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Finding the Flow in 2017

30 Jan, 2017 By: Thomas K. Arnold

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This is the year when the home entertainment industry’s creative juices really need to get flowing.

For years, the ongoing fight to get people to buy movies, TV shows and other filmed content has become increasingly difficult.

The struggle began when the industry was born, with studios fighting retailers over the right to rent videocassettes. That battle lost, studios came up with revenue-sharing concepts, which worked fairly well until the emergence of DVD — two decades ago this year — became Hollywood’s silver bullet.
But after plateauing in 2004, the novelty of being able to buy content began to wear off. The launch of a high-definition successor was marred by a bruising format war as well as the realization that consumers aren’t going to re-buy their libraries just because a marginally better disc is now available.

At first, sales growth slowed; then, it became a rapid decline, with the rise of Netflix and streaming. Studios presented an “electronic sellthrough” alternative to the subscription-streaming model, but it was slow to take off; early windows gave EST a temporary push but double-digit gains came to an end in 2016, prompting everyone to wonder, “What now?”

Studios should be encouraged by one unheralded statistic from 2016: While EST sales growth did, in fact, slow to the single digits, electronic sales of newly released theatrical films shot up a robust 20%, underscoring my long-held contention that the buying habit among consumers isn’t dead — you simply need the right content.

The problem is, studios came up with a great idea — releasing films electronically two or three weeks before the disc — back in 2009, when the concept was first tested, but have done little tweaking since. Why isn’t there tiered windowing, with consumers able to buy movies electronically even earlier, at a premium? How important is local ownership, enabled through a mechanism such as Vidity, and are there ways to better exploit this option? What about extra content — for years we’ve hailed such tried-and-trues as deleted scenes, making-of documentaries and filmmaker interviews, but can’t we take this concept to the proverbial “next level” as well? And, as Walt Disney Studios has shown with Disney Movies Anywhere, retail partnerships and a seamless transition into the living or family room is critical.

At the same time studios aggressively seek to boost electronic ownership, let’s not forget about the disc. Yes, DVD sales are falling, fast, but Blu-ray Disc sales are holding up remarkably well — and we now have a new format, Ultra HD Blu-ray Disc, that we need to be crowing about in a loud and clear fashion. Let’s not muddy the waters and confuse the consumer with too many names, and too many logos — pick one and stick with it. And then market the hell out of Ultra HD Blu-ray Disc being far and away the best way to view movies outside of the movie theater, focusing on that single, salient point.
The new year, 2017, will only be as good as our industry makes it. 

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