Professor Elaine Chan Smith
Research Paper 1
“Keeping up with the Kardashians,” Literally
Corporations in the United States spend billions of dollars annually in advertising and marketing. For those companies wishing to deliver a new product to the street, a carefully calculated marketing campaign is necessary for securing, as best as possible, the new product’s success. With converging and emerging technologies, the ways these modern corporations can do that has changed significantly. If a company like Victoria’s Secret wants to design a new line of underwear (an undertaking that could certainly cost the company millions to develop and market), their methods of pre-testing the market for potential success reflects these changes. 20 years ago, the company would have had to put on a fashion show displaying their new line, and hope that buyers and magazines would take to their new product. But now, if that fashion show was streamed online with accompanying still photos of the models, the average man and woman could tell Victoria’s Secret directly – through comment boards under each photo – just how attractive or not this new line of underwear is. And the success of “Keeping up with the Kardashians” can be attributed to just this – organization of the media industries that broadens the reach of marketing and allows for excellent cross-promotion and exposure.
It is remarkable what conglomerates are able to achieve today. In the case of “Keeping up with the Kardashians,” their parent company Walt Disney Co. has a reach hard to fathom prior to the deregulation implemented by the Reagan administration in the 1980’s. The show is broadcast on cable television’s E! channel; prior to this current organization of the media industries as a result of vertical and horizontal integration, an upcoming season of “The Kardashians” would have enjoyed limited, if not expensive, promotion and exposure.
In May of this year Amanda Kondology reported that the show’s 7th season premiere in May greatly outshone that of season 6. Three million people watched the premiere – a 16% increase from the season before. Amongst viewers ages 18-49, viewership jumped 20% for that episode. Online, in the week leading up to the premiere of season 7, the show’s site on E! Online set a record with 2.1 million page views (paras. 1, 5).
Living in America, it is difficult not to see, read or occasionally hear about the Kardashians, so this rise in popularity and/or exposure is startling. Sure enough, it directly corresponded with a major story: the emerging relationship of Kim Kardashian and Kanye West. On April 5th – only weeks leading up to the season 7 premiere, news broke that West and Kardashian were in fact dating. Abcnews.go.com – a company owned by the Walt Disney Co. (which of course also owns the E! channel) published an article quoting a People magazine source as saying, “Kim and Kanye have now just started dating” (Fisher, paras. 1, 2).
US Weekly, which is 50% owned by Disney as well, ran their own story on that date, titled “Kim Kardashian Dating Kanye West: She’s ‘Ready to Give It a Try’.” With the ESPN, Disney, ABC, A&E and Lifetime channels all under ownership of the Walt Disney Co., the promotional considerations via television were vast. Through its publishing outfits – Discover, ESPN and US Weekly magazines, as well as their daily newspapers County Press and Oakland Press and Reminder in Michigan, the company could very affordably advertise their upcoming season of “Keeping up with the Kardashians” – at their own cost. What is more, the Walt Disney Co. has considerable holdings in radio – most notably through Cumulus Media. For example, with their majority ownership, the company was able to promote via the airwaves on national radio shows such as “Cannon’s Countdown” hosted by celebrity personality Nick Cannon, “Perez Nights Live/Radio Perez” featuring Perez and Adam Bomb, and through “ESPN Audio,” whose sports radio network boasts over 22 million listeners a week, according to abcradio.com (2012).
With such horizontal integration, the possibilities for increased viewership increase with each new acquisition, enhancing the capability of cross-promotion. Walt Disney Co., as well as the E! channel itself, is efficiently “building the brand.” What is great for these two companies, especially after that first week of the 7th season premiere, is their ability to sell advertising – the main source of revenue in television. With the considerable success of that first episode corresponding with the continuing saga of Kardashian and West’s relationship, E! was sitting on a very lucrative niche of programming – and one which could very well demand high rates to advertisers. In addition to the television revenue is online advertising – E! Online enjoyed record visits to their “Keeping up with the Kardashians” website, and therefore could increase advertising rates for their site, which in turn would boost their revenue and contribute to their bottom line. These two sources of revenue are the main forces driving the building of the “Kardashian brand”, and with such massive reach across different audiences, formats and media, the Walt Disney Co. has been able to profit rather handsomely from such media organization.
