Is it 1999 in Hollywood?
Around five years ago, I remember a buddy of mine telling me about this thing called "Napster."
"You can download any song you want for free," he told me. I gave it shot on my dial-up connection, and while it was painfully slow, the novelty of free, on-demand music was addictive.
Now I don't download much of anything these days, but I have to admit -- when I moved up to broadband in early 2000, it was an MP3 feeding frenzy. A typical song download took a minute instead of an hour. Practically any obscure song that came to mind was at hand in just a few moments. I think at Napster's high point, there were more people swapping songs at any one time than watching all three of the networks combined.
And at that point, no marketing, however clever or skillful, was going to get me (or millions of others, for that matter) to shell out money for a CD.
So is it 1999 for Hollywood? 2 out of 5 users have fast connections now. According to an article in today's Financial Times:
Ipsos-Insight, a worldwide marketing research firm, reported Tuesday one out of five Internet users who swap files have downloaded a full-length motion picture. Almost 10 percent did so within 30 days of the research product conducted by Matt Kleinschmitt, senior analyst.
Some people may argue that Hollywood has more revenue streams than the music biz or quote box office figures as proof of the industry's financial health.
But in reality, the theatrical release is more of a marketing effort for ancillary revenues, and is rarely a profit center in and of itself. And when you combine actual marketing expenditures with production budgets, most films are still bleeding red when they appear at the local video store.
Accounting tricks aside, if people stop buying DVDs, it'll be quite the blow to the movie industry's kneecaps.
We'll take a look later this week at how the Film Industry is dealing with the issue.
Investor's Business Daily: Breaking News
Lions Gate Uses Fake Website to Promote 'Godsend'
Lions Gate Films has created a fake website to promote their upcoming Robert Deniro vehicle "Godsend." While not the first this year to do it ('Eternal Sunshine of the Spotless Mind' had their Lacunainc.com site) this new approach is decidedly more deceptive.
With a professionally polished look, bogus testimonials, an 800 number, and absolutely no references to the film, the "Godsend Institute" poses as a medical facility that can clone lost loved ones. To an unsuspecting visitor, the site looks tantalizingly real.
Wired quoted some of the false testimonials and commented on them:
The site features testimonials from satisfied customers. For example: "Our son's name was Michael, and when he died he was 5 years old. I was heartbroken, of course, but my wife was absolutely devastated. She had been told that she was unable to have children, and when Michael was born, she had taken it as a sign from God. When he died, my wife's faith died with him. Then we heard about Dr. Wells and Godsend. It's been three years since he gave Michael back to us, and all I can say is that if there is a God, his name is Dr. Richard Wells. -- Joe R."
The site also exclaims: "Death doesn't have to be an ending. At the Godsend Institute, we have the ability to make it a fresh start -- A New Beginning!"
"That part of it is kind of eerie for anyone who has gone through the loss of a loved one, particularly a child," said George Belch, chairman of the department of marketing at San Diego State University. "But we see so many bizarre things on the Internet."
With such a sensitive topic as cloning, it's easy to see the thinking behind this marketing approach -- It wouldn't surprise me one bit if this erupts into a controversy overflowing with press coverage. But if Lions Gate is subscribing to the "all press is good press" mantra that Hollywood has made famous, it might just backfire. Just one deceived parent who lost a child and falsely got their hopes up could cause some serious outrage. Movie marketing, as fast and loose as its been in the past, is not above ethical marketing standards. But in an environment where the ethics sections in marketing texts are an afterthought, marketers will continue to skirt the limits of acceptability.
Wired News: Attack of the Movie Clones
Former FTC Commissioner's remarks on enforcing truth in Advertising
'Prisoner of Azkaban' Extended Preview to Air on ABC
The "extended preview" bandwagon continues to fill up. ABC will air a ten minute sneak preview of 'Harry Potter and the Prisoner of Azkaban,' the latest installment in the series.
The extended clip will follow the broadcast debut of 'Harry Potter and the Sorcerer's Stone' scheduled to air on ABC May 9th.
The segment will be a prelude to an HBO "behind the scenes" special to air in late May. The film is scheduled for release on June 4th.
Sci Fi Wire -- Harry Potter Sneak Preview
VOD Strategies Compared
According to TVweek.com, the video-on-demand battle for mind share has heated up. Their recent article analyzing the competition arising from satellite's DVR push gives some interesting insights into recent VOD strategy changes. A quick summary:
Universal Television is considering reducing the VOD release window to day-and-date parity on select titles, with the remaining windows being reduced from 45 to 30 days or less.
TV Guide Channel is creating special 2 minute promos to boost VOD buy rates. Preliminary testing shows a 39% increase in buys.
