Home Media Magazine - January 6-12, 2008 - (Page 36) NEWS Retailers See Little HD Boost Continued from page 1 www.homemediamagazine.com high-def this holiday season. Research firm The NPD Group forecasted earlier this year that highdef software sales will hit 4.5 million units, accounting for only 3.5% of the packaged-media business. Ross Rubin, director of industry analysis for The NPD Group, said while specific numbers were not yet available, high-def certainly was not “at a high volume” this holiday. Selection may be an issue too. One independent studio head said retailers didn’t do enough with highdef in general for the holidays, and snubbed smaller companies’ releases. “We hope retailers will stop looking at who the supplier is, and look at the quality of content,” he said. “That’s the only way consumers will have a chance to commit to a format, if they have a broad selection.” Netflix in Box Continued from page 1 real competition and continue to focus heavily on consumer education at the retail level,” said Ken Graffeo, EVP of HD strategic marketing for Universal Studios Home Entertainment. “DVD still gets top billing,” Zaganiacz said. “A lot of the retailers are doing the same as the consumers, and waiting.” It’s true, the competing sides have been aggressive in getting high-def in front of consumers, and have worked with retailers such as Amazon.com and Best Buy to offer buy-one-get-one deals and free disc incentives with the purchase of a high-def player. But retailers large and small knew DVD sales weren’t going to be touched by 2007 Numbers Trend Down Continued from page 1 Wal-Mart, which accounts for about 40% of the business, the actual decline could be more — or less. As for consumer spending, most observers believe the decline in actual consumer spending will be less than the percentage drop in unit sales — a reversal from the past, when mass discounting at retail saw consumer spending decline even as unit sales went up. Midway through 2007, for example, Nielsen VideoScan data showed unit sales to be down 7.5%, while Home Media Magazine’s market research estimated consumer spending for the first six months of this year to be down just 3% from the first half of 2006. Credit goes to a variety of factors, including the influx of high-priced boxed sets, mostly of complete TV series, which still count as a single unit; the growing tendency among studios to release two or more versions of a hot new theatrical release at the same time, one packed with extras and commanding a higher street price; and a decline in catalog product, which generally tends to sell for a lot less than new releases. Just before the holidays, Ron Sanders, president of Warner Home Video, projected that consumer spending for TOP 10 DVD SELLERS DVD S E LLER S GENRE LABEL YTD through December 30, 2007 INDEX BOX OFFICE* TITLE 1 2 3 4 5 6 7 8 9 10 300 Transformers Happy Feet Pirates of the Caribbean: At World’s End Ratatouille Shrek the Third Harry Potter and the Order of the Phoenix The Departed Night at the Museum The Bourne Ultimatum Action Sci-Fi Animated Adventure Animated Animated Fantasy Thriller Comedy Action Warner 100.00 Paramount/DreamWorks 98.49 Disney 96.08 Disney 93.55 Disney 82.17 Paramount/DreamWorks 79.59 Warner 75.20 Warner 71.11 Fox 60.07 Universal 58.00 $210.59 $316.48 $197.28 $309.40 $205.63 $320.71 $291.98 $129.40 $249.33 $227.02 * In Millions Source: Nielsen VideoScan First Alert data 2007 would come in at about $13.6 billion, down about 3% from 2006. “This is not what we expected coming into this year,” Sanders said, echoing a sentiment expressed by most other studio presidents who had expected the high-definition disc to take off and more than make up for any slowdown in DVD sales. Due to the format war and consumer confusion, however, that didn’t happen, although Sanders is hoping for a turnaround in 2008. “We started this year with the expectation that DVD sales, industrywide, would be flat,” he said. “However, it appears we’ll be slightly off.” Still, he added, “we see encouraging