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Box Office Rebound Could Lift DVD

16 Jun, 2006 By: Thomas K. Arnold

I know, I know — the home entertainment business doesn't live or die by the box office. Films with less-than-spectacular theatrical grosses, say in the neighborhood of $60 million, tend to overperform on video. Meanwhile, DVD sales of the handful of true blockbusters that have hit the big screen in recent years, including Shrek 2, didn't meet expectations.

Chalk it up to coincidence, then, that last year, when box office receipts were down about 8% from the year before, the DVD business felt a little pain as well. The video industry finished the year essentially flat from 2004 — after several years of steady, and spectacular, growth.

Like it or not, home entertainment is inextricably tied to theatrical — and the fortunes of one tend to rise with the other. It's not a case of people staying away from theaters because they'd rather watch the movie on DVD. Nor is it that consumers are not buying DVDs because the novelty has worn off.

If there's something people want to see, they'll see it. It's that simple. Last year, the box office took a dive because there were few movies people really, truly wanted to see. And DVD sales were flat because the home entertainment slate, compared to previous years, was similarly weak.

So yes, I'm pretty optimistic at this point, given that the box office this year has been up for 10 of the past 11 weekends and year-to-date ticket revenue is up around 4% from last year. We've seen some tremendous hits, most notably X-Men: The Last Stand, and even smaller films like the romantic comedy The Break-Up have opened to more dollars than expected.

Let's all keep our fingers crossed that this trend continues and that we keep seeing more movies, bigger movies and better movies on the big screen.

As Sony Pictures Home Entertainment chief Benjamin Feingold recently said, feature films still drive the DVD business.

And the more we can push that pedal to the metal, the better for all of us here in the back seat.

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