mid-range plan september 11, 2013 1. worldwide marketing and distribution mid–range plan...
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Theatrical Market Update 3TRANSCRIPT
Mid-Range PlanSeptember 11, 2013
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WORLDWIDE MARKETING and DISTRIBUTION
MID–RANGE PLANTheatrical Market Update
• Domestic• International• Market Rankings
FY14 Savings Initiatives and Status• Overhead• Marketing and Print Costs
FY15 MRPMarketing Strategy Discussion
• By-Studio Comparison• Sony Goals for FY15
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TheatricalMarket Update
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2006 2007 2008 2009 2010 2011 2012 2013 proj.
2014 proj.
2015 proj.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1,200
1,250
1,300
1,350
1,400
1,450
$9,138 $9,644 $9,850
$10,622 $10,609 $10,289
$10,875 $11,413 $11,694
$11,961 3D Box Office Box Office Tickets Sold
($Million) (Million)
Domestic box office increased about 6% in 2012, and is now above the historic annual levels recorded for at least the past 10 years driven by 3D since 2009.
Admissions were up about 4% in 2012, and are projected to increase a modest 2% by the end of this year. Ticket sales are then expected to retract slightly for at least the next two years
Box office is projected to be up by about 5% by year end, then increase around 2.5% per year in 2014 and 2015
The 3D shares for 2012 releases was 52%; To date in 2013, the average 3D box office per title was consistently below 40%, with some even dipping below 30%, a trend that will likely continue
Theatrical Market Highlights Domestic Box Office Industry Data
1%10%
2%
21%17% 17% 16%
Source: IHS Screen Digest reports as of September 9, 2013; MPAA Theatrical Market Statistics 2012 Report; SPR Print Operations Planning
14.5% 14%
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5
2008 2009 2010 2011 2012 2013 proj. 2014 proj. 2015 proj.$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$9,850
$10,622
$10,609
$10,289
$10,875
$11,413
$11,694
$11,961
$9,889
$10,073
$10,532
$11,234
$10,792
$11,558
$12,148
$12,735
$6,977
$7,194
$8,556
$9,296
$10,539
$11,780
$13,038
$14,170
$1,438
$1,491
$1,877
$2,189
$2,279
$2,521
$2,739
$2,955
U.S./Canada EMEA Asia Pacific Latin America
US$
Mill
ions
Global box office reached $34.5 billion in 2012, up 4.5% over 2011’s total, due to increases in all regions except Europe.
North America barely regained its #1 position in 2012 after dropping to #2 behind EMEA in 2011. For 2013-15, AsiaPac is projected to be #1 and EMEA #2, with North America dropping to #3 for the first time.
Chinese box office grew by 36% (the highest growth market) in 2012 to become the largest international market and 10% ahead of #2 Japan.
International box office is up 29% over five years ago, driven by growth in emerging markets, especially China, Russia and Brazil.
2013 international box office is projected to grow 9.5%, while 2014 and 2015 are projected to grow 8% each.
Theatrical Market Highlights Worldwide Box Office Industry Data
Source: IHS Screen Digest reports as of September 5, 2013; MPAA Theatrical Market Statistics 2012 Report
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Market Highlights Worldwide Box Office Industry Data
Green markets in calendar 2012 represent higher ranking than 2003Source: IHS Screen Digest reports as of September 5, 2013
10 Year % Change
1. J apan $1.753 1. China $2.706 +2140%
2. UK $1.213 2. J apan $2.446 +40%
3. France $1.127 3. UK $1.743 +44%
4. Germany $0.962 4. France $1.677 +49%
5. Spain $0.724 5. India $1.731 +140%
6. India $0.722 6. Germany $1.328 +38%
7. South Korea $0.602 7. South Korea $1.293 +215%
8. Italy $0.592 8. Russia $1.182 +587%
9. Australia $0.564 9. Australia $1.166 +107%
10. Mexico $0.435 10. Brazil $0.839 +299%
11. Brazil $0.210 11. Mexico $0.812 +87%
14. Russia $0.172 12. Italy $0.783 +132%
17. China $0.121 13. Spain $0.765 +6%
Top 10 International Box Office Markets
2003 2012
