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Marketing, Distribution, & Promotion of Films
Term Paper ID:27989
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Highlights key factors in the marketing, promotion, production, & distribution of films. Focus is on advertising successes & failures, & turmoil caused by decreased window of time between theatrical & video release.... More...
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Paper Abstract:
Highlights key factors in the marketing, promotion, production, & distribution of films. Focus is on advertising successes & failures, & turmoil caused by decreased window of time between theatrical & video release.
Paper Introduction:
INTRODUCTION
The marketing, distribution, and promotion of films has changed within the last decade as the result of changes in ancillary markets, notably the continuing development of sales to cable and other television outlets and the growth of the home video industry both as a rental market and as a sales market. In addition, there have been changes in the structure of exhibition which has contributed to new methods of distribution and promotion. Costs have also been a factor and are becoming even more so today, and the expense of promoting a film has risen greatly, just as has the average cost of film production. The film business has become more expensive and more risky, but at the same time the potential for high returns has continued as an incentive for producers. Indeed, this potential has itself
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While there are no statistics available, itis believed by many that the number of second-run theaters nationwide isgrowing because multi-screen second-run complexes have been built at thesame time that many of the older, single houses have switched to second runas well. The 1992 release of "Pinocchio" marked the first Disney animatedfeature to return to theaters after release on videocassette. There are also lessons tobe learned from film marketers' errors: 1) do not let costs get out ofcontrol so that prices get too high for customers; 2) do not dilutebranded products and then expect success; and 3) do not release newproducts when everyone else does the same thing. Most of thenation's neighborhood theaters have gone from first-run to second-runbecause they have been pressured to change by the success of the multi-screen national chains which have moved into suburban regions and whichhave attracted more audience. "Marketing Management: Lessons from Hollywood." Sales & Marketing Management April 1992: 32-34.Rouvalis, Cristina. Indeed, some producers found that they coulduse television to create their film by selling the television rights inorder to raise the money to make the film in the first place. This is always the danger with marketing--it has thepotential to fail, sometimes by making the audience tired of hearing aboutit, as may have happened with Dick Tracy. Sneak previews areundertaken well in advance of a film's scheduled release date to allow forany editing or changes. The recent release of Malcolm X is a case inpoint, and T-shirts and caps with an "X" on them are big sellers and wereeven before the opening of the film. film Batman Returns and the 2 th Century-Fox film HomeAlone 2: Lost in New York. Anotherproblem is that the window is shrinking between the time a film is firstreleased and when it comes out on video, leaving second-run theaters tocompete with the local video store (Rouvalis 1992). Movie studios spent almost $1 billion on media advertising that year, a 6 % increase over 1987 spending. There are successes and failures each year in both categories, withthe most bothersome to the industry being failures on the part of filmsperceived as having high potential. This methodis still used with reference to cable outlets that may put money intotheatrical production in order to have pictures for showing on cable at alater date. This may result in a changed ending for a film,since research has shown that, if the viewers do not like the movie'sending, they forget they ever liked anything in the film. Magiera and Fahey reported recently that theCoca-Cola Company had outbid the Pepsi-Cola Company for promotionalpartnerships with what are expected to be the most popular movies of 1992:the Warner Bros. Theatrical distribution also serves as advertising for titles thathave little chance in the theatrical marketplace at all, yet these filmsare distributed on a limited basis because video companies often will notrelease a film unless it has had theatrical distribution. It can bedisastrous, however, when marketing tie-ins do not work, and they may notwork even with successful films. Some films that rely heavily onsecondary marketing fail miserably on both ends. Tie-inmarketing is another matter, generating great profits when a film issuccessful and in effect allowing the film to pull it along. Yet, industry practice still seems to be designed as if it were theengine driving the system, whereas in truth it is the quality orattractiveness of the films themselves that serves this role. Observers believethat the industry-wide ad spending increases will continue, though perhapsnot at the same high pace. Research!" Marketing News 11 September 1989: 1 -11.Fitzgerald, Kate. The reason forthe increases may be that there are more entertainment options competingfor the dwindling leisure-time dollars of the audience. Theatrical distribution was still theprimary source of revenue, with television seen as an ancillary market thatcould produce added revenues. At onetime, of course, theatrical exhibition was the only goal for producers, whoreaped their profits entirely from box office revenues. . There are different ways this is attempted, frominundating the public with stories and images from a given film to subtlercampaigns that try to target specific audiences or audience