By Barkin, Eric
CRM Magazine , Vol. 15, No. 12
If a narrative feature film doesn't open well in the first week, it's a failure.
"It's day-old bread," explains Perry Katz, a consultant to the Motion Picture Group at IPSOS OTX Media CT, and former head of research for Columbia Pictures and Metro-Goldwyn-Mayer and of marketing at Universal Pictures. "By the time Monday comes around, if you haven't established your flag in the sand, then you're forgotten in a week."
Theaters will not hold over a movie that does not perform in its first week--really, its first weekend. There are so many competing movies being released every week that they will pull it off a screen and put another one up. To be successful, a movie has to develop a relationship with its customers fast, or risk getting lost in the crowd of other films.
How competitive is the market? According to The Motion Picture Association of America (MPAA), 560 films were theatrically released in the U.S. and Canada in 2010, and as many as 706 were rated (G, PG-13, R, etc.) for public release. This means that nearly 20 percent of the films that were rated never made it to any theater in the U.S. or Canada. Add to that 2,126 feature films certified for production in India and 520 in China--not to mention Latin America and Europe, two other major markets.
"Because there are so many films still being released, and there's just so much shelf space, exhibitors will pull your movie if you haven't established your self," laments Rob Hollocks, vice president and creative director for interactive media at New Wave Entertainment, a marketing and content creator that has worked on Avatar, Black Swan, and the Blu-Ray release of Star Wars.
Consequently, just before the release of a major, big-budget, "tent pole" feature film, the market is flooded with ads. It's like a political campaign. A major studio buys so much ad space on TV, radio, in print, billboards, etc., that a film's presence becomes ubiquitous. Tens of millions of dollars are spent with the goal of taking public awareness from, say, 20 percent up to 80 percent. That's the kind of penetration a big movie demands to recoup its investment.
Campaigns are furious. Just how much ROI a feature is able to pull from any one given piece of a bigger media strategy is often difficult to assess. Yet, tent poles consistently spend big without being able to follow every dime, as in other industries.
"If you've got a movie that costs $120 million--let's say you have Sherlock Holmes--you've got so much money wrapped up in production, you need to protect that investment," explains Katz. "You're not going to take a chance by not spending against it on television.
"Could you have done better if you just let it simmer?" he asks "Possibly. But who's going to take that chance? I wouldn't want it done with my movie and I'm sure you wouldn't want it done with yours."
DVDS TAKE A FALL
Add to that a number of shifts in the market that have posed challenges for the way movies have done business in the past. One of the biggest has been an erosion of DVD purchases and rentals and the rise of digital subscription and streaming consumption.
"DVD used to be our cash cow; if we didn't make money at the theatrical release, you could always try to pick it up on the backend in the DVD release," says Katz.
In the first quarter of 2011, U.S. DVD sales fell 20 percent, according to a study by Digital Entertainment Group (DEG). DEG also has found that home video sales and rentals have been steadily falling from their high-water mark of $21.8 billion in 2004. In 2010, they stood at $18.8 billion. Meanwhile, consumer spending on streaming and subscription services, such as Netflix, rose 33 percent to $695 million.
As those numbers suggest, the pickup in streaming and subscription services isn't making up the deficit in DVD sales.
"Maybe in five years," Katz speculates, "but it's not the same kind of tsunami we saw when people switched over from buying videocassettes to DVDs. …