The bigger picture
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Mr. Magorium’s Wonder Emporium star Zach Mills was named best emerging actor at the KIDS FIRST! award show in Malibu on Oct. 7.
Arts Alliance America recently held a screening of Run Granny Run with film star Doris “Granny D” Haddock in Keen, N.H.
Sony and Reef Check celebrated the DVD release of Surf’s Up at Malibu Bluffs Park in Malibu, Calif., on Oct. 6.
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By Samantha Clark -- Video Business, 10/13/2006
OCT. 13 | Within hours of analysts Richard Greenfield and Mark D. Smaldon of Pali Research releasing their report entitled “The DVD Party is Over—Movie Industry Concerns Growing,” consumer media was ready to report the DVD format was all but buried.
Clark
Soon after the report was out, our office was contacted by CNBC asking for an interview. The show was On the Money, and the story it wanted to tell was “DVD is dying.”
(We later saw that On the Money is basically Access Hollywood for finance. In the same episode, the show aired a segment that asked whether kids who were spanked were more likely to grow up to be CEOs.)
That scandalous headline is great for pulling in an audience. But there is a bigger picture.
Sure, the DVD market has matured. And yes, we’re not seeing the meteoric growth of the early DVD years, but that doesn’t mean the format is going away.
Analysts see the future as a generation happy to watch Pirates of the Caribbean on the 1x1-inch screen of a mobile phone. But, even the Pali report said, “most consumers will want to view movies in a high-quality experience”—and that’s not the latest RAZR, iPod or Zune.
Analysts also think DVD will be replaced by downloads. But it will be many years before downloads can be finished within minutes and watched at DVD quality on the TV.
In fact, studios say they have showed that downloads and DVDs can coexist, as High School Musical was available for sale on iTunes long before it bowed as the No. 1 seller on disc. And last week, X-Men: The Last Stand was available for download-to-burn on CinemaNow and The Little Mermaid was for sale on iTunes the same day the movies arrived on disc in stores, and studios say the DVDs still pulled in $80 million combined on their first day.
Anyone who reads Pali’s report will see that Greenfield and Smaldon are not saying DVD is dead.
On the contrary, the report says, “2007 could be the first year that U.S. consumer spending on DVDs actually declines,” and the report predicts the downturn will be only 1%.
According to Video Business research, in 2005, the industry had its first downturn ever, and this year, it’s looking to be at worse flat but possibly back up.
Sure, DVD could dip in 2007, as Pali forecasts, but the industry will still be close to a $24 billion business, with DVD the biggest chunk of that by far. Not bad for a format that was introduced only nine years ago.
And high-definition discs—although slow to build this year—offer the opportunity of added revenue now and solid business for years to come.
Maybe that’s not enough for Wall Street. But for the average retailer, that means customers will still be coming through the doors looking for entertainment.
Samantha Clark is managing editor of VB.
