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2005: The Year in Review

11 Jan, 2006 By: Thomas K. Arnold

The maturing industry was on everyone's mind as 2005 drew to a close. After years of double-digit growth, the DVD business slowed to a crawl. It happened faster and more furiously than many had expected. By year's end, studio executives were scratching their heads, wondering how to breathe new life into this business and get consumers excited about home entertainment.

They did it in 1997, right before DVD hit. And they did it again 1991, when America was in a recession and sellthrough was just beginning to take off.

At the Video Hall of Fame dinner in December, Sony Pictures Home Entertainment president Benjamin Feingold reminded guests that our industry has been through lean times before, “and each time we've come back stronger and better.”

The hard part's the waiting — and that's where our industry is now. While warning signs emerged in 2004, with the weakening of rental and softening in sales of big mega-hit titles, all segments of the industry felt the pain in 2005.

The big rental chains lumbered along, their stock prices trailing in their wakes. Studio executives saw big titles consistently fail to hit sales targets, while margins continued to erode due to ridiculous discounting at retail.

Not helping matters was a slump at the box office and a growing fascination with wireless gadgetry like Apple's video iPod and its $1.99 “Lost” and “Desperate Housewives” downloads.

Yet, there were encouraging signs as well. The battle for a unified next-generation, optical-disc format tilted heavily in Blu-ray Disc's favor, with a launch expected as early as this spring. TV DVD sales continued to break records, and special-edition treatments of classic movies sold surprisingly well — even if those movies had already appeared on DVD once, twice or even three times before.

With that, we present our annual recap of the year in home entertainment, on a month-by-month basis, as presented in the pages of Home Media Retailing.

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