Studios Ratchet Up ‘Tentpole' Strategy14 Nov, 2002 By: Thomas K. Arnold
Studios have long used so-called “tentpole” video releases of high-profile, usually big box office titles, to spur sales of catalog titles, often through rebate offers in which consumers who bought the new heavyweight got money back -- provided they also picked up a couple of oldies.
But with DVD rapidly replacing VHS and consumers beginning to amass formidable movie libraries in their homes, the practice is accelerating, industry observers say. As DVD player U.S. household penetration nears 40 percent, studios are concerned about maintaining buy rates. And with this fourth quarter chock full of hot new releases, studios are employing the tentpole strategy to bolster catalog sales and appeal to consumers' holiday shopping mood and desire to build up their DVD collections.
* Columbia TriStar Home Entertainment is enclosing certificates inside its litany of fourth-quarter tentpoles, including Spider-Man, Men in Black II and XXX, which entitle the buyer to get two catalog titles for the price of one.
* New Line Home Entertainment is bundling Austin Powers in Goldmember with the two previous installments, and also offering a $5 rebate to consumers who buy Goldmember and any other of the studio's “infinifilm” special editions.
* Fox Home Entertainment is using the Nov. 26 release of its big fourth-quarter family title, Ice Age, to spur sales of catalog titles Anastasia, Dr. Dolittle, Dr. Dolittle 2, Home Alone and Mrs. Doubtfire.
* Paramount Home Entertainment assembles catalog collections around two big DVD special editions of Sunset Boulevard and Roman Holiday -- a Billy Wilder gift set and an Audrey Hepburn package, respectively.
* When Universal Studios Home Video in January releases a quarter of new releases, including The Bourne Identity and Blue Crush, consumers who buy two or more copies get two free catalog DVDs.
* Each time a new James Bond movie comes out in theater, MGM Home Entertainment repackages catalog Bond titles in new DVD collections. The latest, which streeted Oct. 22 -- a month before the new Bond flick, Die Another Day, opens in theaters -- includes special edition DVDs of Dr. No, GoldenEye, Goldfinger, License to Kill, The Man With the Golden Gun, The Spy Who Loved Me and Tomorrow Never Dies and retails for $124.96.
“Catalog is so important,” said Michael Arkin, SVP of marketing for Paramount Home Entertainment. “Obviously, our new releases get the most media attention, but from a business standpoint, the catalog portion of our business is just as important. It's the backbone of the studio.”
“Because of the velocity of DVD purchasers, libraries are much larger, and when you look at that, everything old is new again,” added Tracy Garvin, VP of marketing for Columbia TriStar Home Entertainment. “And with DVD, it's not just taking old movies and putting them out again. You can find all this wonderful content and make it fresh.”
Arkin said next year, when the latest “Star Trek” film hits video, “we will absolutely promote all our other ‘Star Trek' movies in our advertising and marketing programs. It just makes sense.” Going one step further, Arkin said Paramount will use the theatrical release next year of Tomb Raider 2 to promote the original film's DVD and VHS availability.
Similarly, New Line regularly promotes videos of catalog titles when a new film in the franchise hits theaters.
“[DVD] has invigorated the whole catalog market,” said Justine Brody, VP of marketing and promotions. “People, now that they have DVD players, are buying more movies. And if you have a franchise title, like Goldmember, even if they own the VHS of the earlier films, they're going to want to complete the series on DVD.”
Retailers applaud these studio attempts to drive catalog sales. “I think it's a great offer for consumers,” said John Thrasher, VP of video purchasing for Tower Records and Video, a 98-store audio-video combo chain based in West Sacramento, Calif. “For us, we wouldn't be in business if it wasn't for catalog. You make nothing on the hits, particularly right now, when you've got Best Buy and Kmart and Circuit City selling every new release at $3 to $5 below cost.”
It works for rental dealers, too. Tom Hannah, owner of Video Quest in Joliet, Ill., said when Pearl Harbor came out, he bought a copy of Tora! Tora! Tora! for $15 and got back $40. “If you do that kind of thing enough it helps,” he said. Ideally, he said, he'll already have the catalog title in stock. In that case, “It's free money. I get dollars from movies that were paid for during their new-release run. When I have to buy a catalog piece, the return on investment is not as good as my new-release ROI.”
Garvin noted Columbia TriStar's catalog promotion is being extensively advertised in time for the holiday season, with ads in the Nov. 29 issue of Entertainment Weekly and the Dec. 2 issue of People.
“It's really the idea of driving the purchase and collectability of DVD,” she said. “We're hoping to not just add value to our new releases, but also to show people there's all this great catalog product out there you can buy.”
The practice of using new releases to drive catalog sales has proliferated to the point where some studios are even hitching a ride on some other studio's tentpole release.
When Disney releases Lilo & Stitch next month, Fox will be right there with My Neighbor Totoro, an animated Japanese family feature created in 1988 and originally released on VHS in 1993. The video will return to the market, this time on DVD, on Dec. 3, the same day as the Disney blockbuster.
“Disney's been very good to us over the years,” said Peter Staddon, SVP of marketing for Fox Home Entertainment. “When Disney released Pearl Harbor last year, we released Tora! Tora! Tora! And sold more than 1 million units.”
Staddon is quick to point out, however, that Fox also employs this strategy with its own tentpoles.
“When we launched Don't Say a Word, we dusted off some Michael Douglas product, Romancing the Stone, Jewel of the Nile, put them out as attachment titles and during our initial promotion sold more than 800,000 copies, all on DVD,” he said.
Using tentpole titles to promote catalog product is particularly important for MGM, which derives nearly 80 percent of its business from library titles, according to marketing director Allyssa Moore-DelPiano.
The studio's healthy collection of Bond films gets a marketing makeover whenever a new Bond flick hits theaters, and this time around certain key retailers will also be provided with DVD samplers that include previews of Die Another Day that they can give away to their customers who buy the special-edition Bond boxed set.
“Catalog is extremely important to us, because we have one of the industry's largest catalogs,” Moore-DelPiano said.
MGM even uses special-edition DVD releases of catalog titles to promote sales of deeper catalog product, she said. Copies of the special edition of the groundbreaking Wes Craven horror film The Last House on the Left included instantly redeemable coupons good for a dollar off other MGM horror movies, like Amityville Horror 4 and Phantasm.
It's only going to get worse -- or better. DVD is approaching the 40 percent penetration mark, at which point, some studio execs say, the floodgates will be flung open and even studios that have been slow to release catalog product on disc will aggressively mine their vaults for anything and everything they feel makes sense -- and promote it accordingly.
“I think the real task is still ahead of us,” Staddon said. “When you start getting up to 40 percent, 50 percent penetration levels, you're getting into consumers who are not as avid as the initial wave. How do you get them to step up their purchasing behavior -- that's going to be the big challenge. When they go into a store to buy a big title, you've got to get them to buy something else.”
Tower's Thrasher agreed that it's important to maintain consumer buy rates. “There are only so many big hits that come out in any given year,” he said. “You can't make your living off just 10 big hits. You've got to have something else to sell.”