Tuesday's 'Toy Story 3' release should show shift

It typically takes several years for the masses to embrace a new technology, and Blu-ray is proving no different.

Four years after the first high-definition discs started hitting store shelves in summer 2006, the Blu-ray format is showing signs of attracting more families than ever. Tuesday’s release of “Toy Story 3″ should be a prime example of the shift.

Disney is certainly more bullish about Blu-ray than others given its focus on family films.

At a September investors conference, Disney chief Bob Iger told Wall Street that “Disney is different (from other studios in) the type of movies we typically make. While the sell-though business has certainly faced some challenges these last few years … we haven’t seen as much of an effect as some of the other studios.”

Given the focus on the family market, he also said Disney isn’t threatened by the cannibalization that’s hurt other genres from $1 rentals that Redbox’s thousands of kiosks provide or from low-cost DVD-by-mail or digital rentals via Netflix.

In fact, Iger is so confident that he gave the greenlight to the Mouse House’s homevideo division to offer up the complete slate of Pixar pics to date for on-demand rentals through Nov. 9, across a variety of digital retailers, marking the first time all the Pixar titles are available simultaneously.

Disney experimented with releasing “Alice in Wonderland” to kiosks the same day that the DVDs and Blu-rays appeared at retailers, and saw no major effect in sales. In fact, “Alice” has gone on to earn more than $73 million on homevideo from DVD alone. “For the most part, when you make a quality Pixar, Marvel, Disney title, people want to own it,” Iger said. “Either because it is economically right to do that due to the multiple times children want to watch it, (or) the titles tend to be the type people like to collect.”

As a result, “Toy Story 3″ will also bow day-and-date in stores and via rental outfits.

Walt Disney Studios Home Entertainment will also release all three “Toy Story” films on Blu-ray, DVD and digital together for $100. A four-disc Blu-ray, DVD, digital combo pack will sell for $46, with two other versions retailing for $40 and $30.

“Toy Story 3″ is already the top pre-ordered DVD on Amazon.com and Walmart.com, the companies have said.

And as Blu-ray continues to expand its customer base — sales won’t overtake those of DVD for another few years — family titles are expected to be a key factor in boosting the biz.

In fact, the next several months should provide further evidence of that as more high-profile family pics hit homevideo, starting with next week’s “Toy Story 3,” from Disney, and “Shrek Forever After” and a “Shrek”-franchise bundle from DreamWorks Animation in December. The studio bowed “How to Train Your Dragon” on Oct. 15.

While “Dragon” bowed strongly, 31% of its sales came from Blu-ray, according to Nielsen VideoScan.

And it’s that share that studios are increasingly scrutinizing.

Last year, most family titles moved just over 10% of their discs on Blu-ray. The current average for the family genre is 15%. By the end of the fourth quarter, that could be north of 20%, studio execs say.

Fox is attributing much of the industry’s growth to the success of “Avatar” on Blu-ray, which set a high benchmark with close to 5 million units sold in North America alone. It moved 2.7 million discs in North America in four days when it was released on Blu-ray in April. More than 30% of its sales came from Blu-ray.

“That was unprecedented,” said Simon Swart, exec VP-general manager, North America, Twentieth Century Fox Home Entertainment. “That raised the tide for everybody, permanently.”

Fox, in particular, has seen a number of new titles sell briskly after “Avatar.”

During the summer, “Percy Jackson and the Olympians: The Lightning Thief” saw more than 20% of its sales come from Blu-ray, a “tremendous success” for the title after the bigger box office hit “Night at the Museum 2″ earned 10% of its sales from Blu-ray last year. Swart, like a number of other studio home-vid execs, says the packaging of family films to include a Blu-ray, DVD and digital copy has helped increase sales as consumers “are clearly looking how they’re going to be using the disc,” he said.

Because hardware sells briskly during the holiday shopping season, the purchase of new Blu-ray devices and flatscreen TVs is expected to boost Blu-ray even more overall.

“I wouldn’t be surprised to see the average title sell north of 30% by the end of January,” Swart said, adding that studios expect to see Blu-ray outsell DVD by 2012.

Although overall homevid spending is down 4% this year, sales of Blu-ray discs reached the $1 billion mark by the end of September, up 80% over the same period in 2009, according to the Digital Entertainment Group. The U.S. market now contains 21 million Blu-ray players, which includes videogame consoles like the PlayStation 3 and computers.

“When you’ve got 20 million households, you’ve reached critical mass,” Swart said.

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