Hollywood to Newsosaurs:Drop Dead

In a surprising role reversal, Hollywood is about to deliver bad news to the Los Angeles Times and The New York Times and, to a lesser extent, other big-city dailies around the country. Every major movie studio is rethinking its reliably humongous display ad buys in those papers because those newsosaur readers are, to quote one mogul, “older and elitist” compared to younger, low-brow filmgoers — so it makes no sense to waste the dough.

Wait, it gets worse: I’ve learned that at least two Hollywood movie studios have decided to drastically cut their newspaper display ads as soon as possible.

This news couldn’t occur at a worse time for the LAT and NYT, which both receive the lion’s share of those very showy $100,000-plus full-page after full-page movie display ads. At Spring Street, editor Dean Baquet just moved into the power office on Monday, and publisher Jeff Johnson only took over his hot seat on June 1. In Times Square, culture editor Sam Sifton has barely put his stamp on the section since assuming the post in May. Now comes a body blow to their beefed-up cultural coverage.

In response to the recent turf war initiated by his former employer and current national competitor, the NYT, Baquet, a proponent of moving Hollywood coverage onto Page One, has made it his professional mantra to “own” the beat. The NYT over the past year has underwritten a huge increase in editorial employees and space in its culture sections. But without those big movie ads to foot the bill, both newspapers may not be able to justify the increased pages and bigger overhead they’re devoting to arts and entertainment coverage.

I have long maintained, and frequently written, that the nearly simultaneous decision by both the LAT and NYT to increase the space devoted to, and upgrade the quality of reporting on, culture is the direct result of these newspapers’ attempts to woo even more Hollywood advertising than the large amount they already receive. For some time now, movie ads are no longer the one bright spot in an otherwise dim display-ad picture for even these newspapers. According to Wall Street’s Goldman Sachs, newspaper ad revenues are growing at a dismal pace. Goldman Sachs pegged the weakness to decreased spending in entertainment, which makes up 14 percent of national revenues for the newspaper industry.

The foremost financial analyst of the newspaper business, John Morton of Morton Research, tells me that not only are newspaper display ads “flat to down a little” this year compared to last, but newsosaurs still haven’t recovered from close to $1 billion in ad losses resulting from consolidation in the retail industry. Likewise, the reason for the decline in entertainment display-ad expenditures no doubt lies in the continuing wave of Hollywood studio consolidation. But unlike retail stores, which traditionally place their display ads in the first section of the paper, movie display ads go reliably and exclusively where movie articles appear: in the arts and culture pages. Therefore, papers argue that this is a win-win situation for themselves as well as readers.

All well and good for the papers, and even readers, but what exactly is Hollywood getting for its ad bucks there? Little, from the looks of it. The numbers don’t add up.

According to the Motion Picture Association’s 2004 U.S. movie attendance survey, overall, 12-to 39-year-olds accounted for 57 percent of total moviegoers, 40- to 59-year-olds only 31 percent, and 60-plus-year-olds only 12 percent.

Look at the demographics for newspaper readers and it’s almost exactly the reverse. The Scarborough Research Top 50 Market Report found that 35- to 54-year-olds are the biggest readers of daily newspapers, followed by those 55 and older. A much smaller portion of readers came from 25- to 34-year-olds, followed by the barely there 18- to 24-year-olds. And despite the newspaper industry’s efforts to reach a younger audience, the Readership Institute notes that the biggest decline in daily newspaper readers was in the 18-to-34 group.

One way newspapers attract younger eyeballs is by writing about mass entertainment, since it’s the province of the young. Yet ousted NYT editor Howell Raines was savaged by media critics when he gave a story on Britney Spears Page One placement. Today’s paper, under his replacement Bill Keller, reads increasingly like TomKat 24/7. That’s also why newsosaurs are giving the US/People/Star fans more pop-culture news, either in spinoff freebies like the Chicago Tribune’s Red Eye, or within the regular paper like the Los Angeles Times’ extensive revision of its features sections, changing both format and content to infuse a newer ’tude (which we all know is just a rip-off of The New York Times’ first-on-the-block features redo).

All advertisers dearly love the 18-to-34 demographic, and the Hollywood movie studios are no exception. In their eyes, the newsosaurs aren’t measuring up. Sources at the two Hollywood studios who are axing their movie display ads in newspapers gave me that information on the condition they not be identified. But, studiowide, it’s on everyone’s to-do list. “We’re rethinking our newspaper ads and I mean, literally, on every movie. Everybody is,” one movie mogul tells me. “The only people who read newspapers are older and elitist. Movies like Sky High don’t need ads in The New York Times. But the studios did it because newspapers were seen as a necessary evil.

“But I don’t think it’s as important anymore.”

Now the box office bust, combined with bloated promotion and advertising budgets to market every film, are forcing Hollywood to change the way they look at these expenditures. “It’s not only the cost of the space, it’s also the cost of the color,” a top studio movie marketing exec complained. “It’s always another whole weekend full of newspaper ads. The average amount is a Thursday ad, a big color ad on Friday, more on Saturday and Sunday, and ads for sneak previews.” Then there are the declining circulations. “You’d think it would get cheaper because it doesn’t reach as many people as it used to.” Indeed, the Audit Bureau of Circulations keeps finding that something like half of the nation’s 38 largest papers report circulation declines. That’s why the Oracle from Omaha, Warren Buffett, has been quoted as saying recently that “the economics of newspapers in the United States are very close to certain to deteriorate over the next 10 to 20 years.” And this is coming from a self-described newspaper addict and savvy media investor.

There are still those quaint reasons why Hollywood studios keep advertising movies in newsosaurs: predictably, theater info, and, inexplicably, talent relations.

Only moguls who don’t know how to turn on a computer (and many don’t, believe me) would insist that those ads displaying movie running times and locations contain information that filmgoers can’t access on the Internet. In fact, the Pew Internet and American Life Project released a study last month finding that nine out of 10 American young people, ages 12 through 17, have online access, while 66 percent of U.S. adults now use the Internet.

It’s also just as ridiculous for Hollywood studios to continue to kowtow to actors, directors and producers by spending vast amounts on newsosaur display ads that make no strategic or financial sense. “It’s about talent relations. The only reason you do it is because the talent expects it,” one mogul admits to me with unusual candor. “These people like to see their ad in the paper. It’s ego feed.” Another studio executive suggests that top talent would take a role or bring a project to a rival if demands like this weren’t met, even though this is hard to swallow at a time when many of the industry’s best filmmakers in front and behind the camera are jobless.

If only the moguls were as concerned about offending the sensibilities of their shareholders.

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