Lack of Tentpole Theatricals Driving Down DVD Sales14 Jun, 2007 By: Thomas K. Arnold
No wonder DVD sales to consumers are down — nearly 8%, as of the first quarter. After years of trying to space out big new releases throughout the year, studios once again appear to be focusing on the fourth quarter and cutting back on the rest of the year.
But don't think this is a strategic shift by studios to concentrate their bigger releases in the weeks leading up to Christmas when consumer spending on DVDs traditionally reaches its peak. It's more a function of a weak slate of theatricals, combined with rapidly depleted catalogs and a flattening of the TV DVD business, now that so many popular shows, like “Friends” and “Six Feet Under,” have completed their runs on DVD.
The biggest ding comes from the conspicuous lack of tentpole theatricals, which is a reflection of what's been happening at the box office.
“A lot of it has to do with the fact that they don't have much inventory [of new releases],” said Ralph Tribbey, editor of The DVD Release Report, which just did a studio-by-studio study of release patterns. “Right now, there are only 10 films that have grossed $25 million or more that don't have dates, which is remarkably low.”
Tribbey said the summer months look particularly bleak as far as high-profile new theatricals go.
“If you look at the release calendar, ‘Shooter' is June 26, and you don't have another film that grossed $25 million or more until July 17 when Sony's ‘Premonition' comes out, so you're looking at four consecutive street dates, and there's your hole,” he said.
Tribbey notes that the collective box office value of new releases that have come to DVD so far this year, or have been slotted through the end of June, is down 12.1% from the first half of 2006.
“When you look at just the hit films — those grossing $25 million or more — seven fewer have been released on DVD during the first six months of 2007, 50 versus 57 in 2006, translating to a box office decline of 13%,” he said.
David Bishop, worldwide president of Sony Pictures Home Entertainment, said the slowdown in DVD releases “is a reaction to what's happening theatrically. Windows aren't changing.”
And consumer spending these days is once again increasingly driven by new releases, he said.
“It's a reality that the home entertainment market has matured, and we are now acting more like a mature business,” Bishop said. “In the past we were riding the wave of double-digit growth. We hadn't reached 100% penetration [with DVD] in U.S. households, so we were always adding new buyers, and it really was a year-round business.
“Now, it's still a year-round business — we just shipped 6 million units of ‘Ghost Rider' and it's performing very well — but if you have less box office [coming to DVD], overall performance will be down.”
Studio executives expect DVD releases, and consumer spending, to step up as the fourth quarter draws near, and the summer blockbusters begin rolling out on DVD. And there's no question that installments No. 3 in the “Spider-Man,” “Shrek” and “Pirates of the Caribbean” franchises will be monster DVD sellers.
But Tribbey cautions not to expect any miracles.
“Last summer, in May, June, July and August, the studios released 33 big films that grossed at least $25 million,” he said. “This summer, we're looking at 25. So do the math. If you don't have the big theatrical films driving people into stores, business is going to hurt.”