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TV DVD Is Exploding

21 Oct, 2004 By: Jessica Wolf

TV DVD is an exciting, fast-growth component of the DVD juggernaut, panelists and presenters agreed at the second annual TV DVD Conference.

It's got its own unique set of marketing and shelf space challenges, but TV DVD product also has a loyal fan base, an evergreen sales quality, less price erosion and better margins for retailers, suppliers said at the confab held this week by Video Store Magazine, The Hollywood Reporter and DEG: The Digital Entertainment Group.

Releases in the category have ratcheted up over the past couple of years, especially multidisc sets. According to Ralph Tribbey, editor of The DVD Release Report, 256 TV series multidisc sets were released last year, and 315 releases have already hit the market this year as of Sept. 30.

That's not even counting the slate in this year's bulging holiday-shopping season.

“I think it will be a great Q4 for TV DVD, especially when it comes to gift buying,” said panelist Peter Staddon, EVP of marketing for 20th Century Fox Home Entertainment. “Our biggest challenge is getting space at retail.”

The retail space hasn't necessarily broadened to encompass the increase in releases or to address the fact that these titles sell strongly long after their release dates, said Ron Sanders, EVP and general manager of Warner Home Video.

But, he said, he expects the fourth quarter to be “massive.” The foot traffic that stores will see, thanks to a loaded hit-theatrical slate, will be a boost for TV on DVD sales, too.

Sales of the product are already significantly up from last year, according to Video Store Magazine data, presented by VSM director of market research and associate publisher Judith McCourt. TV DVD sales should hit $2.3 billion this year, compared to $1.5 billion in 2003.

There were about eight TV DVD boxed sets released on average each week of this year, Tribbey noted, predicting the market will stay around that level next year, too.

“We're reaching a zenith in terms of what the market can absorb,” he said.

But consumers seem to love to absorb TV DVD product, to the delight of suppliers.

“I predict sales of the final season of ‘Sex and the City' will outsell every other season,” said panelist Henry McGee, president of HBO Home Video.

According to a survey of consumers conducted by Video Store Magazine, TV DVD consumers are more voracious DVD buyers than the average DVD household, purchasing about 24 DVD titles a year, compared to the average DVD household's 19 buys.

And 51 percent of consumers surveyed said they buy the product simply because they want to own it.

And they want to own all of it, Fox's Staddon pointed out.

“The great thing about TV on DVD is that the number you sell of season one is the number you sell on season two, season three and any amount of releases you roll out,” he said, noting that sales of all seasons of “The X-Files” on DVD were within 5 percent of each other.

But that doesn't mean that you can't increase sales season over season as well, said Sam Toles, director of acquisitions and marketing for Rhino Home Video. Rhino saw an uptick in subsequent releases of “Mystery Science Theater” on DVD with some marketing tweaks, and during his tenure at Paramount, Toles noted that seasons three of “Star Trek: The Next Generation” performed well over earlier seasons, in part because fans thought the show got better.

Ninety percent of TV DVD buyers have PCs and Internet connectivity, according to VSM Market Research. Studios and marketers have found that not only do a lot of TV DVD sales happen through the Internet, but that it is a great way to tap into the core buyer for a show.

“You fish where the fish are,” Staddon said. “We won't spend a dollar on TV for ‘Greg the Bunny,' but we will go into some chat rooms and get people excited.” He said there's value in taking a “busted show” like “Greg the Bunny” and releasing it on DVD because of the cult following that will definitely buy.

Warner regularly advertises TV DVD product during the broadcast airings of the show, Sanders said.

Other releases, like classic or lesser-known shows, are a little harder to get into the right hands; you have to be in it for the long haul, independent suppliers said.

Indie suppliers actually make up a bulk of the releases in the TV DVD market, according to The DVD Release Report.

“It's a marathon, not a sprint,” said Barry Gordon, SVP of acquisitions at Image Entertainment. “The big sales in the first week are not happening as much anymore. These are not commodities. These are gems.”

There are plenty of other genres besides current TV series battling for shelf space and consumer attention — like kids programming, British TV shows and TV documentaries. Extra features and packaging become especially important for these types of TV DVD titles, suppliers in attendance said.

Panelists said key elements to the successful marketing of current and classic children's fare has less to do with special features than with the automatic play feature and programming length (i.e. the more episodes, the better).

But even the major studios have to be very cost-conscious when putting sets together and planning marketing campaigns for TV DVD titles, said Ken Graffeo, EVP of Universal Studios Home Video, more so than with theatrical releases, because the product has a lower volume of turns.

Meanwhile, cooperation between television production and home entertainment departments on the studio level has increased greatly in the past 18 months, studio reps in attendance said.

TV producers and talent are starting to view DVD releases as a natural and effective marketing tool for their shows, panelists said.

And they get excited about TV DVD because it can also allow producers and TV creators a way to exhibit alternate versions of their programming, Graffeo said, pointing out the extended music sequences that were re-inserted into the American Dreams Complete First Season and the upcoming “Las Vegas” season one release, which will feature unrated content that differs a bit from the episodes that appeared on broadcast.

Fox is using its 24 DVD strategy again for multiple Emmy-winner “Arrested Development,” timing the critically-acclaimed but ratings-struggling comedy's first-season DVD set release this week to the new fall season.

That recognition factor — the sense that the consumer has heard of or about a show — can boost sales of the complete season sets, said HBO's McGee, citing renewed interest in HBO's Angels in America DVD after the Emmy Awards show.

Marketing strategies for TV on DVD releases are intrinsically tied to the debut of a new season, studio reps said.

For “Carnivale,” which comes out in a first-season DVD set in December, just before the second season hits the cable channel, the broadcast and DVD release were tied from the beginning, HBO's McGee said.

“We looked at it like, ‘how do we market the ‘Carnivale' franchise?’ he said.

Fox plans to package a short, specially-made feature that bridges the gap between 24: Season Three (which hits DVD) and the fourth broadcast season which begins airing in January.

But there's no reason those marketing campaigns couldn't also be centered around sweeps months or season finales as well, making it a year-round category, Warner's Sanders said.

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