Home entertainment expects rebound

Blu-ray to help sector recover from dismal '08

If the fourth quarter is a pressure cooker for theatrical execs, consider the lot of their hapless colleagues in home entertainment.

Summer's biggest theatrical titles tend to hit shiny disc between October and January, making the year-end a make-or-break period for studio's home entertainment divisions. Happily, the availability of $99 Blu-ray Disc players and an expanding HD footprint have execs anticipating more holiday cheer this year.

Consumer spending last Christmas was so slack that the fourth quarter actually tugged down annual revenue in home entertainment rather than bolstering it. This time, though, with year-to-date sector revenue off 10%, industryites expect that a solid holiday session will brighten home-entertainment's year-end report card.

"Players are down below $200 now, and if we don't see a whole lot of $99 players, I will be very surprised," said Bo Andersen, executive director of the Entertainment Merchants Assn. "I think that is a very good stimulus for consumers buying Blu-ray software."

Adams Media Research calculates 90% growth in Blu-ray's installed base during the past 12 months to more than 8 million households. That's not even counting those using Sony PlayStation consoles to play HD discs. Analyst Tom Adams adds that there's doubly good news in the number of notable titles hitting retail this year.

Paramount Home Entertainment has two of the biggest fourth-quarter releases with "Transformers: Revenge of the Fallen" and "G.I. Joe: The Rise of Cobra" -- set for release Oct. 20 and Nov. 3, respectively -- while Warner Home Video has "Harry Potter and the Half-Blood Prince" arriving Dec. 8.

The big releases are expected -- finally -- to post some big numbers in Blu-ray.

"The industry will easily beat the Blu-ray numbers from last year," said Sony home entertainment marketing maven Lexine Wong. "If you look at the titles coming through, it really bodes well. And from all of our research, we are seeing people really interested in both hardware and software."

Disney's big holiday sellers are expected to include new Blu-ray and DVD collectors editions of "Show White and the Seven Dwarfs" (Oct. 6), and Sony envisions the Tom Hanks starrer "Angels & Demons" (Nov. 24) doing well both in traditional and HD formats.

Ditto Fox Home Entertainment's effects-filled "Night at the Museum: Battle of the Smithsonian" (Dec. 1).

"Fox has a very exciting and robust slate of projects on Blu-ray this quarter," Fox home entertainment boss Mike Dunn said. "Even though unemployment continues to rise, we are still seeing significant growth. Blu-ray Disc sales are up over 96% year-to-date. I don't know of any other area that can make a claim like that."

Most analysts say Blu-ray revenue won't compensate shrinking DVD sales dollar-for-dollar until at least next year. But that won't stop execs from beating their chests about finally marking some high-def progress.

The Digital Entertainment Group, a trade group with particular emphasis on Blu-ray and other digital innovations, has set its second annual Blu-Con conference for Nov. 3 at the Beverly Hilton. Keynoters will include Martin Scorsese and Merrill Lynch analyst Jessica Reif Cohen.

"We're confident that Blu-Con 2.0 will underscore the critical role that Blu-ray plays," DEG and WHV topper Ron Sanders said.