A Package Deal27 May, 2013 By: Chris Tribbey
Packaging companies look to Blu-ray, special editions
Ross Youngs, CEO of disc packaging company Univenture, surveys the state of the home entertainment packaging business and says there’s a lot to be happy about.
“After we all fell off the cliff in 2008 financially, we’ve seen a slow, steady rebound, and now as consumers’ belts are loosening a little bit, we’re seeing more-interesting, higher-value collectable home entertainment products come through our shops,” he said. “Volumes are getting a little bit stronger.”
The consensus among home entertainment experts is that despite the decline in DVD, the Blu-ray titles, multiple SKUs (Blu-ray combos, collector’s editions and retailer exclusives) and catalog are carrying the day for the packaging arm of the business.
“Content owners are definitely going deeper into their repertoire, as catalog and TV series grew at a faster rate than theatrical new releases — although theatrical continues to constitute the bulk of video demand,” a spokeswoman with Sony DADC said.
She pointed to numbers from DEG: The Digital Entertainment Group that showed spending on Blu-ray was up 10%, with a 25% growth in spending on catalog titles.
“DVD physical sellthrough did drop about 9% in the U.S. in 2012, but DVD continues to provide a good value proposition for consumers,” the DADC spokeswoman said. “While it will likely continue to decline slightly, we expect it to be a viable format for years to come.”
According to the DVD & Blu-ray Release Report, 2012 saw a dip in total DVD releases, with 11,230, down from 11,962 in 2011, and 11,636 in 2010. However, there were 1,910 Blu-ray releases in 2012, up from 1,886 in 2011, and 1,392 in 2010.
Packaging demand for Blu-ray is up, agrees Paula Tait, EVP of sales and marketing for replication and packaging company Precise/Full Service Media. And it’s marginally making up for the drop in DVD.
“But is it completely making up for DVD? No,” she said. “Though DVD is still a very good business for us.”
Limited editions — with books, posters and tons of inserts — are also in higher demand, along with content owners asking for more O-sleeve packaging, Tait added.
Blu-ray is helping keep the packaging side of the business afloat, according to Karen Mika, SVP of home entertainment for AGI-Shorewood Group (ASG). Despite the decline in DVD, all of 2012 and so far in 2013, business for the home entertainment packaging companies has been strong, she said.
“That’s because the content has been so strong,” Mika said. “The box office was great last year, a lot of good stuff out there, and it proved for [disc] that if it’s good, people buy it. When you have good content, it resonates with DVD sales. [And] the studios have been really smart managing the transition to digital, making it part of the physical package, and you see people still responding to the physical goods [because of that].”
Mika points to her company’s boxed sets of JAG: The Complete Series — Collector’s Edition for Paramount and Desperate Housewives: The Complete Collection — Deluxe Edition for ABC (both released in late 2012) as two of the more recent examples of what content owners are looking for with specialty packaging.
“[Content owners] want bold packaging, add-ons, unique things tied into the content,” Mika said. For “JAG” that meant a military uniform-themed case and a bonus, collectable coin; for “Desperate Housewives” that meant a slick box and an embossed, wedding invite-style addition from series’ creator Marc Cherry.
Goggles included with a limited-edition Blu-ray of Universal’s Despicable Me or a mustache with a Target-exclusive Blu-ray combo version of the studio’s Dr. Seuss’ The Lorax are other examples of what content owners are striving for with packaging, Mika added.
“We’re doing a lot of playful things with these packages,” she said. “That’s trending, trying to find the right add-on to put with a movie.”
DADC points to the packaging for the Blu-ray release of Lawrence of Arabia: 50th Anniversary Collector’s Edition from Sony Pictures as an example of what content owners are aiming for with specialty packaging nowadays. The late-2012 release featured a CD, a hardbound coffee-table book detailing the film, an original numbered 70mm film cell, along with three Blu-rays, all in a limited-edition collector’s package.
Getting products like that to market takes a ton of planning, coordination and quality assurance, the DADC spokeswoman said.
“Because these items are unique and often complex, the challenges begin with working through the packaging concept with the customer to deliver a structurally viable product at an agreeable price,” she said.
Content owners are putting more thought and marketing energy into packaging more regularly, Univenture’s Youngs said, and the importance of a slick presentation can’t be understated.
“The expectation of retailers is high, and everybody loses when you devalue the product,” he said. “We don’t see people looking at just dollars. If they’re looking at just dollars, they’re going to grab standard-packaged discs, put a wrapper around it, and that doesn’t drive the higher-value purchase. If anything, that devalues the product.”
Traditional jewel box and paper packaging for disc isn’t going anywhere, Youngs added, but demand for higher-quality packaging is “up across the board.”
Mika agreed, also noting that multi-SKU releases are more prevalent. She added that the studios are being cautiously optimistic with home entertainment results this year, and the packaging companies are following suit.
“When I talk with the studios, they feel like this year will be good, and 2014 will see maybe a modest decline,” she said. “But after that, it’s a big unknown. We’re all trained to be more cautious going forward.”