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Hollywood Cutbacks Hit Trailer Houses

There’s less work overall, and studios are holding the line on what they’re willing to pay — if they pay at all.

A couple of years ago, creative director James Verdesoto walked into the marketing department of a major studio and saw stacks of potential ad options for one film’s campaign strewn about the room.

"The room was 200 square-feet and filled with a year’s worth of mockups like a pile of garbage for just one project," said Verdesoto, who co-owns Indika Entertainment Advertising, which often does campaigns for Warner Bros. films.

"The marketing departments at studios used to spend just to run the gamut with every possible direction — but with economy the way it is, they no longer have that freedom."

Indeed, once-flush trailer houses and print advertising companies are feeling the ripple effect of studio budget cuts. Movie campaigns and TV spots have shrunk in size, and the rates for creative services are frozen — if not decreased.

But the biggest change — and the one that has proved most costly to the trailer houses — is a drastic cutback in multiple vending.

In the past, studios would pay five or six different firms to offer up a variety of ideas, then pick the ones they liked to do the final work. Sometimes, they would even use "Frankensteining" — stitching several ideas from several houses together in one campaign, with each house getting a piece of the pie for its contribution.


Now they are sticking with just one or two vendors and formulating more focused ideas from the outset to save money.

"When a film-marketing executive was developing a trailer, he used to have the work spread out over a lot of different outfits around town. There’s less of that," said Rick Probst, the executive director of Picture Mill, which recently worked on the "Monsters vs. Aliens" campaign.

"The idea of having multiple looks at different trailers or TV campaigns is a luxury," added John Long, a partner at Buddha Jones, which recently finished the trailers for "17 Again" and "Ghosts of Girlfriends Past." (Watch trailers for the upcoming summer blockbusters.)

Compounding the problem is that the days of multiple trailers for many films are long gone. "Studios are more likely to do more than one trailer only on their huge tentpole movies," said Long.


And they are asking for fewer revisions and incarnations.


The first iteration of a trailer used to cost around $15,000, and the rough cut for a film poster ran anywhere from $15,000 to $18,000 — plus $5,000 for each revision — according to one studio marketing executive. Now revisions are a rarity — and when they are called for, it’s at a much reduced rate, the exec said. 


The result is less work overall for the industry. And when a company does get a job, it faces a studio that’s holding the line on what it’s willing to pay.

"There hasn’t been an increase in fees for several years — and in some cases, there’s some rolling back," said Long. "It’s part of the reality of the recession, and as much as the movie industry has held up really well in the downturn, the big media conglomerates are having difficulties. I wouldn’t expect us to be able to raise our prices at the moment."

Which means, more and more, the studios are looking for a deal. "Rates aren’t automatic. There’s not some general all-inclusive rate card, and there’s more negotiating with the clients than has been done in the past," said Craig Murray, the CEO of CMP Entertainment Group, which has worked on a number of Disney’s animated films, as well as campaigns for edgier films like "8 Mile." "It’s not cut-and-dry like it used to be."

For its part, CMP has been offering package deals and combining its online services with its trailer cuts to get studios to continue getting studio business. It’s something that requires compromise, Murray said.

"There are clients that come to us that really need a favor, and you will do something at break-even prices if you want to keep busy,” he said. “The high-end has completely gone away.”

Bills are also being scrutinized more carefully on both ends, as vendors are wary of studios attempting to skip out on or postpone charges. 

"Certain studios may lag on your payment or go back to a deal you had with them 10 years ago," said Sohini Sengupta, a producer at Mark Woollen & Associates, which has worked on a number independent films such as "Slumdog Millionaire," "The Wrestler" and "Revolutionary Road." "Vendors are more cautious because there’ve been stories and times when we haven’t gotten paid or it’s been six months and we haven’t gotten an invoice."

Some vendors have tried to avoid dangerous financial situations by investing in financial teams versed in the art of haggling — others are more cautious about overtime.

"Studios more worried about how much time you’re spending on certain projects and check in with you constantly or ask you not to do certain things. A few years ago, that wasn’t the case," Sengupta said. "Now, you keep pestering the accountants or in extreme cases, you tell the studio, ‘We’re not going to work with you if you don’t come through.’"

But perhaps the most palpable effect the economy has had on the industry is in its newfound, more furiously competitive spirit.
"We don’t have the whole year planned out like we would have in the past. There’s definitely less work out there," said CMP’s Murray. "It used to be, ‘Well, we didn’t get to finish on this trailer, but we’ll get ‘em next time.’ There’s now an urgency on our part because you have to win each assignment."