MGM ROARS BACK

DAN ALAIMO

SANTA MONICA, Calif. -- The lion's roar has never sounded better.

Metro-Goldwyn-Mayer is celebrating its 75th anniversary this year as one of the strongest brands in Hollywood with one of the most recognizable logos in the world. This staying power is remarkable because it competes in an industry where big names come and go and also because the company only recently turned the corner from a prolonged bout with financial difficulties.

"The MGM brand stands for entertainment," said Gerry Rich, president for worldwide marketing at MGM/UA Distribution Co. "It was not the first studio, but it was one of the primary cornerstones of Hollywood and has continued for 75 years. The lion has signified Hollywood and entertainment, which are synonymous around the world," said Rich.

Under the leadership of investor Kirk Kerkorian and chairman and chief executive officer Frank Mancuso, MGM has acquired the libraries of Orion and PolyGram to add to its own rich catalog, which includes United Artists. The studio recently negotiated its way out of an onerous video distribution deal with Warner Home Video, Burbank, Calif. MGM now has the rights to a library of more than 5,100 films, including the James Bond franchise and the Pink Panther films, among many others. It is in a strong position to take advantage of new distribution technologies as they arise, as well as the current highly profitable home-video pipeline.

The 75th anniversary presents an opportunity to sell that catalog into the home-video market, while building up the brand images of MGM, its subsidiary labels and film franchises. For example, a new Bond movie is due out later this year from UA along with the re-issue of the Bond catalog, which has been on moratorium for more than a year.

"What happens over time is that MGM and the MGM brand begin to stand for a certain quality of film-entertainment experience and help reinforce that promise of quality," said Blake Thomas, senior vice president for worldwide marketing at MGM Home Entertainment. "That promise is a kind of experience that you can expect to have with MGM films. But frankly, it is probably not as important as the stars in the film or what equities the particular film has built up over a period of time," he said.

One of the biggest efforts of MGM's 75th-anniversary celebration is to market its extensive library. "In and of itself, the fact that MGM has been around for 75 years doesn't have any meaning to consumers. We are taking the opportunity that this anniversary affords to focus on the elements of our brand equities that are meaningful to consumers," he said. MGM is promoting the anniversary with a trailer on the front of each video, print advertising and ample in-store merchandising materials.

As evidence of the viability of catalog video promotions, Thomas noted the sales results of Warner's 75th anniversary and the American Film Institute's Top 100 movies promotions of last year, along with the strong sales MGM has seen so far this year in the first two waves of its anniversary program. "If catalog titles are merchandised well and aggressively, there is a significant upside in revenue that can come with that," he said. Most of those sales come from impulse purchases, he added.

"Because of the margin opportunity on catalog titles, particularly compared to blockbuster animated releases that supermarkets use as leaders, this is an incredible business opportunity. It's an opportunity that we have been busy communicating to supermarkets," he said.

"When you have a logo that is so recognizable, it is a very powerful asset and tool," said Rich. "It has many different extensions in potential revenue streams. And longevity works in your favor."

However, major studio brands have a limited effect on consumers, the MGM executives pointed out. "There is a cachet to the MGM logo, but it doesn't have the same meaning to the consumer as a packaged good brand with very strong brand loyalty. I don't think that kind of thing exists in the entertainment business," said Rich. On the theatrical side of its business, people buy tickets for specific movies and are minimally influenced, if at all, by the studios that distribute them, he said.

"The studio brand doesn't work the same way that a packaged-goods brand does," said Thomas. "It is a reassurance of quality and creates an expectation for the kind of film experience you might have," he said.

"What we try to do in home entertainment is create separate brands or collections of film that can be more targeted, not only to consumers, but to retail outlets. That can help consumers more directly through their purchase decision process, to help them find filmed entertainment that is right for them, and therefore more directly fulfill the promise of the MGM brand," Thomas said.