Marcy Magiera

Innovation, against the odds

No matter what part of the home entertainment business you’re in, it seems it has been a grind of a year already—and it’s only March. It’s unclear whether consumers will spend money on anything, and that can make product innovation feel like sort of an exercise in futility.

Nevertheless, innovation persists, as illustrated by a couple of stories in this week’s issue.

Warner, long the owner of a classic film catalog far too big to effectively monetize at retail, will open its vault for fans with what must be the largest number of films from any major studio available for manufacturing-on-demand, now accessible through its new Web site/MOD system, WarnerArchive.com, as Susanne Ault reports .

Consumers can visit the site and order classic Warner movies that have never been available on DVD (or on demand—I love that little tidbit on the Web site) to be custom manufactured and shipped out to them in under a week.

Technology has made this sort of small-batch manufacturing more cost-efficient, and Warner is putting that technology to work to create what could be an entirely new profit center out of assets that otherwise would be collecting dust. The studio has a library of 6,800 films, fewer than 20% of which have ever been released for home viewing.

Since most of the WarnerArchive films would never be viable retail products, the studio is building this incremental revenue for itself without taking anything away from retail. It’s a business with undoubtedly low volume per title, but the potential to build good volume across all the titles offered.

On the other side of the revenue generating/cost-cutting spectrum, Sony is setting itself up for
tidy long-term savings on packaging and shipping with its innovative new green packaging program.

Environmental innovation has been happening across the studios, and this is a great commitment by Sony to reduce plastic in standard DVD packages by 20% on an ongoing basis.

A great commonality between these programs is that they aren’t structured to benefit the studio at the expense of its retail partners as another recent “innovation,” Fox’s push for separate sell-through and rental SKUS, does.

Posted by Marcy Magiera on March 23, 2009 | Comments (2)