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Video a More Equal Partner

31 Mar, 2005 By: Thomas K. Arnold

Video used to be seen as the ugly stepsister of the glamorous movie business. Now, they're looking more and more like twins.

The advent of DVD brought Hollywood's creative community into the home entertainment fold. In 2001, when home video revenue to the studios surpassed theatrical for the first time, the suits came as well.

And now, wonder upon wonders, theatrical and home entertainment executives are even starting to work together. In more and more cases, the DVD crowd is reading scripts for films that haven't even been made yet, and are called in during “green light” meetings to project how well a film might perform in the home video arena.

“I've been reading [some] scripts ever since I got here, and I've always been involved [to some degree] in the green-light process, but now it's every movie,” said the home entertainment president from one of the six major studios, who asked that his name not be used.

“As the revenue from DVD sellthrough becomes a higher percentage of the overall revenue on a movie, the DVD sellthrough profile of a potential movie becomes even more important in determining whether it gets made,” said Benjamin Feingold, president of Sony Pictures Home Entertainment (SPHE).

Feingold added that the emergence of genre divisions at the major studios, like Sony's Screen Gems unit, “is testament to the importance of DVD, because genre movies that appeal to the 18- to 34-year-olds tend to derive a larger percentage of their overall revenue from DVD sales as opposed to theatrical.”

This integration isn't just happening on the front end, but also on the back end. Mike Dunn, president of 20th Century Fox Home Entertainment, said shrinking theatrical-to-video windows also are making video execs “armchair quarterback theatrical releases like never before.”

“You're really integrated with the theatrical group, while they're making the trailer, while they're testing the film,” he said. “And a large part of that is because of the condensed window. After the first weekend a film plays theatrically, we have to be real familiar with a title to get it out in a quick manner.

“So we have to have a real good understanding of what the movie did when it launched, we have to analyze how the commercials are being tested and how the movie is being tested, we have to know what markets are accepting the movie and what markets are rejecting the movie, and we have to understand everything about the PR campaign and how we can build on it, so when the movie comes out of theaters we're ready to go.”

This is not to imply home video marketers simply draft off each and every theatrical campaign. Getting people to see a movie in the theater is a completely different matter than getting them to buy a movie on DVD for their collection.

“When you sell a movie for theatrical, you're selling an experience,” says Tim Nett, CEO of creative design agency Trailer Park. “When you're selling a movie for the home, it's a product.”

While theatrical campaigns strive to build awareness, DVD campaigns tend to focus on giving people a reason to buy. Home entertainment marketers also benefit from hindsight, which can have a pronounced effect on the flavor of the campaign, particularly with a domestic theatrical underperformer such as King Arthur.

When that film came to theaters, it was marketed as a broad, sweeping backstory to the legend of Camelot. The goal: to spark excitement and build anticipation for a new twist on a familiar tale. But when it came time to market the film for video, the campaign turned 180 degrees.

Nett said it was decided to embrace the Arthurian legend “instead of saying, ‘This isn't the Arthur you know.’ Research conducted after the film opened led to this change of heart. “We found people were actually very comfortable with the legend of King Arthur, and the idea of selling it differently wasn't necessary,” Nett said.

Indeed, home entertainment marketers do a lot of their own theatrical-style research, analyzing consumer demographics in markets where the movie was successful and creating their own commercials that, if a movie bombed, sometimes completely reposition the film.

“We have focus groups testing various aspects of marketing and consumer propositions — from advertising campaigns to key art to intent-to-purchase to sales velocity — on a constant basis,” said SPHE's Feingold said.

“We also have extensive marketing meetings about advertising expenditures for every title we release,” Feingold said. “Ten years ago we did not have that, because we were not in the retail sellthrough business like we are today.”

“Our business model has changed to a fast-moving consumer product,” added David Bishop, president of MGM Home Entertainment. “DVDs will never be a true commodity product like soap or peanut butter, but they are a very strong impulse buy, more like magazines or books.”

But DVDs are still very much a part of the Hollywood experience, insists Kelley Avery, worldwide head of home entertainment for DreamWorks SKG.

“I think the thing we have to be careful of is to make sure DVD isn't perceived as just another item at a price,” she said. “More than ever, this business is a market-driven business. And if we do it right, it's not just a box at a price that the consumer sees, but that entertainment experience they had in the theater.”

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