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Music DVD Market Challenging, But Here to Stay

6 Mar, 2007 By: Jessica Wolf

The music DVD market has never been more challenging, but the genre isn't going anywhere, presenters and panelists said at the third annual Music DVD Conference, held March 6 in West Hollywood, Calif.

Retail support for music DVDs has markedly slipped with Tower Records — a major booster of the genre — no longer in business and increasing competition for shelf space from the two emerging high-definition formats at big-box electronics retailers, according to speakers at the event, produced by Home Media Magazine in cooperation with DEG: The Digital Entertainment Group, The Hollywood Reporter and the Entertainment Merchants Association.

Music DVD releases make up a little more than 14% of the more than 72,000 DVD titles in existence, according to The DVD Release Report. Releases in the genre dropped around 1% in 2006 as suppliers deal with a shifting retail landscape. Last year didn't even see the traditional spike in music DVDs hitting shelves for holiday shopping, said Ralph Tribbey, editor of The DVD Release Report.

Amy Jo Smith, executive director of DEG: The Digital Entertainment Group, kicked off the conference with the admonition that change is inevitable and it is incumbent on the music industry to adapt, a lesson she said she learned from her father-in-law, legendary music mogul Joe Smith, and his experiences with the launch of the CD.

In attendance at the conference were executives from some of the most prolific suppliers of music DVD content, including Rhino Entertainment, Image Entertainment, Eagle Rock Entertainment Shout! Factory and distributor Vivendi Visual Entertainment.

They insist they are committed to the genre.

“One thing music has over other content is it does have a long tail,” said Jay Boberg, the former MCA Records president whose new company, Liberation Entertainment, is producing “Soundies,” a series of classic music titles in conjunction with PBS.

“You could see that a music title, a year from now or two years from now will have value,” Boberg said. “You have to wonder what the relative value of most movies are two years later.'

Cross platforms, are going to become increasingly important for music DVD, said Shawn Amos, VP of A&R for Shout! Factory. His company has a deal with DirectTV through its Blaze Production company.

“We have to find content that can be used as many ways as possible,” he said.

Everyone is looking for a differentiator, agreed Richard Buchalter, SVP of sales for Image Entertainment.

And there's even reason to cautiously expect the retail sector to improve for music DVD, suppliers said.

Mike Carden, president of North American operations for Eagle Rock Entertainment, said new buyers at Best Buy seem to be newly energized about music DVD. TransWorld recently shifted its music DVD buying from the movie department to the music staff, a change that was a long time coming, Buchalter said.

Meanwhile, anyone in the business needs a crystal ball and a veritable Swiss army knife of tools to make sure the future of the business for music video is covered, wrapping digital licensing into all acquisitions and rights agreements, shooting concerts in high-def and preparing masters for future release on one or both of the high-def formats.

There is little or no market right now for high-def music discs thanks in part to consumer confusion, high hardware prices and retail reticence to stock the titles, panelists said.

High-def music releases are in a holding pattern, Carden said.

Authoring is costly — $30,000 per title per format — making the modest sales of a handful of titles thus far little more than an experiment, he said.

Still, everyone is preparing to leap in when the time is right, Amos said.

One of the most exciting promises of high-definition is still on the horizon, with the promise of 7.1 Surround Sound, panelists said.

“The sound is half the show,” said John Powers, VP of marketing for features films for Image Entertainment.

Meanwhile, the “low-def” market, digital downloading, can't be overlooked, though it is just as nascent as the high-def side of the business at this point.

It's the potential the digital future has to offer that's really exciting, especially with regard to consumer reach, said Mitch Mallon, VP of sales for Egami Media, the digital arm of Image Entertainment.

A decent music DVD might sell around 15,000 units, but the potential for digital downloading is in the hundreds of thousands.

There's versatility on the horizon, he said, such as having a music DVD to watch at home and an included digital file to play in the car, Mallon said.

The “sampling” nature of digital downloaders, along with products such as Microsoft's Zune with its wireless sharing feature, creates a promotional potential that traditional music DVD releases have never been able to realize, added Chris Donaldson, director of marketing for Liberation.

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