The average media-consuming American contributes to the conglomerate’s revenue by paying for cable, and occasionally buying a subscription or individual issue of ESPN The Magazine or US Weekly. When it comes to radio, Sirius Satellite Radio does charge fees, so that adds to the revenue stream for such parent companies like the Walt Disney Co.. It may not cost to visit an individual site such as E! Online, but it does cost to have internet in the household. With 4G phones of today, consumers have to pay for their data plans that accompany their smartphone contracts. So, revenues from cable television and internet service combine with the additional revenue from advertising within the paid-for content itself.
To give another example of how cross-promotion through established horizontal integration succeeds, Croteau and Hoynes (2005) explained: “…when Warner Bros. released the 2001 film Harry Potter and the Sorcerer’s Stone, its parent company AOL Time Warner pursued an elaborate multimedia strategy to cash in on the Harry Potter franchise. AOL’s online services provided links to various Harry Potter Web pages, including sites for purchasing the Harry Potter merchandise that AOL sells. The company’s movie information site, Moviefone, promoted and sold tickets to the film, while company magazines Time, People, and Entertainment Weekly featured prominent Harry Potter stories. In addition … used its cable systems and cable networks for massive promotion of the film, and the company-owned Warner Music Group released the Harry Potter soundtrack” (p. 43). Not unlike the steamrolling campaign for the season premiere of “Keeping up with the Kardashians,” Time Warner was very affectively able to cover different media industries and streams, uniquely creating exposure to its now famous Harry Potter brand. With a franchise like Harry Potter, however, additional revenue streams are possible that would not be possible with the “Kardashians” series. For example, if Time Warner owned a children’s clothing company, they could sell sweatshirts, hats, shoes and t-shirts sporting the series’ images and stars. If they also owned manufacturing firms, they could additionally design pencils, folders, backpacks and lunch pails with the images from the films, further boosting revenue and in turn spreading the popularity of the franchise itself. If a spinoff for a Harry Potter cartoon was created, Time Warner would be again in the driver seat for new and potentially very promising revenue streams. “Keeping up with the Kardashians” lunch pails would definitely not take to the market like that of Harry Potter, but it gives a reasonable example of the power of horizontal integration.
The organization of the media industries explains the phenomenon and success of “Keeping up with the Kardashians.” Such fluent horizontal integration has allowed an abundance of cross-promotion never before realized prior to the 1990’s, and this series is a shining example of how it contributes greatly to a company’s bottom line. Like the example of Harry Potter before it, companies are expanding on the ways to utilize their ever-growing empires. And their brands popularity, as a result, is growing in stride with them.
Professor Elaine Chan Smith
Research Paper 1
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Fisher, Luchina. (2012, April). Is Kim Kardashian dating Kanye West? Retrieved July 16, 2012, from http://www.abcnews.go.com
Kondology, Amanda. (2012, May). E!’s ‘Keeping Up With The Kardashians’ Season Premiere Delivers Nearly 3 Million Total Viewers, Besting Previous Season Premiere By +16%. Retrieved July 16, 2012, from http://www.zap2it.com
Lessig, L. (2008). Remix – Making Art and Commerce Thrive in the Hybrid Economy. New York: The Penguin Press.
McBride, S., & Marr, M. (2006, February). Citadel to Buy Most of Disney Radio Assets. Retrieved July 17, 2012, from http://online.wsj.com
The Walt Disney Company. (2001). Retrieved July 16, 2012, from http://pbs.org/wgbh/pages/frontline/shows/cool/giants/disney.html