Selling VOD windows

Major moviemakers come together for consumer

In an era in which marketing is driving key decisions in moviemaking, the push by Fox, Sony, Universal and Warner Bros. to shorten the theatrical window and deliver movies directly to consumers’ TV sets via VOD only 60 days after their cinematic debut should come as no surprise.

Yet the demographic group this effort, dubbed Home Premiere, is aimed at is somewhat startling, given that younger customers have been driving theatrical box office revenues.

“It will target the older, lapsed movie consumers, those who are out the habit of going to the movie theater,” says one veteran film marketing executive and current consultant.

Home Premiere customers also figure to be more upscale, and able to afford the $29.99 pricetag the service has set for a two-day home viewing opportunity (in contrast with the $4-$5 charge for VOD offered in the traditional 90- to 120-day post-theatrical window). Many customers are likely to have families, making such viewing cost-effective, particularly in markets where individual theatrical tickets can approach $12 apiece.

On the face of it, the new premium VOD scheme will extend the bang studios get from their existing theatrical marketing buck.

“My sense is this 60-day window will allow the studios to take greater advantage (of) the millions of dollars they allocate to launching the movie theatrically,” says Robert Levin, former senior theatrical marketing exec at Sony Pictures Entertainment and Walt Disney Pictures, now an adjunct faculty member of entertainment marketing at USC School of Cinematic Arts.

The marketing of major theatrical releases has always spilled over as a halo effect onto other windows — especially the homevid/DVD business, which has traditionally launched some 90 days after a film bows in theaters. That’s because a hefty $50 million campaign for a wide release generates awareness for a title that extends beyond the initial theatrical window.

This marketing halo effect is about to be tested. DirecTV, with major cable companies to follow, has already launched Home Premiere, with Sony’s “Just Go With It” the first title offered.

The studios contend the service won’t hurt exhibitors, because 97% of all box office receipts are amassed within 60 days of theatrical release for 25 of the biggest-grossing movies in a given year, according to industry estimates.

But exhibs maintain the new VOD scheme will cut B.O. revenue. And with Comcast trolling for studios to provide premium VOD content within a time frame that’s as short as 42 days after a pic’s theatrical bow, the National Assn. of Theater Owners sees no guarantees the move toward collapsing windows isn’t a slippery slope.

“It’s no surprise that additional delivery companies are interested in the model,” NATO prexy John Fithian says. “It’s the parties that have the most to gain and nothing to lose that are the ones floating new models.”

Indeed, NATO members have strongly hinted they might retaliate by curtailing in-theater running of trailers.

One marketing exec says the Regal Entertainment Group theater chain has plans to cut back on 50% of all in-theater trailers for films of the four studios involved in Home Premiere. And with in-theater marketing efforts a major component of a studio’s promotion for a film, such a cutback on trailers would likely force studios to increase TV advertising for their films.

“You would have to make up for eyeballs lost, and TV (commercials are already) a prime driver for movie studios,” says Greg Kahn, exec VP at media agency Optimedia U.S. and founder of film consultancy FilmBuzz. Thus broadcast TV and cable could benefit considerably as studio ad dollars seek those lost eyeballs via the small screen.

For VOD films, marketing is traditionally the responsibility of the cable operator, satellite distributor or telco TV programmer on whose service a title is offered. Initially the strategy will be the same for Home Premiere. For example, DirecTV’s website has already promoted “Just Go With It” with the marketing tagline, “From the Big Screen to Your Screen. First.”

DirecTV says marketing efforts for each movie will begin one week before a film launches on Home Premiere, and will include TV promos on satcaster’s channels, banners in its program guide, on and in emails. DirecTV also plans to run national television commercials on other networks.

The studios themselves will continue to spend their marketing coin for theatrical, Kahn says.

If it lives up to the hopes of its proponents, premium VOD could benefit such cable MSOs as Comcast and satellite providers like DirecTV by giving a shot in the arm to today’s anemic VOD sales. “VOD for movies has underperformed for years,” says Robert Marich, author of “Marketing to Moviegoers.” The 90- to 120-day window has never resulted in urgency for consumers.

The other group that would benefit, of course, are the studios. Erick Hachenburg, chief exec for film/video site Metacafe, who has worked on many marketing campaigns with the studios, says the shorter VOD window is an attempt to offset the steady falloff in DVD sales. “This is modest step for a new business model,” he says. “The DVD business helped to fund movies. You want studios to figure out how to replace that (declining) revenue stream so they can make more movies.”

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