In tough economy, original DVD titles chug along

As the DVD market plateaus and ever more releases vie for space on store shelves, the direct-to-video kidvid sector is proving resilient in tough economic times.

Take Disney’s “Tinker Bell,” the runaway sales success of 2008. According to Meredith Roberts, senior VP and g.m. of DisneyToon Studios, the CG-animated property has far exceeded its revenue target and proves the resiliency of kidvid in times when families are cutting back on a night at the movies, which can cost a family of four around $100.

“Family audiences, even in this sort of down market … continue to support family titles overall on DVD,” says Marc Rashba, VP of marketing for Sony Home Entertainment.

That’s good news for studios and producers looking to score a hit in this sector, which is dominated almost completely by licensed fare and sequels to theatrical releases. In addition to “Tinker Bell,” licenses like Barbie, Bratz, Marvel and DC superheroes, and series like “The Land Before Time” are all eking out shelf space.

The sequel strategy is going strong at Sony, where Rashba has high hopes for “Open Season 2,” due at the end of January. While he says it’s possible to launch original titles in this market, a brand name to peg a release on is a huge help.

Scoring one of the few untapped, high-profile toy licenses is XLT, a CG studio that develops software and produces animation. The Hollywood-based shop is in production on three animated direct-to-DVD features based on the Playmobil line of toys, which are second in popularity only to Lego in much of Europe.

“There are not that many brands left out there that are really valuable in terms of awareness and passion,” says Charles Cohen, prexy of the company and exec producer on the projects.

Cohen says XLT won the license based on the quality of animation that its real-time rendering technology produces, as well as the idea of making the product interactive — something he says will influence the future of this market. “We now have a generation of kids who are sophisticated in ways we are not,” he adds. “Their aesthetics, their sensibilities are more demanding.”

The license is important to XLT in a number of ways: The company’s private investors expect a reasonable return that a high-profile license makes more likely; and it raises the company’s profile, helping it reach a long-term goal of developing its own intellectual properties (IP) for features and television. “Owning IP is everything,” Cohen says.

No studio has as much valuable family IP as Disney, which pioneered this sector with sequels to its theatrical releases. But those sequels have been dropped, and the just-released “Tinker Bell” is the first title under a new strategy of focusing on fewer titles and building new, stronger franchises.

Roberts says the change in strategy is a result of both creative concerns and erosion in the market. Disney has responded by using the potential of Blu-ray to create extras that extend the experience. Also, focusing on one or two releases a year allows for more internal coordination with consumer products, theme parks and travel —¬†all of which are offering or plan to offer experiences related to “Tinker Bell.”

The main challenge in the kidvid market remains one of visibility, Roberts says.

“You’re losing some vendors, who are going out of business, and so you’re really playing with the big three — Target, Wal-Mart and Toys R Us — and there’ll be a lot of competition for shelf space,” she says.

Building relationships with vendors is key. “The retailer wants to trust the product,” Roberts says, “and make sure that we’re delivering on our promises.”

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