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Offering Hope

12 Jul, 2006 By: Erik Gruenwedel

Opening the trade group's 25th annual convention, Entertainment Merchants Association president Bo Andersen held out hope to retailers that they would continue to play a role in the evolving home entertainment business.

“No one's thrilled” with the flattening of the DVD business, he said, but high-definition packaged media, as well as digital distribution, could revitalize the industry and help lift retail fortunes as well, he indicated.

Also speaking at the opening business Tuesday, Steve Nickerson, SVP of market management for Warner Home Video, gave retailers an optimistic look into the future. He said upwards of 8 million HDTV sets would be sold in the second half of the year, bringing to 28 million the total number of U.S. homes with HDTV. This, he said, underscores the fact that the consumer is “hungry” for high-def content.

“Consumers will pay a premium for a superior product, packaged in a way that satisfies them,” Andersen added.

He said retailers must be educated about both HD DVD and Blu-ray Disc as they represent the most direct link to the consumer.

Andersen stressed that retailers should avoid discussing the format war and focus on selling the “enhanced experience.”

“We are not just DVD retailers, we are entertainment merchants,” Andersen said.The record-breaking opening box office results for Walt Disney's Pirates of the Caribbean: Dead Man's Chest put Dan Glickman, president and CEO of the Motion Picture Association of America, in a good mood.

As keynote speaker at the opening session, Glickman said the success of Pirates should help jump-start a flat home entertainment industry in the second half of the year.

“Word of mouth spreads like wildfire to get people to go to the movies, buy the movies and rent the movies,” Glickman said. He said the success of this year's theatrical slate would have “an amazing” spin-off to all aspects of the entertainment industry, including home entertainment.

That said, Glickman reiterated the negative impact piracy continues to play on the studios and home entertainment. He said piracy equaled 47% of the studios' worldwide revenue in 2005.

He said after the box office decline in 2005, the studios decided to conduct consumer research to better understand the changing appetite of moviegoers.The MPAA took an “attitudinal survey” of U.S. consumers, completed in June, that addressed myriad issues, including piracy. The survey found that in the United States, ripping and burning DVDs is more common than illegal downloads, and those who download also rip and burn DVDs.

“People have less time and tight budgets, and they are intensely questioning the value of their entertainment experience '' particularly watching a movie,” Glickman said.

He said the survey found that the majority of people who engaged in piracy did so primarily for the love of filmed entertainment and the ubiquitous access to that content.

He said the studios and their home entertainment divisions must continue to offer varied movie choices, work to educate consumers about piracy and the consequences of stealing, and continue to enforce antipiracy laws already on the books.

The MPAA Tuesday announced the creation of MyMovieMuse.com, an online feedback site that lets non-industry consumers give their input on issues affecting the entertainment industry.

The studios created the Web site as a way to get continuous input from consumers. The MPAA is in the process of hiring a research firm to find 7,500 consumers as a representative sample to offer feedback for the site. The MPAA hopes to grow the feedback group to 15,000 by next year.

“By gaining focused intelligence, as an industry, we will remain strong,” Glickman said.

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