Television, The Big Elephant in the Room, May Be Shrinking
The number one single cost in releasing a film to theaters has been the buying of television ads. For many studio films, this can run from $4 million a week to $15 million a week in the month to six weeks running up to the film’s release. Of course small indie films (outside of those horror films which were given significant wide releases no matter their production budget) have never had the deep pockets for this kind of release, but their budgets might still get stretched in buying Spot TV ads, going after the random minutes available in weird time-slots or leftover network ad slots. Television is still expensive in those situations.
As you can see in the chart above, Television ads have for a long time been the dominant place for gaining first information, and being primed to see a film, with trailers in the theater coming in second. With television being the only medium which marketers felt they could target effectively, it was the mainstay of and the holy grail for film marketers.
Look at this statistic, though, in the heat of 2018 summer box office:
“This year, for the two-and-a-half months — April 1 though June 15 — national movie TV spending from the movie studios (not including consumer marketing partnerships) totaled $363.1 million… A year ago it was $505.6 million.”
Okay, let’s make a chart of that, just for emphasis:
A 30% drop! And arguably the first significant signal that the world may be changing in this focus on television as the primary ad medium. This also came in the face of slightly rising box office, after last year’s roller coaster plunge. Which means that the box office is not necessarily totally tied to TV.
There can be many elements at play here, including the fact that larger and larger numbers of consumers, mostly younger ones, are cutting the television cord, and opting for SVOD for TV content, along with more and more skinny bundle options. These make the consumer harder to target through TV-attached marketing, and would rightfully drive marketers to seek more direct relationships and channels, much more targeted digital, for example.
So, on top of losing television customers, the networks are also now losing this portion of the ad income that drove their businesses. I think as we go forward, we will be adjusting the cost structure of prints and ads, particularly for the really big films we work on, but likely more so for the smaller films, which we would anticipate having little reason to be spilling money at all over into the world of conventional television.
We are already studying how this will play out in our projections and reports.
Onward and Upward
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What originally caused me to begin FilmProfit® was my noticing that the studios and big players had lots of folks to help them figure out how to make their films profitable. Indie producers were in a gunfight with rubber stage knives. I wanted to give them some weapons to begin to level the playing field a little. The things I do, whether for rump indies or mid-level players, or even the studios, are meant to get down under the hood, not just numbers, although numbers tell a story, but to get at the functions, of moviegoers, exhibitors, distributors, and all the working parts of the industry, to help my clients see better what they are getting into and how to prepare for it.
Onward and Upward