China was #1 in 2012, moving Japan to #2 Brazil replaced Italy in 2012 Top 10 China, Brazil and Russia are new to the Top 10 since 2003. India is the only other
market to move up in Top 10 market ranking since 2003
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Theatrical Market Highlights Top 15 SPRI Box Office Markets
SPRI Rank
Industry Rank
Territory Total Box Office
1 3 United Kingdom 145.62 8 Russia 135.53 2 Japan 116.44 10 Brazil 103.85 9 Australia 101.36 6 Germany 97.57 1 China 82.58 7 Korea 78.19 4 France 74.510 11 Mexico 70.511 13 Spain 52.012 20 Taiwan 33.713 12 Italy 33.614 43 Venezuela 29.515 5 India 25.4
SKYFALL’s £100M performance in UK propelled them to the #1 SPRI box office market, knocking Russia to #2
Japan grew from #10 to #3 due to RESIDENT EVIL 5, AMAZING SPIDER-MAN and SKYFALL’s strength
Taiwan and India knocked Sweden and Holland out of SPRI top 15 due to 2011’s Europe-friendly SMURFS 1 and TINTIN
FY14 SAVINGS INITIATIVES
AND STATUS
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FY14 OVERHEAD INITIATIVESFY14 Overhead initiatives budgeted at $15.8M and
estimated at $12.4M Shortfall due primarily to not changing Japan office Due to starting initiatives in FY13, realized $5.3M in unbudgeted savings in
FY13 Sony Pictures Releasing International savings total $7.7M annually
New sub-distribution deals in Belgium (April 2013), Scandinavia (July 2013), and Brazil (September 2013)
Office closures in Argentina (June 2012) and Holland (June 2013) New joint venture partnership in Korea Restructuring of Home Office distribution services group Renegotiation of current sub-distribution deals Sale of real estate in Argentina (one time savings) Other miscellaneous savings
Sony Pictures Releasing savings total $4.6M annually Dallas office closure Executive department changes Creative Advertising restructuring International Accounts Receivable and collections restructuring 9
In FY14 budget, reduced worldwide P&A&O expenses by roughly $164M with the following initiatives: Eliminated most Newspaper and Outdoor, and applied a 5% Marketing
Challenge to all film media budgets, cutting Domestic Media by $62M. Anticipated savings from appointing new media agencies and audit firms for
Latin America (UM) and Japan (Dentsu), along with 5% Marketing Challenge applied to six major territories, reduced International Media by $22M.
Cuts in Creative, Publicity, Research and Freight reduced Basics by $47M. Further worldwide expansion of the digital cinema footprint, reduced the FY14
Prints budget by about $33M.
The above initiatives continue for FY15 FY15 Worldwide P&A&O budgets are $153M (13%) less than greenlight
submissions or comparable films (newer titles) SPE continues to fully leverage our media relationships and partnerships,
increasing the total number of promotional deals, including in-show integration, over the past year, and delivering extra media exposure of $40-50M annually.
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FY14 MARKETING & PRINT (P&A&O) COST INITIATIVES
FY14 P&A&O COST INITIATIVES(in thousands)
FY14 budgeted P&A&O savings were $164M Current estimated savings are $150M Shortfall due primarily to ONE DIRECTION and CLOUDY 2
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WORLDWIDE P&A&O CUTS
Budget Current Fav/(Unfav) Comment
EVIL DEAD 8,955$ 7,945$ (1,010)$ Over $650k in DADS and $360k in DPTS; DBO up $8MAFTER EARTH 19,705 28,350 8,645 Addl P&A savings in domestic and intl
THIS IS THE END 2,610 (6,770) (9,380) DBO and IBO exceeded budget; WW BO up from $100M budget to $130MWHITE HOUSE DOWN 20,885 30,325 9,440 Addl IADS and IPTS savings
GROWN UPS 2 11,660 11,040 (620) Over $325K on DADS and $295k on DPTS; Intl on budgetSMURFS 2 9,605 3,940 (5,665) Over in IADS and IPTS; $2M for sustaining media & $3.5M on prints
2 GUNS 4,015 10,515 6,500 Cut intl spend in light of lower target from $85M to $65MELYSIUM 9,725 10,755 1,030 Cut IADS $1M, but exceeding IBO target of $175M likely
MORTAL INSTRUMENTS 6,165 6,170 5 DADS over; offset by DPTS savingsONE DIRECTION 300 (18,695) (18,995) Budgeted WW BO was $30M, current WW BO is $75M
