Looking for new, less risky ways to boost profit, Warner Bros. is launching a direct-to-DVD business that will release 10 to 15 low-budget movies a year.
First up will be a sequel to the studio's 2005 hit "The Dukes of Hazzard," scheduled to go on sale at the end of this year or in early 2007.
Movies made exclusively for DVD typically are done on the cheap without the costly stars and lavish production expenses associated with theatrical films.
Adhering to that model, Warner aims to keep each direct-to-DVD movie's production budget to $5 million or less, although some films may cost slightly more. The "Dukes" sequel, for example, won't reunite cast members Jessica Simpson, Johnny Knoxville and Seann William Scott.
The new venture, a partnership between Warner Bros. Pictures and Warner Bros. Home Entertainment Group, aims to cash in on what has been a lucrative, relatively inexpensive business for such rivals as Walt Disney Studios and Universal Pictures.
"We recognize that the made-for-video business is a place we need to put emphasis and devote considerable resources," Warner President Alan Horn said. "Discipline is the key to the ultimate success of the new venture for us."
Still, the direct-to-DVD business is no sure bet. It faces increased competition from boxed sets of popular television shows such as "Lost," "24" and "Desperate Housewives," one of the hottest areas in home video.
"The made-for-home entertainment business can be very profitable if you select the right projects, control your development and production costs and time your releases to minimize your marketing expenditures and maximize your exposure," said Louis Feola, Universal Pictures' former home video president who oversaw such popular direct-to-video franchises as "The Land Before Time."
Jeff Robinov, Warner's production president, and Kevin Tsujihara, president of the studio's home entertainment group, will oversee the new division, which is expected to be operating within three months. The two are looking to hire an executive to run the day-to-day operations of the unit, which is expected to have 10 staff members, including its own creative, business and marketing personnel.
Robinov said the division would produce live-action DVD prequels and sequels to existing Warner Bros. movies such as "Dukes," which grossed $80.3 million domestically but was not the kind of hit that would justify spending the large sums required to make and market a theatrical release.
