MUMBAI: Seeing DreamWorks Animation SKG Inc‘s strategy for Dragon failing, it‘s come to light how Hollywood, that spends more than $4 billion a year promoting movies, is under pressure to cut costs and experiment.

From Time Warner Inc‘s Warner Bros to Walt Disney Co, Hollywood‘s stalwarts have been employing Youtube and Twitter, consolidating advertising staff and using fans to spread the message through viral marketing.

Hit by the downturn, Hollywood had cut its ad spending by 8 per cent to $4.39 billion in 2009 after cutting it short by 3 per cent in 2008. It is likely that more cuts would come about in the first half of this year.

Dreamworks spent $160 million to $175 million to market Dragon and then had to revamped its promotional materials and TV commercials right before the film released. However, its campaign fell flat with audiences.

The movie logged in $43.7 million in its domestic debut weekend compared to a projected $65 to $70 million.

In the wake of a revised campaign, Dragon has held up well and its critical praise and has earned $104.7 million in ticket sales so far.

Faced with weak DVD sales, studios like Disney and Viacom Inc‘s Paramount have cut costs by combining marketing for DVDs and theatrical releases, whereas earlier they used to have separate teams to do so.