Invigorating Sales Is Key Goal for 201719 Dec, 2016 By: Thomas K. Arnold
Well, it’s been an interesting year again, hasn’t it? Last year ended with disc sales way down and everyone looking to electronic sellthrough as our industry’s great hope. This year is ending with disc sales remarkably robust and lots of excitement over the new Ultra HD Blu-ray Disc format. Meanwhile, EST sales growth has slowed to the single digits and studio heads are scratching their heads and wondering whether the novelty of early release windows has worn off.
The EST situation certainly is a pickle. It was never a huge segment of the business, primarily because of waning interest in ownership as well as the economic model. We have become a nation of streamers, first with music and now with movies and TV shows; we don’t necessarily want to own things, just borrow them for a while. Compounding matters is the inherent difficulty in getting consumers to spend even $10 on a movie when the same amount of money buys them an entire month of unlimited Netflix access.
On top of that, there’s the lack of something real — a download simply doesn’t have the appeal of a physical product you can look at, touch and display.
Now, I happen to think there are ways to invigorate EST sales and looking ahead to 2017 I think we are going to make substantial progress. I foresee a new platform to replace the fractious UltraViolet as well as more wow-factor Digital HD releases like Suicide Squad (the digital edition came with both the theatrical and new extended cut of the film, and that’s just the beginning).
Meanwhile, I also predict a renewed effort by the studios to nurture relationships with retailers, both physical and digital. The disc business needs to be carefully tended, and as studios have focused their efforts on EST they have perhaps paid a little less attention to retailers than they should. Data analytics is a wonderful thing, but so is the personal relationship, the phone call instead of the group email or text. Two decades ago, retailers were stunned when studios effectively shoved VHS out the door. Looking back, it could, and should, have been a much slower, and potentially more lucrative, death.
At the same time, distribution channels must be broadened and the search for marketable, ownable content widened. Defying conventional wisdom, Sony Pictures scored big with “House of Cards” even though it had already streamed on Netflix. How many other opportunities like this are out there?
It’s time, high time, to get down to business.