Slimming Down With T.K.5 Aug, 2004 By: Thomas K. Arnold
Remember the big issues our industry once grappled with? Lower rental pricing for secondary titles, pay-per-view windows, revenue-sharing and supposedly sweetheart deals given to Blockbuster by the studios, to name just a few. All of them irrelevant in today's sellthrough-driven, DVD universe.
The hot-button issues of today include how long the DVD growth curve can continue to soar before flattening, explosive first-week sales driven by loss-leadering mass merchants, competition for shelf space now that everything's for sale out of the gate, the used-DVD trade and the significant decline in consumer rental spending reported for the first part of the year.
Oh yeah, and there's one other one I expect to see hog more and more of the limelight in the coming years: space in consumer homes.
We've certainly become a nation of movie collectors. DVD has made it feasible for anyone to build a home video library that's both affordable and archival. But the question remains, how many movies will the average consumer buy before he runs out of room? Space has become an issue in the Arnold household; I know I'm a lot more selective now than I was even a year ago in deciding what to keep and what to toss. At what number of DVDs will the buying habit begin to flatten out, not necessarily because of a lack of interest, but, rather, a lack of space? 300? 500? 1,000? More? Less?
Regardless of the specific number, there is widespread concern on the studio side that eventually buy rates, which have held up remarkably well as DVD has moved into the mainstream, will begin to peter out. Consumers will still buy movies; it's just that at a certain point, they're bound to become more selective, simply because there isn't enough room in their home.
That's why some of the sharpest studio minds are revisiting the Amaray-style “keep case” that has become ubiquitous now that Warner has finally discarded the dreaded Snapper. It's the perfect vessel for a DVD, and yet it's half an inch thick. Thus, the question: Would a thinner case keep buy rates steady a little while longer? Let's say the average consumer keeps his DVDs in a family room bookcase, three feet wide and five feet high, that can hold about 300 discs in keep cases. If capacity, due to a thinner case, becomes 500, would he keep buying voraciously until the bookcase is filled up?
If the answer is yes — and I know at least in my case that it would be — then the studios stand to reap a substantial gain by switching to a thinner package. Indeed, one high-level studio boss recently told me he envisions an industrywide move to a slimmer box sometime over the next two years, depending on how soon current buy rates start to fall off.
The only drawback, he said, is that in a thinner case it will be more difficult to print the movie title on the spine. But I really don't think that's much of an obstacle. If there's a will, there's a way, as they say. And if buy rates drop off, you can bet your collection of banged-up Snappers that we're in for a major packaging revolution.