After a less-than-sunny first half, a steady flow of box-office heavy hitters, coupled with the continual push of DVD product, will translate into a potent summer season for video, according to retailers and analysts.
"The slate for this summer looks like it is very well thought-out," said Bob Gettner, video buyer/coordinator, B&R Stores, Lincoln, Neb. "The studios have done a nice job of spacing out their movies [instead of] bunching them up in one month. It is shaping up to be a very good summer."
The combined box-office dollars for new releases that grossed over $8 million were down 26.6% in the first quarter compared to the first quarter of 2001, said Andrew Miller, director, supermarket division, Rentrak Corp., Portland, Ore. The box-office total for the second quarter was up 10% over 2001, while the first half was down 8.1% collectively, he said.
"Accordingly, everybody has been singing the blues since the first quarter about how terrible their business is," he said. But Miller expects a big resurgence in the third quarter with the new-release, box-office dollars going up 28% over last year.
"What you are going to see is the market coming back with a lion's roar for the summer," Miller said.
While box-office blockbuster releases like "Harry Potter and the Sorcerer's Stone"($317 million) and "Ocean's Eleven" ($183 million) that street this month have jump-started the summer season, other breakout hits fueled by the Academy Awards such as "A Beautiful Mind" ($155 million), "Black Hawk Down" ($108 million), "Monster's Ball" ($20 million) and "The Lord of the Rings: The Fellowship of the Ring" ($297 million), have analysts projecting stronger rental and sell-through sales than last summer.
"There's a very strong lineup going into the summer," Tom Adams, president, Adams Media Research, Carmel Valley, Calif., agreed, "especially given that what rents is not necessarily what came out that month, but what's come out the previous couple of months as people catch up."
Titles like "Lord of the Rings," which streets Aug. 6, are the kind of movies that "will really light things up," said Larry Hage, general manager and video buyer, C&K Markets, Brookings, Ore. "Any time you have those big-smash, box-office titles, things get better. They get better instantly."
Titles with wide appeal, like "Black Hawk Down" and "A Beautiful Mind," do especially well in C&K's 32 stores with video sections. Any month where the collective box-office take for new releases exceeds $650 million holds formidable video potential, he added. "If we can get a couple of big titles to flow us through [each month], then we'll probably have a pretty good summer," Hage told SN.
The acceleration of DVD manufacturing and more affordable pricing structures offered to retailers by movie studios are also expected to boost overall rental and sell-through revenues, analysts said.
"On the DVD side, studios are pressing for less pricey DVDs and that helps any store buy more copies for rental," said Richard Kelly, president, Cambridge Associates, Stamford, Conn. "If the title has legs, it's a win-win."
Kelly said one billion DVD units are projected for production in 2002, while manufacturing of VHS units will shrink for the first time to 830 million units, an 8% to 10% drop from production last year.
Customers' acceptance of DVD has also propelled big earnings potential in the VHS and DVD sell-through market, said Bill Bryant, vice president, sales, Ingram Entertainment, La Vergne, Tenn.
"One of the big advantages this year is, with the migration from VHS to DVD, there are a lot more titles at a sell-through price than there have been in previous years," Bryant said, citing "A Walk to Remember," "John Q" and "The Majestic."
"This should create a lift in the summer where typically there has not been a feature sell-through title available," he noted.
B&R Stores recently began carrying sell-through DVD product, Gettner said.
"We are now bringing in the major sell-through titles that come out," he said. "We held off because of the major competition, but now we are getting into it full force."
C&K also promotes sell-through by displaying two shippers of major sell-through titles in both VHS and DVD formats on an ongoing basis, Hage said.