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Book Stores a Stable Segment in Home Media

21 Mar, 2008 By: Billy Gil

The home entertainment industry was down 2% in 2007, with a $0.6 billion drop in DVD spending compared to 2006, according to figures compiled by DEG: The Digital Entertainment Group, But industry sources say book stores may be a segment of the industry that still finds ways to be profitable, catering to a focused demographic.

While the numbers for 2007 aren't yet in, data from Adams Media Research showed that in 2006, total video consumer spending at book stores was $453 million, up from $416 million in 2005 and $439 million in 2004. Book stores represented 2.8% of the total video market in 2006, compared to 2.5% in 2005 and 2.6% in 2004.

Suppliers small and large pointed to the enduring importance of book stores in the home video market, citing the narrowing of titles carried by big-box retailers and the differences in the consumer demographics of book stores versus other DVD retailers as reasons the segment continues to be a focus.

“The book chain market has become, and continues to become, more and more important to us,” said Gary Baddeley, president and CEO of The Disinformation Co., an alternative media source with publishing, television and home video divisions. “As the video and music retail spread of stores is narrowing and we continue to see store closures, the book chains … for the most part are growing or maintaining their size. In a shrinking market, they're becoming more important.”

Independent voices

Disinformation's home videos, distributed through Ryko and owned by Warner Music Group, is home to documentary fare such as Wal-Mart: The High Cost of Low Price and Da Vinci Code Decoded. Those titles featured tie-ins to books (unofficially, for The Da Vinci Code), making them perfect for book stores looking to maximize profits by cross promoting products. But, Baddeley said, the release date for a book matters, as it saw with its 2004 documentary Outfoxed: Rupert Murdoch's War on Journalism, which was released before its accompanying book (also published by Disinformation).

“We thought that the gap hurt us on that,” Baddeley said.

Another smaller company focusing on documentaries, Cinema Libre Studio, focuses on book stores for its DVD product as it has documentaries and other titles based on books and authors, such as its “Speaking Freely” series, in which an author is asked to speak at length about a particular topic.

“It's a perfect match,” Martin Mair, Cinema Libre's VP of home entertainment, said on marrying his studio's product to book store clientele.

Still, bigger retailers are putting independent book stores out of business, distributors said, making it harder for their niche fare to reach its intended audience.

“At independent book stores, they have more freedom and can pair a book with its DVD,” Mair said. “Try that in a Barnes & Noble, especially for an independent supplier.”

What's selling, who's buying

Just who is shopping at book stores is open to debate, but Kolleen O'Meara, a spokesperson for one of the biggest book retailers in the United States, Borders, said their average customer tends to be older (age 45+) and is more often female than male — a far cry from the consumer targeted by big-box retailers with such product as Universal Studios Home Entertainment's Transformers, for example.

Research from The NPD Group shows that in 2007, 68% of electronics store customers were under the age of 45, compared to 56% for book stores. Book stores had slightly more female customers than male, while electronics stores were 63% male to 37% female.

These demographics show up in sales: Borders' top 10 DVDs at the end of February were Sony Pictures Home Entertainment's Across the Universe, Walt Disney Studios Home Entertainment Becoming Jane (a biopic of sorts on beloved author Jane Austen), BBC Video's Planet Earth: The Complete BBC Series, Warner Home Video's No Reservations, Disney's Gone Baby Gone, Universal's Elizabeth: The Golden Age, Warner's The Assassination of Jesse James By the Coward Robert Ford, Disney's Snow Buddies, TS Production's The Secret (based on the bestselling self-help novel by Rhonda Byrne), and Sony Pictures' We Own the Night.

By and large the titles are critical favorites, with one documentary, one book-based film and one author biopic. Additionally, a representative from Nielsen said children's nontheatrical titles and family titles tend to underperform in the specialty retail channel, which includes book stores.

Studio look to book stores

A look at Borders' top 10 also reveals sales are rounded out with big studio pictures. Warner, for example, has product that while not tailor-made for the book store channel, is a natural fit.

In celebration of its 85th anniversary, the studio is releasing more than 50 remastered classics, some of which will appear in lavish collector's editions. The first collector's edition of 10 that will release this year, Bonnie and Clyde, streets March 25 on DVD and Blu-ray Disc. The Blu-ray comes with an exclusive 34-page book featuring behind-the scenes footage, profiles of the actors and director, original reviews from critics, and perspectives from today, 40 years after the film was released, as well as what the film meant at time.

“From a qualitative point of view, the book channel is extremely important,” said Jeff Baker, SVP and GM for theatrical catalog. “They carry a tremendous breadth of assortment, part in product that has a literary background, but also with classic films.”

Baker said classics such as Casablanca and Ben Hur typically performed well in the book store environment, as well as more current, book-based films such as The Notebook, The Polar Express and the “Harry Potter” films. Holiday titles (when consumers are looking to give gifts) and boxed sets of actors such as Bette Davis, Jimmy Stewart and Doris Day also do well for Warner in book stores, Baker said.

A specialized market

Baker's comments echo those of much smaller distributors: The book store segment represents a specialized market unattainable elsewhere.

“The trend in bookstores is similar to what's happening with video — it's becoming more niche,” said Emily Santos, VP of sales for New Video Group, which distributes documentaries from its label Docurama. “If it's something that's topical, timely, speaks to what's going on around us, and it's meaningful to people, that's sort of what draws attention.”

That specialized market is especially important for independent distributors. Santos said book stores probably account for 5% to 6% of New Video's video business, while Cinema Libre's Mair estimated the percentage of his company's video business generated by book stores to be 25% to 30%.

“If you want to buy a copy of There Will be Blood, you can buy that anywhere,” said Dennis Hedlund, chairman and founder of Kultur Films, which releases special interest product such as opera, ballet, music and art DVDs, as well as documentaries. “But if you want an unusual title, a book store's a good place to go for that.”

Chart: Borders' Top 10 DVD Sellers for 2007:

1. Harry Potter and the Order of the Phoenix – Warner
2. Planet Earth – The Complete Collection – BBC Video
3. Pirates of the Caribbean: At World's End – Disney
4. 300 – Warner
5. The War – A Ken Burns Film – Paramount/PBS
6. The Departed – Warner
7. The Secret – TS Production
8. Ratatouille – Disney
9. Casino Royale – Sony Pictures
10. Heroes - Season 1 – Universal

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