With an aggressive plan to mine Hollywood gold in a largely ignored medium, a Santa Monica company is preparing to launch a nationally distributed interactive CD-ROM magazine that will be handed out free to moviegoers as they walk into theaters, beginning at the end of this month.
As its name suggests, Hollywood Previews will feature numerous film trailers and other entertainment-related content ranging from soundtracks, celebrity interviews and games to spotlights on new artists and sneak peeks of upcoming videos and DVDs.
Hollywood Previews is the creation of MOD Studios’ CEO David MacEachern. The digital production company has entered into partnerships with four national theater chains to distribute the monthly magazine on a limited basis in 18 major U.S. markets, with the aim of developing similar CD-ROM magazines for markets worldwide. The digital publication will also be available at newsstands and by subscription.
Already, the magazine, backed with about $3 million from private investors, has inked deals with major advertisers such as MasterCard International, EarthLink Inc., Mazda Motor Corp. and Best Buy Co. Inc. Buoyed by the strong initial response, MacEachern is projecting that the endeavor will be profitable in eight to 12 months.
“If you look at our product, we’re like print-meets-broadcast-meets-the-movies-meets-the Internet,” MacEachern said. “We think there is an inevitable industry here, and we want to be first.”
However, in untested waters, first is not necessarily best, said Bishop Cheen, an entertainment analyst with First Union Securities Inc.
“They’re going to have to hit on exactly the right balance of content, marketing and promotion,” Cheen said. “I’m sure it will be scintillating, but will it be sustainable? The track record of these types of efforts is not very good.”
Promotional vehicle
Nevertheless, MacEachern insisted the time is right for a movie-preview publication on CD-ROM. Two million copies of the first issue, featuring two-time Best Actor Academy Award winner Tom Hanks on the cover, are on their way to theaters nationwide.
Although it has an editorial department, much of the content on Hollywood Previews is coming directly from the major film studios, said MacEachern, who described the magazine as “more of a promotional vehicle than a critical vehicle.”
“Content of all sorts is being exploited in all the digital media,” he said. “CDs, which are available on virtually everyone’s home computer, are an unexploited medium.”
For the beleaguered theater business at least nine exhibitor chains have declared bankruptcy in the past 15 months the advertising-supported magazine is a no-risk proposition. The theaters receive a fee from Hollywood Previews for distributing the CD-ROMs to their customers and MOD Studios is customizing the disks for the chains that have signed on: Pacific Theatres Corp., Loews Cineplex Entertainment Corp., Edwards Theaters Circuit Inc. and General Cinemas.
“This industry has had tough times; we want to be a profit source for the theaters,” MacEachern said. “We went in there and showed them the money and they embraced it.”
In addition to generating distribution fees for the theaters, Hollywood Previews can serve as an additional enticement for customers to return to the venue, said Pacific Theatres spokesman Kevin Mortesen.
“It’s the new technology. It’s something that everyone has their hands on,” Mortesen said. “I think right now people are going to be more inclined to take one of these CDs home and pop it in their computer than they would be to take home a (print) magazine and read it.”
Best content wins
It’s precisely that competition with other forms of media that will be Hollywood Preview’s biggest hurdle, Cheen said.
“If I’m (viewing the Hollywood Preview CD-ROM), I’m not watching something on television or downloading music or reading a magazine,” Cheen said. “At the end of the day, you have a myriad of entertainment choices to consume. You can only do one thing at once. The best content, the most compelling choice, will win.”
By combining more and longer film clips with behind-the-scenes images and information all in one package with an easy-to-use format, Hollywood Previews will prove compelling to moviegoers, MacEachern vows.
“You’re hearing a lot about broadband right now, but CD-ROM is the true broadband. It’s instant video and it’s already on most computers,” MacEachern said. “The Internet can’t deliver the quality right now. It will later, but not right now.”
And, because production costs for disks are much lower than for a print publication, advertising rates are more affordable, he said.
EarthLink marketing director John Lake said that his company, which has signed on as an advertiser for the first three issues, was impressed with the quality of the product. In addition, distribution will be independently monitored, he said, ensuring that all copies are delivered as promised.
