Marketing engine in 'Speed Racer' stalls
The movie 'Speed Racer' was supposed to be a blockbuster. Warner Bros. put $250 million into making and marketing it. But so far it's earned less than $30 million at the box office. Stacey Vanek-Smith reports on the economics of a flop.
Image from the movie 'Speed Racer' (Warner Bros.)
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KAI RYSSDAL: This being Monday, the weekend box office numbers are in. The new "Narnia" movie's big. "Iron Man" is still hot. "Speed Racer" has sunk. It was supposed to be a blockbuster. Warner Bros. put $100 million into making it, then another $150 million marketing it. Total box office so far? Less than $30 million. And all those "Speed Racer" Happy Meals and action figures? They may not pay off as planned either. Stacey Vanek-Smith reports on the economics of a flop.
COMMERCIAL: Speed Racer, the movie, rated PG, is now in theaters and at McDonalds.
STACEY VANEK-SMITH: Happy Meals are among Speed Racer's $80 million worth of promotional partnerships. General Mills put "Speed Racer" action figures in cereal boxes. There is a "Speed Racer" Lego set. And Puma made "Speed Racer" shoes. So what happens to all that stuff when the movie crashes and burns? Consumer retail consultant Burt Flickinger.
Burt Flickinger: Retailers will start cancelling orders. So a lot of it will wind up in close-out markets and in the off-price markets at deep discount.
And this couldn't have come at a worse time. Flickinger says companies are already slashing their marketing budgets. And when a big-ticket movie like "Speed Racer" fizzles out after just a few weeks, it highlights how expensive and dicey movie deals can be.
FLICKINGER: As some of the sponsors say, it's too high-cost, and it's too high of a risk with too little reward. It could change studio sponsorship and finance for the foreseeable future.
Flickinger says this may be the dawn of the movie make-good, with studios compensating marketers for poor turnout by giving them discounts on future promotional deals. But L.A. Magazine's Mark Lacter says box-office performance is only one part of a movie's marketing pay-off.
Mark Lacter: Overseas box office, the DVD sales. . . . So, just because a film doesn't do as well as expected in the first few days, doesn't mean it's going to be a total disaster from a financial standpoint.
And those tossed-aside toys and shoes? They can find new takers when the movie opens internationally.
SPEED RACER SOUND: Move it, speed! It's getting ugly out there!
I'm Stacey Vanek-Smith for Marketplace.
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