US Report: Hollywood sees Net payoff

Hollywood executives say the Web sites they use to promote movies are returning the investments in spades -- but don't expect the Internet to replace your local cinema anytime soon.

The executives said the Web sites, which often include interviews with the stars, promotional "trailers" and merchandise, can drive tens of thousands of people to one movie or another, as well as create ancillary revenue. And the industry as a whole is helped by independent sites that offer movie times and ticket-buying options.

"This is the only medium where a movie fan can find out where a movie is playing, what time, and get the trailer instantly," said Stuart Halperin, executive vice president of Hollywood Online. Gordon Paddison, a marketing director for New Line Cinema in the US said he has run several promotions for movies on that required viewers to redeem a coupon at a theatre to receive special merchandise. Those promotions resulted in between 15,000 and 30,000 coupons being redeemed, coupons available only on the Web.

In addition, the Web campaign for Lost in Space netted some 150,000 subscribers to a newsletter, and a heady 32 percent click-through to advertisements in some areas. "The Web is more than a marketing medium -- it's a revenue medium," Paddison said. Some of the more popular areas on are related to movies, including film reviews and news about the movie business, added Bill Miltenberger, sales promotion director for Yahoo.

Still, in earlier comments at the Herring on Hollywood show, sponsored by Red Herring magazine, movie studios were criticised for giving away too much content on the Web, and for using the Internet as a promotional vehicle instead of a money-making one.

The executives made several other points, including:

  • Although movies will eventually be available for download from the Web -- saving studios significant amounts in distribution fees -- don't expect that soon. "Eventually this probably will happen, but it won't be in the next few years," Crone said. One problem: Hollywood wants better anti-copying technology.

  • Chat features on movie sites will become more popular because movie viewing is an emotional experience, said Lisa Crone, an executive at Universal Studios Online. People will come home and discuss their impressions of the movie with others on the Web.
Given their international audiences, studios must be careful in online marketing. Putting a "Now available in video" tag on an online movie ad will turn off movie goers in, say, Israel, where the movie is just coming to cinemas, said Paddison.