Even good year has challenges
By Marcy Magiera -- Video Business, 12/15/2006
DEC. 15 | As I said at our Video Hall of Fame gala two weeks ago, the industry has much to celebrate this year.
Fourth-quarter DVD sales are going gangbusters, and it looks safe to predict the industry will experience an up (albeit slightly) year, after 2005’s first-ever decline since the introduction of video more than 25 years ago. At the same time, two new delivery vehicles—high-definition discs and digital downloads—are emerging (albeit slowly and less than smoothly) to expand the home entertainment business. The net result is definitely positive.
That said, there are good, bad and challenging developments in every business year.
Among the good this year is most obviously the stellar sales of such titles as Pirates of the Caribbean: Dead Man’s Chest, Cars, Harry Potter and the Goblet of Fire, The Chronicles of Narnia, X-Men: The Last Stand, Over the Hedge, Wedding Crashers and more. Every studio has contributed to pull DVD sales and rentals up.
In addition:
• Blockbuster has narrowed its losses considerably this year and expects further improvement based on its new Total Access online/in-store subscription combination and a strategic shedding of stores. Whether or not you’re a fan of Big Blue, the company is viewed as a home entertainment bellwether by the financial community, so positive signs at Blockbuster arguably benefit the entire industry.
• There’s a renewed creativity in standard DVD, as seen in such releases as New Line’s “Choose Their Fate” feature on Final Destination 3, which offers alternate sequences that can be accessed over the course of the film, and Fox’s latest season of 24 with its two dozen weeks worth of additional DVD-ROM content. These sorts of extras not only serve to renew interest in the maturing DVD format, they can serve as a bridge to the expanded capabilities on high-def formats.
• Download-and-burn is near, with the industry having recently cleared the last technical hurdle on the way to commercial implementation. Download-and-burn is key to wider adoption of consumer downloads but also represents a potential revolution in retail inventory management.
On the less good front, there are new tensions between retailers and suppliers, as stores lobby for one high-def disc standard, and then ample hardware supply of whatever the chosen format is, and try to find their place in the download world. Wal-Mart and Target went to great lengths this year to show the studios how serious they are about maintaining their packaged media business.
Finally, after 30 years, suppliers and retailers are still at odds over the First Sale Doctrine, this time as indie retailers sue The Weinstein Co. and Genius Products over an exclusive deal with Blockbuster.
All the best in the New Year.
