Historic summer box office means big shoes to fill
Studio marketing execs will be running a homevid gauntlet in the coming months. A record-breaking theatrical summer box office means bigger expectations for home entertainment sales — all in the face of a slower, mature DVD market and a consumer economy hit hard by high fuel prices and a burgeoning real-estate crisis.
Unlike recent quarters during which homevid units failed to achieve growth, homevid toppers won’t be able to blame weak release slates this time.
In fact, this fourth-quarter sales period is jammed with 15 major titles that each pulled in more than $100 million in domestic B.O.
So, will homevid arms step up their marketing efforts in order to ensure that their overall revenue numbers for the year end up in growth mode?
Lori MacPherson, Disney homevid’s senior VP and g.m. for North America, says her studio won’t increase what it spends on marketing appreciably this fourth quarter.
However, Disney and other studios are maneuvering their massive marketing machines to strike ahead of their typical Tuesday release dates.
“We have started front-loading our media before the title street dates so we can create as much awareness as possible,” MacPherson says.
Disney is doing this for their big titles: “Pirates of the Caribbean: At World’s End,” “Ratatouille” and “High School Musical 2.”
Estimates are that studio marketers will now spend 75% of their media dollars prior to disc release. Media budgets are around $5 million to $10 million for midsize home entertainment titles and as much as $15 million for major hits.
Tom Adams, president of Adams Research Group, says the media budget for each title comes to about 15% of expected sales.
The push to strike early stems from retailers like Wal-Mart, which have an increasingly fast trigger-finger when it comes to relegating slower-selling new releases to less-prominent shelf space.
“Because retailers are so eager to yank titles quickly, it make sense,” Adams says.
Lexine Wong, senior exec VP of worldwide marketing for Sony Pictures Home Entertainment, says her unit’s biggest title of the season, “Spider-Man 3,” released today, started its marketing campaign back in August while the movie was still in theaters. “Spider-Man 3” TV spots touted the title’s pending availability on Blu-ray.
Wong doesn’t expect Sony to spend much more in paid media advertisements than it did for the “Spider-Man 2” disc release in 2004. But Sony, like other studios, believes it can gain in other marketing areas.
“What you’re going to see from all of us is a lot of in-store point-of-purchase advertising because we can’t hit the consumer only through the media,” Wong says. “The market is fragmented. We need to be in there when all the foot traffic starts at retail.”