The DVD Business

With the way the movie industry works now, the first weekend earnings matter a lot. For the highly awaited ones as Iron Man 3, the first weekend would bringforth about 40% of the total domestic earnings. For the ones that grow on people with time as Gravity, the first weekend would contribute to about 20%. Either way, they matter a lot, and are an indicator of the total collections a movie is going to garner. But once the theatrical run is over, there are more revenue streams that Hollywood films catch onto (with, of course, additional costs attached too). It begins with DVD / Blu-Ray sales, income from DVD rental viewing, pay-per-view income, TV streaming income etc. The income from these sources usually becomes a factor of the theatrical earnings, for you would expect a superhit movie to have higher DVD sales as compared to a flop film. But you do have the odd exceptions, and the variances. Movie-wise earnings data for each of these categories would be really difficult to get a hold on, and may not be perfectly calculable as well (say, a movie studio could have a bulk TV rights deal for three films). So we try to get a look and feel of something we could get data on, viz. the DVD + Blu-Ray sales business (henceforth termed “DVD” alone) in the USA market.

There are times when the studios would be satisfied to break-even with the theatrical run and start churning money from the subsequent income streams. DVD income is the first one that follows, and these are big bucks too. No wonder, that when a popular movie’s theatrical run is inching towards it end, the studios start working on generating interest in their DVDs. Apart from the movie itself, they bring out additional features in the DVD, be it deleted scenes, alternate endings, bloopers, director’s commentary etc. The bigger franchises in fact provide you with two DVDs together, where one of them is dedicated only to such additional features. Holding a DVD at times is like holding a memory of your favourite movie; it feels good to line them up on the shelf, just like an array of books would delight a voracious reader. Sales of DVDs are a strong business in the USA market, worth millions of dollars for each movie, and would be a trend picking up in the foreign markets as well, especially in the developing economies where consumer spending is on an upsurge.

DVD_The Avengers

So how big the business truly is? To understand that, we picked up DVD sales figures (as told before, this includes Blu-Ray sales too) for the top Hollywood movies of 2012 from The Numbers website, since the big movies of 2013 are still in the process of releasing their DVDs. We compared the DVD sales in the USA market for the top 10 domestic earners of the year, and it made for an interesting table. Data for The Amazing Spider-Man was not available, so the next film has been chosen to complete the list of ten.

DVD_Earnings Table

One thing we can gather from a cursory glance is that the DVD income for a movie with a good theatrical run is pretty solid. The Avengers which was the biggest box-office hit of 2012 has the highest DVD sales too in the USA. But you have your anomalies too. Like who would have known that The Hunger Games would sell more DVDs than The Dark Knight Rises? Now how much of this money comes to the studios is not clear, but from what we have read, it is a better percentage than the money received from the box-office collections. So should be more than 50 per cent.

Now what else do we concur? DVD sales were about 30% of the domestic box-office earnings for most films; at least six of the above ten have DVD earnings around that ratio. But you do have exceptions. The Pixar animated flick Brave (US DVD earnings to US box-office collections at 68%) and another animation film Doctor Seuss’ The Lorax (51%) have done amazingly well on this count. So we looked up other animation movies that did well last year, and guess what, Wreck-It Ralph has a corresponding ratio of 56%, Hotel Transylvania is at 52% and Ice Age: Continental Drift is also slightly higher than the average at 38%. This is limited data, but the conclusion that animated films usually do well on DVD sales too seems a realistic one, as the primary target audience of young children are likely to have enough time on their hands to see the movie over and over again without complaining. There are other movies too which develop a stronger following once the DVDs are released, and the R-rated comedy film Ted seems to be one of those. The Hunger Games was a highly popular film of 2012 and its run continued beyond the theatres in the USA, with its DVD sales falling only a little short of that of The Avengers.

And then you have the ones that simply deliver way too much than was expected on the DVD front. Like Pitch Perfect. This musical comedy of 2012 was well received and became a hit during its theatrical run. But given its $65 million earnings in the domestic market, no one would have expected the US DVD sales to turn up a higher figure of $76 million! Releasing this movie around Christmas time might have played a part, and with high ratings enjoyed across movie websites, people who may have not heard of the film the first time would have given it a shot when the DVD came out.

DVD earnings for these movies may increase somewhat in the future too. Usually at the time of the sequels, the original movie DVDs are re-sold. Or you have the previous one clubbed with the DVD of the newer movie and sold as a ‘combo pack’. But just like is the case with the theatrical run, sales of DVDs are highest in the opening days and then they start tapering off. How well would a movie DVD sell is a tough one to figure out even for the studios. A solid performance in the theatre and a good reception by the audience undoubtedly forms the strongest base. But beyond that, it is just the mood of the people that dictates these sales. It is a revenue stream that movie makers do not ignore for obvious reasons. And as members of the audience, we would want the studios to be as serious about the DVD releases as they are about the movie itself, to pack it up with enough goodies that would make owning a DVD feel something special, something beyond owning the movie itself…


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