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Double-Dip Releases Growing

13 Sep, 2004 By: Thomas A., Judith M.

Once again, for the third consecutive year, an elaborate extended version of a “Lord of the Rings” title will be out in time for Christmas.The Lord of the Rings: The Return of the King four-DVD set arrives six months after the initial two-disc edition.

And once again, New Line Home Entertainment will go double dipping for consumer dollars — and probably strike gold a second time.

Releasing two, or sometimes more, DVDs of the same movie is becoming an increasingly common practice in Hollywood. According to Ralph Tribbey, editor of The DVD Release Report, more than 60, or 23 percent, of the 266 theatrical titles released on DVD so far this year have come out in at least two versions.

Three years ago, just 14 of the 364 theatrical titles brought to DVD had multiple editions.

Tribbey calls the dual-release strategy — in which a film's initial DVD release is followed weeks or months later with a spruced-up multidisc edition, often with an extended version of the movie and gobs of new bonus materials — a “win-win situation.”

“You only have so many weeks to generate box office numbers, so on opening weekend you have to be solid,” Tribbey said. “It's a smart move if you can get that film to a ‘PG' or ‘PG-13' rating, because it gives you the maximum number of bodies you can put in seats. With DVD, the director can go ahead and make the cuts to get to that ‘PG-13' rating and maximize box office potential, and then still be happy with the final version that comes out on DVD.”

Director Guillermo del Toro agrees. Columbia TriStar Home Entertainment is releasing an extended three-disc version of Hellboy Oct. 19, just three months after the initial release. The 11 extra minutes make the movie a lot darker, del Toro said, and could have jeopardized the theatrical release's ‘PG-13' rating.

“Having gone out with the three-disc version the first time probably would have been too extreme,” del Toro said. He really liked the chance to go back in and re-edit the film, restoring what he called “some really great character stuff that I love, but that I felt could be a little heavy for the ‘PG-13'-rated theatrical release.”

On top of that, he said, “are a lot of extras I felt would be really great to have as a collector” — including a ROM feature that will allow fans to read and download the complete screenplay.

But pleasing directors isn't the only reason more and more films are finding more than one life on DVD. In some cases, the strategy arises out of necessity. With theatrical-to-video windows getting shorter and DVDs arriving in stores four months or less after their theatrical opening, there simply isn't time to get all the bonus features ready.

“With everybody racing DVDs out, that shaves the time we have to compile the added value,” said Columbia TriStar catalog marketing VP Marc Rashba.

Audience differentiation — or micro-marketing — also is a factor. There are casual fans who are perfectly content with a regular DVD; then there are the diehard collectors who want everything but the proverbial kitchen sink. As the population of DVD households becomes bigger and more diverse, tastes and preferences become less homogenous.

This is Hollywood's way of pleasing everybody — and maybe making a little extra cash when some consumers buy both versions.

A fourth reason for the rise in double dipping is Hollywood's desire to extend product life and strengthen the brand. That was the motivation behind 20th Century Fox Home Entertainment's decision to release a loaded version of the campy horror film Club Dread Sept. 28, three months after the film's initial DVD release.

“We had a lot of extra good material and decided to extend the life of the film into the fourth-quarter shopping season,” said Steve Feldstein, Fox's SVP of marketing communications.

DVD Tailored to the Viewer

Back in the VHS days, it was simple: one movie, one tape. But then came DVD and the simultaneous growth of home theater. Studios began issuing full-frame and widescreen versions to please both mainstream audiences who didn't want black bars on the top and bottom of their 19-inch Zenith TV set's screen, as well as movie lovers who bought high-end widescreen TVs because they wanted to see movies exactly as they had appeared in theaters.

Then came the unrated and rated versions, a nod to grocers and other retailers that shy away from racy stuff (even though the unrated versions, according to Video Store Magazine Market Research, far outsell the rated editions).

Another variation: double-dip releases.

Whether the dual-release strategy is a function of convenience or design, it works. The initial DVD release is affordable and offers great value to the buyer — like a paperback book. Granted, people keep their DVDs and they are definitely collectable, but given a disc's affordability — even hot new releases routinely sell for less than $15 their first week out in mass merchants — they are rapidly becoming both an impulse buy and a consumable experience, equivalent in price to, say, four Starbucks mochas.

Then there's the issue of immediate gratification. Given the low price point, consumers — particularly the prime disc-buying segment of buyers in their teens and 20s — don't defer making the initial purchase just because they know there may be a second release with more and better content down the pike.

New Line Home Entertainment's The Lord of the Rings: The Fellowship of the Ring and DreamWorks Home Entertainment's Shrek illustrates the effectiveness of the dual-release strategy.

New Line has sold 20 million copies of Fellowship, in four incarnations. The initial release, which gave consumers the choice of either full-frame or widescreen, accounts for approximately 65 percent of total sales. The extended edition, released several months later, accounts for 25 percent of the mix. And a gift set, with a figurine and a fifth disc of new material, generated 7 percent of total sales.

Shrek also has had four incarnations. The initial double-disc set, released in November 2001, accounted for 75 percent of total sales. Fourteen percent of sales came from a subsequent single-disc release, while the recently released package of the two-disc Shrek and a new 3-D animated short added another 12 percent to the total.

Effective pricing, product differentiation and targeted marketing will be paramount to the continued success of the multirelease strategy. A multiple release strategy will continue to work providing the price is right. The releases will also have to continue to be sufficiently differentiated to convince retailers that the new version warrants shelf space. In turn, the consumer must also embrace and value the difference enough to make the purchase.

Finally, marketing beyond the masses and reaching the targeted segments will be critical to the continued success of the multi-release strategy.

Double dipping can be a lucrative proposition, but, like everything else, it only works if it's done correctly.

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