Crowded Summer Theatrical Slate Portends Bumper Second-Half Disc Rental Releases17 Jun, 2013 By: Erik Gruenwedel
With the summer box office in full swing, studios have crammed so many tentpole titles through August consumers will be hard pressed to see them all on the big screen. This should be good news for video stores and rental distributors such as Redbox, which should see banner third- and fourth-quarter revenues when the titles are released, according to Wedbush Securities’ Michael Pachter.
There are 22 films with budgets greater than $100 million scheduled for release this summer, compared with 15 last year and an average of 12 to 15 most years.
Titles include the already released Hangover Part III (Warner) and Fast & Furious 6 (Universal), and Warner Bros.’ just-released Man of Steel, Walt Disney Studios' Monster’s University, Paramount Pictures’ World War Z; Sony Pictures’ White House Down; Universal’s Despicable Me 2 and Walt Disney Studio’s The Lone Ranger; Warner’s Pacific Rim; Fox’s Turbo, Universal’s R.I.P.D.; The Wolverine (Fox), The Smurfs 2 (Sony Pictures); Elysium (TriStar), Percy Jackson: Sea of Monsters (Fox), We’re the Millers (Warner) and Kick-Ass 2 (Universal), among others.
“There are going to be several films that people want to see, but the crowding of the release schedule will make it impractical for them to see all of the movies they care about in theaters,” Pachter wrote in a June 17 note. “As a result, we believe that people are far more likely to rent the movies when released on DVD.”
The analyst said the average time from theatrical release to DVD is less than five months, and even for movies falling within the 28-day window (which is about 50% of Redbox’s supply), DVDs are generally available within six months of release.
“This means that the majority of big-budget films will be available in Q3 or Q4 for [Redbox],” Pachter wrote. “As a reminder, the high end of CSTR’s guidance calls for Redbox revenue growth from $1 billion in the first half to $1.2 billion in the second half.”