A New Box Office Model – Paramount’s ‘Justin Bieber: Never Say Never’

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How nimble, inexpensive moviemaking with viral marketing hooks can bring the kids back to the multiplex

He may not have won a Grammy, but Justin Bieber achieved something this weekend no one else has through the first six weeks of the year — draw large numbers of kids to the box office, and do it without spending a lot of money.

With Bieber's "Never Say Never" grossing an impressive $29.5 million in its first three days of release, the movie reversed a steep downward trend at the box office.

The movie also commanded an audience that was 67 percent under the age of 25 —  the very moviegoers who are critical to maintaining the theatrical box office.

By spending a tight $13 million on production, leveraging tons of free, viral publicity — everywhere from Saturday Night Live to the pop star's massive Twitter feed — the movie just might represent a prototype for future theatrical success.

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Not only was "Justin Bieber: Never Say Never" produced for the entirely frugal $13 million but it required a prints-and-advertising spend of only around $20 million, according to Paramount executives.

"The ad spend was about half of what you would normally have to put out to get a gross like that," noted Don Harris, general manager of distribution for Paramount. For Paramount, which launched the Jon Chu directed film through its Insurge micro-budget label, timing was everything.

Within a span of only about six months — turnaround time for script changes at most major studios — Insurge was able to conceptualize, develop and shoot the biographically-edged concert movie focused on an emerging star with a big fat Twitter following — currently at 7.2 million and ever growing.

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But being able to get the movie ready quickly enabled "Never Say Never" to debut at a time when its subject is still very hot … and has a ton of no-cost marketing opportunities.

In the run-up to "Never Say Never," these included an appearance at the Golden Globes, during which the teen icon aggressively hawked his film, as well as spots on "The Daily Show," "David Letterman," "Ellen" and two gigs on "Saturday Night Live."

And while Paramount executives say it was never their master plan to have "Never Say Never" debut during Grammys weekend, when Bieber's media presence would be more ubiquitous than usual, the timing was fortunate.

"You have to attribute most of the film's success to the passion and awareness that was built in already on the Internet," said a rival-studio distribution executive. "Paramount really did a great job of tapping into that."

Added another rival-studio marketing executive: "For this to work like it did, it has to be built around a subject that has sort of an eventized nature to it."

For its part, Insurge was thought-up two years ago, when Paramount was hot off the heels of its huge viral success with the first "Paranormal Activity."

The thought: Instead of searching for the proverbial needle in a haystack — i.e. $16,000 movies that can gross $194 million globally with the right viral marketing juice — why not launch a nimble, low-budget division that can spot youth trends and exploit them quickly inhouse?

Truth be told, $13 million isn't exactly a microbudget, but it still qualifies as cheap by major studio standards.

And Paramount isn't alone in having those thoughts.

Last week, during its fourth-quarter conference call with investors, Lionsgate chief executive Jon Feltheimer spoke of plans to launch a new division focused on ultra-low-budget genre films, narrowly targeted and requiring P&A spends of only around $20 million.

Lionsgate's model is "The Last Exorcism," a $1.8 milion horror movie it acquired and released last summer to the tune of $41 million domestically, targeting the movie to a youthful demographic with an efficient marketing spend.

And while it hasn't formally announced a new micro-budget division of its own, under studio chair Rich Ross, Disney is now crafting low-budget, no-name-cast titles, like April's "Prom," that it also intends to efficiently and narrowly target to teens.

"It's all about the economics of the business," said a studio executive. "You're dealing with huge front-end expenditures and a lower backend pie, since we really don't have DVD anymore. Something has to give, and if you can control the P&A spend and you can control the negative cost of the movie, your profits soar."

But it's about more than lost DVD revenue. It's about lost youth, too.

Even the movies that have succeeded in early portion of this downer year have had trouble drawing younger audience members. The year's No. 1 opener, Sony's "The Green Hornet" drew an audience that was only 50 percent under the age of 25, while the film that enjoyed the second biggest start, Sony Adam Sandler comedy "Just Go With It" registered only 40 percent under 25 this past weekend.

Coming off a record-breaking 2009 at the box office — and a 2010 that came just shy of the $10.6 billion revenue mark — it's perhaps too early to get freaked out about a youthful market that may be adopting consumption trends that don't include going to movie theaters on a regular basis.

"But we are beginning to have those conversations," conceded one studio marketing pro.

According this executive, the younger audience isn't necessarily lost to video games and the internet.

"It's just a generational difference — they need to be marketed to in a different, non-traditional way. It's not a code that only Paramount has cracked — every studio can do this if they have the right subject."

Never say never.