segments. Video has made particular use of theatrical distribution as anadvertising medium with certain classic titles that are reissued totheaters just before they are released on home video. It wasbelieved that this release would be successful (as it was) because thevideo had sold only 7 , units in the 1985-1986 period, in contrast tothe 14.2 million copies of "Fantasia" sold last winter (Harris D1). Asproduct placements become more common, so do worries among regulators inEurope and the US, who see them as deceptive and damaging to the integrityof programs. When a smaller film breaks through and does well, it is less asuccess in a marketing, which may be minimal, than it is proof thataudience tastes are tantalized by marketing but not ruled by it. Indeed, thispotential has itself contributed to the increase in costs because it hascreated a blockbuster mentality that causes studios and producers to throweverything into a few large movies in the hopes of producing high grossesat the box office. Magiera states that the emergence of movie studios as major playersin upfront sales for network TV exemplifies how big a factor the entireentertainment industry has become in today's media world. Yet, it is not just second-run theaters that are complaining aboutthis new marketing and distribution environment. Themain objectives behind sneak previews are to identify creative problems,test audience satisfaction, and suggest ways in which the film might beimproved. Audience testing can include everything from the contents of the filmto the trailers and television ads and print advertising campaigns. The long-troubled filmBrenda Starr was released after a five-year wait on the shelf and did nobusiness at all. For the film companies, this meant money paidto them for tie-ins and also promotion of their films by entities otherthan themselves, thus contributing to audience awareness and the sense ofmust-see that they wanted to create. According to The Economist ("Brands on theScreen: Rocky the Salesman." 1991: 7 ,75) highly visible brand-nameproducts are appearing more and more in movies and television shows. Over the lastdecade, the window between the time when a film is shown in theaters andthe time when it appears on video has closed, making the lag time shorterand shorter. "Lights, Camera . . Much marketingeffort today goes into developing ancillary markets and product tie-ins ofvarious sorts, all to help recoup expenses and, if a film is verysuccessful, to cash in to an even greater degree.LOOKING TO NEW MARKETS Theatrical exhibition is still a vital part of the film business, butin many ways it has changed in terms of the importance accorded it. It is not always the case that peoplewant to see the movie and wear the T-shirt, for instance, though it isoften the case that they do. Admissions have declined somewhatwith higher ticket prices making up for any revenue shortfall that wouldotherwise occur. First-run theaters alsosee this shorter window as damaging to their business--if a consumer isuncertain about a specific film, he or she may simply wait a month or twoto see it on home video. These tests also suggest what elements in a film might be moremarketable to the public based on audience reactions. Broker commissions run as highas $25, , and advertisers pay fees ranging from $5 , to $1 , fortheir products to be used as props in a film (71, 75).ADVERTISING Television is the primary advertising medium for motion picturestoday. Gottesman reports that in 1991, the movie industry's spendingaccounted for about 2 percent of national advertising outlays and that theindustry's ratio of advertising to sales had been rising over the previousfour years. An analysis of the marketing methods in Hollywood recently shows boththe best and the worst elements in marketing and thus points out bothstrengths and weaknesses in the system. This has always been a risky venture, but it appears tobe getting even riskier as costs rise so high that grosses have to beextremely high in order to reach break-even. By watching the marketingpractices Film marketing includes product tie-ins of various sorts and thepromotion of the film through arrangements with other advertisers. "Squeezing the Screen." Pittsburgh Post-Gazette 24 March 1992: 9.----------------------- 11 Entertainmentmarketers are now spending more to buy media time and space for theirproducts. "Mattel Polishes Its Star Power: New Toys Tie into Movies, TV Shows." Advertising Age 3 February 1992: 1 .Gottesman, A. In the 195 s and into the 196 s, producers discovered televisionand the fact that they could sell their old films to television and makemoney from an entirely new market. "Advertising Topics - Industry Report" Paine Webber Inc., 29 July 1992.Harris, Kathryn. Thesystem today is based on testing, surveying, and analysis of the audience,its likes and dislikes, and imagery that will attract the customer intobuying a ticket. Movie marketers are leading the way in theeffort to control costs by developing narrowly targeted campaigns, such asParamount Pictures' use of the cable outlet MTV almost exclusively to reachthe young audience appropriate for its movie Wayne's World, and the successof that approach means that it will be used again by other marketers in thefuture (S1, S6).MARKETING SUCCESSES AND FAILURES The marketing methods of the Hollywood studios are used to somedegree on every film, though much more energy is expended on those filmsthat are perceived as having a high potential rather than a high need.That is, energy is expended on films that are thought to have an audience,with marketing used as a way of boosting sales and increasing ancillary tie-ins and other revenue deals. INTRODUCTION The marketing, distribution, and promotion of films has changedwithin the last decade as the result of changes in ancillary markets,notably the continuing development of sales to