Hollywood’s homevideo biz has had little to brag about lately, but the rest of 2012 is making studio executives giddy.
An avalanche of high-profile disc releases is coming in the fourth quarter, thanks to summer blockbusters “The Avengers,” “The Dark Knight Rises” and “The Amazing Spider-Man” plus family fare “Brave,” “Madagascar 3” and the fourth “Ice Age.”
At the same time, studios are wringing the physical-disc value still left in Steven Spielberg’s “Jaws,” “E.T. The Extra-Terrestrial” and the “Indiana Jones” pics by releasing them on Blu-ray for the first time. Other notable re-releases include anniversary editions of “Lawrence of Arabia” and the James Bond franchise.
Studios have a lot riding on the fourth quarter, banking on blue-chip titles to woo renters back to buying DVDs and Blu-rays. It isn’t a make-or-break scenario for the biz just yet — but the future of homevid as the majors know it is on the line.
It also could boost membership to UltraViolet, the cloud-based storage locker that the studios hope will increase digital homevid sales.
“Historically, the fourth quarter is the most important period for DVD and BD sales, and this year will be no exception,” said David Bishop, president of Sony Pictures Home Entertainment, which has the “Spider-Man” reboot, “Men in Black 3” and “Total Recall” releasing on homevid. “Coupled with some of the summer blockbusters that will be available from the other studios, there is good reason to be bullish about this quarter.”
Execs are encouraged by the numbers for some high-profile releases already out.
Lionsgate kicked off a flurry of homevid rollouts with “The Hunger Games,” which sold 3.8 million DVD and Blu-ray units combined in its first two days of release in the U.S. and Canada last weekend. That figure bested the last two “Twilight” installments, “Breaking Dawn, Part I” and “Eclipse,” which moved 3.2 million and 2.7 million respectively. “New Moon” sold 4 million in 2010.
Next month, Disney is expected to cash in with “The Avengers,” whose discs hit retailers Sept. 25.
With the film now ranked as the third-highest grossing film of all time, research firm SNL Kagan expects Disney to ship more than all time, research firm SNL Kagan expects Disney to ship more than 9.3 million DVD and Blu-rays, generating $219 million in wholesale revenue for the Mouse House. Interest in “The Avengers” already has increased sales of “Iron Man,” “The Incredible Hulk,” “Thor” and “Captain America: The First Avenger,” characters assembled in “The Avengers.”
Separately, Universal is expected to collect around $98 million from “Snow White and the Huntsman,” out Sept. 11, SNL Kagan said.
Hollywood is especially upbeat about Blu-ray, which is finally showing the kind of growth that makes the format more appealing to mainstream auds.
Overall, the physical sale of DVDs and Blu-ray still generate the majority of Hollywood’s homevideo sales, earning $3.7 billion during the first half of year, a decline of 3.6% compared to the same period last year. But Blu-ray disc sales grew 13.3% during the period, according to the Digital Entertainment Group.
Much of that is being attributed to older catalog titles, a category that saw sales increase 26% during the first half of the year — with many buyers replacing the same pics on DVD they already own, as restored and more feature-packed versions are released.
Much of that coin came from discs priced at more than $20, which have made up 35% of Blu-ray sales this year, studio execs said. But an increasing number of budget-focused consumers are picking up Blu-rays priced at less than $10. Last year, that amounted to 15% of the Blu-ray biz. This year, it’s increased to 32%.
The suggested retail price of many Blu-rays is $39.99 (3D releases are $49.99).
“Consumers are buying a lot of library titles with much more vigor this year,” said Jeff Baker, executive VP and general manager of Warner Bros. Home Entertainment Group, Theatrical Catalog.
And that’s mainly because the demo behind Blu-ray is changing, “indicating a broadening of the consumer base from the original early adopters and fan boys to families and an older demo,” Bishop said.
Classic titles are still expected to be a major driver for Blu-ray growth, Bishop added, especially as films like “Titanic,” “Jaws,” “E.T.” and the “Indiana Jones” pics are released on Blu-ray for the first time, or as studios celebrate anniversaries.
For example, 20th Century Fox and MGM will release all 22 of the James Bond films on Blu-ray on Sept. 25 to promote the series’ 50th anniversary, while Sony will celebrate the 50th for “Lawrence of Arabia” after previous celebratory box sets for “Casablanca,” “Ben Hur,” “Singin’ In the Rain,” “The Wizard of Oz” and “The Sound of Music” have sold well for studios. Anniversaries are typically a marketing tool to tout library releases.
Universal and Paramount also are celebrating centennials, which is the reason Blu-ray releases of their most iconic titles are hitting shelves this year. Universal kicked it off with “To Kill a Mockingbird,” which has helped it report double-digit growth in catalog titles.
But Warners is testing the waters with a $500 box set for its eight-pic “Harry Potter Wizard’s Collection” — the most expensive Blu-ray set ever released by a studio (some retailers are expected to offer it for $350).
Studio will offer 60,000 of the sets worldwide which weigh 19 pounds and includes 31 discs. The numbered sets are limited to 30,000 in the U.S. Given early demand, “we expect to sell out of them,” Baker said.
Collections of studio’s “The Terminator” and “Lethal Weapon” films costs $50 and $80, respectively. And one for Tim Burton, including seven pics, is priced at $60, when it bows in September.
Comparably, the “Lawrence of Arabia” re-release is still impressive with the pic remastered in 4K and set including pic’s soundtrack, 70 mm frame from the film and a coffee table book. The “Indiana Jones” box set includes a new two-part documentary entitled “On Set with ‘Raiders of the Lost Ark’ – From Jungle to Desert and From Adventure to Legend” featuring nearly an hour of rarely seen footage.
UltraViolet could also benefit as a result of the expected strong sales for higher-profile titles.
Earlier this year, at the Consumer Electronics Show, in Las Vegas, studio execs announced 1 million members for the service. That has since grown to nearly 5 million. Studios will put considerable coin around promoting UltraViolet during the fourth quarter, as they look to grow it to 25 million — the magic number the biz feels it needs for UV to become mainstream.
Other digital services like Apple, Amazon, Walmart’s Vudu, Best Buy’s CinemaNow, others on videogame consoles and naturally Netflix, also should see sales boosts, as will kiosk-based rental firm Redbox.
Electronic sell-through is up nearly 22% during the first half of the year, while VOD is up around 12%.
But studios are hoping discs remain the top draw, especially Blu-ray, which boosts studio profit margins.
“So far the year has shown positive signs in the growth of Blu-ray and consumers embracing content on multiple platforms including physical, digital download, VOD and other emerging technologies,” said Amy Reinhard, executive VP and general manager of domestic home media distribution for Paramount Pictures, which has “Titanic” and “Indiana Jones” forthcoming.
Yet with so many titles hitting retailers within weeks of each other, grabbing consumers’ attention is the challenge.
So studios have launched marketing stunts like screening a digitally remastered version of “Raiders of the Lost Ark” on Imax screens for one week in select Imax theaters beginning Sept. 7.
In Lionsgate’s case, the studio launched one of its most aggressive marketing campaigns for “Hunger Games,” including hosting midnight events at retailers like Target and Walmart, buying TV spots and a social media push.
Fox has promoted the James Bond set since January, kicking off a campaign at CES and stopping by Comic-Con to take pre-orders.
“With more than 40 million U.S. homes with Blu-ray devices, we are seeing an onslaught of demand in new and classic films alike for the format,” said Mary Daily, president and chief marketing officer of worldwide marketing for 20th Century Fox Home Entertainment. “Specifically, the interest in the upcoming release of the entire Bond franchise on Blu-ray for the first time has been through the roof.”