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Company Town | THE BIZ / CLAUDIA ELLER

Marketing Costs Run Out of Control

May 31, 1996|CLAUDIA ELLER

The early blockbuster success of this summer's first two big-event movies--"Mission: Impossible" and "Twister"--would appear to be great news for the financially struggling movie business.

But in fact it's likely to exacerbate the trend of runaway costs that is the primary cause of the industry's notoriously slim profit margins.

Even studio marketing chiefs will tell you they are spending more money than ever to get their films noticed in an increasingly crowded marketplace.

"We are spending big, big time, as all the studios are," concedes Sidney Ganis, president of worldwide marketing for Sony's Columbia/TriStar Motion Picture Group. MGM/UA's marketing chief, Gerry Rich, said, "Until the industry collectively decides to release fewer movies, we're forced to spend excessive amounts of money to open our films--it's clutter madness."

Because there are too many releases fighting for available screens, New Line Cinema marketing president Chris Pula says, "it's become a business of first-weekend gross just to keep your movie in the theaters."

One studio head says that with the stunning box-office starts of "Mission: Impossible" and "Twister," which together have grossed more than $200 million in record time, companies are likely to be forced to spend even more money than they had originally planned for later summer releases.

"It's a big poker game, and the one with the biggest wallet wins," says the source. "The success of these two movies will make people that much more aggressive to make a place in the market--it's all about shouting louder to make sure your picture is heard."

Even as studios search for alternatives to the high cost of network advertising--the cornerstone of any campaign--some wonder whether studios need to spend as much as they do.

A case in point may be "Mission: Impossible," a movie based on a popular television series and starring the biggest marquee name in the business. If that isn't enough of an inherent marketing hook, what is? It would seem that without spending a ton of money, you could get moviegoers in droves to go see Tom Cruise in "Mission: Impossible."

In fact, the film's "tracking"--which measures public awareness and interest in a film before it opens, showed that "Mission" was on a similar path to 1993's mega-hit "Jurassic Park."

Still, sources say Paramount spent more than $24 million in paid media costs just to open the film, and they suggest that if the studio had spent less, the film would have opened to the same huge numbers. (It grossed nearly $75 million in its first week.)

The problem is, in the movie business there's no way to quantify what advertising dollars buy you. And, as anyone in Hollywood will tell you, there's no such thing as a sure thing at the box office.

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So the studios, driven by fear that the competition will get a leg up, spend more and more.

"Nobody knows how much is enough--that's why you spend that kind of money," says one head of a studio.

Paramount's worldwide marketing president Arthur Cohen insists that Paramount spent "substantially less" than what sources report, yet he admits that even with a marketing "natural" like "Mission:Impossible," studios are under pressure "not to just open, but to open to a threshold."

Distributors want to take in as much of the potential revenue stream in the first week to 10 days of a film's release both to avoid being knocked off screens by competing movies and because that's when they get a much bigger cut of the box office (as high as 90%)--which they split with theater owners.

Whatever Paramount is spending on "Mission," it isn't alone in dishing out huge marketing dollars on this summer's crop of big movies, which also include "Eraser," "Independence Day," "The Rock," "Cable Guy" and Disney's new animated movie, "The Hunchback of Notre Dame."

The typical pre-opening media blitz for such movies, which includes television, print, radio and outdoor advertising, costs between $12 million and $18 million. Those numbers are being exceeded by many this summer.

The average studio marketing cost for prints and advertising has increased dramatically over the last 10 years--rising from $6.4 million in 1985 to $17.7 million in 1996, according to the Motion Picture Assn. of America.

Studios are always looking for new ways to break through the clutter. Sony's Columbia/TriStar, for example, recently made a deal with MovieFone, the popular phone service used to purchase advance movie tickets, to advertise nine of its upcoming movies, including "Cable Guy" and "The Fan," on 30-second spots that will run from June 7 through Aug. 29. Sony purchased 9 million calls--half the service's summer inventory--the largest single purchase of MovieFone time for any studio promotion.

"It's the most direct route to moviegoers," Ganis says. "You know that everybody who calls is going to the movies. They're not shopping for anything else."

Cable TV is also fast becoming a popular advertising vehicle for movie companies.

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