TEXT OF STORY
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.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.