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Tips for a Successful Fourth Quarter

28 Aug, 2009 By: Thomas K. Arnold

Every year since DVD sales stopped posting double-digit gains each year we've been saying that the fourth quarter is make-it-or-break-it time, but it's never been more true than this year. DVD sales have been off by an alarming percentage for much of the year. And while that doesn't exactly paint a true picture of home entertainment consumption--consumers are simply opting for other means of bringing movies into the home, including renting, buying Blu-ray Discs and downloading movies over the Internet--it does ding the Hollywood studios' bottom lines, since DVD sales are far and away the most profitable business model they've come up with.

Short of unplugging every rental kiosk (take that, Redbox!) and convincing the postal workers union to go on strike (what are you going to do now, Reed Hastings?!?), studio executives are scratching their heads and wondering what more they can do to spur sales, short of spending even more money on the one surefire way to boost business, buying trade ads (I jest--sort of). So here are five tips I've come up with that make the captains of our home entertainment industry a little more jolly as we move into the holiday season.

1. Step up the counter programming. If your competitor slots a big kidvid release for the second Tuesday in November, immediately schedule your nearest chick flick for that same day. And consider talking to the competition about some joint marketing efforts for both titles. I don't care if it's never been done before--there's strength in numbers, and these are desperate times, to paraphrase two of my favorite cliches!

2. Don't cram everything into the fourth quarter. Each year Q4 is increasingly crowded, not just with hits but with everything else. Sooner or later the law of diminishing returns is going to come in. Consumers can't buy everything, and if there is too much product out there you'll find a particularly nasty development: Not only are rental kiosks cannibalizing DVD sales, but now DVD sales are cannibalizing DVD sales. It's much better to wait and save some of your strongest product for January. You'll still make money in Q4, and get the new year off to a good start, as well.

3. Put a moratorium on all TV DVD releases until after January 1. Last year I spent most of November watching season 8 of CSI. I missed a lot of good movies that came out around the same time because I was too wrapped up in those 26 hour-long episodes. I think we as an industry are throwing too much product at consumers, all at once, and then wondering why they aren't buying. The answer's simple: They don't have the time to watch everything!

4. Give consumers more affordable Blu-ray Discs. Launch value lines, something, but with Blu-ray Disc players selling for less than $250 consumers can't be expected to plop down another $30 or $40 for every new movie. Roll out catalog titles at $15--make 'em as vanilla as you need to--and get them hooked.

5. Buy more ads in Home Media Magazine. (Sorry. I had to throw it out there.)

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