TK's MORNING BUZZ: Hollywood's Summer Bummer Shouldn't Chill the Thrill of Cool DVDs

5 Sep, 2000 By: Thomas K. Arnold

The Labor Day weekend is barely over and the first press reports of what a down summer this has been at the box office are already trickling in.

As early as Saturday, two days before the official End of Summer, the Associated Press was already reporting that "Hollywood's summer fell well short of the record $3 billion that movies raked in a year ago.... There were solid successes and one unexpected blockbuster, Scary Movie, but nothing on the order of last year's string of hits and the surprise horror sensations The Sixth Sense and The Blair Witch Project."

For video retailers, such a story two or three years ago would have made them cringe and prepare for a long, hard winter. In the old days, a slow period of the box office would mean a slow period in video stores, five or six months down the line.

I remember in early 1997, when video rental was down about 5% from the previous year, Blockbuster was tanking and Forbes magazine ran a story on how the end was near for video stores. Warner Home Video put together a road show, explaining away the malaise to a weak slate of theatrical films; practically every video retailer I knew was crossing his fingers and hoping that Hollywood would get back in gear so he and his video-dealing peers could eat again.

But, as they say, that was then and this is now. And the fact that Hollywood had a bummer of a summer shouldn't send a chill up too many video retailers' spines. For one thing, the video business is in enough trouble, so what's one more blow? But, more significantly, I'm betting that DVD will be the critical factor this fourth quarter, and retailers on both the rental and the sales end of the business should stock up on the little discs and focus their marketing and merchandising efforts not on the hits, but on all things DVD.

It's not going to be a title-specific Christmas; if it's out on DVD, it will sell.

I bought a DVD player for my dad over the weekend. I went to the Best Buy near my house and the selection was dismal. I spoke with a manager and he said they'd get more players, if only they could. Player sales to consumers are already far surpassing even the most optimistic estimates, and the fourth quarter hasn't even begun.

I predict that once the fourth quarter selling season officially begins, we're going to witness something akin to the early days of VHS. Consumers are going to want to buy anything and everything on DVD; even though we're well past the early adopter phase and we're actually seeing players sell for as little as $96 (one of Best Buy's weekend specials), Best Buy executives tell me they're still selling an average of 16 discs for every player.

My only hope is that video software dealers will be there with a full array of discs, properly merchandised and promoted, instead of tightening their purse strings because Hollywood had a bad summer.

The old rules simply don't apply anymore.

Comments? Contact TK directly at: TKArnold@aol.com