AOL Teen Portal ‘Incubates’ Movie Downloads

NEW YORK As AOL gets set to relaunch its teen portal AOL Red on Oct. 23, the online service is betting that long-form programming will be a click magnet.

To test the strategy, AOL Red is partnering with filmmaker Adam Shapiro to premiere his new horror movie, Incubus, on Halloween. The 87-minute film will head straight to b-red.com, bypassing theaters.

Whether “incubus” will be the debut’s mantra remains to be seen. Even if it’s a smash hit, there will no doubt be kinks to smooth.

Either way, Shapiro and others see the technique evolving into a major window for marketing films.

In the process, lessons drawn from early experiments like this fee-based, advertiser-free release are sure to guide how the business model takes shape.

“Direct-to-download” is the method the filmmaker fixed on while pondering options this summer with his longtime friend Malcolm Bird, svp, kids and teens, AOL.

The timing was auspicious: Red would reopen as a free portal in October with a mission to multiply its 4 million users. And a tent-pole event like Shapiro’s Tara Reid vehicle was just the ticket to ignite buzz.

After cutting a deal that included Shapiro’s condition that AOL get behind the film, the parties settled on download costs ($7.99 for purchase and $3.49 for a five-day rental), terms for offsetting the 35mm production’s more than $5 million budget and a plan to let loose a promotional frenzy.

Shapiro’s gauge of a successful Internet performance will be if “there’s a brand awareness that carries through to being valuable” in other windows. Think theatrical release, where the big payoff is often the publicity stirred for the auxiliary market.

“The value to that movie is the amount of press and buzz it generates for the aftermarket,” Shapiro said. “The currency I trade in is awareness.”

In addition to mobilizing cross-AOL platforms like Moviefone and instant messaging service AIM, the campaign, which began in earnest Oct. 9, targets Web sites and traditional media where the film’s 11-14-year-old core audience likes to lurk.

Horror sites like Joblo’s Arrow in the Head and movie sites like iFilm also figure in the attack plan drawn up by Los Angeles-based Crew Creative Advertising, said the agency’s vp of integrated marketing, Julianne LaMarche.

Promotional giveaways, online and offline talk shows with Reid and movie theater trailers are among other activities surrounding the launch.

“All those millions of people that will have interacted with the movie will have something they can relate to before the DVD even hits the shelf,” said Bird.

Following Incubus‘ 30-day run on Red, Sony Home Entertainment will begin worldwide distribution via DVD and television. The Sony version is fortified with eight racy minutes cut from the b-red.com program.

Shapiro is already thinking ahead to an Incubus sequel, among other teen-oriented product he hopes to offer as free downloads. The pitch he’s perfecting for advertisers goes something like this: “I’m on a platform that’s reaching 20 million people a week to a targeted demo. What would that be worth to you?”

The independent producer/director has in mind two potential ad models. One relies on product integration to defray costs followed by a deal with an Internet platform, and the other clinches the deal with the digital platform and then guarantees the advertiser a quorum of users.

AOL Red is also gaming different revenue models for direct-to-download. Currently it’s in discussion to open a major studio picture before the end of the year, though advertising is not in the cards.

Indeed, studio films and ad-sponsored downloads won’t be quick to mesh, said many industry observers. ” ‘Nobody knows anything’ is not going to make a bunch of media buyers excited about committing X percent of their annual budget to a film,” argued JupiterResearch analyst Todd Chanko, invoking William Goldman’s famous Hollywood dictum.

One of the riddles teasing Bird is whether opening weekend mania, or time considerations in general, will migrate to the Web.

“Online’s on-demand premise is that you don’t have to go and sit in the room and watch it right now,” he said. Nonetheless, Bird ventured, “in a couple of years … you’ll be able to release to first week’s download numbers” and monitor what he christened the “Weekly Download Box Office,” or WDB.

Without plexes to program or prints to dispatch, can direct-to-download take its sweet time in racking up clicks? Or, as online competition mounts, will pressures to parse audiences and viewing habits close in on movie stakeholders as they consider allocating added promotion and/or server capacity?

And then there’s the more fundamental question of consumer willingness to view movies on computer screens, especially when there’s a cost involved. Here recent failures like Waterborne—the “download-to-own” film that Google Video Store inaugurated in January to just 300 takers—come to mind.

AOL Red and Shapiro’s production company, Automatic, are betting that youth traffic on the portal will want to pay for horror-themed entertainment.

“The teen market is the first one doing the direct-to-download and it is the demo that’s engaged in the Internet,” Bird said.

Teens average two hours longer online than other demographics, he said. “Teenagers are the ultimate early adopters, so if anyone is going to download Incubus on Halloween at 8 p.m., they’re it,” Bird said.

For his part, Shapiro is optimistic that older cohorts will develop a taste for watching features that bow online. “First-run movies are something that a mainstream [of Web users] will embrace,” he said, noting that rapid download technology has slashed the wait to momentary.

Bird too believes broadband “is going to be the future of media delivery for long-form content.” Eventually we won’t think twice about consuming movies on computers and iPods, just as we watch them on our TV screens, he said.

For now Bird is happy to bushwhack in the vanguard and meet his young market’s demands that Red be “above the curve.” Conceding that Incubus “may be an incredibly hard thing to pull off,” he and his colleagues plan to do a post-mortem once the trial is over. Armed with hard data, they may rethink the revenue model and how advertisers might fit in a future round.

“At the end of the month we’re going to evaluate it,” said Bird. “We haven’t wanted to approach advertisers for something that hasn’t been done before when we don’t know the scale of the opportunities. We wanted to first understand … so we would be able to provide a package for our marketers that’s more targeted.”

For their next direct-to-download, AOL and its partners can only hope that movie Web sites like Fandango will extend their databases to accommodate release dates and back-end provisions for Internet releases, and not just for DVD and theatrical programs, as currently configured.

Based on the four-star rating and 2,000 views the Incubus trailer scored within hours of its posting at iFilm’s Movies Channel, there may be cause to ready those advertiser packages.

Then again, maybe not. As Brian Taptich, Bit Torrent’s vp of business development, put it, “The first time seeing something, I’m not sure my appetite for advertising is very great.”