Lionsgate hot for young, niche DVD market

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Touting what they said is a dominant share of the catalog market, Lionsgate Films executives in their annual midyear summit with key retailers outlined a market-driven strategy for the future — one in which mainstream product, and mainstream DVD consumers, will be less significant than before.

Studio research chief Michael Youn said that as the DVD business moves ahead in its mature phase, the core 13- to 50-year-old demographic is spending less, while younger children and consumers older than 50 are spending more. Research shows consumers in the 13-50 demo are expected to spend $1.2 billion less on DVD this year than in 2004, while consumers younger than 12 likely will spend $1 billion more and the 50-and-up set likely will spend $200 million more.

Generally categorized among the late adopters, kids and older adults have significantly increased spending on such niche areas as family, action, horror, fitness and Christian DVDs during the past two years, Youn said, and have shown a greater propensity to buy catalog product — particularly premium-priced collections and boxed sets, both of movies and of TV shows.

Lionsgate's catalog business is expected to grow to $201 million this fiscal year, up from $178 million in 2006, Lionsgate president Steve Beeks said.

Lionsgate said it leads all studios in catalog unit growth — the studio upped its unit shipments by 29.1% from 2005-06 — and will focus more on these and other niche markets while continuing to release midrange theatrical features with a continued emphasis on horror.

In home entertainment business, Lionsgate through June 24 claims a 6% market share, sell-through and rental combined, ranking behind the six majors, Beeks said.

Home video highlights for the remainder of the year include "Delta Farce," a comedy with Larry the Cable Guy that grossed $8 million theatrically; the $7 million theatrical action thriller "Condemned," with World Wrestling Entertainment star "Stone Cold" Steve Austin; "Away From Her," a festival favorite about the effects of memory loss on an aging couple that stars Julie Christie and Olympia Dukakis; and "Bugs," a horror film with Ashley Judd and Harry Connick Jr. from Oscar-winning director William Friedkin.

Former Marvel Studios CEO Avi Arad introduced another upcoming Lionsgate release, "Bratz: The Movie" — which he described as " 'The Breakfast Club' meets 'Bring It On.' " The first theatrical and live-action "Bratz" release opens Aug. 3 on more than 2,500 screens and will be heavily promoted on DVD in the fourth-quarter selling season.

Lionsgate also intends to further exploit its Tyler Perry franchise, which has resulted in DVD sales of about 18 million units during the past two years.
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