The Cross-Promotion of Vestron and Nestle

An article titled Tapes hear a word from the sponsor, written by Mary Stevens, was published by The Chicago Tribune on August 5, 1988 -- about one year after the movie Dirty Dancing was released in movie theaters.

The article in The Chicago Tribune on August 5, 1988

The article includes the following passages:

.... Paramount Home Video broke new ground last summer [1987] when it included a special, lushly produced commercial for Diet Pepsi on the blockbuster hit Top Gun. Pepsi-Cola's sponsorship involvement (which involved collaborative advertising on network TV) enabled Paramount to release Top Gun at the then-unheard-of low price of $26.95 (most brand-new titles sell for $80 to $90 and are not marked down to an affordable sell-through price until months or years later).

Consumers were happy because they got to own Top Gun at a bargain price. Paramount was hapy because consumers bought more than two million copies of Top Gun. And, of course, Diet Pepsi got more exposure in every household that rented or purchased the Top Gun video.

When Vestron Video released its smash hit Dirty Dancing, the tape included a commercial for Nestle Alpine White candy bars. But this time, there was no bargain price tag -- the video was released at $89.95. ....

Video dealers responded with considerable grumbling many thought they and consumers were being shortchanged. Apparently, nearly everyone had assumed that advertising on videos would automatically mean pricing at the sell-through level, simply because that had been the case with Top Gun.

Al Reuben, senior vice president of marketing and sales at Vestron Video, says the public shouldn't jump to conclusions about commercials on videos and how they will or won't affect pricing.

"There are many different ways that commercials and cross-promotions are going to be used by Vestron and other video companies. Right now, it's a whole new, relatively unexplored territory, and there isn't a lot of data yet available," he says. ... But Reuben predicts that as video companies learn more about the potential of this new medium, we'll see a variety of approaches that will be beneficial for everyone, including consumers.

Rather than trying to sell Dirty Dancing with a lower price tag from the start, Reuben says, Vestron concentrated on getting maximum mileage in the rental market first. An aggressive Nestle promotional campaign (using TV spots and store displays) began in the sixth week after Dirty Dancing's debut on video, a time when rentals of new titles traditionally taper off. The promotional boos succeeded in giving Dirty Dancing a second wind on the rental scene.

On September 14 [1988], consumers will get their chance to add Dirty Dancing to their video libraries at a low price ($24.98). Vestron is launching its Dirty Dancing sell-through attack with an ambitious holiday sale program called "Stars and Bars VideoGift Promotion, Act I." Reuben notes, "The 'Stars' are the stars in our hit videos; the "Bars" are Nestle candy bars."

Seventeen more popular Vestron titles will be reduced to $19.98 each. When consumers mail in proof-of-purchase seals and cash register receipts from any two of the 18 selected titles, along with 10 wrappers from Nestle candy bars, they'' get a third VideoGift title of their choice free. ...

[The article lists the other 17 movies.]

Reuben comments: "This is the first time a major packaged goods company has put its marketing power behind a total feature film promotion such as Vestron VideoGift. The combined marketing expertise of Vestron and Nestle, along with the desire to drive consumers to purchase videos during the peak holiday season, will create the most exciting video cross-promotion to date."

The "Stars and Bars VideoGift" campaign has a $10 million budget. There will be national TV advertising during the prime holiday period, ads in major Sunday newspapers, and point-of-purchase materials wherever Vestron and Nestle products are sold, and so on. Nestle candy commercials will be included on approximately ten of the featured titles. Reuben expects Vestron to sell more than two million videos through the campaign.

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