SOURCE: eMarketer

October 27, 2006 09:00 ET

Moviegoers Decline, But Studios Miss Chance to Re-Engage Them Online

eMarketer Report Shows Hollywood's Online Ad Spend Lags Other Industries

NEW YORK, NY -- (MARKET WIRE) -- October 27, 2006 -- Hollywood movie studios are committing a marketing gaffe. They spend a smaller percentage of their media budgets (just 3% in 2006) on online ads than does the average US industry, which spends 5.7% of its overall media budget on the Internet. This is a mistake because the audience filmmakers most need to reach is online, according to the new eMarketer report, "Hollywood Online: Ad Innovators Play Spending Catch-Up."

While box office revenues have been stable over the past five years, movie admissions have been declining since 2002, according to the Motion Picture Association of America.

"Moviegoers who see one or more movies a month account for 80% of all movie audiences," says James Belcher, eMarketer senior analyst, and author of the report. "These prime customers are young and online. Drawing them to the big screen now means spending to reach their computer screens."

Studios are beginning to realize that they must spend more online, and eMarketer expects the growth of online advertising as a percent of total ad spend to reach 8% by 2010.

Considering the number of frequent moviegoers (teens) who are online, and that 46.1% of Internet users get their movie information from the Internet, Mr. Belcher says, a significant increase in online advertising makes sense.

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