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Transformers and Dragons Boost Home Video Sales in Fourth Quarter

Early reports indicate fourth-quarter disc sales are getting off to a strong start, helping studio executives breathe a little easier as the industry gears up for the Black Friday sales frenzy.

“We kicked off the fourth quarter in a big way with ‘Transformers: Age of Extinction’ and followed it with ‘Hercules,’ both of which exceeded our expectations,” said Dennis Maguire, president, Worldwide Home Media Distribution, Paramount Pictures.

Twentieth Century Fox Home Entertainment, too, scored a big hit earlier this month with the animated family feature “How to Train Your Dragon 2,” from DreamWorks Animation, which the studio said sold more than 2 million copies its first week in stores on Blu-ray Disc, standard DVD and Digital HD.

And Sony Pictures Home Entertainment said fourth-quarter disc sales “are on track with expectations,” fueled in large part by impulse buyers — a critical segment of the disc-buying public that studios are courting as tenaciously as ever.

While studios used to be compelled to secure attention-grabbing, point-of-sale placement at brick-and-mortar retailers, this year it has become increasingly important to secure point-of-sale placement at all consumer touch points, whether in stores, in the home or on mobile devices and tablets, studio executives say.

That coincides with the growing popularity of electronic sellthrough (EST), or Digital HD, particularly as it pertains to the new releases that drive consumer spending. During the third quarter of this year, DEG: The Digital Entertainment Group reported earlier this month, overall consumer spending on EST rose 26% from the same quarter last year, while spending on new theatrical releases in the same period was up 70%. A key catalyst: early release windows.

So far in the fourth quarter, “we’re seeing continued growth in digital sales, with more and more families opting for early digital purchases,” Paramount’s Maguire said. “We’re looking to take advantage of this with the digital release of ‘Teenage Mutant Ninja Turtles’ right before Thanksgiving, followed by the physical release before Christmas.”

“The industry is all about maximizing our different platforms and product offerings,” added Lexine Wong, senior executive vice president of Sony Pictures Home Entertainment (SPHE). “In an increasingly complex market, SPHE is continually working to drive greater value for the consumer and maximize the home entertainment experience, promoting ownership of both physical and digital media. We are also excited to see that traditional VOD players, such as Comcast and Verizon, are active in the EST space and showing strong performance.”

At 20th Century Fox, “How to Train Your Dragon 2” became the studio’s top-selling Digital HD family title after just one week of availability, fueled by strong advance orders. The studio struck a partnership with the Minnesota Vikings football team in which film characters Hiccup, Snotlout and friends parachuted into TCF Bank Stadium at the University of Minnesota in Minneapolis on Sunday, Nov. 2, just as the Vikings were to take on the Washington Redskins. The studio also held a #DragonsDay Twitter Viewing Party on the Friday night of the Digital HD release. “#DragonsDay” was one of the top trending topics that day, Fox says.

Of the year’s top 20 theatrical films, nine came out earlier in the year, while another seven have been slated for fourth-quarter release. Four of these films have already come out on disc between Oct. 1 and now, with three still to come: 20th Century Fox’s “Dawn of the Planet of the Apes” on Dec. 2, Walt Disney Studios’ “Guardians of the Galaxy” on Dec. 9 and Paramount’s “Teenage Mutant Ninja Turtles” on Dec. 16.

(Additional reporting by John Latchem.)

Thomas K. Arnold is editorial director of Home Media Magazine, http://www.homemediamagazine.com.

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