Upfront 2003: Movies

It’s not a bad time to be in the movie business, all things considered. In times of conflict, consumers crave catharsis in comedy, and distraction in drama, drowning their sorrows with artificially flavored popcorn butter. With the combined effects of skyrocketing ticket prices and escapism-seeking Americans going to the movies in record numbers, film studios are faring well in an environment that’s murky for most marketers.

Total studio advertising spending for 2002 amounted to $871 million—up 10.3 percent over the previous year. Likely, this means the entertainment category will invest a healthy amount of dough in the forthcoming upfront.

Caution is the word of the day for most brands in these tumultuous times, naturally.

Ray Warren, managing director at media buying agency OMD, says that advertisers in many categories have tended to pull back their option buys at the beginning of April, deadline for the 90-day window for the third quarter. “As we get closer to the 2003-2004 season, our advertisers are sending a slightly different signal than they were earlier in the year,” Warren reports.

But entertainment is a different animal. According to research from media buying agency Initiative Media conducted at the height of homeland security scares, 84 percent of Americans were not at all reluctant to go to movie theaters, and about three-quarters of those surveyed said the war was not impacting their plans to spend disposable income on films and other out-of-home entertainment activities. Fully 78 percent of respondents said they planned to see a comedy.

When it came to advertising messages, humor also fared well. Comedy was ranked as the most appealing aspect of movie ads, followed by patriotic symbols.

“As a country, we’re going to movies at a greater clip and spending more per ticket,” says Tim Spengler, executive vp and director of national broadcast at Initiative Media. “We anticipate entertainment to be one of the strongest categories [in terms of year-to-year growth] in this upfront.”

That’s primarily because the studios have a slew of blockbuster movies with recognizable brand names on their slates. Among the most anticipated forthcoming features: The Matrix Reloaded and Matrix Revolutions (Warner Bros.) and the latest installment in the Terminator series, T3: Rise of the Machines (also from Warner Bros.).

Other much-awaited releases: Columbia’s Charlie’s Angels: Full Throttle, 20th Century Fox’s X2, Universal’s The Hulk, 2 Fast 2 Furious and The Cat in the Hat, Disney’s Pirates of the Caribbean, Miramax’s SpyKids 3, MGM’s Legally Blonde 2: Red, White and Blonde, and Paramount’s TombRaider 2: The Cradle of Life and Rugrats Go Home.

“There are more sure things coming out, better investments—a Matrix 2 versus a Waterworld as a wild card,” Spengler says.

With more competition than ever among entertainment product—not just movies, but video games, for example—consumers face a multitude of forces vying for their hard-earned cash.

Expect to see studio marketers pony up advertising bucks toward ensuring box office dreams rather than duds.

Also, expect studios to continue to put more focus on the growing home-entertainment market. Disney is investing a whopping $200 million in overall marketing support for the DVD re-release of The Lion King—a budget that eclipses the outlay for most theatrical releases.

Sales of DVD players have reached a critical mass, the result of price-slashing, consumer comfort with the format and the explosion in such DVD-only features as directors’ cuts, trailers, Easter eggs (hidden features) and commentary tracks.

Studios increasingly are using major TV campaigns to push DVD releases.

By doing so, they have found that they can convince consumers to invest in the DVD version of a movie they may have rented before or, in some cases, which they already own on videotape.—

Prime-time Network Spending in 2002: $870.6 million*
Hot Buttons: Sequels to The Matrix and Terminator are a sure thing at the box office. Consumers craving escapism.

Category: Movies
PERIOD: Jan 1, 2002 – Dec 31, 2002

Advertiser: Network TV $$$
AOL Time Warner Inc.: $259.5 million
Sony Corp.: $220.5 million
Walt Disney Co.: $174.6 million
News Corp Ltd.: $126.9 million
Vivendi Universal SA: $124.8 million

Top Programs for Movie Advertising: Expenditures
Friends: $35.9 million
ER: $27.7 million
Will & Grace: $22.3 million
Source: Nielsen Monitor-Plus