“Hunger Games” success spells trouble

BEVERLY HILLS: The success with which “The Hunger Games” film harnessed social networks, en route to becoming 2012’s biggest blockbuster, underscores a growing threat to billions of dollars in movie-advertising revenue on which broadcasters rely. The futuristic movie about children fighting to the death has scared up more than $375 million at the U.S. box office since it opened in March, in part because Lions Gate aggressively stoked interest on social network sites like Facebook and Twitter. That meant Lions Gate marketers likely spent $15 million to $20 million less than a larger Hollywood studio might have, using a campaign heavier on television advertising, Lions Gate Entertainment Corp Chief Executive Jon Feltheimer said during the Milken Institute Global Conference in Los Angeles this week. Movie studios will likely buy fewer TV ads in the future, and look more to online promotion, he said in answer to a question. “The mix will change,” said Feltheimer. “Companies that are conglomerates, with large broadcast networks or a bouquet of cable channels are going to have to adapt. And it will be disruptive.” Lions Gate devotes 10-15 percent of its budget to online promotion, he said. To stoke interest among its target audience of under-30 moviegoers, the studio’s efforts included a channel on Google Inc’s YouTube, a blog on Tumblr dedicated to the movie’s futuristic fashion, and a contest in which fans collected pieces to the film’s poster on several sites. In all, the studio spent $45 million to market the film’s opening, according to people with knowledge of the expenditures. TV networks “face a huge, huge risk” down the road, agreed Mel Karmazin, CEO of satellite radio service Sirius XM Radio Inc and a long-time advertising executive.
“It won’t happen in 2012 or 2013 but in the longer term it will hurt them,” he said. “People listen to what their friends say they like. Word of mouth is what advertising is about.”