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How Will DVD End 2007?

30 Dec, 2007 By: Thomas K. Arnold

It's fingernail-biting time for studio executives. Extraordinarily strong sales for several December DVD releases may yet lift overall DVD sales into positive territory for the year, or at least severely narrow what everyone up until a month or so ago was predicting would be a significant decline from 2006.

Negative stories had already sprouted in the mainstream press about how the public's infatuation with DVD is waning, the next-generation format war is turning people off to packaged media, and before long everything will be electronically delivered.

If we end the year on a down note of, say, 5% or more, those stories will proliferate and things could get worse — and fast. After all, if the public is told they're beating a dead horse, they'll believe it — and that could speed up any exodus from packaged media that might occur naturally.

But if we finish the year with a sales falloff of 2% or less, the perception of our business would be a lot brighter. The truth be told, consumer DVD spending doesn't have to be up in 2007 for our industry to look good. With a dropoff of no more than 2%, we're in flat territory, and analysts will say that for a mature business valued at $24 billion a year, flat is a great place to be. DVD would be seen as holding its own against electronic delivery and any other competition for leisure time. And the strides made by next-gen discs — as long as they're expressed in a percentage rather than units — would give studio marketers a great cornerstone upon which to spin a yarn of bigger and better things ahead.

“DVD is holding steady, and we expect consumer spending on home entertainment to rise significantly in 2008 as next-gen discs build on the momentum they scored in 2007 and really take off.” That's the sort of quote we're likely to see from some of our industry prognosticators.

The witching hour will soon be upon us. We know December titles such as Disney's Pirates of the Caribbean: At World's End, Fox's The Simpsons Movie, Warner's Harry Potter and the Order of the Phoenix and Universal's The Bourne Ultimatum racked up strong first-week sales, but how did they perform, collectively, during the holidays and gift-card redemption season? Every day could make a difference, and the last day is Dec. 31.

Are we down? Up? Flat? No one really knows. But we'll know soon enough. In the meantime, keep those nail files handy.

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