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Lean and nimble, Lionsgate punches above its Hollywood weight

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SANTA MONICA, Calif. » With its cutting-edge social-media campaigns for "The Hunger Games," the tiny 27-person marketing department at Lionsgate has become a model for Hollywood’s legacy studios: scrappy, thrifty, forward-thinking.

But is the "Lionsgate way" even possible for the old guard to replicate?

"The Hunger Games: Mockingjay Part 1," the third movie in the postapocalyptic series, sold an estimated $123 million in tickets at North American theaters over the weekend. It was by far the biggest opening since last November, when Lionsgate released "The Hunger Games: Catching Fire," taking in $158.1 million on the way to a global total of $864.9 million.

Perhaps more impressively, given the constant discussion in Hollywood about reducing promotional costs, Lionsgate spent roughly $50 million to market "Mockingjay" in the United States and Canada. Hollywood’s six major studios, each of which operates a domestic marketing department at least three times the size of Lionsgate’s, routinely spend $100 million to release a major movie in North America.

"There is a lot of fat," said Richard Greenfield, an analyst at BTIG Research.

The lesson is as obvious as it is humiliating: In the social-media age, the marketing of mass-appeal movies does not necessarily require a cast of thousands (or hundreds) or a Brink’s truck full of cash. Lionsgate keeps costs down by taking full advantage of low-cost media like YouTube, by making certain advertising decisions without relying on expensive market research studies and even by shooting its own pictures to save on photography.

Big studios like Universal Pictures and 20th Century Fox release more big-budget movies than Lionsgate does, which is one reason they maintain much larger domestic promotional departments. But little Lionsgate has lately been schooling some of its heftier rivals.

Walt Disney Studios, for instance, recently sent its global marketing and publicity teams to Google’s vaunted BrandLab for workshops designed to help companies "world build," a trendy catchphrase that means creating overlapping online experiences for various customer bases. Google held up Coca-Cola and Mercedes-Benz campaigns as best-in-class examples, along with a lone movie: "The Hunger Games."

"It’s very easy to follow convention, and what Lionsgate has done with ‘The Hunger Games’ is an interesting case study about breaking convention," said Ben Malbon, Google’s director of creative partnerships.

Warner Bros. is in the middle of laying off 1,000 employees, or roughly 12.5 percent of its workforce, with marketing among the departments suffering losses. Sony Pictures Entertainment recently shook up its promotional unit, bringing in a young executive to replace its top marketer, who departed after 22 years, and elevating a well-regarded digital advertising executive to another top post.

But rewiring the Hollywood equivalent of an aircraft carrier is an almost impossible task. Lionsgate, founded in 1997, about the time Warner Bros. was celebrating its 75th anniversary, has been built differently from the ground up. For instance, Jon Feltheimer, chief executive of Lionsgate’s corporate parent, Lions Gate Entertainment, has long empowered Tim Palen, chief marketing officer, to make instinctive snap decisions – and Palen does, so much so that The New Yorker in 2009 nicknamed him the Cobra.

"Typically at a studio, you sit in marketing meetings and there are 17 proposed versions of a poster and sheets of data about how various proposed materials have tested," said Francis Lawrence, who directed "Mockingjay" and whose other credits include "I Am Legend" for Warner and "Water for Elephants" for Fox. "Decisions are data-driven and made by committee."

He added, "You just don’t get that at Lionsgate."

Douglas Wick, a producer of Lionsgate’s new "Divergent" series, who has worked with almost every studio in Hollywood over the years, was more blunt: "Tim knows that bureaucracy is death," he said.

Palen, 52, is rare among studio marketing chiefs in that, along with running a department, he often personally photographs actors for promotional materials. That both reduces costs and gives him crucial artistic credibility with filmmakers. Palen largely taught himself photography over the years, gradually taking on a more direct creative role in every campaign because filmmakers started to demand it.

"To be that creative and original and still have the trains come and go on time is very unusual," said Lucy Fisher, a "Divergent" producer who has held senior positions at Warner, Fox and Sony over the years.

Palen – even while managing the "Mockingjay" campaign, as well as several other smaller ones for films like "John Wick" – flew to Atlanta to photograph the cast of "The Divergent Series: Insurgent" for posters, billboards and a flurry of online efforts. He shot 15 actors in a single day, some with four different setups each.

"We didn’t shoot one thing that we didn’t end up using," Palen said, sitting in his decidedly nonpalatial office at Lionsgate’s headquarters here. The cost of the shoot was his plane ticket and a hotel room; hiring an outside photographer, which is what most studios would have done, could have easily cost $225,000.

Palen, sitting with his publicity chief, Julie Fontaine, a former Disney executive, grew visibly uneasy when the conversation veered toward his singular contribution. He pointed to the lack of corporate layers at Lionsgate and an overall culture of risk-taking.

"We may be outlaws, but Jon Feltheimer is still the sheriff," he said, referring to the chief executive. "He’s the reason I get to make moonshine."

Take, for instance, the time Palen’s team advertised fake "Hunger Games" beauty products on billboards and bus shelters. Or more recently, when Palen used an amputee underwear model and the reigning Mr. L.A. Leather in a major "Mockingjay" outdoor and online promotion called "District Heroes."

"At another studio, legal or standards or both would have stopped us 10 steps before we got any of those ideas," Palen said.

Lionsgate, one of the last remaining independent studios in Hollywood, released 21 movies last year, although many were small in scope.

A built-in fan base for "Mockingjay" certainly helped fuel its weekend ticket sales. More than 80 million copies of Suzanne Collins’ "Hunger Games" trilogy have been sold worldwide. But industry observers also point out that keeping moviegoers interested in a "Hunger Games" movie every year is difficult; typically studios wait a year or two between installments, in part to maximize demand.

So Lionsgate relied heavily on YouTube, in particular creating a boundary-pushing initiative called "District Voices."

Palen and his team – working with Google – essentially created their own "Hunger Games" television network, CapitolTV. Released through YouTube and the other websites, CapitolTV was presented as an official news source from the movie’s fictional government. To provide programming, Lionsgate recruited a group of YouTube stars including Justine Ezarik, better known as iJustine, and Rob Czar and Corinne Leigh, the pair behind ThreadBanger, a do-it-yourself fashion channel.

But Lionsgate went a step further, helping produce the scripted "District Voices" videos, which featured the YouTube personalities in "Hunger Games" costumes with props from the movie, blurring the line between reality and fiction.

"Lionsgate wanted to do something aggressive and pioneering, and it turned out that they actually were serious, which is not always the case," said Malbon of Google, noting that its collaboration with the studio was "a Hollywood first."

He added, "We are now in talks with other movie studios."

Brooks Barnes, New York Times

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