The DVD business is down so far this year, but evolving high-definition formats will keep the industry from falling into the doldrums permanently, according to studio and analyst participants at the Home Entertainment Summit: DVD and Beyond here this week.
During a panel discussion of home entertainment division presidents, panelists said that at best, the 2007 year will wind up flat from last year. With DVD hardware penetration at more than 80% in the U.S., the disc gold rush days are long past.
Warner Home Video president Ron Sanders and Buena Vista Worldwide Home Entertainment president Bob Chapek estimated business could very well be off a couple of percentage points, even though both expect a fourth-quarter surge with such summer juggernauts as Pirates of the Caribbean: At World’s End hitting DVD.
Year-to-date, worldwide consumer spending on DVD purchases represents $10.4 billion, which is down 2.6% from the same period in 2006, according to research presented by the Digital Entertainment Group. Within that performance, new releases slipped 5.4%, and catalog jumped 3.2%.
In the U.S., consumer spending on DVD purchases fell by 5.2% to $5 billion, DEG reported. New releases are down 8.5%, and catalog is flat. Some of this DVD slump can be blamed on theatrical content, as box office value of new releases to date is trailing 8.1% from last year.
“[The year could end] up flat, or slightly up, depending on the degree to which high-def takes off,” noted Kelly Avery, president of worldwide home entertainment at Paramount Pictures. “Box office for the summer is up 5% [compared to 2006], making it bigger than the last two summers.”
Studios and analysts are bullish about their futures. But they realize they have to be patient as consumers catch on to HD DVD and Blu-ray.
“It’s in the very, very early days of our forecasts, but we believe that high-definition discs will help return consumer video spending to growth,” said Helen Davis Jayalath, senior analyst video at Screen Digest, during a session.
Story source:
videobusiness.com.
