Studios see opportunity to turn green to gold

Carbon already reduced, though conversion is in early stages

By Susanne Ault and Marcy Magiera -- Video Business, 4/3/2008

APRIL 3 | LOS ANGELES—The DVD industry took a step toward developing standards for eco-friendly DVD manufacturing, packaging, shipping and marketing at the first Green Media Summit here yesterday.

Produced by DEG: The Digital Entertainment Group and the Entertainment Supply Chain Academy, the daylong invitation-only event drew about 150 executives for a discussion heavy on greenhouse gas emissions analysis and recycled/recyclable/biodegradable packaging.

The media industry, including home entertainment, has a relatively low environmental impact, said Zoe Riddell, VP of Carbon Disclosure Project USA, who spoke via phone (no carbon imprint from travel), and is likely to be only indirectly affected by future environmental regulation on business.

Nevertheless, keynote speaker Dan Esty, Hillhouse professor of environmental law and policy at Yale University said that changing federal environmental regulation is a certainty and some regulation is already being implemented in states and cities around carbon controls, extended product responsibility, waste regulation, packaging restrictions, recycling and limits on heavy metals and chemical exposure. In addition, DVD suppliers stand to benefit from eco-friendly practices by cutting costs, lowering eco-risks, driving revenue in new market segments and brand building, Esty said.

In a light analysis of the home entertainment industry, Esty said he saw opportunities for improvement in packaging, transportation and logistics, toxic materials in products and supply chain management.

“Be strategic and sustainable over time,” he said, noting that changes need to make sense for a company’s business.

Esty and Riddell, as well as other speakers, have worked with Wal-Mart on its sustainability initiatives, which include a drive to reduce packaging in the products on its shelves by 5% by 2013.

“All vendors are being evaluated on their environmental performance,” said Maria Harris, an Environmental Defense Fund project analyst and Wal-Mart consultant who helped develop the retailer’s “packaging scorecard.”

“Suppliers should look for opportunities to innovate, and [Wal-Mart] will buy more product, feature it in endcaps and provide more shelf space,” she said.

Harris also moderated a panel of packaging executives, in which Steve Robinson from Ivy Hill/Cinram provided an example of the way the Wal-Mart scorecard works, taking into account package material, size and shipping packaging. On the retailer’s scale of 1-10, 10 being the best, a standard polypropylene Amaray case would score 2.65, but the same case made of polystyrene would be only a 1.00. Higher scores went to the “snapper” paper/plastic hybrid (3.80) and the thin Amaray (4.25). Even higher were various paperboard options, with the highest score (9.8) going to the Soft Pak, similar to the packaging on Paramount Home Entertainment’s An Inconvenient Truth.

Studio execs were out in force for the Green Media Summit, with Bob Chapek, president of both Walt Disney Studios Home Entertainment and DEG, opening the event with the promise that “eco-friendly” is “a commitment to think outside the box, be that box corrugate, plastic or paper.”

Disney’s Larry Wilk, VP of worldwide operations, led a supply chain carbon footprint analysis, saying that the issues for home entertainment involve energy and water use, waste management, chemicals and heavy metals, air pollution and deforestation. The carbon emissions to create the average DVD, not including movie production, were recently 1.1 pounds, he said, using data commissioned by 20th Century Fox, but have been reduced below 1 pound within the past two years.

In the next 10 years, the DVD industry should be able to shave the footprint by 25% if it can create green standards that facilitate affordable, cleaner manufacturing processes, Wilk said.

The industry’s “best prospects” for continuing to improve that are in energy efficiency; the increased use of recycled raw materials; reduced, sustainable and recycled packaging; transportation changes such as minimizing air shipments and consolidating replicator shipments to retail among studios.

“There should be the development of cross-studio standards to help compare information, because if there are different approaches, that will cost more and take more time,” said Wilk. “There should be a training program to work with our vendors to get them to build into products.”

Attendees expressed openness to these opportunities, which also may cut costs. Lighter DVD shipments should translate to fewer freight trucks and less transportation costs, for instance.

However, executives also expressed frustration about other additional costs in going green. Since, pulp and corn are relatively new packaging materials, there are few, if any, automated services available to churn them out efficiently. Also, there are risks in collaborating with usually competitive studios to standardize eco-friendly manufacturing.

“The reality is that we talk about combining shipments, but there is some bravery involved in saying OK, I’ll put my stuff in with Disney” to limit freight weight, said Bill Sondheim, president of entertainment and worldwide distribution at Gaiam, speaking on a green marketing panel. “We need to bring these issues to the forefront.”

As a company that specializes in wellness products, Gaiam has already released several titles in green packages. But Sondheim said that being environmentally involved is not easy.

“We have taken it on the chin with eco-packaging, and I’m not going to tell you it’s cheaper,” said Sondheim. “Let’s get the DEG to help us get to packaging standardization so we can move toward automation. Hand loading by the thousands is do-able, but it is not fun. Our studio brethren have started embracing experimental packaging, but we need more volume to drive this.”

Wrapping a disc in green might cost 40% to 70% more than a standard Amaray DVD case, according to studio sources.

Yet more and more studios have been backing green initiatives, motivated both by Wal-Mart directives and corporate environmental commitment to its customers.

Warner Home Video marketing director Tamar Dolgen said the studio did a financial analysis to determine whether its April 8 release of climate change documentary The 11th Hour at a $4.99 price, with 100% renewable packaging, including corn plastic, could be viable. It also will package and price in the same way May 27 release Darfur Now.

Fox streeted its first carbon-neutral DVD with Futurama: Bender’s Big Score, which won a Green Entertainment Award from DEG at the event.

“By studying our footprint, we are finding opportunities in the supply chain to lessen our impact,” said Steve Feldstein, senior VP of marketing communications at Fox. “You can sell your product…and you can do the right thing.”

In a keynote address, Lauren Zalaznick, chairman of NBC Universal’s Green Council and president of Bravo & Oxygen Media, said the TV network will run a second themed ‘Green’ week starting April 21, featuring environmental lessons and story lines across its broadcast and cable programming.

She also touted some of the environmental accomplishments of Universal Studios Home Entertainment, including producing packages with 50% recycled paper and in-store displays that use 25% less corrugate and are made out of largely recycled material, saving 43 million square feet of cardboard and paper.

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