Major Site Overhaul, New Features Coming
Posted on Friday July 30, 2004
Filed under
If you've noticed the lack of postings this week, it's due to the full site redesign that's currently underway. We had received several complaints of the old site being nearly unreadable in some browsers, so we decided to re-do everything from scratch. In addition to an overall better design, we will be incorporating weekly features and a resource directory for entertainment marketers in the coming weeks.
If you have any feedback on the new design or suggestion of coverage areas/features, please add a comment.
As far as our daily updates are concerned, they will resume this afternoon. Thanks for your patience!
'Manchurian Candidate' Advertising on Political Blogs
I'm a frequent reader of political blogs like Daily Kos and the Juan Cole blog, and I noticed this weekend that Paramount's been advertising 'The Manchurian Candidate' on them. Given that the film portrays a corporate attempt to control the government, I'm guessing the ads are limited to lefty blogs (post a comment if you've spotted them elsewhere).
If you've been following the political blog arena, you know how politicians have been successfully using blogads.com to solicit donations. This is the first movie advertisement I've seen on their ad network, but it doesn't really surprise me -- look at these traffic rankings of the top political weblogs, and you can see why Hollywood is licking their chops. With a weekly ad on Daily Kos running at $325 bucks, and traffic at 136,000 users per day, you end up with a CPM well under a buck (you can plug the numbers into this calculator if you wanna get specific). Try to find a cheaper way to reach that many targeted eyeballs in print or broadcast!
With the kind of segmentation available with blogs, the movie marketers behind 'The Manchurian Candidate' are definitely on to something...
Related Links:
Manchurian Candidate Official Site
Daily Kos :: Political Analysis and other daily rants on the state of the nation.
Alamo Drafthouse Cinema to Expand Nationally
Posted on Thursday July 22, 2004
Filed under
Theatrical
The Alamo Drafthouse Cinema, an extremely popular Austin, TX-based alternative cinema chain, announced the sale of their franchising operations to their current CEO. Plans call for expanding the business to more than 200 locations throughout the United States.
For those of you unfamiliar with the company, the Alamo is a beer joint/restaurant/movie theater that features an eclectic programming mix of new releases, shock and cult cinema, live film-based events and more. This makes for a movie going experience quite unlike anything you've probable experienced before, which has resulted in an almost "rabid" fan base. Here's a few examples of the kind of programming they do:
Mr. Sinus Theater - a live comedy show in the vein of "Mystery Science Theater 3000"
Foleyvision/Smellovision -- Live Sound Effects/smell effects accompany movies
Open Screen Night -- like an open mic night at a comedy club, only with video.
Movie-oke -- Karaoke to movies.
Celebrity Guests -- Big and small -- everyone from Lloyd Kaufman to Quentin Tarantino.
You should also look at the trailers section to get a feel for thee vibe in their theaters.
If you're guessing I'm a booster -- I definitely am -- I went to an Alamo during a trip to SXSW a while back, and I, like so many others, fell in love with the concept.
So what implications will this have for movie marketers? The biggest is the 600+ new screens available nationwide with audiences craving alternative and indie entertainment. If the Alamo does indeed do a national roll-out, it will become the place for indie filmmakers to get their projects seen. Landmark used to be the place to go for filmmakers looking to four-wall their projects and get a theatrical release, but after reading this article in the NY Times, that may be an uncertain future.
Alamo Drafthouse's franchising arm sold to president, CEO - 2004-07-21 - Austin Business Journal
Fox Offers Bulk 'Passion' DVDs to Churches
According to the USA Today, Fox has been successfully pre-selling 'Passion of the Christ' DVDs in bulk to churches. The article describes their unorthodox marketing tactics:
In an unprecedented move for a Hollywood studio, Fox sent fliers to hundreds of thousands of churches inviting them to buy special packs of 50 DVDs. Fox won't release numbers about the program; spokesman Steven Feldstein says, "This film brought people to the theater that normally don't go to movies and will also bring people into the DVD purchasing pool who weren't there before."
