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Films face a shorter trip from the cineplex to your home

Even blockbusters hasten from theaters to video, where films do even bigger business than on screen.

October 14, 2003|Marc Saltzman | Special to The Times

With arms folded and feet up on a plastic table at Chicago's O'Hare International Airport, traveling college friends Jeff Parker and Matt Steinberg caught a snippet of the film "The Matrix Reloaded" from a dangling TV above their heads. The film had debuted a day earlier.

"Looks awesome," a smirking Parker said. "It'll look sweet on your dad's plasma."

"Yeah, it'll be on DVD soon enough," Steinberg confirmed.

Steinberg was right -- "The Matrix Reloaded," the third-highest-grossing blockbuster this year, arrives in stores on DVD starting today.

And such is the trend these days for most feature films, successful or otherwise -- a shortened window between its theatrical run and release on home video (the catchall term used to describe DVDs as well as videocassettes).

Naturally, Warner Bros. expects the launch of "The Matrix Reloaded" on DVD to help add buzz to its third film in the sci-fi trilogy, "The Matrix Revolutions," due in theaters Nov. 5, but this trend of shortened windows has caught on with all movie studios, even for films without impending sequels.

Universal Studios' "Hulk" came out in theaters June 17. The DVD launch date is Oct. 28 -- a four-month window.

After all, DVDs are big business; the revenues generated from the home video market now more than double box office receipts.

Last year, the home video market grossed an estimated $20.3 billion compared to $9.2 billion from theatrical releases, according to home entertainment's leading trade publications: Video Business and DVD Exclusive, formerly DVD Premieres.

As the popularity of DVDs has grown, that business is even starting to emulate the big-opening approach the theatrical release business employs. It's no longer unusual for big DVDs to be released accompanied by heavy TV advertising, retail displays and multimillion-dollar press events -- such as flying select media to the set of "Harry Potter" in Britain for the "Chamber of Secrets" DVD launch or an exclusive Eminem performance and rap battle contest for "8 Mile."

As a result, says Ken Graffeo, executive vice president of marketing at Universal Studios Home Video, 50% to 55% of all sales for a DVD take place within the first week at retail. "And about 70 to 75 percent of revenues are collected during the first three weeks of a DVD's lifespan," Graffeo adds.

Similarly, there's a short but strong revenue spike with theatrical releases, says New Line Home Entertainment's senior vice president of marketing, Matt Lasorsa.

"The movie plays out much shorter now because it opens in roughly 3,000 theaters, which was unheard of just a few years ago," Lasorsa says.

"So now you see a 50 percent drop-off after a week, compared to when the film could play for 10 or 12 weeks on a thousand theaters."

"We're now starting to see windows as small as three months or even less instead of the standard six months," explains Scott Hettrick, Video Business and DVD Exclusive's editor in chief. "Studios are piggybacking on their own marketing initiatives spent on the theatrical release to help promote the DVD -- a smaller window means higher awareness and familiarity."

But Lasorsa says there are often "opportunistic" reasons for advancing the DVD launch of a film. For example, New Line's "The Real Cancun," a theatrical disappointment that opened April 25, debuted on DVD in early July "because this is a reality-TV-type product, so it seemed logical to release it during summer break," Lasorsa says.

" 'Real Cancun' is a rare example," Lasorsa concedes, "but we're seeing shortened windows for most summer releases because studios want to get their [films] out on DVD for fourth quarter."

According to Lasorsa, 40% to 45% of all home video sales happen around the gift-giving season. "You definitely want to have them out for Christmas, so you're seeing studios accelerate their release to make fourth quarter." While there has been significant shortening between the theatrical release and home video release, "they're as short as they're going to get."

Lasorsa's prediction is mirrored by Bob Chapek, president of Buena Vista Entertainment and of the DVD Entertainment Group, an industry-supported trade coalition.

"I don't know how much more it can be compressed than it is now because of the amount of work that needs to be done for the DVD," he explains, referring to the mastering, duplication and distribution of DVDs to retail.

There are exceptions, however, such as the animated classic "The Lion King."

Unlike other films, these Disney titles don't get "colder as they get older," as Chapek puts it. "Yes, many of our titles are evergreen, so we remove them off the market, then reintroduce them over time."

But with most films, Chapek admits "there tends to be a competitive advantage for studios to release on DVD sooner because they can leverage their marketing dollars spent on theatrical release.

"It makes sense, so now everyone is doing it," Chapek says.


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A film's timetable

Theatrical and home video (DVD and videocassette) releases are just two "windows" for a typical film. Take the example of the various release plans for New Line Cinema's "Final Destination 2":

* Theatrical Release: Jan. 31

* Hotels/Airlines: May 1

* Home Video: July 22

* Pay Per View: Aug. 20

* Pay Cable: Jan. 22, 2004

* Broadcast TV: Sept. 22, 2005

-- Mark Saltzman

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