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The sting of truth

July 17, 2009 L.A. Times reporter Ben Fritz, in the paper's Company Town blog, yesterday took a sharp little slap at the DEG's mid-year numbers release, pointing out what the release didn't include in a post with the opening "Apparently some key information about the DVD business is now highly classified." As one industry wag commented in an email-- Ouch.

It must have stung, that blog, but it made a valid point about the fact that DEG did refuse to detail the performance of the largest pane of the "home entertainment window" -- DVD sales. 

DVD sales still comprise the bulk of home entertainment revenues -- just shy of $5 billion, or more than half of DEG's $9.73 billion total for all formats including DVD and Blu-ray sales and rentals, Internet distribution and cable/satellite VOD. And in recent quarters they've been declining at a rate of more than 15% year-over-year. In round numbers, that means DVD sell-through fell from about $6 billion in the first half of 2008 to about $5 billion in the first half of 2009.

DEG doesn't want to spell that out, of course, out of fear that the media will grab onto that negative story and ignore the larger, positive context DEG and the studios are trying to wrap around the mid-year report -- that the home entertainment window is now multifaceted and that all the facets except DVD sales are growing. 

And DEG is right to push the larger context, as are the studios, retailers, and everyone in the industry. But reporters are generally smart, and have pretty good instincts about what's not being said.  Better to be straightforward with the facts, then apply the spin.

In the interest of transparency, I should divulge that the DEG's mid-year report also threw a monkey wrench into our own mid-year numbers plan. As we have done every year for almost a decade, VB planned to collect numbers from as many sources as possible, including the major studios, analyze them and come up with our own quarterly summary. However, the major studios decided to release numbers only through the DEG this time around, so we did not have access to the breadth of data we usually draw on. As a result, there are no market share charts or top title listings to go with the mid-year numbers story this week. Look for some updates on our Web site. 

Posted by Marcy Magiera on July 17, 2009 | Comments (0)