On studio-retail relations
By Tom Paine -- Video Business, 11/3/2006
NOV. 3 | A few weeks ago, I was privileged to participate on the EMA Retail Advisory Council, along with another indie and executives from most of the largest rental and retail chains. This was an opportunity to have a candid give-and-take and discuss the outlook for our industry with individual studios. There are ample reasons to respect the individual views of the studio and retailer participants in the meetings, and what follow are my impressions, salted by the views of others.
• With seven studios, we discussed prospects for the remainder of 2006 and for next year and shared predictions about the strength of DVD sales and rental. My overall impression is of an industry up slightly in 2006 over last year and expected to be flat to slightly up in 2007 vs. 2006.
• Retailers universally share my concern about the concentration of titles in the fourth quarter. Consumer spending is so heavy in the fourth quarter that nearly any significant release that can fit into the quarter will attempt to have its chance at the pot of gold. Everyone acknowledges it leaves other seasons short. Personally, I do not have much hope of this changing.
• Digital delivery was a major topic. My sense of this is that studios may be willing to try most anything to expand their reach into the marketplace, so long as they feel comfortable about piracy protection. This includes openness to retailer participation in well-protected digital delivery. Everyone is concerned about undercutting existing sales channels, particularly packaged DVDs. In general, though, my impression is that large shifts to digital delivery and away from packaged media is several years off and no one knows how much of a shift that will be.
• There was lengthy discussion about the high-def milieu. Some studios are supporting HD DVD and others Blu-ray, and some are participating in both formats. My impression is that the publicity about “format wars” is overblown, and some believe that opportunities for both formats to thrive are possible. Clearly, the rollout has been slow and confusing to consumers, but as more players become available, we should see some interest build for the holiday season. The industry is relying on game player capabilities to expand this market. 2007 seems to be the year in which momentum will build.
• Late announcement of release dates and short prebook periods are the product of the compression of the theatrical-to-home-video window. While these are getting difficult for all to manage, we should count our good fortune. I look forward to the streamlining of some procedures, but retailers may have to come forward with non-disclosure agreements to gain early access to promotional materials.
These are worthwhile and congenial meetings, and the studios are clearly receptive to working with retailers and EMA to improve our industry. Next year, we may even turn the tables on them and ask them what we can do to help.
Tom Paine is owner of six-store DVDNow! in Redmond, Wash.