signs, such as consumers beginning to understand the benefits of highdefinition media, as well as brisk sales of high-definition hardware. We hope to see improved growth in this area in the coming year.” The accompanying charts are preliminary in nature, based only on Nielsen VideoScan First Alert data. Due to the Wal-Mart factor, final results may vary significantly. TOP 5 HIGH-DEF SELLERS HI GH-DE F S E LLER S YTD through December 30, 2007 FORMAT LABEL INDEX TOP 5 HIGH-DEF SELLERS H IGH- DE F S E L L E RS Aggregate by Title YTD through December 30, 2007 FORMAT LABEL INDEX TITLE TITLE 1 2 3 4 5 300 Transformers Pirates of the Caribbean: At World’s End Casino Royale Planet Earth: The Complete Series Blu-ray HD DVD Blu-ray Blu-ray HD DVD Warner 100.00 Para./DreamWorks 76.06 Disney 69.64 Sony Pictures 54.00 BBC Video 51.68 1 2 3 4 5 300 Planet Earth: The Complete Series Transformers Pirates of the Caribbean: At World’s End Harry Potter and the Order of the … BD; HD DVD/DVD Warner 100.00 BD; HD DVD BBC Video 62.45 HD DVD Para./DreamWorks 50.75 Blu-ray Disney 46.47 BD; HD DVD Warner 37.95 Source: Nielsen VideoScan First Alert data Source: Nielsen VideoScan First Alert data TOP 5 HIGH-DEF BLU - R A Y D ISC YTD through December 30, 2007 LABEL INDEX TOP 5 HIGH-DEF HD DVD YTD through December 30, 2007 LABEL INDEX TITLE TITLE 1 2 3 4 5 300 Pirates of the Caribbean: At World’s End Casino Royale Spider-Man 3 Planet Earth: The Complete Series Warner Disney Sony Pictures Sony Pictures BBC Video 100.00 69.64 54.00 46.17 41.92 1 2 3 4 5 Transformers Planet Earth: The Complete Series The Bourne Ultimatum 300 Harry Potter and the Order of the Phoenix Para./DreamWorks 100.00 BBC Video 67.94 Universal 67.69 Warner 65.57 Warner 33.13 Source: Nielsen VideoScan First Alert data Source: Nielsen VideoScan First Alert data pre-empt what is expected to be a barrage of competing news announcements from this week’s Consumer Electronics Show in Las Vegas. “We thought, ‘why wait until CES?’” said spokesperson Steve Swasey, who wouldn’t comment on the device’s reported price. He said Netflix is talking with other set-top box manufacturers, which could presumably include Sony Corp.’s PlayStation 3 and Microsoft Corp.’s Xbox 360. “Our intention is to have Netflix available in 100 set-top boxes,” Swasey said. “LG is the first.” Richard Doherty, research director of the Envisioneering Group in Long Island, N.Y., said the deal is significant because of what he says LG envisions is the future for HDTV and set-top boxes: wireless connectivity. Doherty, who was pre-briefed on the Korean consumer electronic manufacturer’s CES unveilings, said LG will bow a series of flatpanel HDTVs that receive content and data wirelessly from a separate box — presumably the same device offering standard-definition content from Netflix. He said the Web-enabled box when released in August could include HD DVD and Blu-ray Disc playback — dual-format capability already available in a separate LG device that sells for $799. The analyst said the set-top box, unlike previous “voodoo” units, has the ability to become a consumer entertainment cornerstone in the home. “Wireless with a set-top box is not your grandfather’s set-top box,” Doherty said. According to Doherty, Netflix’s CEO Hastings said it had become evident that partnering with a CE manufacturer was more cost-efficient than creating a proprietary box. Doherty said the LG presentation left even a veteran of CES hype wondering how the competition would respond. He believes successful integration of the set-top-box could result in studios rethinking DRM strategies for packaged media. “This is a wake-up call and shot over the bow of other consumer electronics manufacturers and packaged media suppliers” Doherty said. “This is a very big deal.” HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 51 times per year (weekly except for one week at the end of December) by Questex Media Group, Inc., 306 West Michigan Street, Suite 200, Duluth, MN 55802. 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