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Movie-studio research has shown movie newspaper ads don't encourage people to see a specific wide-release film, and that by the time a consumer reads an ad in a newspaper, consumers already have made up their minds what to see. Despite this, about 10% to 25% of the average $25 million marketing budget for a wide-release movie is earmarked for newspaper ads.
71% spending spike
But the ad model may be shifting. While newspaper spending growth for movie studios slowed in the first half (up 6.5% from nearly 20% in 2002), Internet outlays skyrocketed 71.2% in the first half, according to TNS Media Intelligence/CMR.
Yahoo!'s Yahoo! Entertainment, which claims to command 50% of all Internet movie-ad dollars, maintains the movie the category is surging -- much of it siphoned from newspapers.
"Some studios have doubled their online media budgets," said Jim Moloshok, senior vice president of media, entertainment, information and finance for Yahoo! and Yahoo! Entertainment. Though he wouldn't name specific studios, he said "they are moving money from print into online."
There is evidence newspapers have taken some hits recently in this area. Two of the largest newspaper companies, Gannett and Tribune Co., indicated a weakness in the movies and entertainment category in July. A Gannett spokeswoman declined to comment. A New York Times spokesman said the paper was in "preliminary talks" with the studios and their agencies regarding 2004 plans.
"The category has been weak for newspapers this summer," said Merrill Lynch analyst Lauren Fine, but she quickly added that she had no way of determining whether online competitors were to blame.
Dave Murphy, president of Tribune Co.'s Media Net, which orchestrates cross-market and cross-platform deals for the company, said any implications that online was drawing share away from newspapers in this arena was "very difficult" to measure.
Ego and competition
Additionally, studios can't move the bulk of their budget out of newspapers for two reasons: ego and competition.
Big-name producers, directors and stars in major markets such as New York and Los Angeles want to see print ads of their movies in the newspapers they read. Additionally, studios still compete heavily with each other.
"Everyone would like to not have to run so much newspaper -- but you can't," said Kristy Frudenfeld, senior vice president of media for Walt Disney Co.'s Buena Vista Pictures Marketing, "because you know Sony [for example] is going to run a double-truck ad.
A game of chicken
"Nobody wants to be the first one to blink," she said. "We started this three different times [to cut back on newspapers]. But then you get into the reality of what is going on competitively, and you have to backpedal."
Some major-market newspapers are well aware of movie companies' need to accommodate talent. Two years ago, the Los Angeles Times raised movie studio ad rates 9%. The move surprised marketing executives, who said readership levels at the Times, owned by Tribune Co., have been declining or held steady in recent years.
Movie theater owners have also been looking for alternatives to newspaper ads. For instance, 10 of the largest U.S. movie exhibitors are partners in Fandango.com, a movie ticketing and information site that represents more than 13,000 movie screens -- more than 46% of the U.S. theater market.
But newspaper companies aren't sitting idle. For instance, Fandango.com recently struck a joint venture with Tribune Media Services where Tribune's online readers can link to Fandango to buy movie tickets.
Nonetheless, Tribune's Mr. Murphy took pains to not underestimate any competition. "It's a customer-by-customer battle today," he said. "Advertisers are doing their best to evaluate the return on investment of all media. And we're up to our neck in it. ... Welcome to the media world."
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Tobi Elkin contributed to this report.