Fox is even doing a bit of "co-branding":
Groups placing large orders can buy customized slipcases (99 cents each) with two lines of printing, such as the church's name. "Fox felt that they could rally the churches to use it as a ministry tool," says Laura Neutzling of Nashville-based Word Distribution, which has orders for several thousand slipcases.
While this type of grassroots marketing may be "unprecedented" for a major studio, reaching core demographic groups with mailings and bulk orders has always been the bread and butter of indie movie marketers and home video distributors.
Yahoo! News - Churches buying 'Passion' DVD in bulk
Survey: Wal-mart Rings 37% of All DVD Sales in the U.S.
Variety reports that the retail giant is a foundation for recent robust DVD sales figures. According to a recent cosumer survey,
Wal-Mart, the "everyday-low-prices" retail juggernaut, today rings up a hefty 37% of all new DVD purchases in the U.S., according to a new survey of video consumers, and easily writes the biggest check to Hollywood every year.
The article notes that Hollywood should be cautious, because each disc sold is a "loss leader":
For now, Wal-Mart and its peers seem OK losing a few bucks on every disc sold. But that may not be the case forever, and invariably Wal-Mart will insist on a wholesale price cut that could eat into those juicy DVD margins at precisely the time overall disc sales start to slow.
Yahoo! News - Wal-Mart crowned DVD king
A closer look at the MGM/Sony/Time Warner Triangle
According to Variety, the negotiations between MGM and Sony have hit a roadblock. The much simpler and tax-efficient Time Warner offer could win out.
With all of the buzz going on about this lately, I thought it would be interesting to backtrack and provide a "Q&A" of sorts. After all, understanding the financial value of a film property/library and the implications when a company purchases one can help put individual title marketing into perspective.
By the way -- if you have a Q&A you'd like to add (serious and funny accepted), put it in the comments, and I'll update the list.
Why is MGM a target for acquisition?
In the golden age of DVD, content is king, and MGM has a 4,000 plus title library. Current valuations (depending on if you're buying or selling it) range from $3.8 to 5.5 billion dollars. Here's a link that's a must read as a backgrounder on MGM's value to a potential buyer.
How do you value a film library?
Film Library Valuation typically uses an "income approach" -- that is, based on historical revenue from each title, you make a determination of expected future revenue from all streams (Video, DVD, TV sales and VOD). For titles without any historical data, a weighted average is used to compare similar films. Next, a "decay rate" is used to determine the annual decline in value of the asset.
After this, you add up all future revenues, and deduct contribution margins (Contribution margin is sales revenue less variable costs) and taxes. You discount this future cash flow to present value, and bam -- the magic number.
Many details are missing for simplicity's sake, and I'm not an accountant, so lemme know if I'm way off base here.
What's The Basis for Time Warner's dispute over MGM's valuation of around $5 billion?
My guess is that TW has a problem with two things: MGM's decay rates (they are probably rosy about the long-term DVD growth prospects) and the income stream projections for lower-quality titles (MGM has 200-300 "major" titles that drive up the library's average per-title performance).
What will happen to the MGM brand?
Despite the company's reduced output of new films in recent years, MGM has one of the highest brand-recognition factors of any major studio. Whoever purchases the company, expect to see an effort to leverage the brand (TV channel? Consumer Products? Print?) -- especially if purchased by a diversified media company like Time Warner.
Since Time Warner (or Sony, if they come up on top) already has a well-oiled distribution arm, what will happen to the staff at MGM?
The reality, unfortunately, is that we can expect massive lay-offs. There have been reports (unsubstantiated rumors, actually), that Time Warner may divest the distribution and marketing arm of MGM. Potential buyers could include someone like Steve Jobs (Pixar) or Harvey Weinstein, both of whom are at odds with Disney. Both men would very like have the access to capital necessary for a deal of that scope.
Related Links:
MGM
Time Warner
Buying Universal puts GE in the movie business
Yahoo! News - Inside Move: 'Hobbit' could end up nestling with 'Rings'
Report: Internet Drives Interest in Summer Blockbusters
Very interesting press release from Claria, an online behavioral marketing company (You might know them from their "Gator" ewallet product). The company analyzed their 43 millon-strong user base to see what impact online marketing had on three big-budget summer releases...
