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DVD's Widespread Appeal Sets Stage for Sales War

22 Jan, 2004 By: Thomas K. Arnold

It's funny how DVD has become not only the preferred way to watch movies at home, but also a bona fide pop cultural phenomenon.

Ads for DVD have become ubiquitous on television and in magazines. Top consumer newspapers like USA Today, the New York Times and the Los Angeles Times have launched dedicated DVD sections and special gift guides. And while the DVD market's overall growth rate is flattening out now that more than half of all U.S. households have at least one DVD player, most studio presidents with whom I've spoken recently expect software sales to continue surging upward for at least another two years — and by then we'll probably have a next-generation successor, and the process can begin all over again.

Unlike so many high-tech advancements, however, DVD is not just a guy thing. And that's a pronounced shift in the home entertainment business, which since day one has been geared toward males and only seen women as a conduit to sell or rent children's and family product.

This past fourth quarter, it became most evident that women were not only buying DVDs for their men and their kids, but also for themselves. There were inklings of this happening in previous years, but never was the point driven home so clearly as now.

As a result, you're seeing a big push for Valentine's Day. In years past, the focus was always on rental — rent a romantic comedy and watch it as a couple. This year, the mantra from the studios is sell, sell, sell. DVDs are getting pitched as a nonfattening, non-wilting alternative to candy and flowers. MGM, also on top of the game in packaging catalog titles, has put together a “contemporary romance collection” and will likely sell tons of product. Fox, too, has a Valentine's Day promotion in the works with 18 titles, from Moulin Rouge to Ever After. Universal has Lost in Translation and several other current titles it's pitching to sweethearts everywhere, while Disney is hot with Under the Tuscan Sun, starring the red-hot Diane Lane.

It's a precursor of things to come. The battle for DVD sales of hot theatricals this year is going to be brutal and cutthroat, and the only wiggle room is in nonhit fare — specifically, catalog and niche.

The big studios that have a lot of theatrical product coming their way will, of course, dump huge wads of cash into consumer advertising and marketing, and keep their fingers crossed that they break out ahead. But they'll depend heavily on nonhit product to break out of the pack.

The studios and independent suppliers that don't have much theatrical product in the pipeline are, in many ways, better off. They don't have to wage war on the front lines; they can devote all their time, energy and other resources toward crafting diverse release schedules and clever marketing campaigns to sell product that goes beyond the flavor of the week.

Hopefully both sides will end the year with a good taste in their mouths.

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