Summer attraction: Hollywood’s $1 billion movie marketing blitz
HOLLYWOOD — You know times are getting tough in the movie business when an entourage of studio executives, instead of flying by private jet to Sacramento to attend a screening, is forced to ride-share to Chatsworth.
Universal Pictures, clamping down on costs, moved a test screening of its recent sequel “Fast & Furious” to the Los Angeles suburb to save money on ferrying the executives and filmmakers out of town. Along with hosting fewer lavish premiere parties, curtailing newspaper advertisements and restricting the number of agencies that produce trailers, Hollywood studios are struggling to get a grip on the movie industry’s equivalent of the earmark: marketing budgets.
And like an entitlement program that can’t be axed, Hollywood isn’t having much success. Despite a sharp decline in consumer spending and DVD sales that have long been the underpinning of the movie business, the studios are about to embark on the costliest summer for movie marketing campaigns they have ever pursued. A dozen big-budget pictures are set to crowd into theaters over the 16-week popcorn-movie season, many with worldwide marketing budgets that will top $100 million.
Studio executives contend that if they want to get out the word about their movies, they have to pony up.
From May through August, the studios will spend about $1 billion to market globally such high-profile titles as “The Da Vinci Code” sequel “Angels & Demons,” “Transformers 2,” the sixth “Harry Potter” film, “X-Men Origins: Wolverine,” “G.I. Joe,” “Star Trek,” “Night at the Museum 2″ and “Ice Age 3.” Because the summer movie season can account for as much as 40 percent of the year’s box-office revenue, capturing as much of it as possible is crucial for the studios.
“Every film launch is a new-product release,” said Adam Fogelson, president of marketing and distribution at Universal. “We can’t jeopardize successfully opening these pictures.”
Universal will open two costly “event” pictures this summer: “Land of the Lost,” a special-effects-laden adventure comedy starring Will Ferrell, and “Public Enemies,” a 1930s-era crime drama starring Johnny Depp.
Despite the depressed economy, movie ticket sales are up 17.3 percent this year from last year, and attendance is up 15.6 percent, according to box-office tracking company Media by Numbers.
Although studios have begun to reduce the numbers of films they make and squeezing the fees they pay talent, marketing costs largely have escaped the scythe. After dipping from a peak of $40 million in 2003, the average marketing cost for a studio picture popped back up to $36 million in 2007, the latest year for which data was available, according to Hollywood’s movie trade association. Studio executives contend that marketing costs have only risen since then.
Buying commercial time to advertise a movie on network and cable TV remains the biggest marketing expense for the studios. Fogelson estimates that since 2005, those rates have risen 15 percent to 20 percent. Despite the recession, studios still spent as much as $3 million for each 30-second spot for 10 movies — including DreamWorks Animation’s recent “Monsters vs. Aliens” and Paramount’s “G.I. Joe,” “Star Trek” and “Transformers 2″ — that aired on the Super Bowl telecast in February.
Companies defend their multimillion-dollar Super Bowl advertisements because of the huge audience the game delivers — about 100 million viewers.
“Television is still the No. 1 medium to sell our product,” says Jeff Blake, Sony’s worldwide marketing and distribution chief. “And it’s the only medium that gets you a mass audience.” Studio marketers say that while they have shifted much of their newspaper ad spending to the Internet, it nonetheless can’t compare to TV. “The Internet is a rising medium for selling movies,” Blake said. “But it doesn’t yet have the reach of TV. No single Internet space reaches consumers as effectively as TV.”