Here's the meat of the release:
More Moviegoers Skip Theater Lines with Online Ticket Purchases
-- Of the respondents who go to the movies, 24% said that they have
bought movie tickets online.
-- Of the respondents who bought movie tickets online, 71% made a
purchase 1-3 times in the past 6 months.
-- Fandango was the most popular site for movie tickets with 44%
of people saying they have used it to purchase tickets.
Movietickets.com and Moviefone.com followed with 36% and 21%,
respectively.
Online Advertising Increases Movie Buzz
-- 43% of survey respondents had seen a Spiderman 2 ad online,
followed by Harry Potter at 41% and Shrek 2 at 27%.
Film-Related Sites Also Find Success Online
-- Yahoo! Movies was the most popular general movie site among users for
information relating the three summer blockbuster movies. The Shrek 2
Yahoo! movie site captured 30% of total traffic to the top
general movie sites related to the three movie sequels, followed by the
Yahoo! Harry Potter movie site with 29% and finally the
Spiderman 2 Yahoo! movie site capturing 12% of total traffic.
-- 39% of total traffic to the three official movie sites came on
Fridays and Saturdays.
-- Survey respondents cited "watching trailers" as the most popular reason
for visiting official movie sites with 66% of respondents going
online to see the trailer for Harry Potter, 53% for Shrek 2, and
48% for Spiderman 2.
Movie Enthusiasts Are Likely to Purchase Video/DVD
-- Harry Potter movie enthusiasts are most likely to purchase the movie
when it comes out with 48% of respondents saying they will
definitely or probably buy the DVD or video. This number is followed by
41% who cited that they will definitely or probably purchase
Spiderman 2 when it's released and 39% for Shrek 2.
-- Of those who had seen the first or earlier releases of these summer
blockbuster sequels, more than half purchased the movies when they were
released on video or DVD:
* 58% of the respondents who saw Shrek 1 in the theater also
bought it.
* 63% of those who saw one or more earlier Harry Potter
movies, also bought one or more Harry Potter films.
* 56% of those who saw Spiderman 1 in the theater also bought
it.
Other Results Indicate:
-- 39% of total survey respondents go to the movies once or more
every 3-4 weeks.
-- Most respondents plan on seeing the movies within 1-3 weeks of the
movie's release:
* Shrek 2 -- 88% will go within the first three weeks of the
movie's release.
* Spiderman 2 -- 74% will go within the first week and 92%
will go within the first three weeks.
* Harry Potter -- 60% will go within the first few days, 91%
within the first three weeks.
Napoleon Dynamite's Marketing? Sweet!
I have yet to see Napoleon Dynamite, but I am impressed with the creativity of the guys and gals at Fox Searchlight's marketing department. If you've been Reading the Movie Marketing Blog this year, you've seen lots of innovations in the marketplace. Well, Fox has followed some of their own best practices and added a few new and interesting marketing tactics to boot:
1. New scenes -- with this Friday's expansion, Fox has added a 5 minute epilogue to entice fans to come back for a second showing. Straight out of the DVD playbook, this technique worked well for Fox with last year’s '28 Days Later'. The difference? The scenes were shot just 4 weeks ago...
2. Fan Club Competition -- Fox has heavily promoted the "Napoleon Dynamite Fan Club," and now has 20,000 people competing in a contest to select the club's president. The competition winner gets a free screening and other perks, and helps the movie by virally spreading the word among the target demographic.
3. Napoleon Dynamite Mixers -- Special pre-film events held in "tastemaker" cities to turn out the fan club base.
4. Audience Participation Script -- Ever heard of the 'Rocky Horror Picture Show'?
5. Iron-On transfers -- Over 40 different designs that can be printed out and made into t-shirts. Branding, anyone? And no cost to the marketer?
All of this effort would be moot if the film was a dog, but the reviews have been pretty good. I did read somewhere (don't remember where) that the film is "like watching a Wes Anderson cover band" or something to that effect, but In my opinion, Fox Searchlight has done an incredible job of making the film into a unique viewer experience.
