Commercials on video cassettes? -- We uncover the new trend of advertisements found before the films you buy on tapes

If a full-length movie is a novel, this is a short story,” Richard Rush says of the 109-second adventure he directed to kick off the videocassette of Indiana Jones and the Last Crusade. ”It’s a poem. It’s a limerick.”

It’s a commercial, actually, as everyone who bought or rented the chart-topping video quickly discovered. But the marketers behind the Diet Coke ad preceding Indy’s latest adventure are hoping no one will notice. After several years of trial and error, video companies believe they have found a formula for making advertising acceptable to video audiences: They just combine hit-movie characters, themes, and production values with candy bars and cans of soda. They make mini movies so unlike conventional television advertising that, marketers claim, many viewers actually like the intrusion (even if they did buy VCRs to avoid commercials).

The new video ads are hard to avoid. When sex, lies, and videotape arrived in stores last week, it included a very untelevision-like ad for Premiere magazine, concerning the making of a mythical movie not unlike sex, lies itself. The 50th-anniversary edition of The Wizard of Oz has an ad for Downy fabric softener in which a group of kids dresses up like the movie’s characters in homemade (and very fluffy) costumes. A Fish Called Wanda has ”A Very Public Service Announcement” featuring the movie’s star, John Cleese, pushing Schweppes beverages with humor as dry as tonic water. Cleese reprised his pitchman role for another wry spot, spoofing James Bond movies on the video of Licence to Kill. Batman has Batbutler Alfred plugging Diet Coke, ostensibly the preferred soft drink of costumed vigilantes. And although The Hunt for Red October is still in theaters, a movie related commercial for the cassette releaeleas already in the planning stages at Paramount.

Altogether, about 30 major movie releases on video this year will include commercials and two-thirds of those will have movie themes. Within two years, virtually every ad on hit releases will be connected to the movie content.

”From this point on, commercials will not merely be on video movies, they’ll be about video movies,” predicts Robert Alexander, president of the video market-research firm Alexander & Associates. ”Cassette commercials are developing as a unique kind of advertising, unlike ads on television.”

That evolution is a direct result of viewer dissatisfaction with run-of-the-mill ads. ”People make a special effort to go out and rent a cassette, and for them to accept a commercial on that cassette, it has to be original and special,” says William Perrault, vice president of marketing for RCA/ Columbia Pictures Home Video, which released sex, lies, and videotape. ”You can’t give them the same old commercial they’ve seen on TV a hundred times.”

Video companies learned this lesson the hard way. Until recently, most ads on cassette were TV retreads, and, according to reports from Alexander & Associates, by mid-1989 audience response to cassette ads had ”taken a negative turn.” Nearly three out of four VCR owners said there is enough advertising on television, and resented having commercials on cassettes.

With average budgets of $200,000 to $500,000 — similar to those of network TV commercials — none of the made-for-video ads released to date compares with the Diet Coke epic concocted for Indiana Jones and the Last Crusade. Produced by Lucasfilm, Ltd., ”Journey to the Kitchen” employed a 60-person crew working for five days at one of the largest soundstages in Hollywood — all at a cost of nearly $1 million, according to Roger Mosconi, an executive with Lintas: New York, the advertising agency involved with the spot. (That’s close to the cost of some movies or a one-hour episode of Twin Peaks.)

What Diet Coke got for all that money was a very Lucas-like little movie — an abbreviated saga of a young wife’s harrowing trek to fetch a soft drink for her husband, who’s engrossed watching The Last Crusade on video. On her journey, she encounters several Jonesian close calls, such as snakes, earthquakes, and booby traps, and is rescued each time by a shadowy but distinctly Indy-like figure. ”We convinced Spielberg and Lucas that we would only show the ‘spirit of Indiana Jones,’ ” Mosconi says. ”Most people who watch the spot can’t tell the difference. They think it’s Harrison Ford.”

Although the production was edited into two short spots for network TV, it was conceived and executed specifically for the Last Crusade cassette. ”I thought of it as a warm-up for the audience, like a cartoon at the old Saturday matinees,” recalls director Richard Rush (The Stunt Man). Rush felt a unique pressure to make the segment ”as entertaining-or more entertaining-than the movie. I was aware that the audience has its finger by that button and all they have to do is push fast forward.”

Advertisers also fear fast forwarding. But a survey by Nielsen Media Research shows that people really do watch the ads, at least when the ads are interesting. Nielsen found that 76 percent of the households renting A Fish Called Wanda didn’t zip through Cleese’s clever Schweppes commercial. Even among the households that viewed The Wizard of Oz more than 30 times, 84 percent were still watching its relentlessly cute Downy fabric-softener ad. ”We thought people would recognize these were commercials and zip through the rest of it,” says Paul Lindstrom, vice president and product manager for Nielsen Home Video Index. ”That’s not happening.”

Still, advertisers are cautious. ”Right now, there’s no such thing as ratings for cassettes,” Lindstrom says. Although Nielsen has begun encoding some videocassettes with special signals that can tell them which homes with Nielsen boxes are watching what, it probably will be years before video viewership can be measured as accurately as that of TV.

Movie companies also have qualms about ads on video. They’re concerned about undercutting one of video’s unique selling points, its traditional lack of commercials. Conveniently, proponents of cassette commercials contend that the two fears cancel each other out. ”The fact that you can fast forward gets around any problem,” says Katherine Connelly, a senior vice president with EMCI, the promotions company that set up many early cassette-commercial deals. ”The viewer has the ability to choose whether to watch the commercial.”

Regardless of how viewers feel, ads on cassette carry some huge benefits for movie companies. They don’t do it for the money. Instead, video companies try to join forces with advertisers who can help them promote their cassettes with displays in supermarkets, rebate offers, and other gimmicks. Those Indiana Jones-Diet Coke ads on television didn’t just sell soda, they also hyped the release of Indiana Jones and the Last Crusade far more widely than Paramount could have done on its own. Coke and Paramount claim the total value of their joint promotion was $20 million. The exposure provided by Schweppes’ promotion of A Fish Called Wanda may have boosted rentals of that tape by 20 percent in its first 13 weeks of release, according to one market survey.

A study by the market-research firm the Fairfield Group concluded that, ”Given a choice, most people would opt for no ads on videocassettes.” Of course consumers aren’t given a choice. At a time when movie studios are pushing to eliminate advertising in movie theaters, ads on tape are becoming a permanent fixture. But, if cassettes must have commercials, at least the producers are trying to deliver ads interesting enough to keep our thumbs off the fast-forward button. And as long as VCRs come with remote controls, viewers will always have the last word.