cable and other televisionoutlets and the growth of the home video industry both as a rental marketand as a sales market. "That's Entertainment Marketing." Advertising Age 23 March 1992: S1,S6.Magrath, Allan J. The requirement shows that theatricaldistribution gives a film a certain cachet it does not have otherwise,perhaps only to the extent of giving the video purchaser the feeling thathe or she has heard of the film before, so it is a real film and not just avideo.MARKETING AND PROMOTION Film marketing today tries to create a must-see feeling on the partof the film-going public. Bibliography"Brands on the Screen: Rocky the Salesman." The Economist 2 April 1991: 7 ,75.Diamond, Helene. This trendhurt the neighborhood theaters first, theaters which were alreadyencountering problems in an era of reduced audience size, parking problems,high rents, decaying inner city neighborhoods, and so one. The Walt DisneyCompany recently tested its ability to make money in theaters by releasinga film that was already on home video. "A Nose for Profit: 'Pinocchio' Release to Test Truth of Video Sales." Los Angeles Times 12 June 1992: D1.Magiera, Marcy and Alison Fahey. Then came home video, which pushedahead to become probably the primary supplementary market and, in time, thetail that wagged the dog. Product tie-ins can begin before the film is even shot, and there isone kind of film marketing practice in particular that is controversial.This involves the placement of products within the film itself, generallyfor a fee that helps defray production costs and that may lead toadvertising tie-ins later. This applieslargely to independent film productions which have been sold to videocompanies for video distribution. Fitzgerald cites the case of the Mattel Toy company and the manyfilm and television tie-ins in which it is involved. This has distressed exhibitors, who feel they are being usedto advertise home videos while their own concerns are ignored. Paramount spent$1.3 million for a new ending to the movie Fatal Attraction after testaudiences gave the original ending a "thumbs-down," for instance.Advertising campaigns may similarly be shown to be ineffective, at whichpoint they are scrapped and another approach is tried based on the research(Diamond 1 -11). From the standpoint of the soft-drinkcompany, this deal during the key soft-drink selling season of summer andduring the Christmas holidays gave the Coca-Cola Company a chance to makesignificant inroads in the youth market. Magrath reports that Filmmarketers have taken a few lessons to heart which might serve othermarketers well: 1) the need to use multiple channels of distribution; 2)the value of simultaneous nationwide launch; and 3) aggressively usingthird-party endorsements from opinion leaders. This is because a lot of theatrical distribution and marketing todayis geared less to making money in theaters--though that is always a goaland a hope--and more to making money later in home video. Utilitiesare getting more costly, and the theaters are caught in a cost squeeze madeall the worse because they cannot pass on costs to consumers. "Coke Nabs Movies." Advertising Age 16 March 1992: 2.Magiera, Marcy. Often, a modest success is just notenough, Some time ago the Disney-released Dick Tracy made a profit and didwell against the summer competition, but because expectations had been soinflated by the hype surrounding the release, it was perceived as afailure. In addition, there have been changes in thestructure of exhibition which has contributed to new methods ofdistribution and promotion. Still, spending by the industry rose by more than $5 million over a four year period. Costs have also been a factor and are becomingeven more so today, and the expense of promoting a film has risen greatly,just as has the average cost of film production. The theaters are having trouble staying in business. The company also signed a dealwith Home Alone star Macauley Culkin to promote Sprite--and at the sametime to promote the movie, of course (S1, S6). The strategy forMattel is to become the first toy company that television and filmcompanies turn to when looking to license products (1 ). The film business hasbecome more expensive and more risky, but at the same time the potentialfor high returns has continued as an incentive for producers. Tie-ins are common with toy manufacturers for movie characters andideas. Recently, a decision by the distributor of Danceswith Wolves made a deal with McDonald's hamburger chain to sell copies ofthe film on videotape at a much reduced cost, while the original videorelease in traditional video stores still sells for about $1 . Media marketers spent $2.1 billion in 199 , which was a 38percent increase from 1987. Thesearrangements can be complex and costly, but they can also add to theawareness of a film on the part of the public and contribute both to ticketsales and video sales later. Clearly,this antagonized video retailers. Cable indeed became the next major market after broadcasttelevision beginning in the 197 s. A film that is seen as marginal will not begiven greater attention in order to see that it succeeds, which seems tofly in the face of more usual practices of identifying problems and thenaddressing them. This is no longerthe case. The syndication category accounted forhalf of the gain, but newspapers lost only about $7 million. Traditional methods of promotion and marketing are still widely used,but television has become the centerpiece of every campaign, with theadvertising blitz in the week or so before a film opens being thedetermining factor in the success or failure of the effort. Today, many entertainment marketing companies act as brokersbetween studio producers and advertisers. This would be seen as normal for an industry that is growing,but the movie business is not growing.
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