The Digital Bits: Soap Box - In Which We Answer The Question: Why Are Catalog Sales Down 20%?

[Editor's Note: Okay... as expected, we've gotten many hundreds of e-mails from readers responding to my rant yesterday about some of the reasons why DVD and Blu-ray catalog sales are down 20%. It certainly appears that I've touched a nerve, and I had a sneaking suspicion I would based on the frustrations we've been hearing from readers for many months now. I've added a couple things to the text based on this feedback (including noting that the major studios ARE doing some good catalog BD work too), and I've copied the piece to its own unique editorial page, so it's easier for you all to link to, quickly reference, print and pass around, etc. All I can say is, there's a lot of frustration out there among the most avid Blu-ray consumers - the serious film and home theatre enthusiasts - and those of you who work at the major studios would do well to address it seriously and soon. Many of your best customers are a little... pissed. Sadly, the very good catalog Blu-ray work some of you are doing is being overshadowed all too many titles with recycled, mediocre, digitally over-scrubbed transfers. I would say that if you're not willing to spend a little money to create a new HD master from the best available elements, don't release the title. "Good enough" just isn't good enough, and you REALLY need people with experience in film restoration and mastering to act as a quality check to make sure crap isn't getting through - people who know what a FILM is supposed to look like, not just HD video techs. Trust me, there is a BIG difference.

You know, I suspect there are probably a few upset executives at the major studios today, and all I can say to that is that sometimes the truth just hurts. But we have a very long history here at The Bits - 13 long years of it - of working to approach these situations reasonably, rationally and with the best interests of both our readers and the health of the industry as a whole in mind. We're not unreasonable and we don't grind axes here just to piss people off. So when we talk about a problem like this... there's a REAL problem. We've actually been posting warnings of it now and again since high-def discs first appeared, hoping that it would go away. But the industry seems to have taken its eye off the ball, and it's time we started getting more insistent.

Bottom Line: Nobody's fought harder for DVD over the years than we have here at The Bits, and nobody's fought harder for Blu-ray than we have, because we felt both formats were in the best interests of our readers and the industry. But the fact is, Blu-ray is being sold for a premium price. And Blu-ray has been and continues to be marketed as "The Look and Sound of Perfect" by the major Hollywood studios. So that's what film enthusiasts expect. And if you're cheaping out by recycling a 6-year-old HD master, you ain't delivering perfect, Jack. No way, no how. So think of this as a bit of tough love, from your old pals here at The Bits.]

In Which We Answer The Question: Why Are Catalog Sales Down 20%?

Well, folks... it's apparently time to state the obvious again here at The Bits. So let's get right to it, shall we? And if you happen to work at a 'Major Hollywood Studio' you might want to take notes...

I was reading my friend T.K. Arnold's latest editorial over on Home Media this morning, in which he talks about a surprise positive forecast by PricewaterhouseCoopers on the future of the film industry, including theatrical ticket sales, but also DVD and Blu-ray sales, as well as VOD and EST. Now, that's good news to be sure. But in the piece, here's the thing I found most interesting: T.K. notes that he's heard recent complaints from studio executives that "catalog sales are down a dismal 20%," and "TV DVD is a shadow of its former self."

Well, look... the recession isn't helping any of this. That's the first thing that needs to be said. Generally, when times get tough economically (as they did after 9/11), people immediately cut out stuff like travel and big new purchases first and then tend to say home more, and thus watch movies and consume more entertainment at home. But as a recession drags on, people cut more deeply into frivolous entertainment spending too. So they tend to rent more, re-watch movies they already have, or look for greater bargains when buying DVDs and Blu-rays - like 40% off, or titles for $9.99.

Now, as for TV DVD, I suspect another part of the problem is that most of the best shows, the ones that diehard fans (the kind of people who BUY most TV DVD and Blu-ray releases) really want, have already been released at least once on DVD. And it's hard to convince all but the most diehard fans to upgrade to new Blu-ray versions of these series unless the studio really goes all out to make the release special with new transfers and lots of new extras. That's just the reality of ANY business, when you're trying to sell your customers a product they've already purchased from you at least once in the past. It's not helped by the fact that, as many fans know, most TV DVD sets these days include just a smattering of glossy, EPK-style extras and that's about all - certainly not enough to motivate a purchase among collectors. Generally, only smaller labels like Image Entertainment and Shout! Factory (to name a few) are really going all out on these sets in a way that generates real excitement - and purchases - among fans.

