How much is too much?
September 5, 2008

Amid post-Labor Day reports about the summer box-office’s sunny performance, The New York Times last week ran a story about a glut of films hitting Hollywood and making it difficult for even star vehicles to secure adequate theatrical distribution.

The two stories are separate, but taken together, illustrate the complexity of the movie business and, consequently, home entertainment retailing.

Theaters tallied $4.12 billion in summer movie ticket sales, according to VB sister publicationVariety, due largely to the $500 million-plus performance of Warner Bros.’ The Dark Knight. While grosses were more or less on pace with 2007—off just 1% or so—that’s a function of higher ticket prices. Admissions, or the number of tickets sold, fell about 3% to 4% again, though studio spinmasters largely slough that off as long as revenue is going up.

Of course, the biggest theatrical grossers tend to be the biggest DVD sellers, so the box-office take is great news for home entertainment retailers, who will have six titles that each grossed more than $200 million on their shelves this fall. That includes Dark Knight, which has achieved grosses not seen since Titanic. (Titanic’s home entertainment sales, however, were nowhere near what Dark Knight’s will be because its original release was in the VHS era.)

The only problem may be finding room on the shelf.

On the other end of the movie spectrum from Dark Knight is My Mom’s New Boyfriend, a comedy action movie that despite marquee talent—Antonio Banderas and Meg Ryan—went quietly straight to DVD through Sony, and Smart People, a comedic drama with Sarah Jessica Parker, Ellen Page, Dennis Quaid and Thomas Haden Church that got a theatrical release but made less than $10 million before hitting DVD through Disney.

The NYT story uses these titles as examples of the film “glut” created by billions of dollars in financing that has flowed into Hollywood over the past couple of years. While that stream of cash has largely dried up, the movies it bankrolled are still bowing, in many cases directly to DVD or with a fleeting stop in theaters.

For specialty retailers, this can be good news, providing higher profile product to fill in any shelf space left between the blockbusters. It forces tough decisions, however, on whether to pass on even smaller titles to do so.

Posted by Marcy Magiera on September 5, 2008 | Comments (0)