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The Sky Still is Not Falling

9 Dec, 2005 By: Thomas K. Arnold

Uncertainty over the future of our industry is beginning to border on paranoia.

Even our competition is buying into the “sky is falling” mentality, with an editorial slamming us for accurately reporting studio projections and then attempting to debunk our continued belief in this business with this: “It appears by some measures that the market is not up at all but has slipped into negative territory for perhaps the first time ever.”

We're long out of the double-digit growth territory, but don't call the quarter a bust just because some early releases didn't quite meet sales expectations.

Unlike our competition, we have a market research department and access to VideoScan data, the only point-of-sale data in the business. There have been a few duds, but there also have been some outstanding successes, including 20th Century Fox Home Entertainment's Star Wars: Episode III — Revenge of the Sith, which is back in the top 10 after six weeks in stores, and by our estimates has sold nearly 9 million DVDs in the United States.

What's more, many of the high-profile theatricals released early in Q4 still are posting steady sales, week after week. The Polar Express, Madagascar and Batman Begins are all still going strong and likely will continue to sell well through Christmas.

After Christmas, you've got the gift-card redemption market, said to be an $18 billion-a-year business. The last week in December, studios are straying from their traditional Tuesday release date and putting out a batch of quality titles on Monday, Dec. 26, the day after Christmas. How many DVDs will be sold that day?

On top of that, you're seeing several hot new independents emerge with plenty of startup capital from investors who don't buy into the doom-and-gloom scenarios, either.

Magnolia Home Entertainment will be an active DVD player come January, fueled by “superrelease” advocates Mark Cuban and Todd Wagner. Two months later, expect the first DVDs from Genius Products LLC, the new home entertainment joint venture controlled by Bob and Harvey Weinstein of Miramax Films fame.

Are we wearing “blinders,” as our competition suggests? No. We're just doing our job, reporting and analyzing the news.

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