BATTLE OF THE YEAR 5,030 14,470 9,440 Cut WW BO targets and spendCLOUDY 2 9,710 (3,560) (13,270) Intl strengthened to mirror CROODS: IADS up $13M & WW BO up $75M
CAPTAIN PHILLIPS 13,780 13,780 - CARRIE 2,225 2,225 -
MONUMENTS MEN 3,705 3,705 - AMERICAN HUSTLE 7,190 7,190 -
ROBOCOP 15,905 15,905 - ABOUT LAST NIGHT 6,655 6,655 -
NO GOOD DEED 6,035 6,035 - WORLDWIDE P&A CUTS 163,860$ 149,980$ (13,880)$
FY15 P&A&O COST INITIATIVES(in thousands)
Italicized titles are new GL submissions since marketing initiatives, prior GL not applicable; comp film average used
FY15 P&A&O was cut $153M (13%) versus original greenlight or recent comparison film(s)
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Original GL or Comp Film(s) FY15 MRP Savings % Comment
HEAVEN IS FOR REAL 32,785$ 30,470$ 2,315$ 7% Comps films: Soul Surfer; Colombiana & The CallNO GOOD DEED 36,950 30,195 6,755 18% Based on marketing initiatives, cut WW P&A
AMAZING SP IDER-MAN 2 220,500 202,380 18,120 8% Based on marketing initiatives, cut WW P&A22 J UMP STREET 80,250 69,505 10,745 13% Based on marketing initiatives, cut WW P&A
THINK LIK E A MAN TOO 38,060 33,885 4,175 11% Comp films: TLAM and Death at A FuneralSEX TAPE 83,250 74,670 8,580 10% Based on marketing initiatives, cut WW P&A
EQUALIZER 95,800 84,425 11,375 12% Based on marketing initiatives, cut WW P&ATHE INTERVIEW 61,540 48,950 12,590 20% Comp film: This Is The EndK ITCHEN SINK 45,150 36,950 8,200 18% Based on marketing initiatives, cut WW P&A
FURY 103,175 84,690 18,485 18% Comp films: Monuments Men for Dom; Django for IntlANNIE 103,200 83,780 19,420 19% Based on marketing initiatives, cut WW P&A
BEWARE THE NIGHT 67,830 54,760 13,070 19% Based on marketing initiatives, cut WW P&AK EVIN HART COMEDY 34,315 31,335 2,980 9% Comp film: Think Like a Man
UNTITLED CAMERON CROWE 90,605 79,420 11,185 12% Based on marketing initiatives, cut WW P&ACHAPP IE 98,030 93,120 4,910 5% Comp films: Elysium, D9 and Total Recall
TOTAL 1,191,440$ 1,038,535$ 152,905$ 13%
WORLDWIDE P&A&O BUDGETS
Marketing StrategyDiscussion
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By-Studio Comparisons
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MEDIA STRATEGY – BY STUDIO
SONYOverall falls on the lower side of TV usage (exception Smurfs
2) Smurfs 2 – Moderate side in comparison to family films
Primetime usage is on the low sideEmphasis in national cable for efficiency & premium
originalsFavors :30s more than other studios
1,610 grps KANTAR
1,879 grpsACTUAL
1,646 grpsKANTAR
2,028 grpsACTUAL
1,673 grpsKANTAR
2,172 grpsACTUAL
1,991 grpsKANTAR
2,192 grpsACTUAL
2,307 grpsKANTAR
2,427 grpsACTUAL
1,974 grpsACTUAL
1,528 grpsACTUAL
693 grpsACTUAL
Opening:$17.5
Lifetime:$68.2
Opening:$27.5
Lifetime:$60.5
Opening:$20.7
Lifetime:$98.8
Opening:$24.9
Lifetime:$73
Opening:$41.5
Lifetime:$130.6
Opening:$29.8
Lifetime:$85.1
Opening:$9.3
Lifetime:$27.9
Opening:$15.8
Lifetime:$23.9 15
MEDIA STRATEGY – BY STUDIO
SONY CONTINUED Runs :15s in final two weeks of campaign
Other studios generally run within final 3-4 weeks Digital media is competitive with top studios Elysium, Mortal Instruments & One Direction likely
overstated within competitive reported numbers (used actual)
1,610 grps KANTAR
1,879 grpsACTUAL
1,646 grpsKANTAR
2,028 grpsACTUAL
1,673 grpsKANTAR
2,172 grpsACTUAL
1,991 grpsKANTAR
2,192 grpsACTUAL
2,307 grpsKANTAR
2,427 grpsACTUAL
1,974 grpsACTUAL
1,528 grpsACTUAL
693 grpsACTUAL
Opening:$27.5
Lifetime:$60.5
Opening:$20.7
Lifetime:$98.8
Opening:$24.9
Lifetime:$73
Opening:$41.5
Lifetime:$130.6
Opening:$17.5
Lifetime:$68.2
Opening:$29.8
Lifetime:$85.1
Opening:$9.3
Lifetime:$27.9
Opening:$15.8
Lifetime:$23.9
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WARNER BROS. Heavy TV GRPs overall (many 2,000+) Buys abundance of Primetime TV (as much as 625 GRPs) Buys big on ALL films Tends to run fairly even weight levels in the four weeks
leading into opening Hangover ran more conservative GRPs, but included lots of
