DVD growth, new tech discussed at home vid summit
Homevid toppers tossed off rueful asides about the challenges facing the vid biz at a Century City summit Thursday.
Alternately describing the home entertainment biz as chaotic and bipolar, the execs nonetheless took a bullish stance on the prospects of slight DVD growth this year amid an onslaught of new technologies vying for consumers’ attention.
“I think you’re going to see a lot of chaos in the next few years,” Fox homevid prexy Mike Dunn said at the confab’s presidents panel. “You’re not going to be able to see the path through the woods.
“But as a content person, it’s very exciting,” he added, describing the studio’s plans to market “Milton Shorts” tied into the “Office Space” character played by Stephen Root. “As time goes on, strategy will clarify.”
“To a certain extent, we’re bipolar,” said Disney homevid topper Bob Chapek. The business “just seems to change: Every Monday you come in and there’s some new development. You have the age-old packaged goods battle on one hand, and on the other hand, you have the new technology, visionary issues.”
The execs acknowledged that navigating the transition from DVD to dueling high-def formats is tricky, especially as the digital download biz gears up. HD DVD bowed in mid-April, and the Blu-ray format hits stores later this month; Movielink and CinemaNow began offering download to own, also referred to as electronic sell-through, in early April.
“It was fairly simple in the early days of DVD and VHS,” acknowledged Sony North America homevid prexy Dave Bishop, a longtime exec in the biz. “There wasn’t a lot of competition with different technologies.”
“The transition from VHS to DVD was very safe,” concurred Dunn, who spoke of the need to protect the existing DVD biz while jumping into new technologies consumers want.
The execs were quick to counter the prevailing perception that the vid biz is in trouble because DVD’s rapid growth has slowed down.
“Six months ago, it looked like we were all headed for a fall, but that hasn’t happened,” said Universal homevid prexy Craig Kornblau.
The execs sparred slightly over catalog strategies, offering alternate views on how many times to re-release catalog titles and how aggressive the pricing should be. Noting its recent “Lucy & Desi” set was one of the company’s best sellers, Warner homevid prexy Ron Sanders said, “There’s real buoyancy at the very high end of the market and the low end of the market. In the middle, it’s drifted.”
However, the most encouraging news for studio execs may have come in a research presentation by Adams Media Research prexy Tom Adams. The longtime analyst forecast a long life for packaged media, predicting that several years down the road, electronic delivery would still account for one-tenth of the DVD market. At this point the studio cut would be equally high for DVD and digital downloads: Studios get $17.26 for DVD or electronic sell-through, compared to $3.50 for a box office admission, $2.37 for a video-on-demand transaction or $2.25 for a video rental.