Pay-Per-View Gets Push From The Movie Loft

Cable World, Oct 8, 2001 by Christopher Schultz

Systems show low-cost program to sell movies and ads

A cheap, professional-quality program is helping cable system marketers and programmers sell pay-per-view and digital services, and maybe some local ads in the process, thanks to a one-man company based in Babylon, N.Y.

Ernest Collins, programming and production manager at Cox Communications in New Orleans, is one of the beneficiaries of this program, called The Movie Loft. A few years ago, Collins oversaw the production of a program called Wired for Entertainment. For about $2,500 per biweeldy episode, his staff, along with a local studio, put together the show, which spotlighted upcoming programs on various cable networks.

Despite a generally positive reception, Cox canceled Wired for Entertainment--$5,000 a month was too costly; plus, Collins says, it took a lot of time and extra effort to produce it locally.

Since then, Collins has been showing The Movie Loft, a similar program that he licenses for $274 each month, plus some taping and mailing fees that add up to less than $50.

The Movie Loft is the brainchild of Brian Sullivan, president of the company (also called Movie Loft). According to Sullivan, who counts himself as the sole employee, some 20 million cable viewers in 200 systems nationwide see The Movie Loft each month on local origination channels.

Systems license The Movie Loft for at least a year. The price varies from $75 per month for those systems with fewer than 5,000 subs to a minimum $175 per month for those with more than 175,000, which pay $.001 per subscriber. Licensees get a 30-minute program that features trailers and other studio-provided content--cast interviews, outtakes, etc.--of the top ten movies entering the pay-per-view realm that month.

Each movie is introduced by Pat Murphy Stark, a host who peppers the intros with film factoids ("Anthony Hopkins took home an Oscar ten years ago for his role as Hannibal Lecter in The Silence of the Lambs") and pitches the service ("Order Hannibal on pay-per-view and tell us what you think").

The trailers are occasionally punctuated by Stark's voice-overs and are tagged at the bottom right of the screen with local systems' pay-per-view logos.

Sullivan spends about $15,000 each month to produce The Movie Loft, contracting the visual effects and postproduction. He doesn't pay the whole sum because most of the movie studios whose films are on pay-per-view subsidize around 50% of his costs, he says. According to Sullivan, it's "a minuscule part of their marketing budgets."

Sullivan came up with the idea for The Movie Loft six years ago, when he worked at Request Television, an early pay-per-view entity owned by TCI and Fox. He realized that there should be a third party, he says, which would produce a quality show for local systems that made subscribers aware of upcoming pay-per-view movies.

Sullivan has recently begun to promote digital within the programs: During the show he runs two-minute spots pushing interactive program guides and remotes, more movies, CD-quality music and digital-quality pictures and sound.

Some affiliates leave these spots; others insert their own advertisements; and some sell local ads. Megan Krause, marketing director of Pencor Services' Blue Ridge Communications in Palmerton, Pa., has been showing The Movie Loft since June and uses the two-minute breaks to promote network programs and for local ads.

Sullivan says that his business grows about 10% each year. In March, he began another show, called Premium TV, which promotes cable offerings in several categories: sports, specials, exclusive movies, original programming and family programs. Of 200 Movie Loft subscribers, 25 have signed up for it (the rates are the same), and he expects another bump of subscriptions in January when systems get more money, it costs about $10,000 to produce each episode of Premium TV.

One studio executive says that because The Movie Loft is 30 minutes long, it "sells the movie better." (Many 30-second spots created by studios are trimmed further for local branding, and "there's only so much you can see in 25 seconds.") Studios, of course, also like the program's relatively low cost.

Since licensees "own" the monthly show, many put it on their local origination channels and play it all day. Such persistent hands-off marketing probably increases awareness, but measuring its effectiveness in driving pay-per-view purchases is much more difficult.

Sullivan is quick to say that his programs don't fully solve the problem of driving interest in pay-per-view movies or other premium offerings: "It's a piece of the puzzle," he says, understanding that "it's one marketing effort of many."

Many licensees concur, saying that they can't ever pinpoint which elements of a multipronged marketing effort subscribers are responding to when they order pay-per-view movies. But since there's a chance it might be The Movie Loft, some are airing it in a loop in their walk-in offices, where people pay bills and sign up for cable.

Mike Zimmerman, marketing director of 31,000-subscriber Sunflower Broadband, an independent operator in Lawrence, Kan., runs The Movie Loft every day at 5:30 and on Saturday mornings. He began licensing the show about two years ago and calls it "a marvelous tool."