expensive television with prime and sports
2,106 grps 1,685 grps 2,700 grpsACTUAL 2,339 grps 1,887 grps 2,631 grps
Opening:$50.1
Lifetime:$144.8
Opening:$41.7
Lifetime:$112.2
Opening:$116.6
Lifetime:$290.9
Opening:$37.3
Lifetime:$100.9
Opening:$41.9
Lifetime:$135.2
Opening:$26.4
Lifetime:$123.6
MEDIA STRATEGY – BY STUDIO
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MEDIA STRATEGY – BY STUDIO
FOX Conservatively spends, but supports titles they deem as
“winners” and limits spending on others DreamWorks Animation is the exception
The Heat at almost 2200 GRPs primarily focused on females Only film/studio to run in-show Academy Awards unit
2,327 grps 1,455 grps 2,186 grps 3,948 grps 1,996 grps 1,922 grps
Opening:$33.5
Lifetime:$107.5
Opening:$17.3
Lifetime:$44.7
Opening:$39.1
Lifetime:$157.9
Opening:$21.3
Lifetime:$80.6
Opening:$53.1
Lifetime:$129.4
Opening:$14.4
Lifetime:$59.8 18
UNIVERSAL Media usage varies by title Reasonable TV levels with exception of animated fare Using :15s 4-5 weeks out in most cases The Purge & Kick-Ass 2 – very targeted weight levels Despicable Me- huge push, rivals DreamWorks
1,855 grps 1,300 grpsACTUAL 3,213 grps 1,450 grps 2,195 grps 1,357 grps
Opening:$97.4
Lifetime:$238.7
Opening:$34.1
Lifetime:$64.5
Opening:$83.5
Lifetime:$357.6
Opening:$12.7
Lifetime:$33.3
Opening:$27.1
Lifetime:$72.1
Opening:$13.3
Lifetime:$28.1
MEDIA STRATEGY – BY STUDIO
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PARAMOUNT Strong TV levels, but nothing special in execution Used Super Bowl in-game & pre-kick for both films Tends to use strong levels of local TV in top markets Backloads media weight
2,392 grps2,435 grps
Opening:$66.4
Lifetime:$201.4
Opening:$70.1
Lifetime:$228.8
MEDIA STRATEGY – BY STUDIO
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BUENA VISTA Normal usage, typically in moderate range Monsters University paid kids levels conservative to the
category Disney Channel is not reported as paid activity – but it’s a workhorse for the film
with strong kids delivery Used Super Bowl on Iron Man 3 & Pre-Game stunt on Lone
Ranger Iron Man 3 biggest box office performer with relatively
conservative media plan1,716 grps 2,142 grps 2,030 grps 2,559 grps
Opening:$174.1
Lifetime:$409
Opening:$82.4
Lifetime:$265
Opening:$29.2
Lifetime:$88.8
Opening:$22.2
Lifetime:$79.1
MEDIA STRATEGY – BY STUDIO
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LIONSGATE (included Now You See Me only)
Approached with targeted weight levels (broke through to become a hit)
1,434 grps
Opening:$29.4
Lifetime:$117.4
MEDIA STRATEGY – BY STUDIO
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WEINSTEIN (included Lee Daniels: The Butler only)
Television campaign included strong use of African American syndication, daytime & news coverage
1,490 grps
Opening:$24.6
Lifetime:$91.4
MEDIA STRATEGY – BY STUDIO
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MEDIA STRATEGY – GENERAL
Outdoor usage varies across the board for studios Animated films tend to buy deeper market list Event films vary, however some studios buy deeper market list (with limited
presence in the lower markets) Most campaigns run for 4 weeks
Newspaper varies Studios trending to overall reduction
Flighting similar amongst studios Family films start core flight early, mostly with kids television Event films have 4-5 week core flight, with early out hits/stunts
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Sony Goals for FY15
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SONY GOALS FOR FY15
Consider utilizing more :15s & starting them earlier Greater share of voice with no increased cost
Spend on the front to plant position in marketplace- Don’t backload media as much
High concept films have unique ability to break through with less
Timing is key when placing and/or deleting media Better avails & pricing with lead time Cut less than ideal areas to get dollars back when in flight Damage to long term media relationships
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