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A Return to Good Times?

26 Aug, 2005 By: Thomas K. Arnold

Is the business coming back? After a relatively weak second quarter in which the DVD industry's double-digit growth slowed to the single digits, signs are pointing to a healthy rebound ahead. Our market research department says consumer spending in July rose nearly 12 percent, despite ominous warnings in previous months that ho-hum theatricals may drag down revenues for the remainder of the year.

Yes, there were a couple of big titles — most notably Million Dollar Baby and Constantine — but neither one could be considered a true blockbuster. On the video end, each one sold about 1.5 million units, a decent performance but by no means a record-breaker.

So why is spending up by so much? It's all the other stuff that's come out, most notably TV DVD. Just looking at this week's sales charts, Fox's The Simpsons — The Complete Sixth Season debuted at No. 3 on the preliminary national DVD sales charts, despite a hefty list price of nearly $50. The TV DVD juggernaut is so mighty that earlier projections of a 30 percent annual growth rate appear to be getting blown out of the water — and USA Today just commissioned me to write a pop cultural essay on how TV DVD has changed the way Americans view television.

Can the boom last? Who knows? But what's important here is that the home video business is becoming less and less dependent on the big theatrical hits. That's a good thing. Independent rental dealers have been preaching the gospel of diversity for years, both as a hedge against the big rental chains, with their “guaranteed” availability of the flavor-of-the-week theatrical, and the mass merchants, with their lowball first-week pricing of the latest big movie releases.

Clearly, the indies were right. Live by the hits, die by the hits. Fortunately for all of us, it doesn't appear we're doing either.

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