Theatrical release still drives the train

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Does anybody remember 2005?

That was the year of the summer slump that would not end – a slump that convinced many a pundit that the movie theatre business as we know it was dead. DVDs, flat screen TVs and instant downloading were killing the business, so theatres should acknowledge reality, turn off the popcorn makers, shut the doors and give consumers what they want.

Well, guess what? Now it’s the DVD business that’s down. After a flat 2006, 2007 is down 8% at the end of the first quarter – and why? The same reason that was dismissed when theatre owners made the case in 2005. There weren’t enough movies that people wanted to see.

According to an article by Thomas Arnold in today’s Hollywood Reporter:

The biggest ding comes from the conspicuous lack of tentpole theatricals, which is a reflection of what has been happening at the boxoffice.

“A lot of it has to do with the fact that they don’t have much inventory (of new releases),” said Ralph Tribbey, editor of the DVD Release Report, which just performed a studio-by-studio study of release patterns. “Right now, there are only 10 films that have grossed $25 million or more that don’t have dates, which is remarkably low.”

Tribbey said the summer months look particularly bleak as far as high-profile new theatricals go. “If you look at the release calendar, ‘Shooter’ is June 26, and you don’t have another film that grossed $25 million or more until July 17, when Sony’s ‘Premonition’ comes out, so you’re looking at four consecutive street dates, and there’s your hole.”

Tribbey said that the collective boxoffice value of new releases that have come to DVD so far this year, or have been slotted through month’s endJune, is down 12.1% from first-half 2006.

“When you look at just the hit films — those grossing $25 million or more — seven fewer have been released on DVD during the first six months of 2007, 50 versus 57 in 2006, translating to a boxoffice decline of 13%,” he said.

David Bishop, worldwide president of Sony Pictures Home Entertainment, said the slowdown in DVD releases “is a reaction to what’s happening theatrically. Windows aren’t changing.”

DVDs and theatrical release are complementary – what’s good for the movie theatre business is good for the DVD business. This simple concept has a corrollary: What’s bad for the theatre business is bad for the home video business, too.


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