A Bummer, But Not a Hummer

10 Sep, 2008 By: Thomas K. Arnold

Thomas K. Arnold, Pushlisher of Home Media Magazine

Every four years, as America goes for the gold, home entertainment marketers and retailers sing the blues. The Olympics suck up TV viewers like a ramped-up Hoover, and that means fewer eyeballs are buying, renting and watching DVDs.

These past Olympics put Hollywood in an even bigger pickle than usual because of the circumstances surrounding our industry — and the economy. Three recent studio financial reports fingered DVD as saving the day. And yet DVD sales are flat, at best, while Blu-ray Disc is taking off a little slower than many had hoped.

So the mood in Hollywood in these final days of summer is to ride out the storm as long as it lasts, with the expectation that better times are ahead. Ultimately, the whole world will go Blu, and that will give packaged media another five- to 10-year ride.

But in the meantime, studio executives can’t sit idly by and play the waiting game. Keep in mind Hollywood’s dependence on home entertainment as its No. 1 revenue source — and, as recent financial reports indicate, its savior in rocky economic times. Study after study has shown that home entertainment is remarkably resilient when the economy crashes; buying a DVD for $15, or renting one for $3, is a cheap date in comparison to other entertainment activities — including going out to the movies, where once you factor in the overpriced snacks, you’re going to be out quite a bit of cash.

So what’s Hollywood doing? A flurry of activity to lift home entertainment sales as we move into the critical fourth quarter. You can see it in the rash of ultra-ultra-ultra special editions coming to market, such as Warner’s recent How the West Was Won package. You can see it in the stampede to release high-profile titles on Blu-ray Disc, such as Paramount’s “Godfather” trilogy and Disney’s animated classics. And you can see it in stepped-up marketing efforts such as Sony Pictures’ Emmy tie-in for TV DVD collections and a studio-wide Blu-ray Disc awareness campaign that’s scheduled to start in late October or early November, just in time for the holiday rush.

If history is any indication, we as an industry will ride out this storm with only a few bumps and minor bruises, and then once again enjoy sunny days ahead — at least for awhile. But that’s just the way this business is. And if you start to feel sorry for yourself, just think how much better off you are than, say, the folks at GM, who are trying to figure out what do with all those Hummers!