, that would rank "Avatar" above Niger, the Barbados, and Montenegro.

This movie was the most expensive movie ever made, with a budget of about $500 million. But it was the first movie incorporating this new technology and it widely outgained its costs. Additionally, Cameron has hinted that he would like to make a trilogy based on the main characters' travels to the other moons around Pandora. These are sure to make similar money and threaten to break this new record.

Not too bad for a movie, a 3-hour piece of entertainment.

--Parker Swenson

NCAA Tournament: Basketball competition or huge money machine?

The NCAA tournament has sent brackets into chaos this year. Upset after upset has knocked off clear-cut favorites such as Kansas and Kentucky. But the surprise upsets haven’t been the only madness raging this March. The tournament is the pinnacle of college basketball. It’s about athletic competition and basketball glory. It’s about the players and their dream of hoisting up that NCAA trophy. Oh yeah, and it’s also maybe a little about money.

If you’ve been watching the games these past couple weeks, you might have noticed a lot of Reese’s candy. And not just the ones you’ve been putting in your mouth. With ads on the actual arena floors during conference tournaments and the bottom of the giant scoreboard at Madison Square Garden, the candy maker has taken branding to a new level.

Just in case you can’t afford a pricey ticket ($240.50 on average for a Stubhub ticket, and that’s just for the first and second rounds) to see these logos in person, Reese’s, “an official partner of the NCAA," is coming to your TV. Prying on the grumbling stomachs of TV viewers, the peanut butter and chocolate candy appears in a series of commercials, specialized for each round of the tournament.

Check out a description of all of Reese’s tournament advertising

The cost for the Reese’s invasion? Not cheap. Reese’s deal with the Big East Conference men’s and women’s basketball tournaments alone sits at six figures, according to Street and Smith’s Sports Business Journal.

On the surface, Reese’s candy doesn’t really have a whole lot to do with basketball. But the kind of exposure the NCAA tournament brings is priceless. At least a Reese’s has the same colors as a basketball, right?

We’re used to seeing advertisers spend big money for the national attention brought by major sporting events. Just look at the Super Bowl. But the millions the conferences receive from advertising deals are just a starting point. The conferences that are lucky enough to send teams to the NCAA tournament have the chance to pocket many millions more.

Each tournament game is worth $222,206 to the conference of the winning team. But those winnings are on a per-year basis for six years. So really, over $1 million is on the line for every tournament game. Try thinking about that when you’re shooting free throws with 0.5 seconds left.

The Big East Conference flooded the bracket with eight teams, but it saw its chances for profit drop considerably when three of its teams lost the very first day of the tournament. The price tag for Notre Dame, Marquette, and Georgetown’s losses came in at almost $4 million.

Read about the Big East’s losses

But don’t worry too much about the Big East. The conference guaranteed itself a check of at least $5,332, 944 after West Virginia University secured its spot in the Final Four on Saturday night. So one of the four eager teams remaining in the tournament will take home a fancy ring and all the glory the college basketball world has to offer. But the real winners of March Madness may be the ones who are taking home the checks: the conferences.

--Brooke Sutherland

America's Most Trusted News Source

This "report" from The Onion made me chuckle.

--Michael Morella

Looking South...by Southwest

Disclaimer: I don’t own a BlackBerry, iPhone, or flat-screen TV. I don’t want a Twitter, I don’t need one of those miniature laptops, and I won’t buy a Kindle. I’m just saying.

At the risk of sounding miserly, there are plenty of technological gadgets that I can stomach and I would shell out my proverbial paycheck for. If it’s physically possible, one of my arms is firmly embracing technology while the other is dog-earing the page in a book or looking up the directions on Google Maps, not some newfangled GPS device, like they did in the good old days. But I digress.

The big thing going on in music these days (by “these days,” I literally mean between this weekend and next) is South by Southwest (SXSW), an amalgam of conferences and festivals in Austin, Texas that center on new music, independent film, and emerging technology. Musicians, managers, promoters, labels, artists, journalists, and fans all come out in droves to check out the more than 2,000 musical acts that perform on over 80 stages across the city. Even glancing at a fraction of the lineup has me cursing the way our breaks fall and finding myself having to live vicariously through the photos and videos available on the SXSW Web site and through much-revered indie magazine Pitchfork Media.

But a cool little feature in The Houston Chronicle opened my eyes to just how much more than music is talked about (or listened to) at this festival, which is now in its 24th year. As the article reports, “It’s a chance to get in front of an influential audience of tech taste-makers and trendsetters.” SXSW was even a big launching point for Twitter three years ago, proving that indie music listeners don’t all just wallow in obscurity and pretentiousness. In fact, in a March 24, 2009 article, Advertising Age said, “Often dubbed the Sundance of new media, [SXSW] is the bellwether for what lies ahead for digital culture.”

Full of media presentations, music showcases, film screenings, and conference panel discussions, those who attend SXSW get earfuls, eyefuls, and handfuls of a lot more than just the next Vampire Weekends. Innovation and brainstorming are in full force in Austin next week and it will be interesting to see if more and more marketers head on down to Texas this year to get their products out there to an audience lulled into a trance by the beautiful music.

For those readers lucky enough to make the journey to Austin next week, do mind these rules from Ian Schafer, CEO of marketing agency Deep Focus.

--Michael Morella

Mickey Mouse, Donald Duck, and Friends

Chick flick lovers beware: You might have to find a new source for cheesy romantic comedies and bubbly but predictable endings. People familiar with Walt Disney Co.’s production strategies told The Wall Street Journal that the film giant is moving away from traditional date movies like the recently released “When in Rome” starring Kristen Bell. Disney is heading back to basics. (Check out the Wall Street Journal's article on the Disney production switch here.) The company's upcoming production slate is expected to focus more on creating brand names, similar to the Mickey Mouse face that originally made Disney famous.

It’s not that I don’t like romantic comedies. Sometimes there’s nothing better than a bowl of popcorn and a movie that you know you have to pay very little attention to. Romantic comedies are particularly appealing when their mindless fun is only a click away to the tune of about $1.99. But companies like Disney don’t make money from movies that even their designated audiences (say, a 20-year-old girl like me) only want to see once. DVD sales were way down for the company. And Disney flicks didn’t fare too well at the box office either.

But with its recent purchase of Marvel Entertainment and the acquisition of over 5,000 comic-book characters, including Spider Man and Captain America, Disney is hoping to rework its once titanic empire. And if there’s a movie category that you can bank on for DVD sales, it’s the brand name children’s movies, like Spider Man or the Disney “Princess” movies.

When I was a little girl, I think a princess movie was permanently jammed into my VCR. It really didn't matter what princess movie it was, as long as it had the words “Disney” and “princess” on the cover. I also had my fair share of Disney princess costumes, cups, plates, picture frames, toothbrushes, and basically anything else that could be branded with a princess likeness. These movies bring with them an entire market of merchandise. Just walk into the Disney store at your local mall.

So while Disney’s new strategy may leave a few romantic comedy lovers without a Friday night flick, the emphasis on brand names might just be the right amount of blast from the past the company needs to turn around its profits.

--Brooke Sutherland