Case Study: How I Would Have Run Miramax

As the piece in Business Week I referenced in the previous post observed, network TV advertising is pretty much down to four big categories which still find it worth the trouble to target everybody—cars, drugs, phone service and movies.

Edward Jay Epstein—in the news separately this week as the man who ID'd Mark Felt as Deep Throat 30 years ago-- regularly explains the crazy-like-a-fox economics of Hollywood in a Slate column. This time he's talking movie advertising-- and he says Hollywood is about to find that, in fact, marketing movies on TV, and making the kind of movies that you can market easily on TV, doesn't pay:

I asked a very savvy executive at 20th Century Fox how the studios recover this huge advertising expenditure. He explained that big opening-weekend numbers, even if they are expensively acquired, may pay off in later markets—specifically video, pay-TV, and foreign release. At that time, the year 2000, he was right...

Since then, however, the digital revolution has radically changed the movie business. The video rental market, which had been the studios' cash cow as late as 2000, is rapidly disappearing. It's been replaced by the business of selling DVDs in which a handful of mass retailers, such as Wal-Mart, account for most of the studios' revenues. Unlike the video chains that rented videos, the big retailers don't simply peg their orders to a film's box-office results. Instead, they view DVDs as traffic-builders: The stores use them to lure in the relatively well-heeled, plasma-screen-purchasing customers—who are usually not the so-called LICs (or low-income consumers) who are recruited by ads for movie openings. As a rueful Sony marketing executive pointed out, "Unfortunately, our teens are not always who they want."

Hollywood's reliance on the kind of sensational fare that gets one good opening weekend from teens, if you promote it enough, drove a generation of adults out of movie theaters-- especially the female kind of adults. Every once in a while a female-oriented grownup movie manages to survive past that first deadly weekend and become a sleeper hit over weeks and months-- A Room With a View, Fried Green Tomatoes, Enchanted April, Amelie, My Big Fat Greek Wedding, etc.-- but Hollywood has never figured out how to make that lightning strike with any regularity.

The studio that could have done it, I think, was Miramax-- and that they didn't think outside the TV advertising box to do it was the lost opportunity of modern movie marketing.

Remember Talk magazine, the short-lived Tina Brown magazine they started? Suppose that instead of that effort at making themselves New York literary figures, they had put the same effort into marketing certain of their movies to 30+ women through a similarly glitzy publication-- placed free in movie theaters, hair salons, nail places, wherever, and sent out free to whoever signed up for it. On top of it they could have done viral email campaigns where you'd get advance word about the movies, clips, solitaire games, exclusive content with Johnny or Gwyneth or whoever-- all of which, by the way, you'd be encouraged to share with friends, unlike the way the movie industry normally screams "piracy" at anything digital. And they could have helped the theaters-- or better yet a coffee chain-- launched women-only movie discussion clubs, to encourage viewing of the movie du jour the way Oprah can order every woman in America to read a book.

For a fraction of the cost of TV advertising, they could have developed a whole niche marketing channel which would have women lined up for the opening of the next My Big Fat Greek Wedding when their husbands and teenaged sons had never even heard of it. Well, sooner or later the movie biz, like almost every business before it, is going to have to figure out how to market to different audiences through channels other than TV. Epstein suggests it will be sooner.