Movie Studios Look to Take Advantage of Lower Scatter Pricing

Last-Minute Inventory Cheapened by Softer Demand Is Welcome Relief for Budget-Crunched Film Marketers

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LOS ANGELES ( -- The screwball economy is starting to affect Hollywood's movie marketers and TV networks in unexpected ways.

The happy upshot of the downturn for film studios -- arguably the biggest marketers in the country right now -- is that TV ads purchased at the last minute, known as scatter inventory, are now 30% cheaper than they were a year ago, according to two major media buyers with movie accounts, due as much to softening demand for air time from the nation's less-glitzy advertisers as to the artificially high scatter market from last year's writers strike. That's welcome news for movie studios that can now, theoretically, market more efficiently and with greater flexibility.

That means logistical headaches for studio marketing chiefs suddenly forced to spend or otherwise lose their TV ad dollars. The current decline in pricing for the scatter market means that both sides can actually benefit from the economic downturn: TV networks are getting a boost from film studios that, according to one Hollywood marketing chief, "can now afford to buy more scatter TV time to make up the difference" as other marketers cut spending while helping to "guarantee a strong opening weekend."

As one studio marketing chief said: "There are always fire sales, but right now, things are especially smoky," and many studios are pouncing.

Networks offering incentives
For their part, TV networks, especially Walt Disney Co.'s ABC, and General Electric's NBC, have been eager to offer "incentives" to film studios, in which "if you buy a certain number of ads, we'll also run your trailer for free, and some other freebies," said one studio marketing consultant.

It's a welcome relief for studios, because parent companies such as GE, Sony, Viacom and News Corp. make much of their revenue from ad-supported cable and broadcast TV channels, and thereby are slashing marketing budgets at film studios by 5% to 10%.

Adam Fogelson, head of marketing and distribution at Universal Pictures, said while lots of celebrity perks are being cut in an effort to do more with less, TV spending is so far sacrosanct.

"We're launching a new product every time we open a film," Mr. Fogelson said. "And so there is [at GE] an understanding that, far and away, TV is the most important and effective way to open a major motion picture."

Concerns for second half
While all this is good news for Hollywood, media buyers are still worried about the latter part of the year.

Said one top media buyer, "The second quarter is stuffed with cancellation options," adding that expecting film studios to rescue all of TV advertising in an outright depression is beyond even Hollywood's best special effects.

To further help cut costs, film studios are instead increasingly reliant on free publicity gained by perching stars on morning-show stools and late-night sofas.

Another studio marketing chief said that publicity now plays a gigantic role as the "unsung hero of marketing" even as pressure mounts to shave down public-relations budgets, and studios must force stars to do more than just press junkets at fancy hotels.

No more entourages
Consider the hoops recently jumped through by Kevin James, the star of Sony's sleeper January hit "Paul Blart, Mall Cop." Sony insiders said Mr. James hit the road for two solid weeks to hype the film, doing an endless series of "Good Day, Phoenix" and "Good Morning, Provo" morning shows -- a request that any studio would be have been hard-pressed to make of a star just a year ago.

Celebrity publicists say that when stars do travel to do publicity, they can forget about bringing spouses and entourages on their studio's or record label's dime and that hair, makeup and wardrobe budgets have been cut in half.

Said Mr. Fogelson, "There is exquisite sensitivity to the brutality of the economy. I can tell you that there a lot of $2,000, $5,000 and $10,000 things that when you add them up over a whole slate of movies make a real difference. They may contribute to stars' comfort, but at a time of difficulty, everyone has to chip in."

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