In most industries, a 90% failure rate for products you launch every year would be unacceptable. But in one industry, the film industry, it’s considered acceptable practice. It's not surprising that "Big Studio" films are increasingly coming under scrutiny by movie studio execs seeing marketing expenditures increase and increasingly savvy investors evaluating their investments.

On an average year, most big film studios will put out 12 – 15 movies in hopes that one will be a blockbuster and pick up the slack for the rest of the under performing movies. It’s a bit like throwing spaghetti at the wall. Is this a sustainable way to do business? If you have deep pockets and can afford to throw away money, perhaps, and that’s what many film studios have. However, the market is changing and more and more film execs are finding themselves questioning the way it’s always been done.

Why are they questioning and what are the causes of these changes?

RISING COSTS

The cost of marketing a film is mushrooming, while in many markets, revenues aren’t. The Hollywood Reporter shared that the cost of marketing a film is $200 million and rising, an increase from $175 million over the prior two years, all while U.S. box office receipts were down 20% over the prior year with many other territories flat.

ON-DEMAND

On-demand lifestyles have supported an on-demand economy ripe with on-demand entertainment options so popular that, by the end of 2014, 41% of American households had access to at least one subscription-based video on-demand service. This was a 36% increase over the prior year and is a fundamental shift for the film industry which has historically been supply-led. In fact, experts predict that online streaming video services like Netflix and Hulu will make more money per year than the U.S. cinema box office by 2017. According to Ken Sharkey of PwC, “the consumer is now at the center of their own entertainment and media world, pivoting from finding to being found by content experiences via every channel and device.” In short, it’s more difficult than ever to get them out of their house and into a cinema when literally thousands of entertainment options are conveniently at their fingertips.

EFFICIENCY VS. EFFECTIVENESS

While television ads can easily make up half of a film’s marketing budget and may be an efficient form of advertising, it’s increasingly ineffective due to audience splintering. Few television shows command huge audiences, particularly in the U.S., and for the rare show that does, advertisers can expect prices of up to $400,000 for a :30 spot or $700,000 per spot during a live sporting event like Sunday Night Football.

For the larger number of filmmakers and studios creating mid-tier and below films which cannot afford to drop $300,000 or more per spot, this is a real challenge. Add in the issue of time shifting due to DVR use and these trends are concerning. As long as we’re depending upon traditional advertising and promotion, I argue that the vast majority of films will, unfortunately, miss huge opportunities to find, engage and motivate their audience to buy a ticket.

TIME COMPRESSION

The nature of film promotional windows is inherently inefficient. The compressed nature of a movie’s often 3 to 4 week promotion period and the critical nature of driving traffic for opening weekend means studios are sometimes paying up to 30% more for ad buys in an effort to drive traffic to the theaters. Essentially, shot-gunning advertisements with the hope that they are reaching a potential movie-goer that week. Many studio execs will admit that leveraging an online influencer strategy is likely a more targeted, cost-effective method for reaching the right audiences at the right time, but they want “certainty” so they continue to overpay and often overbuy in an increasingly fragmented environment. Certainty is of course, a relative term, that may need to be supplanted by the more appropriate term "comfort" because it's essentially impossible to have certainty in traditional advertising.

A FALSE SENSE OF COMFORT

If studio execs admit they know that social media and influencer outreach has a greater potential for reaching the right audiences at the right time, then why not change the way they market a film? Some would argue that it’s the fast moving nature of film marketing, while others like Hollywood veteran, Billie Greif, would say it’s a reluctance to try new methods for fear of the unknown. Yes, and in my meetings with over 100 Hollywood film studio execs, it’s also clear to me that influencer marketing can seem vague and hard for film marketers to wrap their arms around. This is understandable and why I believe in a virtual special operations team that can discover influencers, help them understand their influencers and engage them at every stage. This is where technology-enabled services, combined with sophisticated influencer tradecraft, can help.

PARTING THOUGHT

The race to find and capture audiences who will view and talk about films has always been a necessary part of the movie business. However, with a savvy influencer engagement strategy, studios and filmmakers, alike, can circumvent, or at least augment, an increasingly costly and less effective advertising space and build an engaged, motivated following for their films.

To learn more about how VizSense is solving and simplifying the influencer marketing conundrum for today’s most visionary filmmakers, contact us. We invite you to learn more about how to discover, understand and engage influencers at VizSense's Influencer Tradecraft Workshop by registering here. 

Also, download our free film industry eBook, Making Sense of Influencer Engagement: The Essential Elements of a Successful Influencer Outreach Program for Today's Films.