Home entertainment spend skyrockets

This fall and holiday season will probably mark the biggest release schedule ever in the history of the VHS and DVD market, with more than 16 big-budget summer movies headed for the home entertainment market. There will be roughly a video a week released between now and Christmas, and with such a competitive market, media buyers say the spend is going through the roof.

This fall and holiday season will probably mark the biggest release schedule ever in the history of the VHS and DVD market, with more than 16 big-budget summer movies headed for the home entertainment market.

There will be roughly a video a week released between now and Christmas, and with such a competitive market, media buyers say the spend is going through the roof. For instance, Twentieth Century Fox has reportedly set aside a massive $40-million budget to market the Nov. 26 video and DVD release of Ice Age in the U.S.

An important side effect of the escalating dollars is an increase in tie-in and partnership opportunities offered by studios and distributors looking to make their marketing dollars go further. Making a big splash in a hurry has never been more important, thanks to the shrinking sales windows open for each release.

‘It’s like a whole new category for the ad industry,’ says Marilyn Sherman, EVP of media at Toronto-based Echo Advertising, which handles the media buying for theatrical and television giant Alliance Atlantis. ‘I’ve seen it shift quickly and I see it as new money.’

For those who have been following trends in the entertainment market, the escalating spend is no surprise. ‘DVDs are penetrating like crazy in all the markets and households. The prices are also very competitive,’ says Frank Mendicino, VP of marketing for Alliance Atlantis Motion Picture Distribution.

So when it comes to media buying for home entertainment releases, does that mean that the budgets are being cannibalized from their theatrical media buys? In almost all cases, not at all.

‘Theatrical and home entertainment are two distinct divisions at almost every studio,’ says Laura Turner, marketing manager for the Canadian office of Twentieth Century Fox Home Entertainment in Mississauga, Ont. ‘So there’s absolutely no carving of dollars from one to the other. And with home entertainment being a growing category, obviously the dollars have come along with the category.’

While media buyers are reluctant to put exact figures on the growth, the estimates come in at anywhere from 25% to 35% annual growth, with the potential to start leveling off in the next few years.

Media plans for theatrical and home entertainment releases are also quite distinct, even though they’re joined at the hip. Alliance’s Mendicino says the theatrical buy sets up the home entertainment buy: While the former pushes what the movie is about, the latter reminds viewers that the movie they loved can now be owned. And while almost every new release put out by a studio gets its share of marketing dollars, for home entertainment, the media buying money backs mostly two kinds of titles: family titles and big blockbusters.

More and more too, bonus features such as extra footage or DVD interactivity are being pushed in the home entertainment messaging. ‘They’re not the same product,’ says Turner. ‘They’re the same movie, but it’s a completely different experience and that’s how we market it.’

So how does that marketing difference affect the media plan?

Well, in the DVD world, where picture and sound quality rule, a visual medium like television is king. ‘On big-ticket titles such as Lord of the Rings and Austin Powers, I will absolutely spend the money on traditional television,’ says Carmite Cohen, director of marketing for home video at Alliance.

For this week’s release of the collector’s edition of Lord of the Rings (complete with major bonus material), the lion’s share of the media buy is television-based with some print advertising in theatrical magazines, some in-theatre slide advertising and no newspaper advertising.

While Alliance also experiments with things like in-theatre slides and even online advertising, its next line of media buying defence is trade advertising and co-op advertising with retailers such as Future Shop, which throw in everything from in-store employee buttons to flyers.

At Universal Studios Home Video in Toronto, SVP of marketing Janet Billett shares similar thoughts on preferred media. ‘We really target our budget towards television,’ she says. ‘People need the visual reminders of the releases.’

The use of third-party tie-ins is also on the rise. For instance, this past August’s home entertainment release of Lord of the Rings involved partnerships with some 40 companies, which were included in a coupon book bundled with the release.

And last Christmas, Twentieth Century signed on lingerie store La Senza for the home video release of Moulin Rouge – complete with in-pack coupons highlighted on the packaging and third-party advertising. Universal, for its part, is tying in with McCain pizzas (presumably a Marty McFly favourite) as part of its Back to the Future re-release this December.

But even with tie-ins, it’s not just a matter of taking the theatrical partnerships and grafting them onto the home video release. ‘Sometimes if they do a promotion in theatrical, they’ll say they’re interested in the video release, but we’ll revisit that when it comes to our window of opportunity,’ says Cohen.

And while the spend behind home entertainment has yet to reach that of theatrical releases, media buyers say it’s not that far behind.

‘There’s growth in home entertainment,’ says Billett. ‘DVD is still in its early stages – you’ll see huge growth in the first quarter next year with people getting players for Christmas and the pricing on the hardware keeps coming down. For our business, it’s definitely an area of growth.’