EMA: Retail Must Be Part of HD17 Jul, 2007 By: Erik Gruenwedel
LAS VEGAS — It is vital for independent retailers to play an important role in the evolving distribution landscape, despite a projected 5% drop in home video consumer spending from 2006 to 2010, said Bo Andersen, president of the Entertainment Merchants Association (EMA).
Speaking during the opening session of EMA's Home Media Expo 2007, Andersen told attendees consumers spent an average $114 on home video in 2006, compared to $37 at the box office and $56 on music.
He said by the end of the decade, 46% of consumer spending on entertainment will be on home video (down from 51%), 22% on cable television and 8% on pay-per-view content — the latter up 5% from 2006.
“High-definition's hold on packaged media must be trendy, chic and interactive,” Andersen said.
In place of a keynote speaker, national radio technology talk show host Leo Laporte hosted a panel of nine consumer “power users” (chosen from a survey of 2,500 by The NPD Group), who discussed their take on high-def packaged media, digital delivery and online rental.
The panel's heavy consumption of entertainment ran the gamut in modes of distribution. Only one watched HD DVD via an Xbox 360, and two still coveted their VHS collections. All said they were interested in HD but will wait for a price drop. One panelist from New York said he would take advantage of Toshiba's HD A2 HD DVD show special player for $99.
“I'll get one of those,” he said.
To help retailers assimilate high-def packaged media, the EMA unveiled a free CD-ROM, “Understanding High Definition 101,” for its members.
One of the disc's architects, Mark Fisher, VP of membership and strategic initiatives for the EMA, said keys to establishing HD in the home were interactivity and connectivity.
“Easier menus aren't enough,” Fisher said. “But a richer, more interactive experience will be.”
Steven Nickerson, vice chair of the Digital Entertainment Group and SVP with Warner Home Video, urged attendees to take a more aggressive stance in the marketing and merchandising of high-def products.
Citing research from the Consumer Electronics Association, retailers and manufacturers, Nickerson said 16 million HDTVs will be sold this year, bringing the number of HDTV units sold in the United States to 52 million.
The DEG said HDTV household penetration now exceeds 30 million and will reach 36% by the end of the year. Of that group, 20% own more than one HDTV.
Indeed, Nickerson said 30 million standard DVD players will be sold this year, bringing the U.S. installed base of players to 80 million.
He said the second half of 2007 will see a 12.5% increase in North American DVD shipments to more than 914.7 million units, compared to more than 884.6 million last year.
“Best ever second half in the industry,” Nickerson said. “DVD is still the driver.”
Sean Bersell, VP of public affairs for the EMA, elaborated on the EMA's ongoing struggle to combat legislative efforts to reign in the sale of video games to minors nationwide.
“In the vast majority of cases, our position prevailed,” Bersell said.
Andersen unveiled the EMA's decision to give back to the community via an attendee-supported $8,500 pledge to the Make-a-Wish Foundation. Attendees can support the cause through the purchase of $5 pledge pins.
The EMA honored four retailers, including Video Isle in Seattle, Red Box, CinemaNow and Target, for their philanthropy.