AMONG the glories of the rising tide of DVD sales was the wave of discs that revived lost or overlooked works by filmmakers like David Lynch, Werner Herzog, Dario Argento, Jess Franco and Takashi Miike. Now some of the companies that brought those movies into homes are getting pulled under and may take future releases down with them.
The Digital Entertainment Group, a nonprofit trade consortium, reported for the first time in 2006 that overall DVD shipments were stuck at about 1.65 billion units, roughly the same as 2005, after years of rapid growth. According to the weekly DVD Release Report, combined DVD releases dropped to 12,887 in 2006 from 13,712 in 2005.
In effect the video market is glutted. For big studios that means more jousting over future formats that may restart sales. But for specialty companies that have traded otherwise unavailable horror, action, art-house and exploitation titles, the glut has meant a struggle to survive.
“I started in this business in 1992, and this is the worst I’ve ever seen the market,” said Don May Jr., president of Synapse Films, which has released “Lemora: A Child’s Tale of the Supernatural” and the controversial Leni Riefenstahl documentary “Triumph of the Will.” “We’re all drowning in a sea of DVDs. Five or six years ago maybe a hundred titles a week would come out. Now we’re fighting 200 or 300 titles every Tuesday.”
With the demise of Tower Records and various Musicland companies — including Sam Goody and Media Play — many smaller home video companies are feeling financially squeezed, as a result both of fewer outlets and of income owed from chain-store bankruptcies.
“Losing Tower Records and Musicland was a big blow,” said Norman Hill, founder of Subversive Cinema, home to cult titles like “Eraserhead” and the Jamaican documentary featuring Bob Marley, “Land of Look Behind.” “What I’m missing the most right now, even as a consumer, is being able to walk into a retail store and have a breadth of choice. When a major studio cannot get their catalog titles into the retail chains anymore, the independents are having an even worse time.”
Mass retailers like Wal-Mart, Circuit City and Target have limited shelf space, and Best Buy has become less diverse in its stock.
“The big-box stores are ruthless about returning if they don’t turn over enough,” said Gary Baddeley, president of the controversial, documentary-driven Disinformation Company, which has released “Wal-Mart: The High Cost of Low Price” and “Outfoxed: Rupert Murdoch’s War on Journalism.” “The DVD business is a returnable one. A sale is not always a sale.”
As independent retailers dwindle, larger chains focused more on mainstream titles seem to “control and set the arbitrary taste for the entire market,” said Matt Kennedy, former president of Panik House Entertainment, which specializes in international genre movies like “The Curse of the Crying Woman” and “The Pinky Violence Collection.” “Not getting a title into one of these stores can be the death of a small label, but so can getting one in. If you get an order for 40,000 titles and only sell 4,000 because it was left boxed in the back, misfiled by category or never entered into inventory, it can mean bankruptcy.”
The industry’s push toward new formats is also potentially problematic for the smaller players. The quality of mass-market digital downloads is debatable, and the new Blu-ray and HD-DVD discs, which require substantial investment in new equipment, are already taking up shelf space that might have gone to specialty titles.
“I think high-definition is turning out to be the laser disc of the video business today,” said Bill Lustig, the director of “Maniac” and owner of Blue Underground, an eclectic company with titles including “My Brilliant Career” and “Tombs of the Blind Dead.” “It’s taking up a very, very small percentage of the market, and I don’t know if we will see it grow. Most people are happy with their standard-def DVDs and don’t want to replace their movies.”
The suppliers are trying to address the downward sales trend through different means: MPI through acquiring television and theatrical rights for DVD titles; Starz Home Entertainment (formerly Anchor Bay Entertainment) by expanding into nontraditional retail outlets like Kohl’s; Viz Media by taking its anime business into download-to-own with “Death Note”; and Allumination FilmWorks by branching into family and animation titles.
“You have to market more, advertise more and make customers aware of the alternatives to traditional retail,” said Greg Newman, vice president for acquisitions and development of MPI Media Group, which specializes in classic television on DVD, documentaries, music titles and horror films. MPI’s increasing online sales have become an important revenue stream, but as more money is spent on consumer awareness, less will be allocated to catalog acquisitions, and future selections “are going to be as safe as possible,” he said.
Lisa Nishimura-Seese, general manager of Palm Pictures, noted that the contraction and expansion in the independent world is cyclical and cited the importance of “mom and pop” outlets with personalized service that feed a growing interest in independent film. Regional chains like Newbury Comics and Hastings are also supportive of indie companies.
On the mass retail level Target, a sponsor of IFC’s “Cinema Red” programming block on Monday nights, now features an eclectic “IFC Indies” section that spotlights 48 movies a month. Evan Shapiro, general manager and executive vice president of IFC TV, said sales of Target’s existing indie titles have increased substantially as a result of the IFC-selected section, which was also helping smaller distributors like New Video and Genius Products break into the chain.
Most of February’s “IFC Indies,” however, came from major studios or high-profile independents with major distributors. Small indies cannot afford premium store placement and other distribution costs the way larger companies can.
Even for successful independent companies, “where you send consumers has become trickier,” said Dan Gurlitz, vice president for video of Koch Entertainment Distribution, purveyors of foreign and art-house films and British television. Book retailers like Borders and Barnes & Noble are selling DVDs, he noted, while Internet shopping and mail order are still strong revenue-generators for many categories. But many consumers have yet to make the leap to regular online shopping, and the vital, serendipitous “impulse buy,” which has traditionally stimulated DVD sales, is less likely in an overcrowded virtual arena.
“If you’re a retailer and carry 100 titles, you’re still going to get 80 percent of your sales from 20 of those titles,” said Jay Douglas, a vice president at Ryko Filmworks, which distributes numerous indie labels including No Shame Films, Heretic Films, Severin Films, Discotek Media, Mondo Macabro and Grindhouse Releasing. “If you carry 10,000 titles, the 80/20 rule will still apply. The question is whether you want to devote that space to entertainment software or to something else?”
Originally Posted by Rich
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