PSP loses support

Studios narrow release slate to select titles

By Susanne Ault and Jennifer Netherby -- Video Business, 6/16/2006

JUNE 16 | Studios and retailers are continuing to narrow their PlayStation Portable movie slate as sales on the format fail to meet once-high hopes.

Universal Studios Home Entertainment and New Line Home Entertainment have stopped releasing movies on the Universal Media Disc format for PSP in the last month, retailers said. And Paramount Home Entertainment hasn’t put any releases out on UMD since earlier this year and has none slated (VB, 2-20).

Warner Home Video and Buena Vista Home Entertainment continue to support the format but have cut back on catalog releases while continuing to put out select new releases.

The studios contacted by VB would not comment on the record about their PSP strategies.

Meanwhile, Wal-Mart has pulled back shelf space for UMD movies and some Wal-Mart stores have stopped carrying UMD movies altogether, according to one store manager. Some studio sources expect the retailer to cut UMD movies entirely by the end of the year. Wal-Mart officials didn’t return calls for comment.

Best Buy and Circuit City also are downsizing their UMD sections, according to studio sources. Fred Meyer, Virgin and Hastings are keeping up UMD sections, but they believe it will remain only a small part of their overall movie business.

“Last year, we were buying everything, and this year, we are buying select titles that make sense,” said Hastings director of marketing Mason Goodfellow. “Those are the day-and-date ones and then not even all of those.”

Hastings stopped offering UMD rentals in May and now only sells new and used UMD movies.

Newbury Comics estimates that UMD sales make up well below 5% of its ongoing business.

Reasons vary for the UMD decline. Some retailers say they are seeing PSP consumers buy increasingly more games than film or TV titles.

“Sales of PSP hardware still remain quite strong, but it has become evident that the strength of the format is coming from gamers instead of film fans,” said Virgin buyer Chris Anstey.

Some believe sales also are impacted by tech-savvy PSP users downloading films onto PSP memory cards using software that is not necessarily legal but is readily available.

One studio source said that retailer merchandising decisions limited UMD’s appeal.

“There was the initial novelty of owning PSP movies, but they were never that readily available at retail,” the source said. “Some stores locked them up [in glass cases] or had only so many facings displayed.”

Another studio source said studios and retailers put too broad a slate of titles out at first rather than targeting the PSP audience and looking at it as a niche market. The source cautioned that studios shouldn’t be too quick to exit the format, which for the right title can provide incremental revenue since many PSP buyers also will buy the same movie on DVD.

“This is the segment that will buy multiple copies in various formats, and it’s proven to not be cannibalistic on certain movies,” the source said.

A successful title on PSP sells more than 100,000 units, but the average movie sells closer to 40,000 units and in recent months, closer to 30,000, according to industry sources.

Hastings singled out 20th Century Fox Home Entertainment’s Family Guy titles as a particularly hot seller recently.

Fox and Sony Pictures Home Entertainment are among those still rolling out UMD product. Sony has recently introduced a new combo DVD/UMD package, and Fox has scheduled four titles to roll out through August, including Die Hard, Die Hard 2, Independence Day and Man on Fire. Buena Vista released Glory Road this week and has continued to release certain new releases on the format.

“Shorter episodes seem to work better,” said Leshin, noting that the small PSP screens can’t match the full-screen DVD experience. “Family Guy and [Cartoon Network’s] Aqua Teen Hunger Force do well.”

Some retailers think UMD sales would be stronger if there had been more unified studio marketing. At this point, much of the UMD advertising has rolled out on a title-by-title basis.