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Plenty of Revenue Opportunities During Box Office Slump

20 May, 2005 By: Thomas K. Arnold

Are we headed for a slowdown? The box office has been down virtually every month so far this year. Not surprisingly, the collective box office clout of films coming to DVD this summer is off for the second consecutive year. And our market research department reports that consumer spending on home video for April was off 7 percent from April 2004 — the first time in DVD's eight-year life cycle that monthly spending took a dip.

Studio executives are clearly concerned, but they're not exactly surprised. For the past year, they've been predicting that the DVD market was maturing and we would begin to see the heady growth of previous years flatten out. The box office slump couldn't have come at a worse time, and what we're left with is an effective one-two punch that can best be summed up by the old nautical warning, “Storm clouds on the horizon.”

But collectively, the executives at the studios are a lot wiser than they were the last time our business took a hit, back in the middle to late 1990s, before DVD rode in like a white knight to save the day. While new theatricals are still the driver, the wagon is full of other things to sell, from special editions to multidisc collections, anniversary editions — Disney even came up with a 15th anniversary edition of Pretty Woman, not to be confused with the 10th anniversary edition — and thriving niche genres like TV DVD as well as, to a lesser extent, music DVDs, documentaries, sports and special interest.

And then there's Sony's PlayStation Portable (PSP), the hot new handheld gaming device shrewd Hollywood executives also see as the ultimate mobile movie-viewing gadget — and a lucrative chance for incremental revenue. Several big studios are already onboard with aggressive movie-release slates, as are sharp indies like Image, Geneon, Eagle Rock and Lions Gate, the cutting-edge mini-major that also was on the front lines with DVD.

Yes, dark clouds may be in our future. But please don't shoot me if I use the most tired clich? in the world: Every dark cloud has a silver lining.

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