“DVD downturn panics film industry”
Patrick Goldstein provides this analysis of the movie DVD business:
If box office is booming, why are so many top studio executives brooding about the future of the movie business? Let’s just say that in today’s increasingly complex film world, the cinema gods giveth at almost exactly the same time as they taketh away.
The studio bosses who should be celebrating the unprecedented upswing in moviegoing at theaters — with theater box office up roughly 15% this year — have been getting a big dose of bad news from the other end of the food chain. DVD revenues have cratered in the past six or so months, dropping off (depending upon whose figures you trust) as much as 15% to 18% overall.
It used to be that the studios could depend upon DVD sales to make up for movies that underperformed at the B.O., but it appears that consumers are getting pickier:
The example that made the biggest impact in studio circles involved “Iron Man” and “Indiana Jones and the Kingdom of the Crystal Skull.” The films, released within weeks of each other last summer, did almost the same amount of business in their U.S. theatrical runs, roughly $318 million. But when they arrived on DVD, “Iron Man,” the film that performed far better in exit polls (not to mention with critics), easily outperformed “Indiana Jones,” whose DVD numbers were far lower than expected. Among the big-grossing summer films, “Hancock” was also a poor performer (in terms of box office versus DVD numbers), while the DVD numbers for such well-liked family films as “Wall-E” and “Madagascar: Escape 2 Africa” held up far better.
How could this trend affect screenwriters? Apart from less residual income from slumping DVD sales, it could jam up the already tight movie studio development-to-greenlight process:
Needless to say, this volatility in the high-rent district has inspired something of a mild panic in studio executive suites. For years, DVD profitability basically mopped up the industry’s sins and clinkers. If studios lose their DVD margins, they essentially lose their margin for error.
No one knows the answer, but in the movie business, executives are unsettled, unsure of what movies to greenlight if they can no longer be sure of which of their old economic models still apply. It’s why studios are no longer making deals where talent gets first-dollar gross — unless the talent is willing to wait until the studio breaks even first.
I don’t know about you, but I hardly ever buy movie DVDs anymore. It’s more cost effective for my purposes to burn DVDs from my DVR — but I do that mostly for educational purposes (able to compile clips for my on-site screenwriting classes at UNC).
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