The six big movie studios, all suffering from a sharp decline in DVD sales, are scrambling to cut costs. Marketing is seen as the most bloated part of moviemaking. A summer blockbuster can easily carry a worldwide marketing budget of $150 million.
“We are going to look at marketing, where I think we have some real opportunities in terms of reducing expenses,” said Robert A. Iger, the chief executive of the Walt Disney Company, on a call with analysts this month.
At the same time, studios want more of a guarantee that their creative decisions are commercial. Is that plot line confusing? Will audiences like the title? Should we cast Kate Bosworth or Kate Hudson? Neither? A consumer testing company like ARSgroup could deliver statistical reports on those kinds of questions — useful information when it comes to justifying $170 million production budgets to the corporate bosses.
Already, of course, scores of research firms serve Hollywood. Some of the most successful have focused on pockets of the entertainment business. Frank N. Magid Associates, based in Marion, Iowa, has gained traction among studios that target teenage audiences, for instance.
Hollywood relies mostly on three research behemoths — the National Research Group, OTX Research and MarketCast — that test movie trailers and movie-related television commercials with sample audiences. They also provide “tracking” reports that help studios make decisions about spending marketing money.
Say interest among young men looks a little soft for “G.I. Joe: The Rise of Cobra.” Paramount Pictures might decide to increase its spending on ESPN ads or put some trailers on Playboy.com. A little money here, a little money there, and the movie just might find an audience.
While experienced movie marketers have a keen sense for which levers to pull and when, the practice wastes money through inefficiency, Mr. Sherak said. “You don’t want to sell Tide to a 10-year-old and you don’t want to sell an R-rated movie to a 10-year-old,” he said. But that’s just what happens: television ads, the movie industry’s No. 1 sales tool, are as wide a net as there is.
ARSgroup executives talk about offering studios a “holistic testing package” — how well do stars, the script, the marketing plan and other creative elements stack up? “Do you spend that last $10 million of the marketing budget as insurance or do you save it to optimize profitability? That’s the kind of thing we answer,” Mr. Cox said.
Warner Brothers, at the urging of one of its in-house production companies, has been looking at ARSgroup, according to Ashley Grace, the research company’s president of business development. Compared with its rivals, the studio creates more high-cost, high-concept pictures like “Watchmen.” Such films can be marketing nightmares. This fall, the studio will unveil its big-screen adaptation of the children’s book “Where the Wild Things Are,” an unusual combination of animation and live action that is not typical family fare.
Spike Jonze, the movie’s director, said in a recent interview with a movie fan site that his movie had “freaked the studio out.” ARSgroup to the rescue?
A Warner Brothers spokesman declined to comment. ARSgroup, citing privacy clauses, would not reveal its customers.
Mr. Cox and Mr. Grace might hail from Indiana — which might as well be Timbuktu as far as the movie crowd is concerned — but they have learned Hollywood’s ways fast. Mr. Sherak, himself now a marketing consultant, said his work with them would include making introductions, and that instead of paying him they could make donations to his various charities.
Still, is it smart to bring on pricey consultants when corporate overlords are demanding cost cuts? And what of the parade of failed attempts by consumer research firms to break into Hollywood? Few people in the industry can forget Tremor, the research firm that was owned by Procter & Gamble. It came to Hollywood in 2002, signed up with Creative Artists Agency and roped clients like DreamWorks — though its ideas often proved prohibitively expensive.
“One of the biggest differences between movie marketers and consumer brand marketers involves timing,” said Richard Ingber, president of marketing at Alcon Entertainment. “Films have a very narrow window in which to succeed,” he said. “Products are designed to gain momentum while they live on the shelf.”Continue reading the main story
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