Mag Rack utilizes local, affinity marketing events to draw niche viewers like the recent event promoting 'School of Rock.'
So far I'm most impressed with the day-and-date parity approach from Universal. How long before we see overlapping theatrical/VOD releases? The recent success of a concurrent theatrical/DVD release of 'Lost in Translation' shows that it may be viable.
TelevisionWeek -- Media and Television Technology
Festivals Entering the Distribution Realm
Slamdance announced their entry into the distribution game earlier today. According to their release:
Leveraging the brand-name recognition accrued by ten-year-old Slamdance Film Festival, Slamdance President and co-founder Peter Baxter has joined forces with veteran film and television producer and talent-manager Robert Schwartz, and Cleveland-based businessman George Ketvertis to launch the Slamdance Media Group. The company, which will comprise distribution and talent-management units, has pacted a home-entertainment output deal with Ventura Entertainment, a division of independent giant Ventura Distribution, to sell product under a new, branded Slamdance label. The theatrical distribution unit, to be known as Slamdance On the Road, has inked with ArcLight Cinemas for exclusive exhibition of the new company's titles in the Los Angeles market.
With brand recognition running high among top U.S. festivals such as Sundance, South by Southwest and the Tribeca Film Festival, it's really no surprise to see them morphing into specialty distributors. After all, Sundance has had a successful home video venture and premium cable channel for years.
Large, successful festivals bring important ingredients to the mix that give them a leg up in the distribution game:
1. They have established relationships with corporate sponsors to use as a springboard for promotional partners in new ventures.
2. They have a direct channel to secure a "first look" at new product.
3. They have large, highly targeted member/attendee bases ripe for ancillary product marketing.
4. They get loads of free press.
The festival business has grown from a cottage industry into a big business, with major studios often cherry-picking festival talent for studio exec positions. Festivals have also become an important part of studio release strategy in terms of marketing (getting advance word out about upcoming releases) and market research (using festival audiences to determine needed tweaks before a national release.)
Slamdance was one of the original Sundance piggy-backers, and have grown into a powerful force on the circuit in ther own right.
Expect more of the big boys to follow down this path in the near-term.
MCN Press Release: Slamdance Announces New Ventures
Custom VOD 'School of Rock' Promo
'Mag Rack,' Rainbow Media's Video On Demand Service, will be offering custom feature content in conjunction with the 'School of Rock' pay-per-view release.
Here's a bit from their press release:
As part of this unique multi-platform campaign, Mag Rack will feature on"Guitar Xpress" on-demand guitar instruction for "Smoke on the Water" by Deep Purple, "Sunshine of Your Love" by Cream, plus the film's original theme song
"School of Rock." Mag Rack will feature bonus footage from the movie and an original, behind-the-scenes tour of the Gibson Guitar factory in Nashville, which manufactured the signature, cherry red SG model featured in the movie.
This is another example of just how competitive the ancillary market has become -- especially with the advent of shrinking release windows. VOD services are having to come up with value-added content to compete with the DVD release, which will inevitably cause increasing marketing budgets.
Haven't really heard much about Mag Rack before this. What will the effect be? Personally, the whole promo looks a bit too niche-oriented and carries heavy marketing costs due to custom programming, prize giveaways and promotions.
Mag Rack Launches Programming and Multi-Platform Marketing for On-Demand Release of 'School of Rock'
Online Voting Opens for the 33rd Annual Key Art Awards
Online voting is now available for the 33rd annual Key Art Awards. According to their site, the Key Art Awards are:
...the only international competition honoring the professionals who create movie advertising, including theatrical trailers, posters, TV commercials, Internet ads and more. It's the work of these individuals that often determines a film's box office success and chances for Oscar consideration. The Key Art Awards ceremony has become a cornerstone event in the movie marketing community, annually attracting a "who's who"of motion picture executives and creative professionals from every corner of the industry.
The term "key art" is industry jargon for the main pieces of collateral supporting a movie's release -- posters, stills, etc.
I've heard of the awards before, but I never knew about the online voting. This looks like the second year that they're doing it.
Here's a summary of who I voted for:
Best Poster, Comedy: 'Lost in Translation'
Best Poster, Drama: 'American Splendor'
Best Poster, Action/Adventure: 'Pirates of the Caribbean'
Best Trailer, Comedy: 'Lost in Translation'
Best Trailer, Drama: 'Mystic River'
Best Trailer, Action/Adventure: 'Kill Bill Volume I'
I thought the 'Lost in Translation' campaign was brilliant, but perhaps it just struck a chord with my demo...
