Ad Spend 51-58% of Film Production Cost

   June 11, 2010—In 2009, Paramount sports the highest expenditure for prints and advertising at $50 million on average for each domestic theatrical release, while Universal had the lowest at $30 million, according to Baseline Intelligence. Those and other tidbits on marketing costs for theatricals are presented in a Hollywood Reporter article by Larry Gerbrandt, principal at Media Valuation Partners.
   In between, Disney averages $44 million per film, Fox $38 million, Sony Pictures $35 million and Warner $34 million. The major studio average is $39 million.
   “Looked at another way, for every dollar spent on producing a major film, the studios have been spending 51 cents-58 cents to release and market it in the U.S. and Canada,” writes Gerbrandt. “Through the years, there have been periodic attempts to control escalating P&A spending, which can soar to the $85 million range on tentpole releases involving 4,000 screens.”
   Once you get past the bland headline (“Does movie marketing matter?”), the article discusses interesting domestic theatrical marketing metrics and reveals Baseline Intelligence data. One caution always is that there are various ways to define film marketing. Does one include film release prints? That’s not advertising. What about cost of developing theatrical trailers, which can be $1 million. Those are marketing expenses that other products and services don’t have, so it’s misleading to compare film marketing to soaps or diapers.
   Since 2007, the major studio trade group MPAA stopped releasing annual figures on prints and advertising, which had been accepted as gospel in the industry that now lacks standard statistics.
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