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TOUGH MONEY: Entertainment

Lights, Camera, Packaging

Despite all the marketing lingo, home video execs say the Hollywood factor keeps their jobs fun.

March 24, 1997|THOMAS K. ARNOLD | SPECIAL TO THE TIMES; Thomas K. Arnold is a freelance writer based in Carlsbad and an editor of Video Store magazine

If you think landing a home video marketing post with a Hollywood studio puts you smack in the middle of the glitz and glamour of the movie business, forget it.

You're selling "packaged goods," as Bob DeLellis, president of 20th Century Fox Home Entertainment, puts it. And you're more apt to banter around buzz words like "brand marketing" or "category management," just like your peers in frozen foods or cosmetics, than do lunch with Arnold Schwarzenegger or Steven Seagal.

"Sure, you get some of the flash, but it's in a box," DeLellis says. "If you are a video executive and you intend to run your company like a movie studio, more than likely you will fail. But if you run it like a consumer products company, you have a much better chance of succeeding."

"You are in a packaged-goods industry that happens to be in the fortunate position of selling entertainment," says Andrew Kairey, executive vice president with Universal Studios Home Video.

Small wonder, then, that so many home video executives come from outside the movie business. Eric Doctorow (video president of Paramount Pictures), Glenn Ross (senior vice president of Hallmark Home Entertainment), Stephen Einhorn (president of New Line Home Video) and Len Levy (home video chief of HPM Entertainment), among others, are veterans of the record business--where they marketed a different form of entertainment, but also in a box.

And over at Fox, DeLellis makes a point of looking outside the Hollywood scene to fill his marketing suite. His senior vice president of marketing, Brad Kirk, came from Helena Rubenstein, the cosmetics giant. Kirk's predecessor, Bruce Pfander, had been an executive with Procter & Gamble.

"They're consumer-products people, and that's what this business is about," says DeLellis.

Still, the Hollywood mystique does factor in when one is drawing up a marketing plan--a task that video executives insist is infinitely more difficult than, say, launching a new brand of detergent.

"You have to push all the right buttons," says Kairey. "You have to strike an emotional chord, with product that's good for children, product that's credible, product that hits the mischievous side, the fantasy side--so you're working all those sides that make it the fun part of entertainment.

"But at the same time, you have a lot of the discipline that you have to pay attention to from the packaged-goods side--testing the product, developing a consumer campaign, managing inventory."

"We have a very unique situation," says Ross. "Companies like Hershey or Coca-Cola have very stable demographics because they're always marketing the same product.

"But with movies, you're never marketing the same product twice. If we put out 60 movies a year on video, that's 60 different sets of demographics, 60 different sets of audiences, and 60 different reasons why people will rent or buy that cassette."

The first question video marketers have to grapple with is whether to price the video for direct sale to consumers, generally around $20, or release it first at a higher "rental" price of about $100, for sale to video rental stores. In the past, the lower direct-sale price was reserved for movies that grossed more than $100 million at the box office or that were aimed at children.

But with the rapid growth in the "sell-through" end of the business--in 1996, consumer spending on videocassette purchases totaled $7.3 billion, up from an estimated $6.3 billion in 1995, according to Adams Media Research--the equation is a lot more difficult.

"Repeatability is one of the three key issues," says Kairey. "Second is who is the audience you are going after, and third is the collectibility--is this something the average consumer will want to put in his library?"

Specialty video stores like Blockbuster Video continue to dominate the video rental market. But videos priced for sale are available at a much broader spectrum of retail outlets, including mass merchants like Wal-Mart and Target stores. And this is where the packaged-goods mentality figures in most prominently, video executives say, often through rebates and cross-promotions with other consumer products.

"You're moving most of this product beyond traditional video stores, in places like Wal-Mart and Sam's Club and Best Buy, where video is just another packaged good," says Jeff Fink, vice president of sales and distribution with Live Home Video. "You're fighting for the same shelf space as any other consumer product, so what you try to do is offer some type of added incentive so that when people come into these stores they buy more than the video."

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