Related Links:
Official Site
Fan Club
Rotten Tomatoes Review Page
MovieBankUSA Begins U.S. Rollout of Self-service DVD Rental Outlets
According to Crain's NY Business, MovieBankUSA has signed a lease for their second North American location. The parent company, MovieBank, has been successful with their self-service DVD and video game rental outlets in Europe, and they plan on rolling out the concept in the U.S nationwide. MovieBankUSA's first location is scheduled to open in Manhattan (SoHo) at the beginning of August, with ten more New York City locations to follow. With a Similar design to the large ATM centers, MovieBankUSA locations will offer 24 hour access and multiple rental units. Registered members will be able to reserve copies at home using the internet, and the rental machines will hold the selected titles for three hours. If a title is out of stock, the member will be notified when the title they want has been returned. The machines are designed to hold 500+ titles, with the majority being new releases. Rental prices will be as low as .99 cents per rental for members.
With the anticipated rise of downloadable movies and VOD in the next several years, it seems strange for a new company to make such a substantial investment in "meatspace." But if they do prove popular here in the states, what will the implications be for DVD marketers? Given the limited breadth of selection, it could seem to be a boon mostly for the studios, unless MovieBankUSA customizes title selections based on the tastes of each store's demographics. While not impossible, customized offerings by location is a difficult thing for retailers to execute -- for example, The Gap had some problems last year tailoring their offerings to regional tastes despite their skills in analyzing sales data. The real victim, if this is successful, will end up being the already-battered Blockbuster and other mega rental chains specializing in wide releases.
I will post some pictures of the new location in SoHo when it opens.
Related Links:
Automated Distribution Technologies
The Self-service Revolution
Crain's New York Business
MGM's Latest Release - a Makeup Product Line
Okay -- at face value, this seems pretty strange, but MGM has launched a makeup line. Here's how they describe it:
MGM Premiere is the first and only makeup line created by a major studio. "The MGM name equals the Hollywood experience in the minds of millions of families," said Trish Halamandaris, Vice President of Worldwide Marketing for MGM Consumer Products and Interactive. "We decided to bring that feeling of glamour established by the great MGM starlets home to consumers with the creation of MGM Premiere, and are confident that our products are indeed indicative of the timeless quality and style the MGM brand represents."
So what does this have to do with movie marketing? While I don't necessarily like the make-up angle, I am happy to see a studio doing something to distinguish its brand from the other studios. Back in the "golden age" of movie-going, you knew what kind of experience to expect based on the studio behind the film. Today, most people don't know who makes the films with a few rare exceptions (like Disney).
We saw a big move this summer towards a renewed studio branding emphasis with Universal ("home of the original monsters"), but that taught us the first rule -- don't mix your brand's marketing message with that of an untested product (like 'Van Helsing'). What will the lesson be from MGM's brand extension? If Warner's closure of their studio stores is any indication, it should be "forget about consumer goods."
MCN Press Release: MGM Makeup Kit
Ron Burgundy -- Your New Buddy on Friendster?
According to Clickz, Friendster's new business model includes the introduction of fake profiles, which companies can use to promote their products and services. Dreamworks is the first movie marketer to jump into the fray, with profiles of the 'Anchorman' characters already up, and Sony has another eight slated to be added in tandem with the release of 'Black Book'.
It seems a bit gimmicky to me, but hey -- this is the barn-storming, take-no-prisoners world of movie marketing, right? Some analysts think it's a pretty weak marketing effort:
"This is the kind of thing that gets media attention the first couple of times it happens," said Nate Elliott, associate analyst at Jupiter Research. "[Friendster] still needs to fundamentally figure out what its business is."
Analysts question whether the profiles will really boost the movie's profile. "[DreamWorks] needs people to be saying they saw [the movie] and that it was funny. The Friendster angle here is more marketing than credibility," said Dave Balter, founder and president of word-of-mouth marketing and research firm BzzAgent.
Too bad they hadn't thought of this tactic to promote 'Passion of the Christ' or 'Monster'. That would've been fun.
Friendster Profiles Turned Into Film Promotions
Friendster