But the other reasons for the decline of catalog DVD and Blu-ray sales are fairly obvious. At least they are to us and to our readers, and they SHOULD be obvious to studio executives. Yes, there's a recession going, and consumer sales are down in general. And yes, most of the really beloved catalog films have already been released on DVD multiple times. So that's naturally going to make it harder to sell them to fans a second and third time. BUT... that doesn't mean a studio can't sell these titles to fans again. It CAN be done, but it requires a little more effort on the part of the studios. Believe me, because I hear this complaint EVERY SINGLE DAY here at The Bits: Fans are sick an tired of buying double and triple-dip DVD catalog titles that contain only a couple paltry new features, usually some kind of cheesy EPK featurette or music video! These titles just feel to fans like exactly what they are: Shameless attempts to revisit the well one more time with minimal effort. On the other hand, if the studio really puts some effort into creating a genuinely interesting special edition with significant new extras - or a true special edition of a film that previously has only been movie-only on DVD - fans WILL buy it. Hell, look at Blade Runner! Not exactly a blockbuster in theatres back in 1983, and yet Warner sold a helluva lot of copies of that film on DVD and Blu-ray a few years ago.

The situation with Blu-ray is even more irritating for movie fans: MANY of them are DESPERATE to re-buy their favorite films in high-definition, provided they have brand new HD transfers to ensure the very best A/V quality, and include genuinely interesting and illuminating new special features. I know this because I hear from them every day, and because I'm one of them myself! But instead, the studios are all too often recycling old HD masters done for HD cable or satellite broadcast - or even for a previous DVD release many years before - and they're pushing them through a heavy-handed digital clean-up process and releasing the result on Blu-ray for $34.99. And instead of new extras that would actually interest film enthusiasts and collectors - like new audio commentaries with those involved, previously unseen footage and other materials from the vaults, or new retrospective documentaries - the studios are choosing instead to cake up these catalog Blu-rays with silly interactive bells and whistles that add virtually NOTHING to a fan's appreciation of the film and - even worse - sometimes make the disc crash your Blu-ray player.

Let me tell you studio guys something (AGAIN!), because too many of you clearly don't understand this: The ability to look up a recipes, or check an actor's IMDB profile, or chat with friends, or watch content on your iPhone... all while watching a film on Blu-ray... doesn't excite ANYONE who is actually passionate about film, Blu-ray or, hell... even iPhones for that matter. Film fans don't look at ANY of that crap, and even the few people who love that kind of thing may sample it once and never look at it again. And yet the studios are spending hundreds of thousands of dollars to create it, manage it, QC it, trouble-shoot it and maintain the servers for it. I have no doubt that having these features makes the studios feel like they're really innovating technically, and making Blu-ray feel different and more advanced than DVD. And I'm sure such things look great on a marketing spreadsheet or press release. BUT FANS OF THESE FILMS DON'T GIVE A SHIT ABOUT ANY OF IT. And by including it on your discs, you're just wasting money that would be better spent on new HD transfers, or on paying actors or directors to participate in new commentaries or interviews to create truly new extras. Will someone at the Hollywood studios PLEASE figure this out? Finally?!

Look... my own frustration with catalog BDs (and the frustration of MANY of our readers) aside... I should add here that yes, a select few of these advanced interactive features are actually cool, interesting and genuinely worthwhile. I also know that there are a LOT of good people in this business working hard to make them special, and I don't mean to disparage any of them or their efforts. But the bottom line is that Blu-ray is a MOVIE format, above and beyond anything else. And as is (and should always be) the case with any movie format, it's the PICTURE AND SOUND THAT MATTER MOST! If a studio can't be bothered to get that most critical part right, then all the rest of the BD-Java and BD-Live stuff is just putting the cart before the horse. And even the very best and most well-intentioned of you interactivity guys should understand and appreciate that. Nobody buys a Blu-ray for the games, the chatting options or the Focus Points. They buy it hoping to see a movie they love, in the very best possible quality. Make no mistake.

No catalog Blu-ray Disc should EVER be released with an HD master that's more than a couple years old! The state of the art in HD transfer and mastering technology is just moving too fast, and in order to achieve the best quality picture and sound that people expect of Blu-ray, you have to start with the best elements - not recycled ones. And simply including a bonus DVD and Digital Copy, along with murky layers of online-connected interactive features - none of that crap excites a movie fan to a new purchase. None of it. Instead, you have to actually put a little more effort into these titles. Of course, in a time when the major Hollywood studio home video departments are being wracked by round after round of layoffs and aggressive cost cutting measures, this isn't what ANY studio executive wants to hear.

They're ARE studios who already know these things, of course, and who are doing a great job with catalog DVD and Blu-ray releases (and even TV DVDs), but they tend to be the smaller operations who really truly understand their audience and know that you have to give them what they want... not just feed them what's easy for you to give them. Think Criterion, Shout! Factory, Image, Blue Underground, Synapse, Kino, etc. Of course, that's not to say that there isn't certainly very good transfer work being done at the major studios. Think of Paramount's fine African Queen and Braveheart Blu-rays, Warner's North by Northwest and How the West Was Won, Fox's very good Mel Brooks Collection, Disney's Armageddon, Lionsgate's latest Dirty Dancing BD, Sony's recent Karate Kid BDs. Excellent work IS happening, and making it to the format. But they are also FAR too many major catalog BDs falling through the cracks with subpar transfers - Gladiator, Patton, Flash Gordon, Spartacus, etc. Titles people were really excited for... until they actually brought them home and watched them. And these do far more to damage the Blu-ray format than anything else.

