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April 16, 2006

Small Stories Light The Way To The Future

More and more, the future of the film business can be seen in the news about other forms of media. There were two key stories in the Wall Street Journal on Saturday.

First, there was a large story about profit declines at some of the major newspaper groups in which this one line really stood out…

“The Chicago-based publisher of the Los Angeles Times, the Chicago Tribune and Newsday said newspaper ad revenue was flat for the quarter and circulation was down 3%. National advertising revenue declined 8.5%, primarily because of a decline in movie ads in Los Angeles…”

Wow. Not just a major drop in newspaper advertising for films, obviously large sized display ads, but specifically calling out Los Angeles, the industry’s hometown paper. Of course, the reason why the hometown paper had so many massive, expensive ads was because it was bought, before its value selling to movie ticket buyers, to impress and cajole people involved with the movies… a large frame ego booster.

I don’t have details, but I would guess that being off 8.5% overall , with L.A. pointed out, that L.A. must be off by significantly more than that. And the willingness of studios to do this indicates the studios’ desperation to lighten their financial load is, for the moment, greater than the need to stroke. Moreover, it is a good indicator that the studios have come to believe, whether a fashion or a reasonable choice, that newspapers are a dying advertising base for this industry.

The second big story is Fox making a deal with their affiliates for six years to share revenue from post-premiere delivery of TV shows on the network. Unlike others who have jumped as quickly as possible into the fray, Fox took its time and dealt with the people who would be suing them as it adds new delivery systems. With this program in place, not only can Fox take action without looking over their shoulders, they also set the six year target for the experimentation period before we can expect a paradigm shift.

What does this have to do with movies? Well, delivery system changes are coming for the film business too. As you probably know about me if you are reading this, I don’t think that closing the theatrical/DVD window is where this going in the long run. But given their strategic thinking, I would be a little shocked of Fox isn’t the first one to dip their toe in the water with a teen-targeted day-n-date experiment on a film with a production budget under $15 million and a marketing budget of about the same.

Posted by poland at April 16, 2006 12:28 PM

Comments

There's no better way to scare away blog commenters than to link to content behind a paid subscription wall.

Posted by: Eric [TypeKey Profile Page] at April 16, 2006 12:55 PM

At least one major studio has cut back on newspaper advertising -- and not just in L.A. Universal believes it can promote a wide release more efficiently with 30-second spots.

Posted by: Chucky in Jersey [TypeKey Profile Page] at April 17, 2006 02:55 PM

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