Movie marketing, the Long Tail and incentives
(Side note before I begin: I’m reading Chris Anderson’s book version of The Long Tail and will have a review up shortly. Just need to finish reading and, you know, write it. Check back soon.)
One of the mistaken beliefs people have when they’re first introduced to the idea of the Long Tail is that it’s anti-hit, or at least holds that hits will no longer happen. Since the basic premise of the Tail is that there’s a lot of money to be made in non-hits as long as you give people the means to find the products, that’s somewhat of an understandable assumption. But that’s really not what Anderson is saying. He’s saying that while hits don’t matter as much because of niche-finding searches, they can still happen. But the economic costs of production plus marketing plus distribution make hits less of a necessity.
That’s the basic point he makes in this post on his blog. Hits can still happen but they’re no longer absolutely needed. He points to two types of hits.
1. Organic - An audience large enough to justify and recoup the expense of production, marketing and distribution finds the product to be good and rewards it.
2. Synthetic - Products that are sub-standard but are marketed to within an inch of their lives. These often fail because they fail to connect. But not always.
3. Bottom-up - Smaller products that find a large audience because of word-of-mouth.
He defends the idea of the hit in response to the success of Pirates of the Caribbean: Dead Man’s Chest. The movie cost an awful lot and had an enormous marketing push but it was able to find an audience and become successful. Other movies have done this in recent years but not on the scale of POTC: DMC. Capote and Brokeback Mountain were successes last year that recouped their cost but the lower dollar figures involved caused those stories to not get quite as much attention. The funny thing is that these movies represent exactly the kind of “new breed” of hit Anderson talks about so much.
Now here’s where it gets interesting. Stephen J. Dubner on his Freakonomics blog caught a reader comment regarding how movie studios are possibly incentivizing theaters to give their movies more play. Allegedly (this is from an anonymous commenter so I’m skeptical, though this kind of makes sense) studios are offering theater owners a bigger piece of the revenue pie for the first few days of a new release in order to boost their box office revenue. Traditionally theaters have gotten a small piece of the revenue pie from actual ticket sales, instead deriving most of their income from consessions (there’s a reason those Milk Duds coast $4.) Big movies drive people who see eating as part of the experience. But now, if studios are offering a bigger percentage of ticket sales to theaters, those owners have an incentive to put the movie on not three but five screens to bring as many people as possible in. If the area public knows there are plenty of seats available than they won’t be discouraged from attending based on a fear of “the crowds.”
The incentive for studios to give up what might be a huge amount of short-term income is the ability to claim a large number - based on those extra audience numbers - as a movie’s weekend box office take. Those incentives lessen as time and weekends go on which is why we see movies dropping 60 to 70 percent in income week to week - new movies are coming out with more incentives for wider coverage. As we live in a hit-driven culture where we’re so obsessed with charts and statistics, the Monday reporting of box office gross is more and more a part of the marketing program for a movie. After all we need to see those TV spots touting the latest flick as “the #1 movie in America,” don’t we? And every entertainment site worth its salt is reporting on these numbers like loyal lapdogs. So it’s vitally important to get those numbers up.
Again, I’m skeptical of this claim since it implies a certain amount of market manipulation on the part of the studio(s) and no one is signing their name to this claim. But the mix of incentives for all involved makes some sense. It’s funny, though, since the traditional system for revenue splitting actually made movies more friendly to the Long Tail since owners got a bigger piece of the pie the longer the movie was open. It used to be (when I worked for a theater) that opening weekend the theater got about 10 percent of the sales, 20 percent the next week and so on, down to an even split. That incentivized owners to keep the flicks playing longer and longer. Now, though, they actually have an incentive to dump movies or decrease their number of screens from one week to the next.
Remember that it’s all about maximizing the bang for the marketing buck. A big marketing budget along with incentives for theaters can lead to a big opening weekend, thereby extending the value of the marketing as word travels that the movie was a big success and people continue to search out information on and otherwise interact with the brand. The economics of a Long Tail world may no longer demand a hit in order for a company to survive but the incentive realities of a Freakonomics one still reward one.
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movie marketing, long tail, freakonomics, disney
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