Look... if I can send any one take-home message to the studios, it's this: THERE ARE MANY THOUSANDS OF DIEHARD MOVIE FANS OUT THERE WHO ARE DYING TO BUY YOUR CATALOG PRODUCT, ESPECIALLY ON BLU-RAY! They're EAGER to part with their money, if you give them good new Blu-ray editions of their favorite films. BUT YOU HAVE TO DELIVER QUALITY!!! You can't spend money to create boring, unwanted bells and whistles, all while cutting corners on the stuff that REALLY counts (new HD transfers), and then cookie-cuttering these catalog Blu-rays out into stores with a $34.99 price tag. Well... you can, but don't expect ANYONE to actually want to buy them. Because I promise you, the folks who fill out your fancy customer research surveys and say they really love Blu-ray iPhone apps and online chat during the films - those guys aren't actually buying Blu-rays right now. If they EVER started buying them to begin with, Blu-rays were probably the first thing they cut from their budgets when the recession took hold. Instead, they're probably renting movies from Netflix and Redbox, or watching movies on Xbox Live or Playstation Network, or for free on Hulu and Bittorrent, or just watching their old DVDs. Meanwhile, the folks who are ACTUALLY still willing to drop $30 on a catalog movie reissue on Blu-ray right now - you're giving them shit. You don't understand what they want and demand from these titles, and you're disappointing them in DROVES. I'd bet that no small portion of that 20% decline is made up of avid and diehard movie consumers who are just frustrated, and sick and tired of being taken advantage of and taken for granted. And the more you disappoint these folks, the harder it gets to get them excited again... and the less likely they are to buy your titles in the future.

As for those of you (consumers and studio personnel alike) who would say, "Well, who cares? It's all going to be downloading in a few years anyway...," here's a few points to consider. Call 'em a warning, if you like. First, prepare yourself for the death of great movie special editions, because you won't be getting them anymore. They're ALREADY on the decline compared to the "golden age" of the DVD format several years ago, and no studio is going to want to use up valuable server space and bandwidth to make available for download lengthy documentaries and commentaries that aren't download profitable. Great classic film restorations will dry up too, because they cost money and it was profits from strong DVD sales that have funded them (and justified the expense) in recent years. Don't believe me? How many of you are still waiting for MGM to finally save The Alamo? When profits are down, film SEs and restorations are among the first things to fall by the wayside. Second, watch for the entire home video market to became a much smaller pie. Why? Even if you optimistically hope that LOTS more people will download movies in the future, $7.99 or $9.99 downloads will never make up for $29.99, $49.99 and $69.99 (or even more for box sets) physical product sales. And good luck getting anyone to spend more than $9.99 on a movie download. Even if Hollywood's latest scheme to charge $25 or $30 for downloads of first-run movies still in theatres (presumably hoping to snatch some of the family movie-going audience that's sick of paying $100 a pop for 4 tickets, plus soda and snacks - read more here as well), you're still cannibalizing profits from somewhere, certainly theaters and probably also later disc sales and rentals. Finally, here's one to put the scare into you Hollywood marketing folk: Downloads don't require press releases, press events and marketing campaigns. An elaborate new Anniversary collector's edition box set of... say... Lawrence of Arabia is an event to celebrate - something for movie fans to rightly get excited about, and that requires lots of P.R. people to promote. All a newly-available Xbox Live or PlayStation Network download of Lawrence of Arabia requires is a little pop-up message when you log into the system to let you know it's available. So to the extent that the home video industry is driven by (and requires lots of) marketing folk right now, well... one day in the not too distant future, your services will no longer be required thank you very much. How do you like them apples?

Bottom line: There are still LOTS of consumers who want to buy great catalog physical product on DVD and Blu-ray. The window of opportunity is still open, that market still exists, and it's to EVERYONE'S advantage for the major Hollywood studios to cater to it, to encourage it and to not just keep it alive, but get it thriving again. It CAN be done. But all the low-lying fruit has been picked already, so it requires a little more focus and effort - and frankly vision - on the part of you studio types. And the clock is ticking...

Man, I don't know how many times we have to say this stuff, but what the hell... we'll KEEP saying it until the studios finally GET it. That's just what we do here at The Bits, yes?

Stay tuned...

Bill Hunt, Editor
The Digital Bits
billhunt@thedigitalbits.com