Upfront 2004 – The Advertisers: Movies

Much like the stock market, movie studios’ spending on TV advertising—and marketing in general—has steadily soared, and it will continue to. But the incline has been über-steep in their home entertainment department, where marketing budgets have boomed right along with the DVD format’s popularity. Last winter saw the release of several heavily hyped features, including X2: X-Men United (Fox), The Hulk (Universal), The Matrix: Reloaded (Warner Bros.) and Finding Nemo (Buena Vista). A special edition of the latter’s The Lion King was unleashed with an estimated $200 million marketing budget, while Universal’s glitzy big-budget ad campaign for the home video release of Seabiscuit resulted in industry insiders whispering that the studio had “bought” its Academy Award nominations with this hoopla.

But home entertainment is where the real action is in terms of spending increases. This past fall, the DVD household-penetration rate rose above the 50 percent mark, and consumers spent an estimated $4.5 billion on titles during the fourth quarter of 2003, according to Video Store Magazine.

New Line Cinema’s DVD media budget has grown 65 percent to 70 percent since 2001, and that figure is far from an anomaly in entertainment circles. “Advertising spends have grown exponentially in the last three years with the growth in DVD players and software,” says Jeff Platt, director of advertising and research at New Line’s home entertainment division. “We’re spending accordingly for those releases that demand it.”

Unlike most other consumer product categories, the advance timing of the selling season can be problematic for DVD marketers: With the exception of a few can’t-lose properties, an individual film’s ad budget is usually dictated by how it does at the box office, information that sometimes isn’t available at the time of the upfront simply because the movie hasn’t hit theaters yet.

This issue forces Platt to buy some scatter, but he also participates aggressively in the upfront for a few reasons. Sometimes he has the luxury of a Lord of the Rings-type mega-hit with a long window and a predetermined DVD marketing budget (the third installment will be released in May, while an extended version bows in the fourth quarter). Also, his division can leverage the upfront by going in with the studio’s theatrical unit and New Line’s media agency, Carat, New York. This allows more flexibility for ad swapping if something falls through in Platt’s marketing plans.

“Network TV is still the place to be and the No. 1 place for people to see your product,” Platt says. “It may be getting bad press about losing viewership, but DVDs are selling, and network TV is certainly helping.”

For their theatrical releases, studios will continue to back their big-budget titles. Expect to see heavy hits from Universal (Thunderbirds, The Chronicles of Riddick), Paramount (The Stepford Wives, Lemony Snicket’s A Series of Unfortunate Events), MGM (Sleepover), Twentieth Century Fox (I, Robot), New Line Cinema (Cellular, Son of Mask), Warner Brothers (Troy), DreamWorks (Surviving Christmas, Shark Tale), Buena Vista (Ladder 49, The Incredibles) and Sony (Anacondas: The Hunt for the Blood Orchid, The Forgotten).—Becky Ebenkamp

Focus

Becky Ebenkamp is the West Coast bureau chief for Brandweek.

On the heels of 2003 clunkers like Paycheck ($53.8 million in domestic box office), The Hunted ($34.3 million) and Lara Croft Tomb Raider: The Cradle of Life ($65.7 million), Paramount needs to ensure its customers—both the public and the nation’s 35,774 movie theaters—that it means business: big business. So, the studio that slipped into seventh place last year threw a lavish party at the 2004 ShoWest convention in Las Vegas to convince theater owners that it’s pulling out all the financial stops to support its upcoming releases, a move that will no doubt be followed by heavy TV advertising for each title.

At the alleged $4 million soiree, the studio showed off a slate of stars (Nicole, Jude, Jim, Denzel, Gwyneth, Samuel L. and Bette among them), gave the 2,500-plus attendees crystal paperweights etched with the Paramount arch and replaced the standard-issue rubber chicken with filet mignon. Once the celebs were on the dais—which was long enough to pass as the Last Supper with 24 or more disciples—theater owners were invited to ask publicist-written questions and watch the stars chew.

The studio then screened sneak peeks of the most-anticipated films on its 2004 roster, including Sky Captain and the World of Tomorrow, The Stepford Wives, The Manchurian Candidate, SpongeBob Squarepants Movie and Lemony Snicket’s A Series of Unfortunate Events.—B.E.