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Q4 Strategies Differ

8 Dec, 2003 By: Thomas A., Judith M.

While all of Hollywood is reveling in the continued explosive growth in DVD sales, not all the studios are tapping the till the same way.

The studios' approach to the fourth-quarter selling season has been varied, with the sharpest contrast coming between Warner Home Video and Buena Vista Home Entertainment.

Warner finished pumping out its high-profile releases early in the quarter, while Buena Vista has been saving some of its hottest titles for November and even December.

Indeed, Warner's fourth-quarter slate is remarkably empty after Nov. 11, when the studio released Terminator 3: The Rise of the Machines just four months after the film's theatrical opening. Most of Warner's big titles came out in October or even earlier.

Buena Vista, in contrast, continues to release high-profile titles well into December, including Pirates of the Caribbean, which opened theatrically a week after T3, but didn't make it to video until Dec. 2.

Video Store Magazine market research estimates the average theatrical-to-video window of Buena Vista's fourth-quarter theatrical releases is 221 days, far above even the traditional average of 180 days. Warner's window is 152 days.

According to Video Store Magazine market research, in 2002 more than 25 percent of all consumer spending on home video — and nearly one-third of DVD spending — occurred in the last two months of the year.

This year, spending is expected to be even more heavily clustered around November and December due to the higher DVD penetration rate and the greater propensity among DVD households to purchase movies. The different release strategies may ultimately affect calendar 2003 market share.

Through the end of October, consumers spent an estimated $10 billion on home video purchases. Warner is in the top spot, with a market share of 22.7 percent and total video spending (DVD and VHS combined) of $2.27 billion. Disney has a market share of 18 percent, with total video spending of $1.8 billion.

But for November and December, when consumers are expected to spend another $4 billion on home video purchases, the total box office weight of Warner's theatrical video releases is just $164.5 million, coming from two titles: Terminator 3 and Alex & Emma (streeting Dec. 23).

Buena Vista's November and December home video release slate, in contrast, consists of six theatricals with combined box office earnings of nearly $900 million.

Warner's 2002 sellthrough market share was 23.3 percent compared with Buena Vista's 18.1 percent.

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