Best Website: Identity
The Hollywood Reporter.com: Key Art
Proctor & Gamble's 'Tremor' Teen Marketing Arm Used by Film Studios
I had read about 'Tremor', the teen-centric word-of-mouth marketing operation started by Proctor and Gamble in 2001, but I wasn't sure if or how the film studios were using them.
This article in the latest issue of Forbes shed some light on it:
Caitlin Jones is Hollywood's kind of pitch gal. Several months ago the 16-year-old received an e-mail announcing DreamWorks SKG's new teen flick, Win A Date With Tad Hamilton!, and was asked to help the studio pick the movie's logo. A few weeks later when she went to a movie theater, she was thrilled to see a trailer for the film and discover that they'd picked the logo she liked. "Oh, my God," she told a friend who was sitting next to her, "I voted for that logo!" She beamed. "So they do listen. It does matter." Jones, a junior at St. Joseph Hill Academy in Staten Island, N.Y., couldn't wait to spread the word. "I told a bunch of friends at school," she recalls. "I told my next door neighbor. I told well over 10 or 20 people." And, of course, she plans to see the film, taking a handful of pals with her.
Based on the article, it looks like Dreamworks uses them fairly regularly for teen-targeted films.
What the excerpt above fails to mention, however is that 'Win a Date with Tad Hamilton' had production costs of $22 Million and estimated marketing costs of $25 Million.
Grosses for the film through March 29th were just shy of $17 million -- pretty unconvincing from an ROI standpoint. Perhaps there are a few successes with film marketing under Tremor's belt, but their website is lacking information on past campaigns.
Forbes.com: Kid Nabbing
Pixar amassing cash for an acquisition?
With Pixar freeing itself from the Disney corral, there's been a lot of speculation about who their next distribution and marketing partner will be.
But the real question may not be "who" but rather "how long." An analysis of Pixar noted that the company has a goal of amassing over one billion in cash by 2006:
What is 54%-owner Steve Jobs really after, besides the $52 per year Pixar pays him? Of course, having all five of your films among the 11 highest-grossing animated films of all time isn't shabby. But in the last conference call, Jobs -- who, incidentally, has never sold a share of Pixar -- indicated that the company hoped to have up to $1 billion cash stockpiled by 2006. Why? To ride out a string of flops? At $100 million to $150 million per film, that's a lot of flops. Dividends? Maybe, but why not start a little one now?
I'm guessing that at a minimum, Jobs plans to put out more than the current one movie per year, but given that his conference call comments hint at a preference for quality over quantity, it's questionable how far down that line he and Pixar's creative talent are willing to go. And it's not all up to him, either.
Pixar's market, at least as it stands now, might not be willing to absorb more than one or two films per year. In other words, he probably has something up his sleeve. Maybe it's an acquisition; maybe it's a significant expansion of Pixar's offering; maybe it's just a few extra films and a buyback or dividend. Whatever is coming, I'd say this lottery ticket has some decent odds.
With Apple's successful foray into music, it would make sense that the next move would be an acquisition.
Who Pixar partners with will speak a lot about that.
Fool.com: Funding Nemo [Commentary] April 6, 2004
Sony to air Extended 'SpiderMan 2' Trailer during 'The Apprentice'
The extended preview trend continues. Following the recent 'Dawn of the Dead' and 'Taking Lives' previews, Sony will air a 2 1/2 minute version of the 'Spider Man 2' trailer approximately 40 minutes into this week's installment of 'The Apprentice.'
Sony's VP of Marketing commented by saying:
"We've got to look at unconventional ways to get our message across," says head of marketing for Sony. "Running your trailer in a theater is a great place because you've got a captivated, movie-going audience. But if you want to reach a broader, more general audience, you need to go beyond the theater."
So how is this a bigger audience than the typical movie trailer?
TV certainly has a wider draw than a theatrical trailer. Last week's episode of The Apprentice drew 22.8 million viewers. By comparison, a movie trailer attached to this week's No. 1 movie had an audience of about 4 million.
In a media environment where getting a message to the consumer is becoming increasing competitive, we've seen several major approaches:
1. Saturation marketing of DVDs featuring extended clips and behind the scenes footage. ('Hellboy').
2. Online releases of extended clips. ('Taking Lives').
3. Long-length ad buys featuring an extended preview ('Dawn of the Dead,' and now 'Spider Man 2').
On top of that, several other new approaches have been:
1. Studio-sponsored Production and fan blogs
2. Pay Per Click keyword buys (Adwords and Overture).
It will be interested to see which actions have the greatest ROI in terms of box office performance and ancillary sales.
'SpiderMan 2' Trailer To Feature In 'The Apprentice'